My hunch is that it isn’t particularly fashionable to defend Wonga, the loans company, at the moment.

But a few things have been bugging me, so I wanted to share them.

This week, Archbishop of Canterbury Justin Welby told Wonga founder Errol Damelin;

“We’re not in the business of trying to legislate you out of existence; we’re trying to compete you out of existence”.

He is not the first to take a dim view, although to be fair, he says that he was taking aim at the wider array of ‘pay-day lenders’ and believes Wonga to be a “professionally managed company”.

More widely, it seems that the easy thing to do, is to damn the company.

Before doing so, a few questions have been playing on my mind.

I should say that I think that Justin Welby comes across as an incredibly likeable, articulate and thoughtful man.  Also, that I know Errol, CEO of Wonga.  He is a formidably ambitious entrepreneur and is also likeable, fun and engaging.

Before I rush to conclusions,  here are a few thoughts.

Firstly, this is a serious subject.  Debt ruins lives.

So does junk food, if consumed to extremes.

And alcohol.  I don’t wish to see either banned, although I’m happy that they each come with certain warnings.

If we’re going to sort this out, we’ll need to trace the problem back to its roots.  The lack of financial education in our schools is startling.  Although this is starting to change, the idea that generations of children learned about Pythagoras and not about interest rates, is staggering.  I’m not suggesting that all young people are leaving school without knowing how many beans make five.  I’m just not convinced that they have a wide enough understanding about simple concepts connected with money.  That’s a big problem.

A deeper problem perhaps is that, for too long, we’ve been spending beyond our means.  Buying things we don’t need and can’t afford.  A credit card looks remarkably like a debit card after all.

These two things, financial education and buying what we don’t need may have to wait for another day’s reflection.

For now, let’s stick to Wonga.

The first question I would ask, is whether you’re against the idea of borrowing money.

On this, you may side with Polonius (“neither a borrower nor a lender be”), however most people seem comfortable with it.  In principle.

If we’re not against lending, then are we against the concept of interest?  I suspect that the answer from most will be that it depends, how much.

This is one of the main things which winds people up about Wonga; Its interest rate.

Calculated over the course of a whole year, which they have to for legal reasons,  it seems astronomical. Except that they are not in the business of lending money for a year.  They are all about short-term loans. You can’t borrow more than £400 and you can’t borrow for longer than 45 days. The average customers borrows for 17 days.  The average loan is  for £257 and the average first-time loan is £180.  And broadly speaking, the customers seem happy, because 90% of them would recommend Wonga to a friend.

Here’s an example of how Wonga works.  It’s Friday today.  Imagine I get paid on the last day of the month.  That’s next Wednesday.  I have run out of money.  I would like to go out this weekend.  Or perhaps, more importantly, I absolutely have to pay a bill today.  I’m after £100, which, I calculate, I’ll be able to repay in a week, after I get paid.

According to the handy calculator on their website, Wonga will (if I am approved) lend me £100 for the princely sum of £12.89.  And for a very large number of people, that is a deal which they are prepared to do.  The other major benefit is that it’s quick.  As quick as five minutes after my application is approved, the money can be in my bank account.

I don’t condemn the customer for accepting the deal, and I don’t (at this point) condemn Wonga for offering it.  I am, however, aware that these are choppy waters because despite the clean, easy-to-use interface, people are using these sites and running into financial difficulties.

Seen over the course of a year, the interest rate is several thousand percent, which is the source of a great deal of anger and concern.

Personally, I’m less angered, and here’s why;

An analogy; Imagine I was looking to get a new car.  And imagine I chose, as my preferred method of transport, a London cab, complete with my own driver.  You might well call me an idiot.  Or inspired, depending on whether you were under the impression that I was a millionaire.

Money and cars are not the same, but there is a connection here isn’t there? Cabs are for short-term journeys, Wonga is for short-term loans.  Extended, they would both ‘cost a fortune’.  I’m happy to pay a tenner for a  ten minute cab ride from time to time, but I would get pretty wound up if I used one for an entire day, with the meter running. And a year?  Forget it.  It would be extortionate.  I’d be better off going to Avis.  And Wonga will argue, that if you want more money, for longer, you will be better off going to a bank.

For some people, that £13 to borrow £100 for a week may seem like sheer idiocy. For others, it’s a price they are willing to pay. In the same way, some will say that ten pounds for a ten minute taxi ride is lunacy.  Couldn’t you set off earlier and walk?  Or take the bus for less than half the price?

