Enterprise Excellence 3

Here we interview people whose work has relevance to the vision and aims of Transforming Business.

The views of the interviewees are theirs alone - they do not necessarily reflect the thinking of Transforming Business.

Back Page Interview

On the boundary between commercial and social entrepreneurship. An interview with IT tycoon Dr Peter Dawe, OBE.

How did you come to be an entrepreneur?
When I was eighteen years old I decided I wanted to do something to change the world. So I worked in local government for seven years. I planned to go for elected office, probably as Councillor. But I gradually came to realize that local politics, including most Members of Parliament, had been taken over by central government. It was a situation without much scope for innovation.

So I decided that, to have real impact, I had to become a person of independent means. It was still the early days of the internet. But I got a vision of what the internet could do. So I founded Unipalm, which later became Pipex, to sell internet software.

Did this give you the freedom to innovate you longed for?
It certainly did. I was instrumental in a number of key decisions that determined the future course of the Internet. Often the things I did departed from standard business orthodoxy. I deliberately set up competitors, for example. Rather than seeking to maintain a monopoly, I thought a diverse market would be a more effective way to realize the vision I had of the Internet's potential. Up to this point, communication and information technology (CIT) was based on closed networks. I wanted to open up these networks by linking them with each other.

What is the secret to becoming a successful entrepreneur?
I think it is the gift of being able to see things from a different point of view. It is a question of perception, rather than of mechanics and metrics. You need to see things other people don't see.

Someone once asked me how to set up a business. I said I didn't know. It's the same as sculpting an elephant out of a piece of stone. You chip away all that doesn't look like an elephant! It's like asking 'how do I get to London?' At one level, the answer is obvious: you just start walking (though after a while, you could get on a bus or a train)!

In other words, you need to set out. Once you're on your way, you need to meet the challenges as they come. It can't be learned from books.

There are, of course, some things that cannot be left out. You need to decide which sector, conduct research and development on the product and on the market, and devise an exit strategy. That last component – devising an exit strategy – is really important. You can have great success with a product or service. But if the market collapses, you need to know how to exit it, otherwise you may as well never have had the success in the first place.

You are known internationally as a commercially successful CIT tycoon. But in and around Cambridge you are also known for being a social entrepreneur.
Having lived in Cambridge for twenty years, I realized that the quality of life was gradually going downhill. The roads were getting increasingly congested and when you made it to the city centre in your car, there was nowhere to park. The County Council was working on a strategic plan but nothing was coming of it. There was great inertia and no concrete plans were forthcoming. So, with the local newspaper, the Cambridge News, I orchestrated a 'Cambridge is full' campaign.

What did you want to achieve?
Well, after the County Council came up with its options to improve the quality of life in Cambridge, I came up with a third option - to build a new town in the Cambridge area. I did a lot of research and decided we needed not a village but a town that could accommodate around 50,000 people. I focused the proposal on a disused airfield in the outlying village of Oakington because I decided you couldn't argue for a new town unless you could suggest a viable site for it. It had to be a concrete proposal. And I thought the advantage of an airfield is that the land belongs to the government. Otherwise tax payers could object that their money was going into the pockets of a private land owner. I am thrilled that plans for the new town have been approved – there will be a new town as a result of my efforts!

I understand you are also involved in tackling homelessness.
Yes, I seek to work on behalf of the homeless, particularly young men. Again, I did thorough research. The conclusion I drew from it was that the state welfare system was perverse. Although it could provide safety nets, it could not provide any ladders for the young men to escape their situation. Or perhaps I should say that the ladders missed certain rungs, especially towards the top. The men were not getting any adequate preparation for life beyond welfare. They needed not just of a roof over the heads but a place they could call home and a job.

So what did you do?
I designed a project to take young men who are socially stable - not totally erratic in their behaviour - and give them a job and a home. I admit I was motivated in part by wanting to demonstrate to 'the powers that be' how to run a development programme. I was determined to show that these men could, in time, move on to a 'proper job'. They work thirty seven hours per week, over five days, making ceramic tiles for bathrooms and kitchen.

