07
Jun 2023
Funders Shouldn’t Pigeonhole Organizations In Name Of Illusory Efficiency
When trying to reinvent systems or create new value networks from whole cloth, funders often want small and nascent organizations to focus, focus, focus and stick to their knitting. Rather than fund an organization to vertically integrate, funders see it as more efficient to deploy capital by funding other entities to fill in the gaps in new ecosystems.
The problem with this approach, however, is that it can turn out to be penny wise yet pound foolish.
In The Prosperity Paradox, Clayton Christensen, Efosa Ojomo, and Karen Dillon write that in emerging markets—where value networks are often underdeveloped—to be successful organizations must often vertically integrate their operations in ways “that might seem unnecessary in more prosperous countries.”
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