I’m quite surprised that in the media coverage of companies like Wonga, we rarely hear from the people who use actually them.  Is that because there is a stigma attached to borrowing money?  Or because they think that they will be portrayed in a bad light?  Or are the media simply too lazy to seek them out and have a normal conversation?

I ask because a loan is a transaction involving two parties, isn’t it?  When we condemn Wonga, do we condemn their customers too?  Or do we feel sorry for them.  And isn’t that a bit patronising if we do?

Or are we suggesting that the customers are being tricked? Well, last year the company surveyed over 30,000 people, asking them if they felt “well informed” when using Wonga.  96% said yes.

One final thought on the ‘extortionate’  interest rate.  Given that the company is explicitly clear about how much any given loan costs, are we, generally, against things being very expensive?  Mulberry sells handbags for over a thousand pounds.  Primark sells them for under a tenner.  Are both in the wrong?  Or are we just uncomfortable with high margins?

The most basic point seems to be that Wonga’s customers choose to use its services.  They are not forced to do so.

And this leads to the second main objection, because that depends, some will say, on how you define “forced”.  It’s difficult.

I’m more comfortable, rightly or wrongly, with the idea that someone pays ‘over the odds’ to borrow £100 for a few nights out, than to borrow £100 because they cannot afford to eat.

Somehow my sense is that if the money is going on things you don’t really ‘need’, then the high interest is a tax on your impatience.

The idea that someone is forced to get further into debt at a time of considerable personal stress is extremely upsetting.  But where does the logical conclusion lead, if we head in the opposite direction.  That we only lend to people to buy things they don’t need?

We need to talk about needs, and about when offering something means exploiting someone.  Not easy questions.

None of us likes the idea of the weak being exploited.  I don’t like the idea of the addicted smoker being advertised to by Benson and Hedges.  I don’t like the thought of someone being confronted by yet another WHSmith’s counter filled with chocolate bars, just when they are trying to lose weight.

Unsurprisingly, I don’t have the answers either.

I just worry that, in jumping to condemn Wonga, we haven’t stopped to think about what it is that we really dislike.

Is it lending money? Is it the concept of interest? Is it the point at which interest becomes ‘usury’ and is thought to be exorbitant?

Perhaps it’s the idea of preying on some of the most vulnerable people in society.  In which case, do we condemn all of those who offer people things which, in excess, may be extremely bad for them?  And if so, do we call for them to be banned, or do we crack down on how they promote themselves and who they decide who to engage with?

Could you argue that, other than an age check, there is no sensible barrier in place to decide whether that bottle of Jack Daniels is likely to kill you?  By contrast, could digital lenders emerge to be some of the more responsible companies of our time?

This is a sensitive subject and almost certainly easier to steer clear of.  That’s why I admire Justin Welby for having a view, and sharing it publicly.

Wouldn’t it be great if more people from more walks of life sat down and had proper conversations about money, about business and about politics.  Rather than trading insults or one-liners.

I’m hopeful.  We have an Archbishop who used to be an oil executive at a time when our Minister of State for Trade and Investment (Stephen Green) is an ordained priest.  For good measure, he also happens to be a former banker.

Slamming individual companies is easy.  Especially if their name has two syllables and seems a little too ‘brash’ for our liking.

Having complicated conversations which will inevitably involve disagreements is difficult.

Seeing those conversations through to genuine breakthroughs is exciting.

I am confident that the results will generate a high level of  interest – of the kind which everyone can support.

 

 

I’ve been thinking about funders quite a bit recently.

In theory, their role is pretty straightforward.

They fund things.

But what else do they do, and what else could they do?

Particularly here, I’m thinking about organisations which fund ‘good causes’, although this post could potentially apply to venture capitalists, angel investors and so on.

Here are a few ideas, some of which you may have seen already happening.

Whether the funder in question is a foundation, a Government Department or an individual philanthropist, I’ve tried to think of ways in which they could go beyond their traditional role, and create event more impact.

1) Connect potential collaborators BEFORE they apply.  Here I’m imagining a site which allowed you to register online, and tag yourself with the causes you cared about.  From literacy to ex-offenders, you could then search for people, locally or nationally.  It would a place where plotting can begin.  This could also work well as an event format.  Find your fellow change-makers.  A well-known funder could pilot and promote this. You would move from ‘funder’ to ‘connector’, making it easier for people with a passion to find each other. “Who else cares about litter in Lewisham?  I do.  Let’s join forces”.