Well, it all went so smoothly that I opened another project, called the Bridge Project. I have failed to change public policy. But that's because of the system of welfare benefits. For every £1 you earn, the government claws back 70p. I tried to change this. But the civil servant and government minister with responsibilities in this area both changed, so we couldn't make headway. I then founded the Pivot initiative, in collaboration with Centre Point, the homeless charity.

You seem to be attracted to difficult problems most other people accept, ignore or give up on. And in tackling them you change the rules of the game.
It's about imagining solutions, rather than only seeing the problems. It's about seeing things other people don't see. Let me give you another example. I discovered that cost of a phone call from from London to New York was a tenth of a call from London to Paris. I thought 'This is ridiculous - the telecom companies are operating a cartel, raking in massive profits, and the government isn't prepared to stand up to them.'

I decided that someone needed to enter the market to break up the cartel. So I laid a fibre cable between UK, Belgium and Holland. I didn't have any customers for the bandwidth but that was beside the point. The point was to break up the cartel. Instead of selling bandwidth, I merely sold the fibre. People were free to put whatever hardware they chose on the end. Well, the plan worked – I destroyed the cartel!

The result was that something costing £100 at the start of the month cost only £1 by the end. In effect, I had abolished a kind of 'tax' on communication. It was because this tax was holding back social development, that I was so determined to bring it to an end. The means of doing so was profit. But the motive was social. That's what's key to social enterprise.

Do you still have a vision for changing society for the better through CIT?
Definitely. I have devised a little green box called a BabelTV that is designed to end the disenfranchisement of people from digital media. Women tend to use CIT in the home a lot less than men and children. So I've devised something to go in the kitchen, as that's still where women spend a lot of their time. And I've founded a company to make it called Dawevision. My hope is that I'll be able to set up a version of Dawevision in Africa. There the 'digital divide' is even greater, so it could have significant potential in terms of tackling poverty.

Your vision for social enterprise isn't restricted to the UK. You are also involved in developing countries. How did that come about?
BabelTV has great potential in developing countries, partly because it uses very little electricity. It all came about because five years ago I attended a dinner at St Edmund's College in Cambridge, where I'm a fellow. There I met Fr Frank Carey, who had worked in Africa. Frank challenged me by asking what I was prepared to do for Africa. I said Africa was too far away and the problems were too big. Frank said that's what everyone says, and so nothing gets done.

Soon afterwards, I read in the Cambridge News about Nadia Bowes, a young woman nurse who had worked in Mozambique. She was angry that those who ran her sending agency rarely ventured outside phone contact in their efforts to help people in developing countries. She had a vision for teaching poor people the basics of horticulture. So she helped them to use green compost, shade houses etc so they could grow a wider range of crops than just casava and maize. She did this in several villages, and with my financial assistance even built a model farm to do the training more effectively

I decided to support this work and a few years ago I went to see it for myself. I used the trip to try to discover what the key issues are of rural and urban Africa. I concluded from what I saw that aid agencies tend to base their projects on projected western values, rather than local values. This means their efforts are beset with unintended consequences.

What kind of unintended consequences?
A classic example is the relationship between child mortality and population growth. As child mortality improves, population growth can reasonably be expected to slow - because life chances are so much greater, people will decide to have less children. But in actual fact, population increases with falling child mortality. This is because it takes at least three generations to learn that you don't need so many children if your children have better chances of survival.

Another example is the policy adopted by aid agencies to channel money to women. They do so because women are more likely to spend it on food, education and healthcare for their children than men, who tend to spend money on themselves. In doing so, the agencies unwittingly reinforce the view that all the men are responsible for is impregnating the women! Thus the lack of accountability amongst the men is perpetuated. A lot of charities are boasting about helping women. But whether it is doing any systemic good is another matter.

Surely the key to Africa's development is securing an environment in which entrepreneurship can flourish?
You're right. And because so many parts of Africa lack these conditions, there is far less entrepreneurship than there should be. This is especially true of the rural areas, where the people are often quite conservative.

