Age of Innocence

The industrialization of health care has had some interesting by-products.

In Arizona, when prestigious St. Luke's hospital was sold to a for-profit
chain, the foundation that formerly supported it was free to become an advocate
for public education on health care issues. Today I went to the St. Luke's
Health Initiatives conference on the implications of an aging population on
healthcare. St. Luke's has studied this issue for a year, and the report, posted
on the web site (http://www.slhi.org), raises more issues than it answers.

Here's some stuff to depress you:

We never think about this, but in the US, one in 6 of us is sixty, and that
proportion is growing every year. By 2025, 20% of the population will be over
65, compared to about 13% today. There will be as many people
over 65 as children under 17. That means 40% of the population will not be
working, but will require government services.

As a society, we are not organized to have older people in the work force. If we
reorganized jobs and provided public transportation, people could be productive
longer, and lower the burden on Medicare and Social Security.

But the elderly can't work forever. By 2030, we will also have doubled the
number of people over 85. The number of people in Arizona who will be over 80
in 2030 will equal the population of Mesa, AZ or Cincinnati, OH (365,000).

Everyone knows that fewer and fewer workers will be paying taxes to support the
young and the old. More elderly will seek expensive care at the end of life, and
Social Security and Medicare will constitute more of an economic burden on
workers in the future unless the real economy grows at a rate equal to or
greater than the increase in the 65+ population.

If it weren�t for the natural increase in the Hispanic population, we�d have no
one to take care of us. As it is, we will probably have to make a choice to fund
either health care or education. And the elderly vote, which doesn't bode well
for education.

We have extended our lives, but raised the costs. In our lifetime,
corporate-sponsored health insurance will be going away. Health insurance will
no longer be provided by corporations in the future, because it is too
expensive.

Ironically, when we preach "active aging," smoking cessation, diet and exercise,
we lower costs in the short term, but raise them eventually. A ten-year increase
in life expectancy produces a ten-fold increase in health
care costs, because as we get older, we get chronic diseases.

The more people we have in the oldest group, the more likely they are to have a
whole set of chronic
diseases and to take medications for them. And prescription drug costs can push
even middle class people into poverty.

The Baby Boomers who are going to face this problem in the next ten years are in
denial. That's because Social Security and Medicare not only support the
elderly, but they really support the middle-aged, middle class who would have to
take care of the elderly with their own money.

Only 18% of Boomers think that an aging population will be a serious problem for
Arizona, although 75% reported some personal anxieties. Boomers are used to
getting health care and having someone else pay for it. Almost 80% of the
Boomers feel optimistic about
growing older.

In 1960, 40% of those 65 and older lived in the home of an adult child. I
remember keeping my grandfather and my Uncle Willie until they died. By 1999,
this number dropped to 4 %. Boomers will have half the number of children to
depend on for support compared to today�s elderly. Put this together with the
current and projected shortage of health care workers and the projected Medicare
and Social Security shortfalls, and we�ve got a problem.

Technological advances could help solve this problem.

Mapping of the genome will lead us to the age of bioengineering. Cloning will
allow for the elimination of Alzheimer�s Disease. Japan already produces drugs
that will eliminate most Alzheimer�s and dementia problems. Osteoporosis is also
about to be cured. Statins are coming on the market that will be customized for
the individual, lowering your cholesterol to just where
you want it. Drugs that eliminate plaque are on the near horizon. Drinkable
computers can monitor cells that are dying and cloning can replace
them.Bi-ventricular synthesizers now can help patients with congestive heart
failure. And most of us have access to self-diagnosis instruments such as blood
sugar tests and blood pressure monitors. The optimistic scenario is about to
occur: technology will save us.

The pessimistic scenario is also about to occur: only some people can afford to
be saved. Although the increase in spending in prescription drugs has decreased
the
spending on hospitals and a dollar of increase in prescriptions leads to a $4
decrease in health care costs,
the need and desire for prescription drugs will
soon overwhelm even the government.

Why? Because the government pays sticker price to the pharmaceutical companies
for those drugs. Pharmaceutical companies have agreed to price controls in
every other part of the world except in America. Here, they won�t even let us
use purchasing cooperatives to negotiate big discounts (as Canada's government
does).

Big Pharma makes a lot of compaign contributions. So isn't campaign finance
reform as fundamental an issue for good health as anything else?

