Earlier this month, the European Commission named Athens, Greece, its annual capital of innovation, in part because of an online platform called SynAthina, which lets citizens and groups submit city-changing ideas and connect with the officials, nonprofits, or businesses that can help make them happen.
Around the same time, Guadalajara, Mexico, earned that country’s national transparency award for creatively battling corruption for an online platform called Visor Urbano, which allows business owners to submit permit requests and construction licenses through an automated processing system, and makes basic compliance information publicly accessible. And in Providence, Rhode Island, a program to measure and increase how many words young low-income kids are exposed to recently received a positive evaluation from Brown University. Those involved are now hearing over 50% more words as they develop, something that seems to be crucial for later academic success.
The commonality: All of these efforts were developed during past iterations of the Mayors Challenge, a multimillion-dollar competition run by Bloomberg Philanthropies that asks city leaders to submit bold solutions to a broader societal concern they’re facing. Bloomberg then funds the top projects with the idea that if they are successful, they’ll be adopted elsewhere.
Since 2013, Bloomberg Philanthropies has held four such competitions: The first was in the U.S., and helped jump-start Providence’s education program. The following time, it sourced ideas from Europe, then Latin America.
[Source Photo: Jason Leem/Unsplash]
This year, Bloomberg Philanthropies again looked to U.S. mayors for ideas, and the nine winners of this challenge round were announced in October. They include metros like Denver, which launched an initiative that aims to improve air quality by mounting and monitoring pollution sensors around schools. Georgetown, Texas, is 10 times smaller but hopes tobecome the first energy independent community in the U.S. by encouraging people there to mount solar panels and install rechargeable storage batteries in their homes. Other winners are Los Angeles, with a novel plan to tackle affordable housing and homelessness, and Huntington, West Virginia, which will continue battling the opioid epidemic. (Find a full list of winners here.)
Given how well previous Mayors Challenge-supported ideas have fared, Bloomberg Philanthropies’ investment in city-generated ideas appears to be working. “We’re making some good bets and the cities are really proving out their innovations in a powerful way,” says James Anderson, Bloomberg’s head of government innovation.
“Cities are being asked to tackle every issue under the sun, and they need support in developing innovative new proposals,” he adds. “We need better public solutions across the board. And Mike Bloomberg believes that philanthropy has a critical role to play in affording the public sector risk capital to test new ideas, to see if these ideas work, and to prove them out.”
This year’s Mayors Challenge was the largest ever, with 325 cities entering and a total of $17 million funding and support at stake. Unlike in previous competitions, however, Bloomberg Philanthropies got involved in coaching cities before they ever submitted their concepts. “Albert Einstein has this very famous quotation which is, you know, if I had one hour to solve a problem, I’d spend 55 minutes understanding the problem and five minutes focused on solutions,” Anderson says. The funder tried to simulate that through boot camps, where the first 30 cities to sign up were able to meet with available coaches and experts about how to best define the problems they might want to tackle.
In February, Bloomberg Philanthropies narrowed the field to 35 Champion Cities, which also received a new kind of windfall: $100,000 each and technical assistance to build and test prototypes of their concepts and the assumptions behind them. These city leaders also engaged specifically with people in their communities who were directly impacted by the issues they were trying to solve, and sourced from them candid feedback on their solutions.
“I think this was some of the best money that we could have spent,” Anderson says. “It showed us which teams have the capacity to take their ideas off of paper and put them into action. It gave those cities incredibly valuable data about whether their ideas would get traction, and how to improve them,” he says. “And perhaps most importantly, it generated a ton of local enthusiasm: Nearly $19 million dollars were committed by businesses, other levels of government, and local funders around those 35 ideas simply as a result of having the testing phase before any of those ideas had been designated winners.”
Bloomberg planned to award $5 million dollars to the best project, and four $1 million prizes to the best runner-ups. But the range of promising projects grew wide enough that it altered the stakes. Ultimately, Bloomberg awarded nine $1 million prizes to a wider range of cities instead.
