Connie French

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Seeker Spotlight: 60° Pharmaceuticals

Posted by Connie French on Apr 26, 2012 12:44:18 PM

We recently worked with an organization that defines the lean, entrepreneurial startup model - 60° Pharmaceuticals. 60° Pharmaceuticals, run by Geoff Dow and a small team of  advisors, is trying to change the model of drug development for neglected diseases - using crowdsourcing to build virtual teams for specific research projects.  He then plans to invest a portion of the profits from drug sales into further disease research.  He calls it the "Philanthropic-for-Profit" model.  We asked Geoff to talk to us about his organization and his first Challenge, seeking a team to identify an early lead compound for the treatment of dengue fever.

Hi Geoff - thanks for talking with us today.  You call 60° Pharmaceuticals  a “Philanthropic for Profit” company.  Can you explain what that means?

Hi and thanks for the opportunity to share our plans with the Solver community.

I personally believe that the goals of rewarding investors willing to take risks and achieving an important social objective are not mutually exclusive.  I also think there is no fundamental reason that social missions should only be undertaken by 501cs.

From a practical standpoint it means that the company is structured in such a manner that it is feasible to seek a margin that is in line with community expectations given the kinds of diseases we are targeting. There will also be reinvestment of revenue into new neglected disease R+D. I perceive a great desire in the community for drug and vaccine makers to be more transparent about R+D costs and expectations regarding margins. We are thinking these issues through very carefully.

60° Pharmaceuticals has an interesting business model – with very few employees and a heavy reliance on open innovation and incentives to build virtual teams.  What drew you to this model and how has it worked so far?

That’s an interesting story! The team I worked with to write the business plan had a very spirited debate about the Linux model versus the Microsoft model of innovation. What would work better for drug discovery? My personal perspective is that the best ideas come from the crowd, but there needs to be vision and ownership to move a product forward successfully. From a business standpoint I think it will also mitigate risk and keep costs down.

Everyone in the drug discovery and development community knows from personal experience that there is a lot of risk. We have all heard that drug development is expensive and takes a long time. I do think these factors act as a barrier to innovation, particularly for diseases where margins are going to be lower. The way out of that box is to provide a way to reimburse drug discovery and development costs throughout the value chain based on success in reaching development milestones, so that risk and reward are not such binary outcomes. The FDA’s priority review voucher is a step in the right direction, but isn’t a complete solution. Our goal at 60P is to pioneer an incentives-based approach for drug discovery for neglected diseases.

Your Challenge specifically targets dengue fever.  Can you tell us about the disease and the current state of research?

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Topics: Challenges, Seekers

Seeker Spotlight: ACCION

Posted by Connie French on Apr 18, 2012 11:21:36 AM

We recently posted a Challenge with ACCION of Texas (ATI), seeking a way to more accurately evaluate micro-loan applicants who may lack traditional credit history. We asked Veronica Flores-Paniagua, VP of Communications for ACCION, to talk to us a bit about their Challenge and some of the people who will be helped by the solution.

Hi Veronica, thanks for being with us today and talking to our Solvers about your Challenge.  Microlending is a topic that may be new to some of our Solvers - can you tell us a bit about microlending in general, and the people or businesses that typically receive funding in this way?

Sure.  Most people may be familiar with microlending in the Third World, where business loans even as small as $100 can make an enormous difference in a family’s life. The philosophy driving microfinance in the U.S. is similar – lift individuals and, thereby, lift communities. But, out of necessity, domestic microfinance is done on a larger scale. By the definition of the U.S. Small Business Administration, a microloan is any business loan smaller than $50,000.

Why microlenders and not banks?  Two reasons. One: The average loan to ATI customers is about $16,000. Traditional lending institutions typically won’t touch such a “small” commercial loan because the administration of it is not a good value proposition. Two: Banks are regulated and must be more rigid in their standards to protect their assets. As a nonprofit, ACCION can be flexible. We still rely on collateral and character, as banks do. But we look at it differently. Where a bank looks at a minimum FICO score of 680 for a commercial loan, our average customer has a FICO score of 575.

A microloan customer is typically a business owner who’s just starting out. ACCION Texas clients include underemployed and recently laid-off workers who are willing to work but cannot find employment. These potential clients often have the desire, ability, and vision to operate their own businesses, but cannot access capital through a conventional bank loan. ACCION’s borrowers are 85% minority and more than 40% women, two groups that have been historically underserved by commercial lenders.

Can you give us some examples of people who have achieved success as a result of receiving a micro-loan? 

Absolutely.  One success story we like to tell is about Jerry Parker from New Orleans.  As owner of Greater Opportunity Developments, Jerry received an ACCION Texas Inc. loan to buy run-down properties, renovate them back to health and then rent or sell them – leaving neighborhoods in better shape than he found them.  So far, he’s renovated eight properties around the city, replacing blight with hope. He expects to create at least one part-time job, resulting in another small, yet positive change for New Orleans.


Another great story is about Lisa McGrath, who owns Tails Natural Pet Market in San Antonio, Texas.  Lisa's pet store sells unique products that are environmentally friendly, all-natural or made from recycled materials such as men’s vintage neckties that now serve as doggie collars. Her business helps San Antonio pet owners  make more eco-friendly decisions when it comes to pampering their pets.

McGrath received a loan from ACCION Texas Inc.’s green loan fund to start her business. Tails Natural Pet Market also works with other socially- and environmentally-responsible companies such as its Web-hosting service, Sustainable Hosting, and Dharma Merchant Services, a certified green business that donates a percentage of credit card fees to McGrath’s preferred charity – Alamo Area Partners for Animal Welfare (AAPAW.) Even McGrath’s business cards are made from recycled product packaging.

You can read about some of our other borrowers here.

In addition to providing seed money, you provide training and support to small businesses – can you tell us a bit about that?

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Topics: Challenges, Seekers

Prize Venture: A New Way to Fund Challenges

Posted by Connie French on Apr 17, 2012 2:43:59 PM

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Topics: Innovation Insights, Challenges

Contribute to funding and share in the benefits of a smart sensor Challenge!

Posted by Connie French on Apr 13, 2012 10:21:33 PM

We’re trying out a new crowdfunding initiative, which is still in its very early stages. Here’s what we can share with you already - if you’re interested in knowing more, get in touch!

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Topics: Challenges

Congratulations to Benjamin Skowera, Winner of the Economist-InnoCentive Transparency Challenge

Posted by Connie French on Apr 12, 2012 3:29:34 PM

In late March, we announced the winner of the Economist-InnoCentive Transparency Challenge.  Benjamin Skowera, an associate at SEI Investments presented his solution at the Ideas Economy: Innovation event on March 28th in Berkeley, California. The InnoCentive Challenge, which attracted more than 600 problem Solvers and received more than 115 submissions on the InnoCentive website, asked participants to identify an emerging technology or a national or global information platform and propose an innovative way to use this resource to motivate governments to engage in productive and open discourse with citizens.  Below is a video of Benjamin and Matthew Bishop, US Business editor and New York Bureau Chief for the Economist discussing Benjamin's winning solution at The Economist's Ideas Economy: Innovation 2012 event in Berkeley, California.

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Topics: Solvers, Challenges, Seekers

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