Namaste,

Francine

I just saw the most incredible thing. I saw a meeting of about fifty people come to consensus on a large group of issues in an incredibly short time frame. And it was painless; no one spoke, but everyone was heard.

The group was GAZEL (www.gazel.org), the industry cluster for e-learning. The place was the Advanced Strategy Center at Pinnacle Peak, a place worth visiting even if it didn't have this kickass tool for organizational change. (Pinnacle Peak is a mountain in the desert surrounding Scottsdale, Arizona, near which wealthy people build winter homes and then leave them empty three quarters of the time. It's scenic. That's an understatement.)

GAZEL groupies thought they were coming for lunch and a speech, but Doug Griffen, who runs the Center, sat everybody down at a laptop and began to demo the tools and techniques by asking participants "in your view, what are the critical issues for Arizona in the future?" Everyone began typing his or her own list.

The trouble with Arizona is a topic being widely addressed everywhere from economic development to karaoke bars, without much useful activity. There seem to be so many things wrong with Arizona that no one knows what to do next. In short order, the group came up with about ninety issues.

Using the Strategy Center's Categorizer software, the issues were evaluated and reduced to a common fifteen. People whose issues were not represented on the final fifteen were then asked to contribute them. We wound up with eighteen, from water quality to "Fix the Phoenix Suns."

Then came the Prioritizer piece -- or the vote. Everyone simultaneously assigned a 1-10 value (1= not important, 10=critical) to each of the eighteen.

The Prioritizer ranked the issues. At the end of the process, everyone was asked to comment on the most important issue to him or her personally:What's the most important single issue in Arizona to you, personally? What's the benefit to the community of addressing it? What's the downside of not addressing it?

The result was a position statement on all the important issues.

All right, you've seen facilitated meetings before. But you probably haven't seen a computer-aided meeting quite like this, in which there are no BOPSATs. (Bunches Of People Sitting Around Talking) In the meetings with BOPSATs, the individual's goal is to make his point of view heard; the meeting is about making a good impression. Especially in meetings of community leaders, the BOPSATs don't accomplish anything except 1)ventilating one's particular grievance 2)lobbying for one's particular point of view 3)showing the other people in the room that you are wise and articulate.

In the anonymous, computer-aided meeting, none of this is possible. No one knows who thinks what, except in the individual position statements. But at the end ( probably less than a half hour), everyone knows the feeling of the group.

I want you to focus on the incredible amount of time that could be saved in meetings by people using an automated process like this. I also want you to understand that you don't have to be in the same room with your fellow attendees to use this process, since it can be facilitated over the Internet. (www.advancedstrategycenter.com)

But I know all you really care about is how it ended. So here are the original eighteen issues as presented by the Categorizer:
1. Education access and quality
2. Level of traffic and congestion
3. Overall air quality
4. Fix the Suns!!
5. Lack of HQ corporations based here
6. Increasing crime rate, concern for personal safety
7. Lack of a clear and compelling vision for the State
8. Reduction of open land/space...becoming overdeveloped
9. Lack of effective public transportation system
10. The load that immigration is placing on our services
11. Inability to balance the budget
12. Lack of effective telecom infrastructure
13. Lack of career opportunities/activities for teens
14. Lack of effective public leadership
15. Overall reduction in quality of life
16. Concern over wayer supply
17. Lack of access and affordable health care
18. Bringing together multiple cultures

And here are the results of the Prioritizer (the vote):
Mean
8.37 1. Education access and quality
7.63 2. Concern over water supply
7.47 3. Overall air quality
7.00 4. Lack of HQ corporations based here
6.89 5. Lack of effective public leadership
6.63 6. Lack of access and affordable health care
6.63 7. Level of traffic and congestion
6.53 8. Lack of a clear and compelling vision for the State
6.53 9. Inability to balance the budget
6.21 10. Reduction of open land/space...becoming overdeveloped
6.21 11. Overall reduction in quality of life
6.00 12. Lack of career opportunities/activities for teens
6.00 13. Lack of effective public transportation system
5.79 14. Increasing crime rate, concern for personal safety
5.68 15. Bringing together multiple cultures
5.32 16. Lack of effective telecom infrastructure
5.21 17. The load that immigration is placing on our services
2.37 18. Fix the Suns!!

