As Ipswitch continues to think about how to meet our goal of providing some social benefit, I watch with interest how microfinance is evolving. Philanthropy will only go so far - it really doesn’t scale. In some ways it seems sustainable, because foundations persist for many years and continue to fund non-profits that have real impact. But foundations also tie up a huge amount of their capital (often close to 95%) by investing it in traditional capital markets. It’s a shame that this money can’t be applied to socially useful purposes while it’s waiting to be donated to non-profits.

It’s nice to see that the Gates foundation agrees, and is adopting microfinance as a core part of its strategy.

But why stop there? If microfinance can provide returns equal to or better than more traditional investments, all capital markets would look to microfinance as a component of their investment strategy, independent of any desire to help the world. Last week the Wall St. Journal wrote about SKS Microfinance, a company in India that is growing quickly and providing a return superior to more traditional investments. (The article appeared on May 15, 2006 on the front page – it’s in their paid archives, and apparently not linkable.) The headline was, “Entrepreneur Gets Big Banks To Back Very Small Loans; Microlending-for-Profit Effort In India Draws Business From Citigroup, HSBC”. I like the direct way that its founder characterizes the business, “This can work driven only by greed.” On first reading it seems a bit harsh, but it’s a reality given the pervasive need for capital in developing countries. It will take more than good intentions to fund all of the small businesses in such markets – for microfinance to continue to grow, its loans must have competitive returns.

As SKS and others continue to prove the concept, that’s when things will really scale, and microfinance will have broad, sustained impact on underserved economies.

Posted by Roger Greene | Permalink
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Yahoo, Verizon and other large ISPs have been hit with huge amounts of spam, but in response, they’ve adopted crude measures that block not only spam, but thousands of legitimate messages. Discussions, negotiations and every-day business are disrupted as a result, costing companies money and time. I’m surprised that no high-profile lawsuits have ensued against a major mail service such as Yahoo. (Note that I don’t recommend that course of action either, I’m just surprised it hasn’t happened yet.) Spam needs to be stopped, but not at the expense of preventing delivery of legitimate e-mail. Rather than protest loudly, lawmakers, companies and individuals are mutely accepting it as unavoidable. They’re wrong, and they should speak up and take action – demand accurate spam filters that block most spam but no legitimate e-mails. If one’s ISP or in-house mail server can’t do this, then switch, or urge your congressman to pass legislation setting spam filter standards.

What’s the right approach to blocking spam? More intelligent filters. Rather than blocking all mail from a domain (such as your university or company), spam filters need to assess each message and block just those messages that really are spam. Spam is constantly adapting. Preventing spam requires an ever-changing arsenal of defensive tools. The best tools, though, rely on the judgment of humans. Paraphrasing that famous comment from a Supreme Court justice - there may be no good way to exactly define spam, but you sure know it when you see it. Completely automated filters driven by algorithms flat-out don’t work – they either block way too many legitimate messages, or they let through huge amounts of spam.

When you choose a mail server or an ISP, make sure spam filters rely on human interpretation of what is spam. We do that in our IMail/ICS product line. A few other vendors do as well, but most don’t, and many thousands of users are suffering as a result.

Posted by Roger Greene | Permalink
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