Success is when risk-taking self asks sensible self “Can we still be friends?”

Ringmaster David Cohn challenged us to a carnival of #fail. What follows is my total cop out.

In life and in entrepreneurship, I don’t believe in “failure,” “failing” or “fail.” I believe instead that we make mistakes. One minute, I am absolutely right and the next I discover I am absolutely wrong.

It is at these “ooops!” moments when the outlook becomes bleak and I see my project, my ambition, my plan as a failure. My life in entrepreneurship becomes a spectacular succession of risk-taking and disappointed aspirations beginning in awkward childhood, continuing through painful adolescence, blossoming in adulthood and now coming to fullness in middle age.

This is when I have to say “Stop!” Risk-taking self asks responsible self: “Can we still be friends?”

The essence of this lesson is contained completely in Todd Rungren’s brilliant and wise song.

LaLaLa LaLaLa LaLaLa LaLaLa LaLaLa LaLaLa LaLaLa LaLaLa LaLaLa LaLaLa LaLaLa

We shake hands and make up. This friendship with myself means I will see the experience as a learning not a failure. To judge a life experience as a failure is to invite a mindworm into your life, one that will swell to monstrous proportions with every inevitable misstep and block your path forward. Banish the mindworm!

This doesn’t mean I shove my less-than-successes under the rug, but it does mean that I accept them fully. Indeed, in private and with special friends, I honor my failures. This is part of entrepreneurship. It also answers my personal question: What is success?

I won’t bore you with a personal story because I believe that no matter what our material success, disappointment in ourselves is too often the human condition. And after long practice I have learned that self flagellation is the root of more disappointment. So although I might fail to change the world’s view so that it no longer condemns “failure,” I can at minimum adjust my own point of view to be friends with myself, and view my seemingly endless capacity to make monumental mistakes with compassion and acceptance.

“To err is human, to forgive divine,” said Alexander Pope. My goal is to extend this divinity of forgiveness to myself and others as much as I can day by day.

“Make no mistake, Let’s end quickly. But can we still be friends?”

The would-be entrepreneurs among us must nurture self love, because it is with passion and self confidence that we beat back the dark times and shake the feeling of being a total doofus. I know this from personal experience and from interviewing dozens of entrepreneurs about their failures and successes.

What I learned from these interviews is that the key to “failing” well is to understand when to quit. You’ve made a mistake, you’re digging a hole and it is getting deeper. Stop digging — now! Honor the work you’ve done and move on. It’s a new day and a new game.

“Fail” with grace. Be delicate with your fragile self. It’s not about being tough. It’s about being real.

“I try to live my life where I end up at a point where I have no regrets. So I try to choose the road that I have the most passion on because then you can never really blame yourself for making the wrong choices. You can always say you’re following your passion. “ Darren Aronofsky

Easy for Aronofsky to say – look at all his success. But look at all his wackiness too. His first movie, “Pi” was about Hasidic Jews, the Torah and the stock market. Sound like a blockbuster to you?

Life really is about following your passion, because life without passion is empty. But don’t kid yourself and think there is only one passion. There are many, as Silicon Valley’s Randy Komisar told me in an interview nearly a decade ago.

And one very important passion for everyone is family and friends.

“Grains of sand one by one, before you know it – all gone.”

Part of being friends with yourself is being there for your friends and family. With their welfare in mind, recheck your professional passion alignment regularly. The entrepreneurship direction that makes sense at 20 years old might not make sense at 30, 40, 50 and beyond.

To add some grist to the mill, and to fortify what might seem a specious argument, I’ve included a syllabus of sorts and some favorite teaching moments.

Yippie! Another failure!
If you are on the entrepreneurial path, I’d suggest visiting the website of my friend, Barry Moltz. Barry’s books and his website are a treasure of insights on entrepreneurship. I coached Barry through his first book and wrote the stories about start-ups in it.  It’s safe to say that our work together on “You Need to be a Little Crazy,” was a humble breakthrough in  discussing the reality of failure.

Kathryn Schulz is a Wrongologist, and she says:

1,200 years before Descartes said his famous thing about “I think therefore I am,” this guy, St. Augustine, sat down and wrote “Fallor ergo sum” — “I err therefore I am.” Augustine understood that our capacity to screw up, it’s not some kind of embarrassing defect in the human system, something we can eradicate or overcome. It’s totally fundamental to who we are. Because, unlike God, we don’t really know what’s going on out there. And unlike all of the other animals, we are obsessed with trying to figure it out. To me, this obsession is the source and root of all of our productivity and creativity.—Schulz from her TED talk “On being wrong” | Video on

And if you are feeling down, it’s always fun to cheer up with your friends, families and neighbors and don’t forget your online friends. I like to Twitter “You’ve gotta have heart” from the musical Damn Yankees when the Knight Foundation is pruning through its proposals and some are learning that their first volley at entrepreneurship didn’t make it. I especially like Peggy Lee’s version.

