Jim Fruchterman, founder of Benetech, a nonprofit based in Palo Alto, was very relieved when, at the end of September, he received an email from the US Department of Education
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While there was one day to fund the federal fiscal year, the ministry had renewed funding for a long-term reading program for people with disabilities and Benetech had chosen for the third the five-year project of $ 42.5 million. This meant that Benetech could continue to exploit BookShare, which provides digital material to 500,000 students with reading difficulties, including blindness and dyslexia, and Fruchterman could forget the planned layoffs in October in Benetech.
No less important to Fruchterman, a 58-year-old graduate of Caltech, with a more or less constant smile, his frequent trips to Capitol Hill are over for now.
"It was a huge distraction to have to go back to D.C. and say," Hey, we're the biggest program that serves blind and dyslexic kids. We are 10 times more profitable than what you did before. Is not it great? Democrats and Republicans love children with disabilities, is not it? "Fruchterman rolls his eyes and laughs at his own frustration.
In the hypercompetitive start-up of Silicon Valley, Fruchterman is a very unusual figure, not just because he spends a lot of time in DC or enjoys working on good social projects. At the time when no one had heard of social entrepreneurship – the idea that the energies and skills of entrepreneurs can be used for social good rather than for investors' profits – Fruchterman was one of the pioneers. And unlike the rich techies in the philanthropic ranks, like Bill Gates or Pierre Omidyar, Fruchterman did not wait to do good until he made billions. In fact, he has never made a fortune, and he has deliberately abandoned the race for the wealth of Silicon Valley.
Fruchterman instead took a page on the Silicon Valley Playbook to address persistent social challenges, such as helping people with disabilities read. His approach is to use the money of philanthropists in the same way that the founders use launching tours to get the concepts off the ground, and then, if they succeed, leverage more funds to achieve a revenue model. self-financed and not-for-profit.
BookShare followed this model at T, starting with Foundation Grants to provide reading tools – by instant digital means – to blind and dyslexic people who previously relied on physical products such as Braille and American mail. Today, the US Department of Education subscribes the service for students and adults can also subscribe for $ 75 per year.
Yet Benetech is much more than BookShare alone. Fruchterman created the organization to house a number of ongoing projects, including around human rights, the environment and other areas. In fact, Benetech hosts an incubator for new businesses, such as a current initiative to make social services as easy to discover as the nearest pizzeria, as well as a consulting service for not-for-profit organizations needing technological aid.
"No one else does what Jim does with such concentration and dedication," says Sally Osberg, President and CEO of the Skoll Foundation, which has awarded nearly $ 2.6 million to Benetech over the last decade. world of technological innovation and the potential of social impact is its real strength in the field of social entrepreneurship. "
Win the Skoll Prize. Sally Osberg is on the left
The model also works. Eighty percent of the $ 13.4 million annual business turnover that the team of 70 employees got last year came from operating projects like BookShare. The balance comes from donors, most of them in Silicon Valley. In total, Benetech projects have absorbed $ 9 million in nonprofit venture capital and have since attracted nearly $ 107 million in grants or follow-up revenue.
I went from a single-business entrepreneur, from a business portfolio leader, to a guy who wants to help the entire Silicon Valley to transform the world of disadvantaged communities and the social sector that serves them.
Fruchterman has accumulated a lot of laurels for his work, including a MacArthur Fellowship and the Skoll Award for Social Entrepreneurship, but in a series of interviews with Fruchterman over the past year these braces never show up. The conversation inclines to what he learns while he "plays the OTG for an hour" at other nonprofit organizations, which provides an endless fuel for his point of view. key view: the poor or non-existent use of technology in much of the nonprofit sector.
