Oh, and there’s not a dime to spare.

This is the challenge faced by many rural health centers utilizing a system of community health workers who travel from clinics to reach patients in very isolated regions. They usually travel by foot or bike. They often cover such large areas that they may not return to the base clinic more than once a month.

In wealthier regions solutions would probably involve large scale databases, interactive web pages, medical equipment hooked up to doctors in centralized locations and maybe even a car or two.

Sometimes a lack of resources and a will to succeed is more than ample to create a real world changing difference.

Frontline SMS:Medic was one of the business plans presented as part of the NU Venture Challenge at the Northwestern University Farley Center for Innovation Entrepreneurship Summit last month. What an aggressive group. They have already deployed several systems, received the NU Venture Challenge ‘Best Social Entrepreneurship’ award  and recently won the N2Y4 Moble Challenge.

The solution? Text messaging.

Through open source software (FrontlineSMS), inexpensive (yet rugged) cell phones, a basic PC at the health center and a GSM modem they are able to set up a robust communication network for health workers and the community health center. Information is of higher quality and instantaneously updated and available.

Sometimes it’s the budget and infrastructure limits that actually drive the most robust and useful solution. When you know what money can’t buy you figure out ways to make due while making great – cardboard creativity in action. The young company even operates in an unusual, low cost way. While the idea was hatched in the summer of 2008 and the company launched this past February – the first face-to-face meeting of most the team didn’t occur until March.

They’ve been working as a virtual organization all along.

The innovative solution they have developed takes into account the limited infrastructure available and can be implemented for just a few thousand dollars. But even this low cost solution stretches budgets.

Next innovation – a charity that accepts your old cell phones to raise the capital needed to implement FrontlineSMS:Medic – www.hopephones.org.

As I said in my previous post – it’s nice to see young entrepreneurs face challenges.  They bring a can-do spirit that is invigorating. FrontlineSMS:Medic is operating in a niche that other organizations could not serve.

If you happen to have a spare cellphone hanging around, check out www.hopephones.org. Donating your phone could help spur a revolution in medical records technology.

Photo Credit: © 2009 Adrian Sparrow via www.istockphoto.com.

I blame Louisa Gilder and her wonderful exploration into the weird path physics took towards accepting entanglement over the past century. In 1964 John Bell lit a small fire at the foundations of modern physics using timber put in place by Einstein 30 years prior. It launched a few investigations but in truth mostly smoldered for another 17 years until he stated the implications of his theory a bit differently. 

He spoke about Bertlmann’s Socks. 

“Dr. Bertlmann likes to wear two socks of different colors. Which color he will have on a given foot on a given day is quite unpredictable. But when you see that the first sock is pink you can be already sure that the second sock will not be pink. Observation of the first, and experience of Bertlmann, give immediate information about the second. There is no accounting for tastes, but apart from that there is no mystery here. And is not the EPR [Einstein-Poldosky-Rosin] business just the same.” “Bertlmann’s Socks and the Nature of Reality,” Journal de Physique, Colloque C2, suppl. Au#2, Tome 42 (1981) 41-61.

Gilder brings this up in her book The Age of Entanglement: When Quantum Physics Was Reborn. Not only did the paper surprise Bertlmann, but it made clear why physics had to deal with the issue of entanglement — something the powers-that-be seemed content to ignore, bury and work around for the previous half century or so. 

Physics is about math, observation and facts. Why would socks do the job Einstein hadn’t? Because it did the job at the right time and so clearly that finally — everyone got it. (And yes, there’s more to it than just socks. There’s tigers too, and a bit of math.)

New ideas seldom come packaged neatly.

I don’t think I have ever met a creative soul in business who wasn’t frustrated by the powers-that-be.

Great ideas are ignored.

Meaningful risks are not taken.

Have you ever seen a concept presented year after year and rejected. Then suddenly accepted. Often the originator of the idea gave up long ago, left ship. So the new kid on the block that didn’t know better, brings the idea forward and gets the kudos. You may have met, or may be, a creative soul mildly frustrated by such an occurrence. 

How can you help an idea through a brick wall? 