Here’s the original assignment from DigiDave.
What: A failure in your life (personal or professional) that has lessons. It must be your failure and you must take responsibility. But this will be a safe space to discuss our failings and what we can learn from them.
The Details
We talk about ‘failure’ a lot in the online journalism community. It can be a bit of a buzzword. “Let’s fail early and fail often” is a motto I personally have adopted. But the true value of failing is if we can share the lessons learned. We probably do this all the time without knowing it – but rather than try to condense our lessons into 140 characters, let’s create a safe space this month to discuss a failure that others can learn from.

PRI-Makers open to choices, including L3Cs

“The jury is out,” as to whether new corporate forms like the L3C (low profit limited liability company) and the B-Corp certification will make it easier for social enterprises and foundations to work together, agreed foundation executives at a 2010 meeting of PRI-Makers in Chicago. But foundation executives also said they are open to having more choices. [see note about program related investments at end of this entry.]

Discussions of the L3C and other forms are emerging on the social enterprise landscape with rapidity these days. The Internet gives them viral energy but the question of how philanthropy responds during this adaptation phase is key to how effective these forms will be moving into the future.

“I am really interested in these forms of innovation,’” said Jeff Clarke, from Alaska’s Rasmuson Foundation. “The conversation we are having is ‘How do foundations adapt and test these new forms?’ There’s all kinds of activity happening in the capital markets — How do we participate and how do we influence?”

In a conversation about what PRI-Makers call “this alphabet soup” of new corporate forms a collective light bulb went off as to their usefulness. The following is an interview with Mary Anne Rodgers of the David and Lucile Packard Foundation. Rodgers moderated a session on new corporate forms at the PRI-Makers conference.

“We had a good discussion about the move to L3Cs and other kinds of corporate forms,” Rodgers said. “What we learned is that the growing interest in corporate forms addresses different needs that are perceived to make not just funding — but also receiving — PRIs easier.

“One of the challenges for a PRI is to establish the charitable purpose and establish that the principal purpose is not to make money but to achieve some other mission,“ she said.

“When you are giving to a 501(c)3 public charity, that test is pretty easy because by definition the organization is a charity and by definition they will not make much money,” she said. “But if you are giving to a for-profit organization, you need a harder test because it is expected the corporation is going to make money, yet you have to be sure the organization is really not just about making money.”

“The point of these different corporate forms is to somehow embed in the corporate structure a charitable purpose or a partially charitable benefit so that the test for foundation investment is easier to meet,” Rodgers said.

“The benefit to the organization is that the manager using that form [the L3C entrepreneur] would not be subject to criticism if in fact they were not maximizing profit but were instead maximizing the charitable benefit.”

“I think the jury is out,” Rodgers said. “These forms are new. They are being adopted at some states. Some states are taking different approaches. The jury is out as to how effective they will be but I think most people in the audience [of PRI-Makers] think the more choices the better. Some forms will work for potential recipients and for potential funders. Others will not .”

“These forms may well make it easier for people to come together and meet the fundamental tests of charitable investing,” she said.

“I think PRIs are things smaller foundations can do. Absolutely,” Rodgers said. “If you want to get started and you are not sure what to do, one terrific thing you can do is find your local community development organization and make an investment that supports community development [through a CDFI, community development financial institution.

“You get a federally insured investment,” Rodgers said. “That’s simple.”

PRI stands for program-related investment, which PRI-Makers define as a type of mission or social investment that foundations make in order to achieve their philanthropic goals. Like grants, PRIs are vehicles for making inexpensive capital available to organizations that are addressing social or environmental concerns. Unlike grants, PRIs are expected to be repaid, often with at least a modest rate of return. Once repaid, PRIs are reused for other charitable purposes.

NOTE: I received this comment from Robert Lang, head of Americans for Community Development. “The statement that PRIs are expected to be repaid is very wrong,” Lang says. “Although PRIs can be loans they may also be equity investments, loan guarantees, low cost leases and anything else that would classify as an investment in the commercial world. This is a common misconception even among some PRI Makers,” Lang says. “If PRIs are to repaid they must be used for a new PRI or grant within one year of receipt,” he says.

Welcome to the birth of journalism!

Carnival of Journalism 2: Take a moment to reflect on your unique skills and circumstances. Then answer: What specific things can you do to increase the number of news sources for a local community.

What specific things can I do to increase the number of news sources for a local community? I can continue to work toward establishing the L3C as a business model for news.

Two things are important to know about the L3C as a business structure for news: 1) it encourages long-term ownership of a news organization that puts journalism first; 2) it is designed to accept an investment from a foundation as seed money.

The starting point for my thought is the current economic and cultural disruption, from which will emerge new ways of doing business. Among these innovations will be branded social enterprise, patient money, slow money and renewed interest in investing in all things local. There’s a lot of cash out there circulating looking for some kind – any kind — of return. The L3C returns 5% or less, and it is designed as a vehicle for investments by foundations, local businesses, institutions and others such as private equity funds.

The ideal owners of an L3C newsroom will be satisfied with this financial return and be enthusiastic about the intangible return, the social benefit delivered by a robust local news stream. Of course, since the foundation provides only seed money, the L3C newsroom in its business plan will have to persuasively describe the full complement of revenue sources for news that everyone is struggling with.

