MicroPlace: Small Investments, Big Payoffs

This feature article and interview originally appeared on the San Jose edition of Examiner.com on May 28, 2011, at this link.

This article is part of Bonnie’s ongoing series of Silicon Valley business features.

MicroPlace is a small part of the world’s largest e-commerce company here in San Jose (eBay), but when it comes to providing real and metaphorical change for lives around the world, the company believes it has it in spades. I recently sat down with General Manager Ashwini Narayanan for a better appreciation of MicroPlace’s prodigious task at hand done right here in our Silicon Valley backyard.

The socially responsible MicroPlace, a PayPal company, connects ‘everyday investors’ with the world’s working poor. Thanks to its SEC regulated status, MicroPlace is the only website that allows investment via microfinance loans. The concept is simple: with as little as $20, an individual can invest in small businesses in developing nations, enabling impoverished people to grow both their businesses and their opportunities. Investors choose a MicroPlace-partnered MFI (microfinance institutions in far-reaching areas) based on geographic location, level of poverty or financial rate of return all from MicroPlace’s informative website. With options for rural areas, focus on women, green and fair trade, there are no shortage of recipients from Kyrgyzstan to Burkina Faso and everywhere in between.

Despite the ease of investing, the challenges are real and daunting. An estimated $250Billion is necessary to help 1 billion souls pull themselves out of poverty. Even a small amount of money can be prohibitive for the poor, preventing them from attaining upward mobility and investing in their future. To compound matters, traditional banking institutions do not lend such meager sums due to the substantial costs associated with lending, especially true in under-served areas. This creates a problem that is anything but inconsequential for the world at large.

Narayanan believes that the answers are found right here- in each of us. She has seen the world through many shades beginning with her upbringing in India and extending to her time at the renowned Monterey Institute studying international business and her considerable travels, all of which have created a lasting impression. Quick to note that charities and organizations fulfill acute needs, she emphatically believes that it takes more than any single option to end global poverty.

“We want to move people to invest,” Narayanan’s eyes glow as she reflects on the power of small sums of money invested in microloans. “We need to think outside of our current paradigm to find a solution that works for everyone. Microfinance is one piece of that puzzle. Instead of investing in a c.d. with a rate of 1.2%, wouldn’t you invest to fulfill an actual need and see the same rate of return, if not higher?” Given that the industry outperformed the markets last year, her sentiments have added benefit to those seeking new investment opportunities in a socially conscious way.

Purchased by eBay in 2006, MicroPlace fits the e-commerce giant’s sustainability portfolio nicely alongside the likes of World of Good and the eBay Green Team. Founded by social entrepreneur Tracey Pettengill Turner, MicroPlace benefited from eBay’s direction and regulatory status which enables the company to act as a regulated broker rather than a non-profit. This simple but meaningful difference is unique in the industry of microfinancing, empowering MicroPlace to appeal to people wanting to invest small sums that might provide them with an ROI while doing good at the same time.

A symbiotic unity between small philanthropist-gone-investor and the working poor ensues, effectively bridging the distance between borders and wealth disparity. Narayanan fervently believes that increasing people’s economic status will result in better education, access to healthcare and overall improved global relationships. She recognizes that market-based solutions to the world’s greatest problem isn’t an easy approach, however.

It is evident that she eats, sleeps and breathes her work, tackling the issues and grappling with the adversity that present themselves. She proudly points out a carefully framed photograph of herself with Muhammad Yunus, the archetype and founder of microfinance who later became a Nobel Peace Prize recipient. His work, as well as the work of other trailblazers, clearly inspires Narayanan and her crew to this day.

Despite the do-good, feel-good mentality, the industry as a whole has garnered some criticism. Some assert that exhorbitant interest rates charged by certain MFIs have not alleviated poverty but rather contributed to it. A big part of the problem is the incongruity in lending costs from place to place and a lack of any substantive standards- something without an obvious solution due to a great disparity in lending practices around the world.

Holding themselves accountable to their mission of helping the poor, MicroPlace comes back to their touchstone again and again. Reinvesting all of its profits, the company has a rigorous set of best practices and their partnered MFIs go through a lengthy vetting process to ensure people in even the most rural areas have access to viable loans that ultimately help achieve the goal of eliminating poverty. Narayanan’s enthusiasm for tackling these problems is evident to anyone who spends a minute’s time with her as she grapples with the challenges of our interdependent world.

