One Laptop per Child Should Go For-Profit, (Not) Give Profits Away
I’ve always been extremely enthusiastic about the idea of the $100 laptop. Giving each child a laptop as his property — and therefore access to education and connectivity — could radically change the world for the better, needless to say.
But as excited as I’ve been about the idea, I’ve gradually been disappointed by the execution of the idea – and we all know what matters to success isn’t the idea but the execution.
And as I’ve gone from bouncy elation to accepting disappointment, I’m now convinced that the root of all of OLPC’s problems is its non-profit structure.
So in the mould of Dan Malven’s suggestion (via SAI) that Wikipedia go for-profit and give its profits away I propose that OLPC go for profit, and (maybe) give its profits away.
The first reason why OLPC should go for-profit is that venture capital is more active than donations. When it launched, OLPC raised millions in charitable donations from corporations such as Intel. Unless you’re a venture philanthropist, when you sign a charity check you don’t look at what your money does; you’re detached from it. When you invest in equity, you have to stay involved (if only to find a buyer). When Intel didn’t like the direction OLPC was taking, it just pulled out, writing off its donation as a sunk cost. If a VC had invested 5 mil in OLPC and didn’t like the direction, he would have done everything to turn it around.
OLPC’s problem is just that it doesn’t sell enough laptops, and that problem can be linked back to two big (and connected) problems: arrogance and ideology, and high staff turnover.
Let’s tackle high turnover first. This one is a no-brainer. When you work for a charity, you’re not getting paid much, and you can leave whenever you want. When you work for a startup, you have equity, and the urge to leave is often compensated by the urge to grow your company and cash your chips.
The main reason why OLPC could shoot for a $100 pricetag (and miss, by a mile) was thanks to an innovative screen technology, cheap and fitting for developing world conditions. Mary Lou Jepsen, the woman behind that, left OLPC to launch a startup around that technology. There’s nothing wrong about that: the profit motive is a legitimate one, and when you invent an innovative, useful technology there’s nothing wrong with wanting to profit from it. But obviously if OLPC had already been a company Ms Jepsen wouldn’t have had to quit to do that: her best hope to profit would have been to stay with OLPC and hope to monetize her stake; meanwhile OLPC would have kept its Chief Technology Officer. With a little capitalism, everybody wins.
Same thing with Walter Bender, the chief software guy, who left over OLPC’s decision to put Windows on the laptops (a frequent request from customers). Now obviously, in startups it happens that senior people quit over differences in strategy, and even start competitors (as Mr Bender did). But the exit costs are much higher. So there’s a lot to wager OLPC would have bled talent much less if it had been a company.
This noise of doors slamming in a huff raises the second question, that of arrogance and ideology. As everyone, I’m impressed by Nicholas Negroponte. But I can’t help but cringe every once in a while when I hear him speak. It all too often seems as if Valleywag hit the nail on the head when they wrote:
MIT Media Lab director Nicholas Negroponte had a vision: Millions of third-world children lacked laptops and therefore the means to learn of his greatness. He founded the One Laptop per Child Project with a singular vision: He, Nicholas Negroponte, would bring laptops to these children, so that they could know that he, Nicholas Negroponte, brought laptops to them.
OLPC’s goal wasn’t just to get a laptop in the hands of every child, it was also to promote a number of ideologies near and dear to Negroponte’s heart: “free and open source software” and a “constructionist” educational model, where children learn by themselves through experimentation rather than top down through the teacher. Now I love free and open source as much as the next guy, and given that I learned a lot more sitting in front of my web-faring computer than I ever did at any school the constructionist model sounds dandy, but does Negroponte want to get laptops in kids’ hands, or does he want to remake the world in His Likeness?
As Bruce Nussbaum writes, the OLPC “is designed to be collaborative because the underlying educational assumption is that the kids will learn on their own without help from teachers, coaches or parents.”
The OLPC is not just a computer, it is an ideology on how kids should be educated – and then Negroponte is shocked, shocked that the leaders of the world’s biggest countries don’t want to be told by a MIT professor how their children should be educated. The OLPC project, Nussbaum writes, is “very anti-teacher, anti-establishment. Which is why I think it is being rejected around the world by many countries, especially in Asia.” He goes on:
I think the educational establishments in India, China, Nigeria and other nations are rejecting the olpc approach because they feel insulted and misused. One Indian professor told me recently in Bangalore that sure, India has a rote educational system that is the anti-thesis of experiential learning but it has brought 200 million out of poverty in a decade so what’s so wrong with that? And China has brought half a billion people out of poverty within a rote educational system.
Now as someone whose schooling has always interfered with his education, label anything “anti-teacher” and I want to buy it, but regardless of the merits, who thought that developing world mandarins wouldn’t rush to buy a system explicitly built to undermine them?
In a TED speech, Negroponte speaks about how, when meeting with developing countries’ education ministers, he would ask them what their biggest natural resource was. They would say oil, or ore, or timber, and he would respond “Don’t you think your biggest natural resource is your children?” And they would agree. How true — how true and how incredibly smug and pompous. Apparently, Negroponte has discovered that the best way to do a sales call is to start by patronizing your potential customer.
Now to be fair, Negroponte has started to face reality and tone down the rhetoric a little, putting Windows on the machines and sounding a little humbled. But had OLPC been a company, I wager this would have been done much faster and much more efficiently. When you’re a charity, you can afford to wrap yourself in your sanctity and not do the changes that the situation requires. When you’re a company, you have to sell, sell, sell. Regardless of ideology or pride. Or you fail.
And that’s the goal, isn’t it? To get laptops in kids’ hands, right? Or is it to aggrandize Nicholas Negroponte? If it is the latter, the VCs on his board would have told him to cut the bullshit and get his act together, fast.
In short, the best reason why OLPC would work better as a company is that in a company the shareholders can fire the CEO. Negroponte seems great at vision, and the $100 laptop may be one of the best ideas of the 21st century, but he’s proved abysmal at execution. In a startup it very often happens that the person who launched the company is not the best person to grow it, or run its main product’s execution.
OLPC would do much better with someone else at the helm, and in a startup that would’ve happened long ago.