My career spans years in newsrooms, government and the independent sector, so the idea of the L3C newsroom struck me immediately as being worth a shot. But when I spoke to a group of journalism students at DePaul University recently, I was surprised by how easily they grasped the main concept of the L3C social enterprise. They didn’t get everything but they got the gist of it. It was a treat to think how unencumbered they are by the past. My attempt to explain the act of fitting copy on a page the old way could have been a comedy act – with me waving my hands in the air and them watching in puzzled silence. But in the end – who cares? Out with the old and in with the new!

I was also struck by how little the students knew about different types of businesses, including nonprofits. But instructors like DePaul’s Mike Reilley are wise, and they are integrating business concepts into the curriculum. Reilley has assigned the students the task of brainstorming a path forward for transforming their class assignment, “The Red Line Project” into a newsroom with a sustainable revenue stream.

The Knight Foundation points out that the main source of journalism has always been private enterprise and that marketplace incentives have fueled original and verified reporting.

Steve Yelvington, noted thinker on revenue models for news, said at a University of Minnesota School of Journalism event on Economic Models for News: “The truth is that journalism has never had a business model of its own. It’s always been a useful component of some other business model.”

My position is that for the first time, journalism has the potential to be thrown from its “newspaper” nest and born to a higher expression as a crucible for civic life.

Welcome to the birth of journalism as a social enterprise!

The L3C social enterprise is the bulkhead in a growing marketplace, one that values social benefit as well as investment return. There are signs of this emerging marketplace everywhere. Take a look at this recent article in the Harvard Business Review, Shared Value.

Inspired by the Peoria Newspaper Guild and its investigation into the viability of an L3C for the Peoria Journal Star, I brought the idea to my former paper, the Chicago Sun-Times. It didn’t exactly resonant with the Newspaper Guild or the Sun-Times corporate ownership. To answer our Carnival of Journalism question: To help increase the number of news sources I could always knock on the door of the Sun-Times again.

Just as the economy is seeking a foothold to stem foreclosures, create jobs, feed people and improve our lives and communities in systemic and sustainable ways, journalism is now preparing to crawl, then toddle and start to walk on its own. The two can be coupled.

I believe we could we bring together street level metrics and journalism in a mutually supportive system and change the way our society measures wealth while also changing the way we pay for journalism. It’s a nice blue sky thought.

It’s possible some of this blue sky could be added to The Red Line Project as an L3C. I could see adding some community development bells ands whistles – an added plus for foundations that are looking for systemic fixes. Maybe that’s where I should put my effort to increase the number of news sources.

Or I could concentrate on the system of news blogs we have developing here in Chicago and evolving it into an L3C; the Red Line Project could be an arm of it.

Or perhaps I could pitch in at Village Soup, a local news site that is making money and likes the L3C model.

Currently, I know of only one newsroom established as an L3C that has seed money from a foundation and that is the Pt. Reyes Light in the Bay Area. They have the structure in place and the money to get started, but when I spoke with them last fall they were hitting some road bumps in their set up.

It’s been slower going than I would like getting this idea launched and off the ground. Despite limited personal resources I have attended conferences of the Social Enterprise Alliance, BALLE and the PRI-Makers [a group of 100 foundations who make PRIs for systemic change.] I have also attended the FTC hearings on the Future of News, CitiCamp Chicago [Gov2.0] and dozens of events in Chicago about the future of news, as well as numerous technology- and journalism-based events. Thanks to the generosity of the Reynolds Journalism Institute, I was able to attend Journalism that Matters- Detroit, where my systemic community development ideas first started to percolate. I am scheduled to attend the Web2.0 conference in March in San Francisco, as a journalist, where I will be reporting on the latest ideas in developing online revenue.

It’s been slow going because new ideas take time to integrate into the mainstream and there is always push back from existing power centers. The foundations I spoke with at the PRI Makers conference are open to the idea of the L3C and other new economic models for news, but they tend to move slowly and with caution. It’s understandable. In conversations, I found more foundation officers who were open than skeptical. In conjunction with this Carnival of Journalism piece, I am posting a statement from the PRI-Makers on L3Cs and other business models as a kind of sidebar.

One common criticism of the L3C is that it is unnecessary, that there are many ways in which a regular LLC- limited liability company, can be structured to achieve the same purpose. Although it is true that many LLCs have been established in conjunction with 501(c)3s for social benefit, they lack the branding power of the L3C – which some foundation executives see as valuable. As the volunteer convener of the L3C for Media working group at trade association Americans for Community Development, I respond as quickly and thoroughly as I can to questions directed my way. We are all learning together.

To appease the legal industry that has historically profited from PRIs as well as those who have other concerns, Americans for Community Development has drafted Federal legislation to streamline the L3C/PRI process at the federal level. If so moved, the community of journalism thought leaders could join ACD in supporting this legislation. That might give a considerable boost to birthing the future of news as a social enterprise and increasing the number of news sources for a local community.

There is much work to be done. I am confident that with the assistance of many partners, we can establish social enterprise newsrooms that will deliver every possible flavor of credible news for local communities.