That is why, on a visit to rural Mozambique, I came up with several inventions during my stay. One was iron canoes. The people were using dug-out canoes. The result was deforestation. But there was a good supply of cheap corrugated iron, which had been imported for building houses. I worked out how to make canoes out of it. Four sheets nailed together, with some corking to help it to float.

A second invention I came up with was a rope ferry. Four miles from the coast, an island served as an entrepot. The direction of the prevailing winds meant that sailing boats could not be used to transport goods. But the boats the people were using had outboard motors, which are appallingly inefficient. So I suggested we buy a four mile
rope and use it for a rope ferry. It was a very simple invention but extremely effective.

The third of my inventions was a solar powered pump. Working out a design was a challenge. It had to cost almost nothing. And it had to be made of local material. If it went wrong, it had to be serviceable locally. I designed valves that could be made from a bit of old car tyre and pipes that could be replaced with bamboo. But when I got back home, I discovered that someone in Cambridge had already designed and patented one. I was delighted, even though it meant that my pump design wasn't needed!

My fourth and final solution was man-day money. If a community wants a communal asset like a well, they have no capital to dig one. There is no effective taxation system. I suggested that the community estimates how long it would take to dig a well. Then it issues man-day money to everyone who works on digging the well. When the well is finished it exacts a tax on the whole community that recovers the man-day money. The money collected can only be used to pay the well tax. In this way, the money doesn't 'leak' from the community. It's a simple idea, but development agencies don't get it.

You are evidently a habitual entrepreneur - creativity and innovation seem as if they're second nature to you.
A lot of the time I'm simply addressing market failures in order to make life better for people. Changing the world is great fun. What else is there in life that is more fulfilling?

Where does your desire to change the world come from?
It's a tragedy, but I have no faith. It's not just that I don't believe in God. I also don't believe in human beings. We will all end up as an amorphous mess. And eventually the human race will become extinct.

There's so much wrong with the world. I get depressed when I think about it too much. I mean that literally – I really have been depressed. Some of it has been work-related stress. But much of it was because I was fretting about the meaning of life. When you come to the conclusion, as I do, that life is pointless, the big picture is very bleak.

On the other hand, there's so much we can do to make the world a better place, and a happier place. In fact, it was the concept of happiness that brought me out of the depression.

So values are important to you?
Oh definitely. I think these have a lot to do with my upbringing. Although my parents weren't religious, they had a strong sense of values.

I have three bits of personal philosophy I try to live by.

First, if you'll pardon the expression, don't piss in the carriage. We're all on a journey, be it to heaven, hell or oblivion. But on the journey don't mess things up.

Second, be happy and be good. At St Edmunds College I talked to someone who was trying to correlate economic measures with well being. But he was finding that people in Brazil were happier than they should be, given their economic circumstances! I said he should forget the economic theories and go and find out what makes them happy at less cost! It's the experience - not the theories - of happiness that matter. In addressing market failures, my aim is to do good by making people happy.

Third, think of life as a picture. And think of a line that goes from when we're born to when we die. Above the line are people who've had a positive influence on the people around them. Below the line are people who've had the opposite influence.

These three beliefs suggest you may have some concept of eternal life?
Absolutely! Eternal life is possible through the things that we do, because they affect life beyond death. Being the founder of a new town is one of the bits of me that is near immortal.

The Internet would have happened without me, but it would have been different. With other things, I've contributed to change, rather than being the key driver of change. You can't always claim the credit for your innovations, because you don't know how things would have worked out without them.

Mind you, I admit to craving public recognition. As the new town was originally my idea and initiative, it would be nice if a statue of me was erected in the new town, once it's been built. The town won't be named after me – it will be called Northstowe. That's partly because I ducked out of the whole scheme when I succeeded in winning the argument for it to be built. A lot of entrepreneurs hold on to their initiatives longer than they should. They should back out sooner and move on to other things.

