THE BLOG
01/23/2012 09:39 am ET | Updated Mar 24, 2012

The Intersection of Business Innovation and Social Change: An Interview with Randy Haykin

Randy Haykin has a rich history as an entrepreneur, angel investor and venture capitalist, having contributed to the success of notable companies such as Yahoo!, Viacom, Paramount, BBN, IBM and Apple. Haykin is the Co-Founder and Managing Director of Outlook Ventures, a firm that actively invests in growth-stage industry-transforming technology companies on the West Coast, as well as faculty at the University of California, Berkeley Haas School of Business and visiting faculty of the University of Cambridge Judge School of Business.

Recently, Haykin turned his attention to the social venture industry with his new companies, The Gratitude Fund and The Intersection Event, a day-long event on innovation and its effect on the major social issues of our time held at Pixar Animation Studios on Jan. 14. I recently had the opportunity to interview Haykin on his experience in business innovation and newly-discovered dedication to its intersection with social good.

[GANO] How would you characterize the intersection of business innovation and social change, and the emergence of social enterprise as a widely studied, taught, and advancing discipline?

[HAYKIN] A great question because this idea of holding an event called "Intersection" seems to be hitting a chord with a lot of people -- they recognize that business innovation and social change are related...but how? As a serial entrepreneur, teacher and mentor to start-ups over the years, I've seen hundreds of examples of business innovation -- in both large and small/start-up companies. In the past, much of this innovation has been targeted to making better, faster, cheaper products and services. More products, more companies, more investments equals more money. Unfortunately, in the past, innovation has not been focused on a better lifestyle, improved standard of living, healthy environment or a safe world for billions of people who live below the poverty line around the world.

As a professor working with many of tomorrow's future leaders at UC Berkeley and University of Cambridge, I noticed a change in the past five years. Many students no longer just ask, "How can I make more money." Increasingly, they are beginning to ask, "How can I make the greatest impact?"

Meanwhile, environmental concerns and poverty has caused many global corporations to focus on "CSR" (Corporate Social Responsibility) and take responsibility for things beyond profits, such as community, environment and education. That means the focus both at a university and a corporate level has shifted. We will see a swing in global consciousness as a new set of social entrepreneurs use innovation to affect positive social change. The swing in consciousness is the intersection between innovation and social change. The new consciousness says, "How can I use new innovative models, products, practices and thinking to impact those issues that are our greatest enemies as human beings?"

With all the changes going, it is easy to observe examples of the intersection of innovation and social change in all walks of life. Examples of this are already in play: innovations in social media affect political balance (think Egypt, Syria and the IAVA); innovations in technology affect biotech, agriculture, food and oil production (think Water.org or Solayzme) ; innovations in business models affect the ways that goods and services from Africa, India and Latin America can be brought to the rest of the world (think Kiva.org or World of Good) and there is so much more that it's dizzying to keep up with it each week.

[GANO] How will social innovation and social enterprise shape the next decade of international development?

[HAYKIN] We are already seeing signs of this. The first wave was the outsourcing of labor among countries in the 1980s. In the 1990s we began to see that the world was interconnected financially and via the Internet. We've transformed in the first decade of this century to a truly global economy -- one in which companies do create and sell their products on a global scale and, unfortunately, one in which a "sneeze" in Greece affects the entire global financial scene. Today we are seeing that the effects of the Internet, communication technologies and social media are transforming the way teams, companies, countries and continents related to one another. We are living in a time where there is the potential for rapid social change unlike any other in history.

Against this backdrop, innovation has the potential to shape the future of most of the major social issues of our time. Take global health, for example. Using innovative technologies and techniques, the Gates Foundation has been able to nearly eradicate disease by focusing on a multi-national and holistic solutions. The same is true in education. The old collegiate system of the past is about to crumble in the next 10 years and university "brands" are likely to give way to new, nimble ways of educating people -- it's the experience that the university provides which will be valued, rather than the diploma or brand. The same will be the case for poverty issues, environmental concerns and energy consumption.

[GANO] What role do you envision The Intersection Event playing in that development?

[HAYKIN] The Intersection Event is developed by The Gratitude Network as a means of bringing together innovative thinkers from a variety of fields who have an interest in making a difference. The Gratitude Network was designed to fund social entrepreneurs who have revolutionary ideas that can have local, regional or national impact on social issues.

The Intersection is a unique way to bring together thought leaders from a variety of fields and draw out the intersections in thinking that are most likely to lead to new discoveries, ways of thinking, relationships and connections. We've designed this inaugural event to cover a variety of topics from personal innovation to team creativity to entrepreneurial innovation and then look at ways in which each of these areas impacts social change.

[GANO] What do you now know, that you didn't know when you first began your venture capital endeavors?

[HAYKIN] I used to think "creativity" meant Picasso. What I now know is that some of the most creative energy on the planet is bundled up in the minds of our founders, entrepreneurs and young leaders. Entrepreneurial spirit has positively affected the US economy dramatically in the past 40 years, and I think it will drive economies in the future. Those parts of the world that apply new rules of how to intersect with these entrepreneurs, by providing the best environment for them to operate out of, will be the long-term growth economies of the 21st century.

[GANO] What have been some of the milestone achievements of the intersection of business innovation and social change?

[HAYKIN] In the last few centuries, major technological inventions -the birth of automotive and aviation industries, the invention of the telephone, the discovery of DNA - have played a role in social change. But these inventions were not driven by a desire for social change. They produced a social outcome as a bi-product. They were mostly inspired by scientific achievement, discovery or profit motive.

We can look at milestones in terms of technology, applications of this technology or ways in which the applications were enabled by a system of funding. The system of funding intrigues me as a former VC the most.

The old method of appropriation was public funding. But in the US today, it is clear that this is no longer working. We cannot solve our present social issues in this country or elsewhere around the world through the use of public funds or government agencies. Bi-partisan issues now bog down any progress we can conceive of.

To me, new forms of innovative funding are the things that drive. Following is a list of financial innovations we've seen in the past 40 years in the area of social change:

1976- Grameen Bank & Opportunity International founded (Bangladesh, Columbia)
1981 - Ashoka founded by Bill Drayton
2001 - Acumen Fund founded by Jacqueline Norquist
2004 - Facebook founded by Mark Zuckerberg
2005 - Kiva.org founded by Matt Flannery & Jessica Jackley

[GANO] If The Intersection Event rests upon one core philosophy, what would that be?

That philosophy is this: some of the greatest inventions the world has seen were developed incrementally as one person built on another's ideas - sometimes transcending decades or even centuries between them. What makes for a real innovation is that someone takes a previous idea and juxtapositions it in new light, or with a new twist, or in a new context. That means finding the intersection between the original observation or thought and the new environment or situation. The most fertile areas for innovation - and the most new ideas - are likely to occur at the intersection of several great minds.