1. The Neutrino Approach: Neutrinos are so small it’s unlikely they will even notice a brick wall.  Send the organization away. Give them a budget and keep management away. Let them interact with the main organization like a consultant group, dropping in to seed the idea and grab useful tidbits for back at the neutrino cave. After a reasonable bit of time see what form the idea is in, can you sell it now? Or have folks seen it enough that it has been adopted without a fight? 
2. The Socks Approach: So you have a great idea and nobody wants to give you a budget to develop it. Time to drop it and move on?  Not until a better idea comes along. Change its form. Allow it to mold to the circumstances. See how reactions change to it over time. Add elements that make it more elegant and obvious. Find kindred spirits willing to discuss it over beer.
3. The Defend Approach: Academic circles are marvelous at challenging conclusions, arguing points minor and major, especially when a paradigm change seems to be in the works. Gilder shows that the scientific method and collegiate courtesy does not always work perfectly — Bohr was great at arguing others away from points he disliked — but the approach provides multiple places and times in private and in public to argue and discuss new ideas. And, most importantly, a record is kept of the theory’s ups and downs. A nice part of this approach is that you establish a culture that learns how to test and probe ideas in ways that are meaningful and not just political.

All of these approaches required varying levels of commitment from both the organization and the creative spirit and accept the idea that sometimes great ideas take time. The danger of these approaches is that you won’t realize when an idea has been eclipsed by a better or ‘more right’ idea.   Drucker always warns that projects must be killed rapidly when they don’t seem to work out.  The same is true here, its just hard to do. The trick is managing the level of investment (thought through physical) and pushing for an organization that learns. The strategies all have the benefit of giving ideas time to be tested and probed in a way that creates a record to be built off of. The more open the historical record is to others in the company, the more likely a great idea will find a second and third champion – even if they riff off it in a slightly different way. This type of record can also give feedback to the original idea holder, encouraging them and creating new ideas.

To succeed ideas need to be had, nurtured and defended. 

Here is where the creative spirit gets whacked most severely and an organization can destroy a fountain of great ideas. Sometimes the person who had the original idea is not the one who needs to take it to the next level.  Physicists were split into groups starting with theorists and experimentalists. Now that extends even further depending on math or viewpoint or specialty. By encouraging lively debate among different specialties you can create better understanding between groups that can lead to stronger ideas moving forward.  (An artist learning to speak in the tongue of the accountant? It happens. Maybe this is where corporate blogging could really have an internal wide open impact!)

Too often the ‘creative spirit’ sees working within a larger organization as burdensome and deadening.  Gordon MacKenzie used to call surviving such an organization ‘circling the giant hair ball.’ Gravity is always working to suck you in, keep you from seeing a bigger picture, defending a great idea.  The least a hair ball can do is create an environment where this becomes a bit easier for the creative spirit.  Even if it means wearing mismatched socks.

What are you doing to nurture and defend your ideas?

Could real fear be the key attribute that drives your next success?

Ideas from strange places: I found myself asking these questions as I read Where the Wild Things Were: Life, Death, and Ecological Wreckage in a Land of Vanishing Predators by William Stolzenburg.  A gripping account of why the connection between predator and prey is essential to the health and well being of both.  He walks us through a century of eye opening realizations by leading scientists of the damage done when the top predators in a system are removed. 

Who would have thought that killing off the sea otter would destroy the kelp forest?

Who would have thought that killing off the wolf would end the growth of Aspen?

Some of the ah-ha moments presented by Stolzenburg are controversial, but most are withstanding the test of time.  The process by which ‘science’ goes about digesting ideas that turn common knowledge on its head is as fascinating a look at human nature as are the descriptions of how the discoveries are made.

Stolzenburg describes how the introduction of the wolf back into Yellowstone National Park changed the behavior of the elk herd seemingly well out of proportion to the wolf’s actual ability to kill. Within a few years Aspen and undergrowth started returning in spotty patches where growth had been absent for decades due to overgrazing.  The most likely explanation appears to be that the areas where Aspen shoots have returned are dangerous places for elk to wander. While on open land a healthy elk has a 9 out of 10 chance to survive a wolf attack, in these spots the odds go down – and so the Aspen return.  

Sure the herd is being culled. Sure the number of elk is being reduced and controlled in a more balanced way (Seems better than cycles of overpopulation, overgrazing, starvation and die off at least). But most importantly, the elk’s behavior has changed.

