In this blog, I'm continuing my conversation with Matt Barrie, CEO of Freelancer.com, the global workforce site. Here, he talks about how entrepreneurs can use Freelancer to begin or expand their business, or make them much more efficient.Read More »
Stone Soup – The Business Strategy for Raising $50 Million for Your Bold Idea
In this blog I'm talking about how we used a competition to get city to bid against city for the rights to build a permanent campus for the International Space University. It's a modern-day version of the "Stone Soup" story, and how we leveraged an idea into a $50 million reality.
A children's book taught me how to raise $50 million – yes, a children's book. And it's a VERY powerful technique that I've used again and again. In this blog I want to teach you how to implement it to create your own big, bold ideas.
The story is called "Stone Soup" and it starts in a French medieval village after a war.
Three soldiers are seen in the distance coming over a hill by villagers who say to each other, "Quick, close all the doors. Lock up your windows, put away your food. The soldiers are coming and they'll take all our food away from us and eat it." The soldiers are, in fact, hungry, and when they enter the village they go knocking door to door. At the first door, they ask, "Excuse me, do you have any food?" The villager who answers says, "No, sorry, I have no food." At the next door, a villager again says, "No, no food." The next door isn't even opened.
"I have an idea," says one of the hungry soldiers to the other two. "Let's make stone soup." He goes to one of the villagers and asks, "Do you have a cauldron and some firewood? We would like to make some stone soup."
The villager says, "Soup from stones? This I've got to see. Sure," he says, thinking that there's no risk to him. The villager gives them a cauldron and some firewood while another soldiers gets some water. They bring the water to a boil and place three large stones in the pot. News spreads to the villagers and they begin to gather. "Soup from stones," they say. "This we have to see." And they all start gathering around the soldiers.
One by one the villagers remark, "I had no idea you can make soup from stones." The soldiers say, "Sure can." Finally one villager asks, "Can I help?" One of the soldiers responds, "Well, perhaps, if you had some potatoes, that would make the stone soup even better." The willing villager quickly fetches some potatoes and adds them to the pot of simmering stones. Another villager asks, "How can I help?" The soldier responds, "Well, some carrots would sure make the stone soup even better." So the villager contributes some carrots. Soon other villagers are adding poultry, barley, garlic and leeks.
After a while, one of the soldiers calls out, "It's done," and shares the soup with everyone. The villager are heard saying, "Oh, my God! Soup from stones! It tastes fantastic. I had no idea."
That story is poignant for me in my life. The stones have been my big bold ideas, the contributions of the villagers has been the capital, resource and intellectual support offered by investors and strategic partners. Everyone who adds a small amount to your stone soup, in fact, is helping to make your dreams come true.
I've used this idea time and time again. What made "stone soup" work and what will make it work for you when you're creating your bold ideas is passion. People love passion. People love to contribute to someone who has passion. You can't really make up passion. You can't fake it. It's something that comes from your heart and your soul, and when it is authentic, people know it and it is intoxicating.
So allow me to share with my own 'real-life' stone soup story, about how I used this technique to establish a $50 million campus for the International Space University (ISU) in Strasbourg France.
In my last blog, I described how Todd Hawley, Bob Richards and I held the Founding Conference for ISU in 1987 and launched the first summer program in 1988 on the campus of MIT.
That first year was magical, gathering 104 graduate students from 21 countries. It was a huge success. The faculty was largely borrowed, made up of my own professors who I hired from MIT and Harvard Medical School. Everything we had was borrowed. It was a complete bootstrap operation.
During the second summer (1989), we held the ISU Summer Program at the Campus of University Louis Pasteur in Strasbourg, followed by Toronto in 1990, Toulouse, France in 1991 and Kitakyushu, Japan in 1992. After five years and about 550 alumni, it was time for us to try and parlay our assets into the next phase of our vision — a permanent campus. The challenge, of course, was that we had few assets. As a fully virtual university with no campus, a borrowed faculty and no cash, our only assets were our brand, our alumni and our vision.
So, in 1992 — which, by the way, was the 500th year anniversary of Columbus and deemed The International Space Year — we decided to make Stone Soup and hold a global competition to build our permanent campus.
That year we put out an RFP, a Request for Proposal, that basically said, "Hi there, we're ISU, we have this concept for a campus, we've held five summer programs in five different cities and this is our vision for what we want to create and where we want to go. Please tell us how much cash endowment, buildings, and operational money you will give us to bring our vision to your city."
If we had gotten no response at all, I would not have been shocked. But that wasn't the case. In fact, it was quite the opposite. We were overwhelmed with seven proposals ranging from $20 million to $50 million in funding, buildings, faculty, equipment and even the promise of accreditation – everything we needed to implement ISU Phase 2. It was spectacular and it shocked everyone. These cities, each of which bought into the dream, wanted to make the vision a reality and contribute what it took to implement.
We basically created a competitive atmosphere where each of the cities bid against each other to capture our business. Ultimately we had seven cities from around the world submit proposals. It ended up in Strasbourg, France, where today we have a beautiful, $50 million international campus in a region called Parc d'innovation. Many of the world's heads of space agencies have come through our doors as students.
One of the lessons I learned here was that the four most aggressive bids we received (Toronto, Strasbourg, Toulouse and Kitakyushu) came from locations where we had previously held summer programs between 1989 and 1992. In these cities we had left a lasting positive impression and an organizing committee that had helped us pull the programs together in the first place. Because our first Summer Session venue (MIT) was organized by Todd, Bob and me, we left behind no organizing committee and received no bid for our RFP.
So when you're looking to create a large competitive bid, it makes a big difference if the people who are bidding after your work have had some kind of smaller-scale advanced participation with you.
The idea of putting forth a competition is a strong one, because people love to compete for things. Cities love to compete for everything from corporate headquarters to the Olympics games. In fact, winning a competition sweetens the acquisition experience.
I've used this idea of international competitions and RFPs again and again in my business world. It worked beautifully with ISU and I hope it does for you, too.
In my next blog, I'm going to talk about the idea of exponential technologies.
NOTE: Over the next year, I'm embarking on a BOLD mission -- to speak to top CEOs and entrepreneurs to find out their secrets to success. My last book Abundance, which hit No. 1 on Amazon, No. 2 on the New York Times and was at the top of Bill Gates' personal reading list, shows us the technologies that empower us to create a world of Abundance over the next 20 to 30 years. BOLD, my next book, will provide you with tools you can use to make your dreams come true and help you solve the world's grand challenges to create a world of Abundance. I'm going to write this book and share it with you every week through a series of blog posts. Each step of the way, I'll ask for your input and feedback. Top contributors will be credited within the book as a special "thank you," and all contributors will be recognized on the forthcoming BOLD book website. To ensure you never miss a message, sign up for my newsletter here.