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Whirlwind Tour Introduces Filipino Students to Functional Entrepreneurship

June 16, 2020

What started as one talk turned into 20 days of traveling through the Philippines for UC Merced management Professor Russ McBride.

In December, McBride headed to southeast Asia to connect with colleagues interested in expanding human consciousness and potential. As the director of the Social Reality and Cognition International Research Group, McBride seeks to answer deep philosophical questions about the structure of social reality, especially for startups and businesses.

Knowing that the Center for Information Technology in the Interest of Society (CITRIS) and the Banatao Institute collaborates with PCARI, the Philippine-California Advanced Research Institutes, McBride reached out to the Philippines Development Foundation to see if there was interest in his lecture.

As excitement for his entrepreneurial research spread, he ended up giving 12 talks. Criss-crossing the Philippines by car, bus, train and plane, McBride visited six universities, meeting with university presidents, faculty, engineering groups and students.

The Philippine government wants to reduce rampant poverty through entrepreneurship. University leaders were intrigued by McBride’s debunking of the popular Lean Startup methodology, in which products are iterated through customer feedback.

“The standard entrepreneurship recipes are just not working,” McBride said. His alternative approach, ‘Functional Entrepreneurship’ involves creating agreements between people who assume rights and duties on behalf of the venture — agreements that have not existed before. McBride’s campus visits focused on the human capacity to create new social relationships.

“My favorite example is the Microsoft-IBM deal,” McBride said. “Bill Gates created a new social agreement. He bought the software once, then sold the license for IBM to pay for every copy on every single computer.”

The Filipino undergraduates he met with were excited to get an assignment to demonstrate the new concept. It’s the same one he gives to his classes at UC Merced on day one: Teams must raise $12,000 for an organization promoting social good.

The students come up with a variety of ideas, such as fancy shoe sales, creating welcome-baby kits for single mothers, selling insurance, cutting hair and reselling a pallet of goods. In doing so, they create new social agreements for themselves.

Social agreements are the foundations from which all ventures are built. The new connections make it possible for many to rise out of poverty.

Functional Entrepreneurship could be particularly good for women.

“If Functional Entrepreneurship is correct, it’s all about communicating to build new social agreements, and studies show that women often excel in communication skills,” he said.

McBride’s roadshow inspired discussion of policy changes in the Philippines’ approach to entrepreneurship, how the professors teach it and how the students see it. He plans to return for more work there in the future.