Notice that this group doesn't care much about public transportation, telecom infrastructure, or the load that immigrants place on our services. But what they really *don't* care about: the Phoenix Suns.

Namaste,

Francine

Every community has human and social issues in addition to business issues.
Although most of us are buried in our businesses, the impact of the social
issues is always felt: the legislature will always take away economic
development incentives and programs to fund new jails, for example.

In my spare time, I'm on the boards of several not-for-profit organizations,
including Social Venture Partners Arizona. This is a group dedicated to venture
philanthropy: doing more than just writing a check. SVPAZ has an investment
committee that makes investments in not-for-profits and then goes in and helps
them with their business models, technology needs, marketing issues, and
anything else they need to be more effective.

Unfortunately, Social Venture Partners only funds half a dozen organizations a year, and according to
very strict guidelines(Children's issues and education issues). All the other not-for-profits are out there hanging by their thumbs. And many communities across the nation don't even have an organization like Social Venture Partners. Most major foundations just go through a grant cycle, read a lot of applications, write a check and hope for the best.

This week, I've been thinking that it is time for an incubator or a CEO/Founder's Roundtable for not-for-profits. After all, in the for-profit arena, founders and CEOs receive coaching on how to perform effectively to accomplish a mission.
They are taught how to present to investors, how to build a team, how to keep the books. Some entrepreneurs have MBAs (although recent research has shown that the MBA is a poor predictor of success as a CEO.) If they don't learn, they are replaced by more professional CEOs who accompany funds into the company. The founders are bought out, shoved out, promoted, demoted, and otherwise gotten out of the way.

For the past three years, Stealthmode Partners has been the life support system for many entrepreneurs. Although it hasn't been easy, we've been able to keep
many of them alive (if not well) and slowly working toward their goals. It's been a form of group therapy from which we have all become stronger.

Could Stealthmode Partners bring the same skill sets to Executive Directors that it brings to the for-profit community: help them set up the *business* end of
the organization so it contributes to the charitable mission, rather than
detracting from it? Large not-for-profits often receive management consulting
help, either through their boards or through fee-for-service. Smaller ones are left in the cold.

Our idea, which I'm exposing here because I'm looking for feedback, is to form groups of about ten executive directors who would meet with us on a monthly
basis, share their issues with each other and us, and receive the benefit of our large network of community resources. To make this affordable for the EDs, some
of it could be underwritten by foundation grants (although I've been advised that the not-for-profits should have to pay part of the cost so they will take it seriously). (Perhaps a university would be interested in running this as an executive program in "Social Entrepreneurship" and giving the attendees in our groups credit for their participation.)

I started this conversation earlier in the week with an employee of our local community foundation. She told me that many of the not-for-profits they funded would not be "ready" for such change. I told her in response that it was the responsibility of the funding sources to *make* them ready. When a venture capitalist invests in a start-up, he/she often comes with a new CEO in tow. To
get the money, the company must accept the CEO.

A founder of a not-for-profit who is not ready to accept a new business model is like the founder of a technology company who develops the product and then is
asked to step aside when the money comes in. It's strange that we require so much proficiency and training from our corporate professionals, and not from our not-for-profit leaders. After all, business is just business, but many not-for-profits deal with life or death issues.

If we're not in a position to run companies inefficiently, we certainly cannot afford to run charities that way.

Namaste,

Francine

Tonight I give a speech at the Sedona Conference called "Fostering Creativity in a Digital Media Age." How appropriate that this marks the the day I write the 174th of my weekly e-zines to my friends and colleagues.
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For over three years I have sat down at the computer every week and let go a piece of my mind. The audience has grown to over five hundred people, in the US, India, Pakistan, London, New Zealand, and Canada. (Looks like it's skewed heavily to the former British Empire!) I write about what interests me, which is usually the place where technology and humanity intersect.

This place where technology and humanity intersect is very special to me, because it's my means of creative expression. It's not that I didn't know how to write before the Internet was around -- it's that there was no one to write to, or for. No way to reach the audience without a publisher.

The Internet lets us all find our audience. Whether we're a garage band, a porno site, a medical information purveyor, or a short filmmaker, we now can be seen and heard. What's more, we can get in a dialogue with our audience. This was nearly impossible previously.

Every once in a while, I catch the Diane Reem show on NPR. Often, she has authors on the show, and callers call in to speak to the authors. What's the first thing the callers say to the authors when they get on the air: "I'm so thrilled to be able to talk to you, because I read your book..." and it continues from there.