2) Match private sector partners with causes on a local and national level. Here, the partnerships team would field requests from companies, large and small, who were looking to support a particular type of activity.  The funder would provide a tailored list of funded schemes.  Again, I can see this working in an event format.

3) Connect grantees with each other. I was asked to help do this recently by a grant-making trust and it was a terrific event.  Hundreds of interesting conversations took place, with lessons shared.  We had a few themes (including lobbying and PR), and experts from within the group took turns to share their advice.  I bet loads of funders convene their grantees for tea and cake.  I wonder how many do it in a more structured way.  I also wonder how many have a space on-line, where their beneficiaries can ask each other for help.

4) Create a platform which makes it easy for beneficiaries to ask for help.  This seems like quite a quick win to me.  Every funded project would have its own page on the funder’s main site.  On it, you would have a brief summary of what the project is all about.  The funded team itself would be be able to edit their page, and encouraged to update it regularly with specific examples of progress and, importantly, what they were looking for at that moment.  This could be advice on something, and it could also be something practical, like space for an event, or access to a minibus.  I’ve written about crowd-funding before, and I think that each funded project, assuming they were still seeking funds, could also use their page to drum up further support.  Through the right partnership (perhaps with a publisher or brand) traffic to the site would be significantly increased.

5) Have a stamp of approval.  This could be handed out to projects which particularly impressed the selection team, even if a project wasn’t funded.  It would be a form of currency.  Years ago, I seem to recall that Nesta had something called ‘Nesta Likes’.   It would be interesting to track and connect the projects which were attracting the admiration of funders, over the course of a year.  When Matt Locke was commissioning education programmes and projects at Channel 4, he once list a few projects he ‘liked’, to give applicants a flavour of what he and the team were looking for.  He mentioned Tenner.  It didn’t cost him anything, it gave us a boost, and brought us to the attention of others. My hunch here is that projects could collect ‘likes’, which in turn might impress the right funder.  “Here’s a project which has been ‘liked’ by Nesta, Unltd and the Nominet Trust.  They’ve come on leaps and bounds.  Let’s back them.”

6) Have an enterprise unit which advises on sustainability post-funding.  This could be done in partnership with another organisation.  Perhaps Unltd.   Or the Young Foundation.

7)  Design amplification techniques into the bidding process.  This could be as simple as requiring that successful applicants make a short audio or video clip each week or month to chart their progress.  These clips could be uploaded to the site (see Idea 4).  By simply hoping that people will do this, I suspect that the results will be minimal.  By making it a condition of funding, things could get interesting.  A simple partnership with Audioboo might unlock the audio, and by teaming up with the Media Trust, a number of flagship projects might be even be paired with their own production unit.

Relatively simple ideas perhaps –  involving connecting, promoting,  endorsing and advising.

Some funders will already be embracing some, perhaps all of the above.  However in many cases I suspect they are paying lip-service. “Yes, we do SOME of that already”.

Can you imagine if someone decided to embrace all of the above in a massive way?

That, to me, would be an Inspirational 21st Century Funder.

What do you think?

 “Get the right people on the bus, the wrong people off the bus, and the right people in the right seats.” Jim Collins.

On June 1st, 2011, I dropped a note to my StartUp Britain co-founders.

Its edited highlights read as follows;

Hi All,

Quick one;

I have a friend with a bus…which has a boardroom in it.

Yes, you know what I’m thinking.

A StartUp Britain Roadshow.

• 6 towns or cities (for example)

• In each destination, the bus would host conversations, perhaps recorded, with interesting local business owners and     promoters of enterprise.

• We could join the bus for a leg or more of the journey.

 What do you think?

One of the many good things about working with a team led by Emma Jones, is that whilst some people would reply to such an email with questions like “why?”, “how?” and “how much?”, Emma does not.

Instead she gets straight on the phone and wonders whether we could manage TWELVE stops instead of six.  And within two months, she and the sponsors are announcing the first StartUp Britain Bus Tour, in August 2011, with fourteen locations.

The serious point is that, in some ways, “ideas are easy”, and without brilliant teams, they would stay as ideas, pub conversations and hazy memories.