In a recent article, Fruchterman called for a "software revolution for social good" to reflect the fact that "the social sector has not taken full advantage of what Silicon Valley does best: use software to scale and use the data inherent to software solutions to continually improve services, identify new opportunities and demonstrate their impact. "
This is the thinker of Silicon Valley at Fruchterman: the opening of the market that he is pursuing today is not just about helping the blind to read but to marry the good intentions of technology. "It's part of my career development," says Fruchterman. "I went from a single-company entrepreneur, to a business portfolio leader, to a guy who wants to help the entire software and data ecosystem of Silicon Valley to transform the world of disadvantaged communities and the social sector that serves them. "
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Thirty-six years ago, the young graduate of Caltech was no less ambitious, although his main interest was then rockets, or perhaps winning a Nobel. It was in the early 1980s, in a distant universe, when the Reagan administration made legal the development of rockets and defense spending by private companies through "Star Wars" missile defense programs.
Fruchterman was enrolled at the time in the Ph.D. program in Electrical Engineering at Stanford. He and his friends enjoyed hosting entrepreneurs for dinner, and one night, Gary C. Hudson, founder of rocket startup GCH, Inc., joined them at Stern Dormitory. Hudson was looking for engineers and he had a simple screening test. He asked Fruchterman two questions:
"Who is your favorite science fiction writer?"
"Poul Anderson", Fruchterman replied, citing the author of A Ghost Knight and Shadows among many others .
Hudson approved and asked, "Who was your favorite character of Poul Anderson?"
Fruchterman replied that it was taught Flandry, the ship pilot became James Bond of the late Terran Empire, in the Technic History series of Anderson.
Hudson shook his head. The correct answer, in his opinion, was Nicholas van Rijn, the libertarian-minded adventurer, another figure in the same series.
1981
Hudson gave Fruchterman a pass on the second question and offered him a job on the spot. Fruchterman could not resist. Which science fiction enthusiast could? In 1981, he took a vacation from Stanford and went to work in Sunnyvale for GCH, which had support from Houston's Space Services, and a real estate investor named David Hannah. Shortly thereafter, on August 5, 1981, GCH attempted to test its innovative rocket engine concept, Percheron, on a launch pad at Matagorda, Texas. The countdown has reached the ignition, but the engine has exploded on the dashboard.
Fruchterman picked up part of a rocket – a better start-up memory than most – then he and some of his colleagues returned to Silicon Valley to try to raise $ 200 million for a new rocket company. There was no taker, but Fruchterman nevertheless decided that he would not return to the doctoral program.
"Gosh," says Fruchterman, sitting in his Benetech office on California Street, about one kilometer from the Stanford campus. "I realized that I had found what I wanted to do; I loved building much more than doing research.
This "gosh" thing occurs strikingly often in conversation with Fruchterman, and it's as disarmingly authentic as his good-looking Archie-comic book and sunny disposition. It is difficult to reconcile this Fruchterman feeling with the stubborn and honest engineer who would not drop an idea of a technological product that would improve the lives of millions of blind people. And it was long before BookShare and after the rocket disaster.
This part of Fruchterman's story begins at Sirloin & Brew, the now-missing rendezvous of Silicon Valley on El Camino in Mountain View. Fruchterman and one of his GCH colleagues, Dave Ross, met Eric Hannah, a Hewlett-Packard chip designer, who had a new idea for a chip that could work with a scanner and software to recognize characters on a printed page.
"I'm really excited about the idea," says Fruchterman, "because I had this idea at the university to make reading machines for the blind using pattern recognition, and Hannah said he had a way of doing things. "
Fruchterman joined Ross and Hannah to found what would become Calera Recognition Systems, where they launched one of the first OCR technologies that used machine learning to "read" almost any script , not just the preprogrammed scripts.
"We collected several million character examples, compared them all, grouped together, and then built an algorithm that would say," It looks like an A ", even if it was not there. never seen this font before. "
During his first seven years at Calera, Fruchterman continued to think about how OCR technology could help blind people. In 1987, after the OCR technology worked well, Fruchterman and Ross, who was the vice president of engineering, decided to create a Skunk work to determine if they could use OCR technology with Votrax , an early speech synthesis technology. a PC.