I feel like I'm writing a very long, interactive book with my friends, relatives, and business associates. Perhaps I'm journaling, blogging, or storytelling. Clearly, I'm being creative -- more creative than I have ever before had the chance to be.

The offshoot of this creativity of mine is something even more important: an online community. My interactive e-zine has created a community of people who have something in common: me.

This community has great potential. A marketer would say it could be "monetized," that is, someone could come in and sell the community something we already know it is interested in. New digital gadgets, perhaps, or golden retriever puppies. Or certain movies.

But it's greatest potential is in its power to educate me. A few weeks ago, I wrote that New Zealand had been settled by convicts. I got about half a dozen responses telling me that I was wrong -- it was Australia that got the convicts. Last week I got a really interesting piece on the current middle East situation viewed by Pakistanis.

The power of online communities to educate their members has been shown again and again. I'm a member of many online communities, and the most typical post to them goes something like this: "I've never used a (insert the technology tool) before, and I'm having trouble getting it to (insert verb)." The answer is usually "If you just take the (noun) and (verb), it will work."

Those are the technology communities. There are other learning communities that are not as amusing: "I've just been diagnosed with spinal degeneration and prescribed a spinal fusion. Has anyone on this list had one? Can you tell me about it?" And the answer goes something like this: "I've had three back surgeries and none of them helped. I awoke with more pain than I had before. I've discovered that only strengthening your abs really works." It will take the medical community years to do and publish the research on this, but the common man already knows it.

I've simplified the examples, but you know what I mean. More actual learning goes on in these online communities than in any classroom. More knowledge is transmitted, more culture created and preserved. Creativity does not have to be fostered in a digital age -- it just needs to be unleashed.

Namaste,

Francine

Ghandi said "Be the change you would like to see happen." Because my business is so wound up in technology, I am always talking to people who assume that changing human behavior, which is *really* what introducing new technology is about, can be accomplished quickly. In fact, if there is one reason technology companies don't succeed, it's because they assume the market for their new products will grow much more quickly than it does.
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Next to me at the dinner table last night (fundraiser for the Arizona Science Center at which the speakers discussed fuel cell technology) was a very good-looking man. Never one to ignore one of *those*, I engaged him in conversation. I found out that he had sold his company two years before, and come to live in Arizona full time.

He had invented, patented, and developed the lint roller, the little plastic roller with the tape on it that we all use before we leave the house if we have pets.

The lint roller, he explained to me, replaced a previous technology, the whisk broom (do you remember them?) It is now in use throughout the world. He invented it when he was just out of electrical engineering school, and decided to form a company to take it to market when he was pretty young.

How long did he own the company? Forty-four years. How old was he? Eighty-one. He never dreamed it would take him that long to replace the simple whisk broom with the simpler lint roller. Not that it wasn't fun along the way, but it turned out to be a life's work.

Unfortunately, he didn't fall in love with me at first site, and he went home before the end of the incredibly serious panel discussion featuring the head of the American Hydrogen Association, an energy engineer, a woman from BP Amoco, a man from Daimler Chrysler, and the host of NPR's Science Friday, Ira Flatow. (How could the planners of this event think that after two glasses of wine, chicken saltimbocca and chocolate cake, anyone would be up for this?)

Forced to give my attention back to the podium, I caught Ira Flatow making one interesting point: the fuel cell, which relies on hydrogen, a cheap source of energy, has been around since 1839. Nope, not 1939. 1839. The lint roller moved into consumer preferences about four times as fast as a fuel cell.

And, my new friend told me, the lint roller didn't really catch on until the proliferation of pets in the United States. (How many of you have more than one pet? How long ago did that happen?)

The fuel cell has some compelling value propositions: it saves natural resources, it cuts down on pollution, it produces inexpensive energy, it could end our dependence on foreign oil.

The lint roller cleans my sweater.

Yes, the Internet has come into our lives faster than the lint roller or the fuel cell. Yes, the pace of change is increasing. Yes, cell phones have been adopted relatively quickly (I had one of the first, in 1980).

But people are not as interested in changing as you think. This week, I met a very cool serial entrepreneur who spent most of our first meeting railing against how "you techies" assume that everyone knows how to use email and the Internet, and how "you techies" (in this case meaning early adopters I suppose, since my degrees are in literature)think everyone cares. A loveable Luddite, he spends his free time working on hot rods.

