How to save the world while sitting at your desk


(A couple of weeks ago I posted a piece that did not fit in my upcoming book. That post was so well received that I decided to post another that didn’t make it into the book.)

We all want to save lives. The thing is that people get paid to save stock prices. We do not need to pay people to feel good about themselves. We need to pay people to say, “You have to come to the office on Sunday.”

During my startup days, I kept scheming to get around this conundrum by doing things like giving money to charity (or to friends who would qualify) or giving employees time off to see shrinks. But my biggest idea came while I was figuring out how to cut data entry costs.

We needed to organize a lot of data and the cost was astronomical. So astronomical that our venture capitalists were getting ready to force us to ditch that part of our business. Then our CFO suggested India. “Data entry is cheap and everyone speaks English,” he said.

I found a recruiter in India who gave me estimates for staffing costs. An experienced data entry person would cost less than $10 a day. “What about health insurance?” I asked. The recruiter said, “Oh, we do not do that here.” The recruiter heard my disappointed pause and said, “Okay. You can do that maybe for another fifty cents a day.”

I plugged Indian laborers into my cost analysis and even if I had added a few U.S. salaries for management, profitability for the data entry business was at 85%. Too high to be believable. Venture capitalists would say my assumptions were wrong. So I spent evenings that I should have been socializing with friends combing through the details of my friends’ business plans looking for costs I might have missed.

Then I read Marie Claire when the cause of the month was sex slaves. They go for $300 a piece in India. So I added to my cost of goods the purchase of twenty girls. I expanded square footage to include housing above the data entry rooms. I added money for a school next to the cafeteria and I increased staffing so that each day each data entry clerk could spend an hour teaching the girls. One-on-one tutoring. Art classes. The Internet. I put these costs in categories like office space and support staff. My profit margins were 65%, the venture capitalist sweet spot: high enough to quell resentment and low enough to quell questions.

Charts and graphs of the economics of India were the focus of our next board meeting. My partner brought up the India idea gingerly, focusing not on the girls but on the cost savings and the shrewd worldview of operations. The venture capitalists loved the idea. They were very familiar with this strategy; of course, it is their job to say that they are already very familiar with every idea.

Then three venture capitalists wrote names of their friends who had data entry companies in India that we could use. There would be no office space considerations. There would be no staffing considerations. I would not be saving the world. I would be calling rich friends of rich people so that the money stays with them. I would be ingratiating myself to all of them so that they give me money next time I need funding for a company. And I would be giving more money to charity to make myself feel better.

4 replies
  1. melanie gao
    melanie gao says:

    I know I’m supposed to get it but I don’t… Did you set up
    the school for the girls? I think you didn’t but then weren’t your profit margins so high the venture capitalists would doubt you?

    Thank you for putting up with my stupid questions… Your idea about
    the school was so inspired and inspired. I want to make sure I
    understand how it played out in reality…

  2. penelope
    penelope says:

    These are very good questions, Melanie. Maybe you should be a VC :)

    No school for girls. It turned out that most of my assumptions for doing business in India were wrong. Lots of hidden costs. So the VCs knew before I did that I would be in tight-margin territory even if I called on their friends in India.

    This all became irrelevant, by the way, because when the dotcom bubble burst so did my company.

  3. Gordon
    Gordon says:

    I think most responsible entreprenuers have looked at this in the past…how to “Save the world”…I have even went as far as to research starting a renewable energies company…but I have always found that for every move to establish something good and positive there are plenty of people ruining it by looking for there piece of the pie….. I did spend a month looking at outsourcing in China….I do and I am glad I did …but that’s another story…good article..



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