Wanted Dead or Alive?Modeling the ‘Walking Dead’ Social Venture

Jennifer Woolley, Santa Clara UniversityNorris Krueger, Entrepreneurship Northwest

these slides: http://goo.gl/cUJ8H

Math problems…

• Social Venture 1: Feeds 100 people a day with an annual budget of $100,000

• Social Venture 2: Feeds 250 people a day with an annual budget of $75,000

• Who do you invest in?• Who do you keep investing in?

And what about beta?

• Social Venture 1: Feeds 100 people a day with an annual budget of $100,000

• Social Venture 2: Feeds anywhere from 50 to 150 people a day with an annual budget of $100,000

Are “Zombies” a Joking Matter?

The back story of this project• “walking dead”/“living dead” from venture

finance• Impact investors?

• But when could a zombie = GOOD thing?• And when do we….

A few questions that we need to ask:

Misallocated resources or misunderstood role?• What causes an organization to become a

‘walking dead’, but not exit or scale? • When do the ‘walking dead’ create value and

if so, how? • Under what circumstances is the status of

‘walking dead preferred?

For Impact Investors & Other Funders• Who should be encouraged? Who should be

discouraged?• What are appropriate metrics?

Deeper Issues• Should we re-allocate resources away from the

‘walking dead’? • When (and how) do we intervene with the

‘revivable’ ‘walking dead’?

Theory of Zombies?

• Who are they? Really…

• How/Where/When do they matter?

• How will we know?

• And perhaps… how to fix them?– Assuming that they need fixing…

Scaling & Investment

• Diagnostics for “failure” to scale?– Want to grow [controllable?]– Know how to grow [fixable?]– External constraints [??]

Scaling usually means higher betaIs that true for social ventures?

Community embeddedness

• Stakeholders –what is their role(s)?• Connectivity -> nonlinearity in returns

• Portfolio theory issues?– For impact investors– AND– For communities?!– Why not apply MPT, etc. here?

• Social Venture 1: Feeds 100 people a day with an annual budget of $100,000

• Social Venture 2: Feeds 500 to 1500 people a day with an annual budget of $1,000,000

• I love gamma but shouldn’t there be two terms? (two alphas, two betas?)

Back to research questions• But are they the right ones?• <more shameless pandering to audience>

Misallocated resources or misunderstood role?• What causes an organization to become a

‘walking dead’, but not exit or scale? • When do the ‘walking dead’ create value and

if so, how? • Under what circumstances is the status of

‘walking dead actually preferable?

For Impact Investors & Other Funders• Who should be encouraged? Who should be

discouraged?• What are appropriate metrics?

Deeper Issues• Should we re-allocate resources away from the

‘walking dead’? • When (and how) do we intervene with the

‘revivable’ ‘walking dead’?

Thanks!

• Want in?• these slides: http://goo.gl/cUJ8H

• Jennifer “Michonne” Woolley– jwoolley (at) scu.edu

• Norris “Shaun” (or “Shaun’s Friend”?) Krueger– @entrep_thinking– Norris.krueger[at]gmail.com