But he spent our second meeting telling me that *his* product, were I to help him develop it, would be used by EVERYBODY immediately.

But you, Mr. Entrepreneur, (women entrepreneurs are usually more patient, so this is addressed to men) are not going to put a new device into the market in three years, or even five. If you are fortunate, you can get it developed in that time, and you can assemble the team to take it to market.

But if it's going to make a lasting change in people's habits, it will probably take forty-four years.

Namaste,

Francine

In a queer twist of fate, I've been selected as an Eller Center Entrepreneurial Fellow at the University of Arizona. (My business partner calls me an "Eller Feller.")This honor allows me to mentor students who want to start their own businesses. Yesterday I went to Tucson to see the finals of the Center's student business plan competition and to be introduced as a Fellow.
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ANNOYING AD: I WILL
STOP INSERTING THIS AD WHEN I HAVE ENOUGH SUBSCRIBERS!

I recently attended PC Forum. I'm doing a special edition of "The Outside
World," Stealthmode's e-zine for the entrepreneurial value chain, about what the
technology market trends look like from the inside. In fact, I may do several
editions, since so much was discussed. Sign up now at
http://www.acteva.com/go/outsideworld and you will get this edition with your
annual subscription.
-----------------------------------------------------------
The message about my selection happened to arrive when I was in New Zealand, and the Eller Center people couldn't understand why I didn't respond to their request for a bio to include in the advance materials for the ceremony. I must have been the least timely Fellow they've ever had.

But when I finally checked my voicemail and snail mail and found out I had been selected, I was really excited. After all, not only did I begin my career teaching college students, but I consort with entrepreneurs all day long, and I wanted to see if there was any difference between the crazies I see on a daily basis and people who go through an entrepreneurship program in a highly rated business school.

In addition, Karl and Stevie Eller are long-time friends of mine, and although they were as surprised as I was by the selecton committee's choices, they were enthusiastic and supportive as I received my award.

So I sat through the finals of the Business Plan Competition, listening to the ideas and the presentations of both graduates and undergrads. Among the finalists were a mortarless block company, a proposal to build USA-style truck stops at border crossings in Mexico, an all-natural pasta sauce company, and a social venture, Casas sin Fronteras, to build affordable housing in Mexico.

The judges were all experienced businesspeople, from Karl Eller himself to Anne Mariucci, who runs the Del Webb division of Pulte Homes. As the students got up and made their presentations for funding, I was struck by their professionalism. Clearly, they are well-trained by the program in making those Powerpoints and speaking about their competition, their marketing strategies, and the experience of their teams. As finalists doing student projects, they were far better prepared than most of the "real" entrepreneurs looking for "real" money.

But there were some down sides.

Sadly, all the women entrepreneurial teams wore matching suits, which made them look like flight attendants. (I'll give them a little mentoring on this subject next year :-)) Yes, I know in the Internet era all the entrepreneurial teams wore matching logo'ed golf shirts, but that's really over.

More disappointing the business ideas that reached the finals were not high tech; they were largely improvements on existing concepts. The background of the student presenters was *business*, rather than innovation, and I missed the piece about revolutionizing the world of telecommunications or bioscience or information technology that I am used to hearing from Stealthmode clients. Here, as at ASU, there seems to be a disconnect between the engineering school and the business school.

Last, it seemed as though the students had come to the program with ideas they wanted to take back to their home towns -- largely outside of Arizona. Not one of the presentations I saw (I didn't see all of them, however), planned to start a business in Arizona.

What was really cool was the skill sets these students have developed in running a business -- understanding the financial models and presenting how they will make money.

WHat was even more exciting was that Anne Mariucci told me that she could help the women who wanted to build affordable housing in Mexico achieve their dream, since Pulte Homes is the biggest builder in Mexico. With Anne as a strategic partner, that project will surely come to fruition.

And that's how the world of entrepreneurship works: someone with an idea presents it to someone with resources, and as a team they make it happen.

The Eller School's program is a model of how to draw the community into the university, too; there are now more than sixty Fellows who offer their expertise to the program by reading business plans, judging competitions, speaking to classes, and mentoring students. I can�t wait to be one of them.

Namaste,

Francine