"It sounded really crappy," says Fruchterman, "but we could scan a page and the voice synthesizer could read it again." He and Ross finally had a prototype that could use a PC and a scanner to read the text aloud to a blind person.
Fruchterman presented the demo to Calera's board of directors, waiting for an immediate go-ahead for the market. Instead, the board asked what the size of the market was. Fruchterman replied that it was probably a $ 1 million market, which actually minimized the market by five times, although Fruchterman felt that the size of the market was not enough. Was not the issue – helping the blind to read was the problem. The board did not see things this way. Calera had taken $ 25 million from investors, and they expected Calera to make a huge comeback. Small markets were not the road to 20x returns.
"We quarreled," recalls Fruchterman. "I say," But the blind need it. They say, "Yes, but we create jobs and we invest money for pension funds, and we have to earn money to fulfill our social goals. To work on a million dollar product a year would prevent us from making all the money we promised to make in return for our investment, "which is a fair statement. I could not really disagree, but I also went a bit, "Wow. So the right technology will not be built. It really angered me. "
Fruchterman leaves. He had been with Calera for seven years, had held several positions, from CFO to VP Marketing, and was ready for something new. He was also determined to build the machine to read, so he made a proposal to the board of directors who, he hoped, would make the machine readable without losing his shirt.
In exchange for some non-competitors, Calera agreed to grant OCR technology barely above cost so that Fruchterman could create two companies: a for-profit to use OCR for postal applications (a market that Calera chose not to pursue) and second a nonprofit to build the machine to read for the blind. Fruchterman created RAF and a 501c3 called Arkenstone, respectively, and became the CEO of both.
"I told my wife that I would only do the 501c3 for about a year, then I would go back full-time to regular technology.But I ended up doing both for six years before I realized that I had to choose one way or another. "
Arkenstone realized better than Fruchterman hoped. He shipped Calera's OCR technology, which was a $ 6,000 PC coprocessor card, at less than half that price and launched the DECtalk speech synthesizer. The anticipated Fruchterman market quickly took off. After three years, Arkenstone was very slightly profitable on $ 5 million in revenue and 501c3 status, a strange beast in the eyes of the IRS, which associates 501c3 status with hospitals and philanthropies at that time. This prompted an IRS audit, which Arkenstone cleared without problem.
It was pretty clear to me that I liked making technology forever more than I liked doing regularly for profit.
After several years running at RAF and Arkenstone, Fruchterman realized that he was not returning to a regular technician position as he had promised his wife, and he wanted to focus entirely on Arkenstone. The financial openness to do so came in the classic fashion of Silicon Valley: in 1995, his former employer, Caleram, was acquired by his rival, Robert Noyce's legendary Caere, and Fruchterman's stock was in l & # 39; money.
The modest bargain (by current standards) of $ 600,000 was enough to expand his two-bedroom ranch and bath on Middlefield Road in Palo Alto and help send his three kids to college. .
"My wife and I said:" Really, do we want to try to make millions more? "I realized that I could do several years of RAF, but I really felt that technology was for me "He resigned from the for-profit RAF company, which is still an operating company, to focus on Arkenstone.
"My friends were shocked," he says, "but it was pretty clear to me that I liked making technology for good more than I liked doing regularly for profit. They are both provocative, and frankly, I saw a field of fallow. "All the others crowd around the for-profit area, always trying to convince the VCs to invest more money. money, whereas here there is no one in the technology for good, and you can have a big impact.What really changes are the financial set points.I went, how do you go to a very profitable business, the way we come to a profitable business that does good. [The answer was to] gives up making money, doing good technology and finding a way to make money. to reach the breakeven point. "
"Why would anyone do that?" Is, of course, the obvious question. Does not everyone in Silicon Valley dream of enriching themselves?
