Venturing for BusSocial Value

3 Credits · Level: Graduate

Entrepreneurs recognize that significant profit pools exist where new technologies can be applied to address problems traditionally reserved for government agencies and the public-sector. In light of growing entrepreneurial activity and innovation in traditionally “public” sectors, venture investors have taken notice. Over the past 7 years roughly $40B in venture capital has flowed into projects traditionally associated with public investment creating important opportunities and challenges for businesses at the intersection of public and private agendas. This course looks at three sectors where entrepreneurs are disrupting the traditional means of delivering (public) services–education, healthcare and labor. The ILE is designed to examine the intersection of public policy and the venture economy –how venture capital and entrepreneurs are finding new profit pools in critical segments of highly regulated sectors of the economy, creating a complex level of “disruption” that will create both societal tensions, and business opportunities. We will examine three critical industries: * The Ed-Tech Industry, is expected to reach$250 Billion by 2020. With only 2% of education and knowledge dissemination conveyed through “digital” modalities, Ed-Tech is generating significant venture activity with “for-profit universities”, and tech firms reshaping the market for training the next generation worker. *Healthcare is being dramatically impacted by both how healthcare services can be delivered to consumers, and how the underlying data for healthcare is being managed. Health IT alone is expected to be a $220 Billion marketplace by 2020. *Finally, public labor markets are being dramatically impacted by significant advances in industrial robotics and industrial automation, where robotics(and associated services)are expected to represent a $135 Billion market by 2019, with the potential to dramatically displace traditional labor while enhancing workplace safety. We will examine Public Venturing in each of these domains, from three intersecting points of view critical to business analysis and strategy for any industry undergoing significant disruption: * Technology–new technologies are the enablers of change for entrenched public sectors as they explore new modalities of social learning,predictive data analytics and collaborative industrial robotics models. Technological complexity, speed of advance and integration into the mechanics of human learning and production provides the first lens for analyzing business potential. * Neuroscience–The application of ideas from behavioral neuroscience provides new models for tailoring learning processes, evaluating user experience (UX), and generating social incentives.Cognitive models also help better evaluate how individuals process data and evaluate customer behaviors, some of which are influencing the development and application of artificial intelligence. * Business Model Innovation–Venture capital firms have exploded in all three sectors we will explore. In Ed-Tech alone, nearly 100+ deals are being made each quarter, sparking a dynamic start-up and M&A market, owing largely to the emergence of financially successful economic models.In regulated areas like education, health and labor, revenue models are more complex, but that complexity is also part of business model innovation that is taking place, with complex public/private deal structures, payments systems and marketing tools emerging. Drawing on these three lenses, the ultimate goal of the course is practical –we will create business proposals specifically in the area of public ventures. In small teams of 2-3, course participants will develop a proposal for venture-backed investments for one of the three public sectors to enhance traditional service delivery. Using a series of valuation tools,teams will be asked to make the business case for change in one of the three public domains, considering all of the stakeholders and constraints associated with the sector. The final class will be a presentation to local venture capital investors, innovators, McDonough faculty and tech leaders. The litmus test for success will be to demonstrate a way to use technology to deliver a better customer experience(learning, medical care or labor management). Projects will need to consider both business and venture requirements as well as social and policy constraints which make up both the challenge and opportunity for public venturing.