The philosophers have enjoyed the most life after death. Religious leaders have also done well. Jesus has already had two thousand extra years of life. But the Platos and Aristotles - and maybe Sartres - of this world are as close to immortality as you are likely to get.

Can you give me an example of an innovation you are working on at the moment which you hope will make the world a better place?
A short while ago I met a person from Microsoft. He told me that the company was considering imposing a stamp on emails. This is because of the low signal to noise ratio. Noise is what you don't need to know – the overabundance of information we're all suffering from. We're getting too many emails, everyone is copying us in, and we're bombarded by spam.

A stamp would act as a brake on unwanted emails and spam, because people would think twice before clicking 'send'. Microsoft developed the software. But the government quashed it because they thought it would be politically damaging.

I'm now suggesting to Microsoft that they introduce the stamp but that it should be a charitable donation. I'm pretty confident my suggestion will get through to Bill Gates. But whether or not it is ever enacted we'll have to see.

Another innovation is the use of straw on farms. Straw is quite a good bio-fuel. But it is expensive to transport. However, if you could simplify the handling of the straw from the combine harvester to the processing plant, it can be made profitable. There is a plant in the Fens that converts straw into fuel. But the straw gets handled six times, meaning high costs. If the government was to withdraw its subsidy, the plant would have to close. So I'm working on a way of turning straw into energy that only uses one handling of the straw.

I understand you are one of the founders of the Cambridge Network, a group made up largely of entrepreneurs that brings together leaders in local commerce, civic society and the university.
Yes, that's right. The Cambridge Network is a great example of social capital at work. It was built by just seven people. People often say 'why is Cambridge such a great place to do business?' One of the reasons is because of the Cambridge Network.

But there's nothing inevitable about the Network – it has had to work hard to get the support it enjoys from such a wide range of local leaders. In other cities, like Manchester, the various sectors don't get together to any comparable degree. Business leaders in many places have a 'my business is none of their business' attitude to other firms in the same sector.

What Cambridge businesses model can be found in other spheres of Cambridge life. Take the homeless charities in Cambridge, for instance. They talk to each other. This is unusual and it makes Cambridge stand out in the field of work with homeless people.

The stakeholders in Ely [an historic town close to Cambridge] don't talk to each other. That's why I'm trying to set up an Ely Network, which will bring them together. But it's important not to use the wrong model. The Cambridge Network's secret of success is the board. The board decided that any Network member could present an idea to the board but they had to be prepared to put it into effect themselves, rather than expect others to do it for them.

I suggested, for instance, that the Cambridge Network should hold small interactive groups of around fifty people. Up until then, all the events were large lecture hall events. So I got the task of arranging these smaller groups. I also organized special interest groups, mainly for the second tier of management.

What would you say to someone who said: 'It's all very well that multi-millionaire social entrepreneurs and philanthropists are able to tell the world about all the good they are doing. But most people don't have the means to draw attention to the good they do – they just get on with it quietly?
That's a tough one. But I'd want to talk about Nadia Bowes, the nursing auxillary in her twenties I mentioned aearlier in this interview. She walked into Africa and is now transforming lives.

My whole purpose in making money has been to do good. In fact, in founding a number of my businesses, my express purpose has been to do good, rather than to make money. I often say, in jest, that these businesses are not-for-profit - they're not yet profitable and maybe won't be!

I see doing good and making profit as independent of each other. You can make money or loose money by doing good. And you can make money or lose money by doing bad.

Am I right in thinking you're an individualist and a non-conformist in your efforts to change the world?
Yes, I think you're right. I discovered that it's much easier to be an innovator as a free agent. My experience of government bureaucracy and of company management have convinced me of this.

I admit that my choice of social concerns to support is pretty random. In that sense perhaps I'm an individualist. But the flip side is that I'm forever starting organizations, and my motive is to change society. On average, I start a new organization every three months. I'm already the founder or co-founder of over sixty organizations. So if I am an individualist, I'm certainly no isolationist. You cannot achieve commercial success or social change on your own.