As Anderson sees it, the competition now has two major themes: Mayors in places of all sizes are increasingly confident that they can dream up the next city-based solution to a national or even worldwide problem. And they’re becoming ever more excited to involve their citizens early and often to get that right. “This reduces risk and increases the likelihood that when you launch your project, your product, or your new service, that it’s going to hit its mark.”
There are about 8,000 people on my newsletter list.
That’s not a ton of people–your email list may have five times that. But these are my people. I love them. It feels like I’ve scratched and clawed for each one, so I treat the list with kid gloves. I only send posts I deem “perfect.” So when one unsubscribes, it feels like a dagger.
My goal is to eventually get to 100,000 subscribers. Yet, I’ve only recently realized my subconscious goal has been to send emails that I think will yield the fewest unsubscribes. This is why I only send a handful of emails each year, despite having hundreds more sitting in drafts. I don’t want to lose anyone.
This is why there are 8,000 subscribers, not 100,000.
Loss aversion is hardwired into each of our brains and it’s killing us. The research behind Amos Tversky’s and Daniel Kahneman’s Prospect Theory from the late 1970s indicates that humans feel roughly twice as much pain and anger at losing something as we feel happiness at gaining something of the same magnitude. For example, if you buy a cup of coffee with a $10 bill, but later notice you received change as though you’d paid with a $20, you’ll feel pleasantly surprised–and maybe slightly guilty. But if you realize you paid with a $20 and got change for a $10, you’ll be livid.
Entrepreneurship is hard enough without adding loss aversion. It’s like we’re all trying to run a marathon while dragging an 85-pound weight. Give yourself a break. Here’s how to shed the weight.
Exactly when loss aversion becomes disastrous for founders
Let’s start with my email list. Being an entrepreneur is emotionally exhausting, so founders tend to optimize for what’ll create the least “emotional drag.”Worst of all, founders tend to overestimate what they have and the general instability of the lifestyle amplifies the feeling of loss.
That means my goal for an email campaign is going to be to minimize unsubscribes, whether that’s a good business decision or not. Spoiler alert: It is not. I’ve seen many founders get a customer to sign up for their service before it launches. In an effort to not bother them until the full-featured product is live eight months later, they don’t contact them again. They didn’t want to lose the customer. But by the time they reach back out, that customer had long forgotten they existed and deleted the email.
This is how damaging the behavior can be
I’m currently letting the fear of losing 25 subscribers dictate when, where, and how I provide value to 8,000 people. I’m letting a handful of people who might not be interested enough in what I’m trying to do at Tacklebox (this is not a crime nor a personal attack) dictate how fast Tacklebox grows. Sheesh.
How do we combat this? By implementing systems to identify and minimize loss aversion. Here are three steps to take.
1. Focus on data points
Treating everything like an experiment that yields data points is a great way to remove harmful emotions. If I send an email and 25 people unsubscribe, that’s not a bad thing, it’s just a data point, the result of an experiment. If that same email leads to 10 new applications for Tacklebox, that’s another data point. These data points can all relate back to exactly who your customer is, and how well you’re solving a problem for them.
2. Only celebrate and prioritize things you do, not things that happen because of things you do
Don’t get upset over people who unsubscribe and don’t get happy about subscribers. Get happy about things you can control. I can control sending emails with good content. I can’t control if someone got a new job and no longer wants to launch a startup, so they unsubscribe. A process you can control is greater than people’s response to that process.
3. Create and follow metrics that optimize your goals, not ones that minimize loss
Understand the decisions you need to make, understand the data you need to make those decisions, and create and follow metrics that increase the experiments that’ll get you the data that’ll lead to those decisions. Everything else is irrelevant.
Our goal as entrepreneurs isn’t to avoid losses. It’s to build things that help people.
Brian Scordato is the founder of Tacklebox Accelerator, a seven-week program in New York City to help idea-stage founders with full-time jobs validate and build their startups. He writes a popular bi-weekly newsletter on startup tactics and loves Tar Heel basketball.