F
ruchterman comes to the question of two directions: the family and the school. He grew up outside Chicago in a Catholic family with six children, and his father was a lawyer at International Harvester, so the idea of service was part of his family's philosophy. Technology was an important topic in the family conversation, but "for us, the business spirit meant owning the dry cleaner or a Chinese restaurant, and we thought," Why would you do that? On the other hand, there was always that expectation. our family that you would do well. It was real. "
As a high school student, Fruchterman also said he was deeply impressed by the example of St. Viator, his Catholic high school, where teachers "lived a life of service and gave back. They loved computers and mathematics as much as me. They were really good role models who could have had more lucrative careers, but they chose education instead. "
The head of the mathematics department diverted him from the sophomore computing year and led him to Caltech, amusing the young Fruchterman by reciting the "hurray" of Caltech, who was also on the wall of the office:
"Cosine, Tangent, Hyperbolic Sine,
Three Points One Four One Five Five
E to the X DY DX
Slider, Slipstick,
Technique, Tech, Tech! "
"I'm a techie first," likes Fruchterman, "not a social activist," who's about as proud as the Caltech graduate, but there's no question social problems have his imagination and his purpose in life.
Even after working full time at Arkenstone on technology products for the blind, he was relentlessly looking for new problems to solve. Human rights violations figure prominently on the list, especially after revelations in the early 1990s about the concealment of the El Mozote massacre in 1981 in El Salvador, during which Salvadoran soldiers killed at least 800 civilians
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He wondered how technology could have prevented such parody, and he went on long walks with a friend on the Stanford track – where many of Silicon Valley's ideas take shape – to think about highly improbable high technology solutions. vulnerable communities. He concluded that the real opportunity was to provide timely and actionable information on abuse. The authors of El Mozote were disguised as much over time as anything else.
Fruchterman had ideas on how technology could help, and he brought them to groups like Amnesty International and Human Rights Watch. He was surprised to discover "that their technical levels were really low, and they wanted help but did not have money." Fruchterman wanted to help, but Arkenstone had no more money.
At the beginning of the year 2000, Fruchterman had a surprise break which, like the acquisition of Calera by Caere, would create an opportunity to attack more than projects. Unexpectedly, a businessman named Dick Chandler offered to buy Arkenstone for $ 5 million. Chandler also promised to continue to produce reading machines. Fruchterman took the offer and used the funds to implement a new 501c3 called Benetech, which borrowed everything but the profit from Silicon Valley.
"Essentially, we adopted the standard venture capital model and modified each of the investment criteria for social good. What Benetech does is the same set of talents and dynamics. It's just that the financial set points are different. We wanted to create profitable businesses that do good. "
F
ruchterman took advantage of the 1999 bust dot com to rent the current office of holding at a high rent (including booths!) And started on two tracks: the l? one to raise venture capital – indeed limited and unlimited grants from donors – because $ 5 million would not last long, and the second to launch projects.
A project was the next step in his work to help blind people read by digitizing virtually all reading materials, from digital audio books (formerly on tape) to Braille digital files that drive an electromechanical Braille reader (formerly Braille ). , on iPad, systems for listening and monitoring for dyslexic readers.
The Skoll Foundation, the Omidyar Network and the Social Profit Network have invested nearly $ 4 million to develop the technologies, and Benetech won its first contract with the Ministry of Education for BookShare in 2007 .
One of BookShare's beneficiaries is Brian Meersma, a Cornell elder who studies industrial and labor relations and suffers from dyslexia. Meersma has been a BookShare customer since elementary school, where her disability was so severe that basic understanding was a challenge.
"To get the words, I had to read so slowly that I had no idea of the meaning," he says. Today, Meersma gets her text books, as well as fun reading, via BookShare, which has a mode for iPads that combines accelerated audio with text that highlights in sync with the text. ; audio. Meersma frequently sends BookShare team ideas to improve the service and requests that new books be added to the library.
"In many ways," says Meersma. "Bookshare really gave me the opportunity to go to university." The opportunity to tap into a library that I could read for myself really opened up possibilities. "
In 2002, Fruchterman recruited Patrick Ball, a leading human rights data specialist, to bring together his Human Rights Data Analysis Group (HRDAG) under the auspices of the United States. Benetech's Aegis, where he worked for 12 years. Data problems – such as estimating the number of civilian deaths in inaccessible war zones – and Martus developed, a self-replicable and self-replicating information collection and management tool to help investigators human rights to protect their data from prying eyes.
