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In Silicon Valley, Some Entrepreneurs Seek Social Change

ARUN RATH, HOST:

Every now and then, you'll hear story about a kid who has a lemonade stand or cupcake sale to raise money for a good cause. Beyond that heartwarming headline is a belief that you can do capitalism with a conscience. Well, this is an idea that has taken root in Silicon Valley, in a big, big way.

Carlos Watson is the co-founder of the online magazine, Ozy. He says that young entrepreneurs there are starting businesses for social change. So, Carlos, who are these idealists? And what are the causes they want to support?

CARLOS WATSON: Arun, one of the most interesting things that's happening in Silicon Valley and the startup world, more generally, is that you've got people helping start incredible companies. And the folks who are helping start these are not just MBAs from Harvard, or not just former investment bankers or - they're not even kind of Mark Zuckerberg-like techie nerds. In many cases, they're folks who came from the nonprofit sector, who are increasingly starting incredible companies, like Warby Parker, the eyeglasses company, Upworthy, which is one of the hottest kind of digital content startups out there, or even companies that are in the education space, like the hottest new ed-tech startup, which is called Clever.

RATH: And how is that different from, you know, companies that have been giving to charities, especially big companies, for a long time? Some even maintain their own. How is this different?

WATSON: A handful of these actually do that, as well. Actually, what I find interesting here, Arun, is that you've got people who believe that their work, whether it was with the Red Cross, their work, whether it was with an NGO, that it can help them build a big, serious business. It can raise, not even, millions of dollars, but in the case of some of these companies, Arun, they're raising north of $100 million. And again, they believe that their ability to organize, their ability to make big things happen, even with relatively small budgets and their ability, in many cases, to sell and persuade - they say that all of that has, in many ways, made them even better equipped to join the new gold rush in startup 2014.

RATH: You know, I have to admit, my first take on things tends to be cynical. And my first thought about this was that, oh, this is kind of sad. The best way to get people to be socially responsible is to assign a profit motive to do it. Am I being too cynical?

WATSON: You may be. I mean, I think it's at least worthy of a truly open conversation. I think, for example, what you would hear, the folks in education technology say is, we worked in the school system. We worked in difficult schools. We worked there year after year. And we saw very little change. And the chances that we would make sure that even the poor schools had really good technology, or be able to really analyze a student's grades and figure out what kind of curriculum would be better is enhanced, when you have a really good technology system. And that, frankly, that wasn't happening inside of inside the nonprofit or inside of school system and has happened a lot better, a lot faster, inside of a company. So is it sad that, in some ways. Is it hard to see a nonprofit push uphill? It is. But on the other hand, am I at least happy, that in lots of different realms, that people are bringing fresh perspectives and fresh skills? So far, I am.

RATH: They're companies, like you mentioned, Warby Parker, that when you buy a set of eyeglasses, they give one away for free. They're other examples like that, in terms of charity, when you are buying things. Why not just cut out the middle and do the charity directly? It feels like it might be making it more complicated than it needs to be.

WATSON: I think, people would tell you that their interests and their instincts are complicated. And I think, they would tell you that, while charity is part of what they're interested in, it's not the whole thing. And that a meaningful part of what they're interested in, as well, in some cases, if you're really candid, is building their own wealth. So I think, this is a way better model, even if, for those were traditionally nonprofit-oriented, it feels incomplete.

RATH: Carlos Watson is the co-founder of the online magazine, Ozy. Carlos, thanks, as always.

WATSON: Arun, good to see you. See you next week. Transcript provided by NPR, Copyright NPR.