That’s why the team (Emma, Remy, Liz, Jamie, Becky, Lorna, Skye, Katie and Ash) bring StartUp Britain to life, and why the experts and entrepreneurs who give their time to join the tour, make the whole thing work.

Today, the third StartUp Britain Tour leaves London, bound for thirty locations.  The team will travel to places including Canterbury, Winchester, Bristol, Wrexham, Liverpool, Newcastle and Edinburgh.

The tour is privately sponsored by PayPal, BT Business, Iris and Intuit.

Yes, it’s a simple idea, which involves using the bus as a magnet, on the one hand for people thinking of starting up, and on the other for people who want to give something back.

Interestingly, when you ask my fellow co-founders (including Rajeeb Dey, Michael Hayman, Duncan Cheatle and Jamie Murray Wells) to name a personal highlight since launching the campaign, almost all will name a moment, meeting or conversation which took place on a bus tour. A personal story or connection, often hundreds of miles from home, which left a lasting impression.

George Bernard Shaw once said;

“Imagination is the beginning of creation. You imagine what you desire, you will what you imagine and at last you create what you will.”

I hope that the coming month will contain thousands of useful conversations which lead to people creating what they will.

And in terms of imagination being the beginning of creation, my favourite conspirators may wish to run for cover.

I have a couple more emails to write.

 

 

Welcome.

You have been invited to join this new group.

Perhaps it’s a committee or a council, a board or a brains trust.

We can imagine exactly what and why later.

Your role may simply be to offer advice, to a person or organisation.

Then again, it may be to make stuff happen.

That’s why I’m writing this post.

I was thinking about this recently when I heard that HRH the Prince of Wales is to lead a new Campaign for Youth Social Action;

 “a strategic, long-term, cross-sector transformation initiative, which will unlock the potential of youth social action across the business, education and voluntary sectors of the UK.”

To use another example, Vince Cable, the Business Secretary, has an Entrepreneurs’ Forum,

 “to provide informal and personal advice on new business and enterprise policies.”

I like the idea of new groups coming together, crossing organisations, industries and perhaps even countries.

There’s an excitement which comes with that new blend of characters.

Fresh perspective, energy and experiences.  A can-do spirit which wants to prove the pessimists wrong.

And let’s be honest, there are a few pretty massive problems right now which would benefit from some new A-Teams.

So, as as you’re reading this, you may be pondering whether to start one yourself…

Or whether you’d like to join one.

Now imagine you’ve joined.

Today is the day.

The meeting room is filling up, the coffee being poured.

You recognise some guests and not others.

You’re here for a purpose.

But what are you actually going to DO?

If the group you have joined is expected to do more than simply offer advice, then here are five possible approaches to making stuff happen.  There may be many more, however these are the top ones which come to mind.

It often amazes me how many groups seem to want to stick with number one or three (and as a co-founder of StartUp Britain, I’m not averse to starting things myself).  My hunch is that by really throwing themselves at three, four and five, and with the right partnerships, some amazing things could happen.

1) Start Stuff.  New schemes, initiatives and activities.  From scratch.  Shiny and fresh.

2) Grow Stuff.  Identify groups and individuals who are ‘onto something’ in their area or sector.  This may have taken months or years.  Sit down with them and identify what is holding them back from growing the impact of their work.  Then try to help.

3) Discuss.  Bring together groups of people who should meet and often don’t, to have tough discussions about problems worth solving.  Consider publishing your conclusions.  This may well be derided as nothing more than a ‘talking shop’.  But in a world in which people often can’t see the wood for the trees, talking matters.

4) Connect.  Think about the most useful introductions you could possibly make to advance the cause of your group. It may be programme makers with teachers, builders with bishops or chefs with ministers.  Make those connections and make a concerted effort to track the progress which follows.  In many cases the thing you’re looking for has already been discovered.  This is why introductions matter and why progress depends on connections and connectors.

5) Promote. Too many brilliant projects and opportunities are simply not well known enough.  Whether to your peers, funders or to customers and users, consider making it your group’s mission to promote examples of fantastic work to the widest possible audience.

Of course it’s possible to blend together all of the above.

Wouldn’t it be great to see more A-Teams pledging to grow, connect and promote?

Are you part of a new group?  How are you getting on?  

Are you tempted to form one?  If so, what is stopping you?

In any case, I’d love to hear from you.