Martus represented the kind of tool that Fruchterman thought could have helped human rights investigators to break the story of El Mozote earlier and perhaps bring the war to light. Salvadoran civil society to a quicker conclusion. Hundreds of human rights groups around the world have tried Martus, and a few dozen have regularly used this tool, particularly in countries such as Guatemala, Burma and Central African countries.
"Martus has never had a security-related bug, which is a credit to Benetech's engineers," Ball says. At the same time, he adds, Martus has not been as widely adopted as he initially hoped. "What we have discovered is that it's hard to get people to use tools that they do not know," says Ball, "and that new tools are raising really anxious.Many would just prefer using familiar tools like YouTube, WhatsApp or just paper. "
In addition, over the past decade, mobile platforms have become safer by default, just as the nature of threats has changed dramatically. Martus' original design worked well for "capture and capture" scenarios, such as secret police seizing a computer or hacking a server, but now spear phishing attacks that can unleash malicious software on a device to read data in the machine memory. Scope of Martus.
The Martus experience serves as a kind of edifying narrative in Ball's eyes. Even the best technologies and the best intentions sometimes do not produce the desired results. Ball pushes this observation a step further, in a challenge to his fellow evangelical technologist and former colleague Jim Fruchterman, to argue that some of the technical innovations coming into the social sector may actually be dangerous for some communities.
For example, data and machine learning on marginal groups, such as the homeless or poor neighborhoods, may end up in the hands of police or inform algorithms of "predictive crime" . "Taking risks to go from here to there is what Silicon Valley likes," says Ball, "but (in many projects) the risks are not born by disruptive people, they are born by the disruption communities. That's what worries me. "
Fruchterman describes Benetech's projects over the years in the same way that a VC would have their wallet: a number of failures, a few singles and doubles, and a very small number of home runs , BookShare being more like a grand slam.
Fruchterman travels a lot these days in the hope of finding donors ready to bet new projects and learn from other social entrepreneurs and technology initiatives for the good. His dream is to raise more venture capital so his Benetech team can develop more prototype solutions that could lead to the next BookShare.
Is it possible, for example, to create a smart search interface for social services? Today, people who need services can not easily discover what is available to them. Google has already mastered this for day-to-day consumer services, and Fruchterman is working with actors on the ground to try to unify their work and data sets. Or maybe homelessness can be addressed if only there were better ways to track client populations, and the causes of their homelessness, and mark progress. This is another high on Fruchterman's list.
If Fruchterman knows one thing, it is that high impact projects take a lot of time and money to make lasting and meaningful changes. Bookshare is the result of 20 years of work for Fruchterman when it was launched in 2007 with the Ministry of Education. His former colleague, Ball, notes that Benetech's success has as much to do with time and trial as with technology.
"These problems are not solved in night hackathons," says Ball. "The great strength of Benetech has been its persistence, which has allowed engagement with many people, and a lot of iteration."
These long cycles suggest slow progress, unless more Benetechs take the field. The good news is that Benetech is no longer alone. "Pour les 10 premières années", dit Fruchterman, "nous pensions que nous étions les seuls. Maintenant, d'autres équipes se présentent, et la qualité de ce que je vois sortir de Stanford, Berkeley et Santa Clara a augmenté. "
Sally Osberg de Skoll voit aussi le terrain de jeu changeant.
"Un potentiel incroyable peut être déchaîné par quelqu'un comme Jim", dit-elle, "et la génération montante voit ce potentiel. Nous voyons des talents incroyables qui sont tout aussi attirés par les organismes sans but lucratif que par les secteurs commerciaux. "
L'exemple de Fruchterman, plus que son prochain single ou home run, peut être la plateforme la plus importante qu'il quitte du monde de la technologie.