What do lions and tigers and fear have to do with finance?  Credit Default Swaps (CDS) and other instruments were the capstone of a number of financial instruments designed to remove risk from financial transactions.  No risk – No fear.  The availability of these instruments changed financial institution behavior.  They started loaning money at interest rates that would have been unpalatable just a few years earlier. This change in behavior effected consumer and corporate willingness to accept debt for two reasons

First - lenders have always been kind of a guard at the door, forcing those with big ideas to pass certain tests before money would be handed out. People who didn’t pass the test didn’t get money. Very similar to a tree keeping fruit on high branches – if you can’t climb or your neck isn’t long enough, no fruit.  Not that our thought process is as simple as a hedgehog’s, but really, should anyone be surprised by how consumers and corporations binged when the institutions that for years had kept debt out of reach started throwing it in the trough?

Second -  consumers and corporations that did not gorge on debt were penalized. Opportunities would go to others, your stock price would falter, you would miss out on tax breaks and real estate deals. In an environment where the risk of having too much debt had been forgotten is it any wonder the herd lined up at the trough?

The elk forgot all about wolves in only a few generations.  A couple of decades. When wolves were first re-introduced, Stolzenburg writes, elks had no fear of wolf smell or howls. The good news is elks learned quickly.  In just a few years the elks re-learned to fear the sound or smell of a wolf, to avoid dangerous areas. And in so doing have allowed biodiversity to regain momentum in the park.

What kind of predator needs to be reintroduced into our financial system? What can prevent overgrazing and encourage diversity that promotes stability in the economic system?  This is probably pushing the analogy too far - but regulators may need to play the part of the wolf protectors.  Any device that works to remove or move risk (the wolf) from the system needs to be regulated fully. Because in the end – if a system claims to be risk free then people and organizations will behave in ways that overburden and break the system in ways that were simply difficult to predict – and introduce a different kind of risk that will control behavior.  Regulators, at the very least, might keep the system open, allowing others to expose risky practice if the regulators are not up to it themselves. (For example – would have been nice to know that AIG’s CDS exposure seemed out of whack with their capital reserves.) This generation appears to be getting the lesson of financial fear reintroduced in the old fashioned, school of hard knocks way – it would be nice if we kept some of the wolves around to keep us on our toes even without a massive recession/depression.

I love books that have nothing to do with business because they so often bring up thoughts that are actually useful in my business life. The economic impact of fear has been studied quite a bit, although the usefulness of that fear probably less so. Fear drives behavior. Perceived fear drives behavior. Lack of fear drives behavior. The large predator concept is interesting because even though a wolf may only kill a few, fear of the wolf affects all. If you get a chance check out Where the Wild Things Were – it prompted quite a few more ideas (and probably will prompt a few more posts) for me.

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I like the idea of open source banking.   Today’s roiling financial markets are creating opportunities for technology and new capital sources to rewrite how money flows.  By pushing for an open source model we could end up with advantages driven by transparency, networking, and robust testing of business models.

So what happens when banks actually bid on your savings account?  Looks like the Dutch are about to find out.  The auction model is being tested by www.sparbod.com (In Dutch, unfortunately, here is a bit more information.) You post how much you are willing to save and banks ‘bid’ on your business.

Granted, this is probably only a marginal improvement over the old ‘Get a Toaster’ approach.  But it does allow for more personalized and aggressive bidding for your business. It continues the attack on geography which still limits a lot of competition for savings. (A twist on the Lending Tree approach to mortgages, a system I always felt was limited by the size of the associate banks in the system).

What this model may do is level the playing field between big national and small regional banks by reducing the cost of identifying and marketing to profitable customers in the industry. In one fell swoop the platform attacks geographic and size limitations. 

As the approach gains hold, non-banks may also be able to get into the mix with clearly stated risk differentials and appropriately higher payouts.

Seems like a step in the right direction.

UPDATES: At end of post

50 years ago one might have been able to make the argument that a huge, national/international bank held significant advantages for its customers.  It could speed the flow of money utilizing internal routes not available to smaller banks. It could network customers and marshal resources. But today, those connections are, or should be, available through other channels.

A bit on language – I’m using the term banking generically to mean any kind of money movement.