“We want our investors to understand the broader implications,” Narayanan says, keen to address what she refers to as ‘growing pains’ within the industry. “As we get more social metrics, we make all of the information available to our investors. The world is interconnected like never before. This is truly a democratization of development that is constantly changing. We are ultimately accountable to our investors and the recipients.”

Profiting cannot be the ultimate goal, she explains, and as new information comes to light MicroPlace is quick to learn from it. “It’s not a perfect solution, but the world cannot wait for perfection.” In the words of Muhammad Yunus, the greatest challenge is to change the mindset of people. Narayanan is one individual bent on doing just that. Leading MicroPlace into an era of greater interconnectivity and awareness will take nothing less.

Continue reading on Examiner.com: Small investments, big payoffs: MicroPlace – San Jose Web 2.0 | Examiner.com http://www.examiner.com/web-2-0-in-san-jose/small-investments-big-payoffs-microplace#ixzz1GtQOYwUD

Pioneering Web Images with Pixazza

This feature article originally published on the San Jose edition of Examiner.com on May 18, 2011, at this link.

This article is part of Bonnie’s look into Silicon Valley Company Profiles and Startups.

Mountain View’s Pixazza is taking online advertising to new levels by transforming the way in which we interact with imagery online, but don’t take my word for it. Hailed as a top prospect startup, Pixazza saw its fortunes skyrocket last year after securing funding from prominent Valley angels and VCs (including Google Ventures and Ron Conway).

Pixazza founder and CTO Jim Everingham and CEO Bob Lisbonne are industry veterans with enviable experience in Silicon Valley (both careers once intermingled at Netscape during the browser wars). Aside from the extensive resumes, both men proved to be unyielding, drawing from their industry acumen and trail blazing a new path. Lucky for us, both were eager to talk about Pixazza’s latest expansion into new verticals and their future plans. To start, let’s see what Pixazza does and how they do it so well.

Partnering with publishers and advertisers, Pixazza identifies, tags and matches items in an image with products. Wonder where to find Reese Witherspoon’s earrings you noticed on the celebrity blog? By rolling over the image, Pixazza shows you exact and similar product matches in a broad range of prices and links you to the advertiser’s site for the purchase.

Through this unique, highly targeted call-to-action service, an inactive reader becomes an engaged shopper with a refreshingly subtle mouse rollover. Websites need not devote additional screen real estate to the service nor do they risk alienating shoppers via uninvited pop-up advertisements. A commission of the revenue generated from purchased products goes to both the partnered publisher and Pixazza. Regardless of a purchase, both parties share advertising revenue.

“Consumers appreciate relevant information when it’s invited,” Lisbonne tells me in a phone conversation. “It’s also the case that advertisers derive greater benefit when an ad is contextual, so our goal of pleasing users and advertisers are aligned.”

Pixazza has been equated to AdSense for images, a fair comparison if we look at how it enables publishers to tap into a revenue stream from their audience. Still, the analogy misses an important element according to the company’s CEO. “What it ignores is how we try to relate to the customers, “ says Lisbonne. “Our aspiration is to deliver related content. [AdSense for images] doesn’t quite capture our goal of making the web a place where users expect to find everything.”

With image recognition still in its infancy and stale algorithms unable to ascertain what people actually want, the Pixazza crew knew that they needed human expertise to identify what products are proper matches. Enter crowd sourcing.  “At LiveOps, we learned how to harness people to do things they love to do,” says Everingham, who picked up service and crowd sourcing skills at the outsourcing call center.

Pixazza has another trick up its sleeve. Their Shopdot program effectively turns a publisher into an e-commerce marketplace instantly. With servers on the Pixazza end and a Shopdot domain name, a blog or other publisher can host an online storefront, generating additional revenue and traffic.

The fashion vertical is treating the company very well, but it’s a stepping stone to an even wider audience. Last month, the company announced that home, travel and sport websites would add to the lineup.

Ultimately, the Pixazza team envisages an emerging era where all online images will lead to greater insight- whether it’s for a product, food recipe or historical photograph.  “Our vision is that every image on the web will be interactive,” says Everingham.

Lisbonne echoes his words. “We always envisioned taking our service to every major category on the web. Ultimately, that’s what we expect.”
Continue reading on Examiner.com: Pixazza: pioneering interactive web images – San Jose Web 2.0 | Examiner.com http://www.examiner.com/web-2-0-in-san-jose/pixazza-pioneering-interactive-web-images#ixzz1GtQtJQyf