Pierre Omidyar: Igniting Change

Today we attended the “Delivering Innovation” event held by The Conference of Nonprofit Communities of Hawai`i. While the focus of the event was obviously on nonprofits, the keynote was delivered by Pierre Omidyar, founder of eBay and Hawaii resident, entrepreneur, and philanthropist. Omidyar’s approach to philanthropy takes a decidedly startup angle, and his keynote was both inspiring and thought-provoking given his creative methods.

eBay’s Social Impact

Omidyar began by relating eBay’s fundamental model to his approach to philanthropy: eBay gives people to the tools to build and run their own businesses and follow their passion. In eBay’s early days, Omidyar mentioned how he quickly noticed that his for-profit business was having social impact, such as creating trust between parties that would never meet in person. In today’s world, that’s a given. But in the late ’90s, eBay was the pioneer in internet commerce.

Saying that eBay fundamentally changed the way that the people of the world buy and sell goods is an understatement, and now he’s trying to change philanthropy as well: His philanthropic investments empower people to improve their lives, even though there may be a for-profit mechanism behind that empowerment. So while his organizations do provide grants, they also act in some ways like a traditional venture capitalist by investing in for-profit companies that have social impact.

An Omidyar Network portfolio company, d.light
An Omidyar Network portfolio company, d.light, provides life-changing benefits to their customers through their solar-powered lighting products. (image credit: dlightdesign.com)

Omidyar spoke repeatedly about “social entrepreneurship” and how business has a role in helping to foster social good. One fantastic example of his team’s investments is d.light, a consumer products company that brings safe, reliable lighting to emerging markets – for a profit. And while d.light could undoubtedly make a larger profit by marketing their solar-powered lanterns to camping hipsters in their Land Rovers, they’ve instead decided to impact thousands of lives, create immense social good, and still make a modest profit.

A great local example of Omidyar’s philanthropic approach is the Hawaii Community Foundation’s Innovation Fund, which grants up to $100,000 for “compelling projects that break with conventional ideas and transform the way nonprofits deliver their mission.” While the focus of this program is nonprofits, it’s a fresh way to encourage creativity by giving future leaders a chance to competitively pitch their ideas and concepts, much the way tech startups do at DEMO or TechCrunch Disrupt. It also brings transparency to the process, something that is missing from most grant-based organizations. The Innovation Fund is an entirely new concept in the world of nonprofits, and they’ve already funded five Hawaii nonprofit startups in round one of the program.

Accepting Risk

The concept of risk was also addressed, with a question from the crowd asking for advice to the traditionally risk-averse nonprofit community. “Risk is a part of creating something new,” Omidyar said. He talked about the status quo being the easiest and least-risky path, but that there needs to be more acceptance of failure as a possibility.

We’ve covered Hawaii’s fear of failure culture, and Omidyar offered up the startup/venture capital model, where the “try, fail, learn” approach is the only way to progress.

“You don’t get a breakthrough without risk,” he said. That’s as true for nonprofits as it is for for-profits.

Creating Impact

Omidyar also talked about how the various initiatives he and his wife have started (now consisting of a team of over 250 people, locally and internationally) take a for-profit’s view of success. Where most nonprofits focus on the amount of money raised and given away, Omidyar’s teams measure impact. Overall, he stated that, “Money matters, but impact matters more.”

While not every entrepreneur will build a company that has a huge and direct social impact, it’s refreshing and inspiring to see for-profit companies with a social mission getting an increasing amount of focus. TOMS Shoes comes to mind, as does Starbuck’s ETHOS Water. But with organizations like 1% of Nothing and Hawaii’s own Entrepreneurs Foundation, every startup has the opportunity to build some social impact into their business plan.

If you’re interested in watching the keynote, Civil Beat has posted the video.