So Open Source Banking -

• Company need a loan that’s too big for one bank? – put the word out and a network will form (this already happens with banks-that-are-too-big-to-fail, they just like putting the network together in secret)
• Want your money to be spread around a variety of investments? – put the word out and a network will form (once again, this already happens, but the bank prefers to set up their own difficult to understand compensation deals)
• Want to get a mortgage for your house?  - put the word out and a network will form.  (Lendingtree.com tried this – but I got the impression that the bids were less than open. Proof of concept, yes, but not yet consumer-centric)

I don’t think there is any question that open source banking is on its way.  So many aspects of banking have become such essential aspects of everyday commerce that one wonders if they shouldn’t be handled more like infrastructure and less like financial institutions.  Wouldn’t it be nice if the ATM worked more on the principle of a highway – where access is based on use more than by who owns the concrete? 

How could the creative destruction of open source occur?  First, I think the only reason it hasn’t is due to a lack of real competition in the industry (Most true competition was absorbed to create scale and oligopolies among target consumers).  Second, the current crises will reform how all money institutions due business – how this ends up looking depends on whether the government allows for creative competition or declares top down solutions.  (Forward thinking creative destruction or backward thinking protectionism). One idea that caught my eye was the idea of creating Good Banks (rather than taking all the bad decisions off the hands of the old banks, and put them through government FDIC intervention. Use the bail out money to create new banks with no bad decisions in their history. This way additional capital destruction caused by credit default swaps is limited to the existing institutions and taxpayers don’t look like chumps) 

The comments I like the best concerning how each bank should be judged is: 

“If a company is to big to fail, it is too big to exist.”  
(Quote: Sen. Sanders)

and its corollary:

“The only thing you can count on is that all things fail sooner or later.”  
(Quote: me and anyone who owns a hard drive)

Anti-trust laws were put in place a hundred years ago to protect the economy and country from corporations that had become too strong for the economy’s own good. I’m not one to love government regulation, however, an open source environment might allow for more innovation with less risk and regulation for the overall economy than what will happen if banks are nationalized for years to come.  

Through the Open Source process we can create a banking system that provides the old ‘benefits’ that mega-banks offered while limiting the danger that they have become.

UPDATE: 3/27/09 – Seems this idea might not be just a shot in the wilderness. Here are some new Open Source Banking discussions I’ve just come across:  Introducing the Open Source Hardware Central Bank at the Liquidware Antipasto blog.  

UPDATE 3/27/09 – And an early discussion about the Open Source Bank idea started by Davey Winder at IT Pro Take that to the Open Source bank.

UPDATE 3/27/09 – And regulatory issues that may stymie an open bank by Michel Bauwens at the P2P foundation: Regulatory hurdles for the open source hardware bank?

That’s right, everyone gets to see what you are planning to do.  This takes open to a new level.

Cuban’s stated goal is to create kind of an ‘open stimulus plan’ encouraging not only the start-ups he funds but also competitors that will drive development faster and hopefully create more jobs and opportunities. He makes no promises to fund anybody, however, it is obvious that many believe he will to follow through on his investment idea (1,400 comments to date – many including business ideas). 

This raises the question.  How important are secrets in today’s economy?  

–Intellectual capital leaks even if it meets the test of patentability.

–Relying on ‘always being smarter’ creates problems of scale. 

–Secrets force you to confront customers with NDA’s and sometimes odious contract clauses.

Could your business survive a rather open planning process?  Software vendors have had to deal with the idea of ‘Beta’ releases which confirm what their software will be doing months or sometimes years before they are ready to charge for their product. Would this concept actually strengthen your end product and customer relationships?

Cuban updated his open plan indicating he is moving forward with several companies. So, if one of the ideas he is pursuing is of interest to you – hop on the bandwagon, become a customer, recommend an improvement or … start up a competitor. Whatever you or Cuban do, I think the customer may end up being a winner here.

UPDATE 5/8/09: Daniel Goleman at the HBR Leading Green blog writes about ‘Radical Transparency’ in which consumers are able to find out everything about you (in this case in terms of Green issues) rapidly and easily. His assumption is that radical transparency is here to stay and that organizations better start learning to live with it and compete in that kind of ecosystem.  In relation to Cuban’s open stimulus idea – what would your business plan and marketing plan look like if you knew competitors and customers would see it and understand it in real time?  Kind of changes what you might focus on from a competitive advantage viewpoint, don’t you think?