Re-Thinking How We Organize
Chinedu Echeruo is a New York City-based serial entrepreneur. His slew of start-ups includes HopStop, a transit navigation app he sold to Apple in 2013. Most recently, he has intensified his study of natural sciences—especially physics—in a quest to re-design organizations. His aim is to align how we dream, build, and produce with a new, better form of capitalism.
Chinedu is a newly elected member of Ashoka’s Entrepreneur-to-Entrepreneur Network, which brings together high-impact entrepreneurs from the business sector with the world’s most powerful social entrepreneurs at Ashoka. We recently spoke about what he’s learned, and why he calls his new endeavor Beloved Ecosystem.
Konstanze Frischen: Chinedu, you believe that the corporation, as a classical form of human organization, is somehow past its due date. Can you elaborate on that?
Chinedu Echeruo: Sure. Just for context, there’s different theories on why companies exist, but the most common one is about efficiency of organization: That having a company, or a corporation, is a very efficient way to organize. But that’s not set in stone. It can change with technology and new ways or information flow. We don't have to have large organizations; those have just happened to be the more efficient systems to organize ourselves in. But the challenge with those systems is that sometimes they decouple themselves from what we truly want. That’s what’s happening in our current world. So what I think we need now is to rethink organizational design and align it to how we want the world to unfold.
Frischen: Helping people find a better way forward was at the core of HopStop, your navigation app.
Echeruo: That’s true! I grew up in Nigeria, and I was always getting lost in our house there. And it's not because we had this palatial residence, I was just very bad with directions. Then when I was 16, I moved to the United States and then to Brooklyn to work on Wall Street after college. Imagine me in New York City, in the maze of the subway system, in that complex labyrinth of tunnels and streets. It was terrifying. But the inciting moment was after some years, when I got lost on a date. I can’t remember how the date went exactly, but I know what I did the very next morning. I went down to the subway station, I took out a subway map, laid it on the wooden floor of my apartment, and said: “How would I describe a subway system to a programmer, who can then write some sort of algorithm to solve it, to help me go from point A to point B?” I didn't know how to code, so I found a developer in Russia. And for four years, borough by borough, train by train, stop by stop, we built HopStop, which was eventually sold to Apple. By then, I think we had included some 300 or 400 cities, and included bus stops and bike routes.
Frischen: So your frustration led to a product that was useful for everyone.
Echeruo: Yes. At the heart of every great product is a psychological need. That’s what HopStop solved; my own very deep desire, my fear of being spatially lost. And that was something that just by looking at my height and my weight, you wouldn't be able to know it. But that psychological need is encoded or is embodied in the notion of a story. Everyone aspires for a story to come true, whether that’s what they want to have for lunch or what empire they want to build with their life. So essentially, what I'm proposing is that the point of our organizational design should be to make those human stories come true.
Frischen: Given humans have diverse and fluid needs—does this imply that the future of organization is nimble and smaller? You were sort of alluding to the size of the organization being outdated because technology allows us to organize in new ways.
Echeruo: Yes. That's some of the work my partner and I did at the Love & Magic Company, to rethink what another form of organization could be. We called it the Beloved Organization. You can think of it as a loosely-coupled, decentralized system of agents, or teams, with three core principles. The first is to align the organization to making human stories come true. The second one is to leverage these decentralized teams. And the third principle is to maximize the velocity of flow of information.
Frischen: And what does it look like in practice? Are you building your next organization on these principles?
Echeruo: Yes. When George Floyd's death happened, it was clear to me that at the heart of the social unrest is wealth inequality. We have to address that economic gap. That’s what I’m trying to do with the next startup I’m building, which is a company called the Beloved Ecosystem. Because what I’ve seen will not move those economic metrics much. And the reason there hasn’t been substantial progress since George Floyd’s death, around wealth creation, is because of its complexity. So the question is, how do you design something that allows you to transform human life at scale? And there’s been recent advances in statistical physics that make it possible, for the first time, to reason about how to design for these complex systems. That is something we should all be jumping about and dancing on the streets, because finally, we have a way to reason about something we couldn't reason about before.
Frischen: Can you summarize these advances in statistical physics?
Echeruo: The core advance was given to us by a man named Richard Feynman. He got his PhD at Princeton and he won the Nobel Prize in physics. His work allows us to make predictions about systems and how they will develop in the future. In order to understand complex systems, we need to understand why movement happens. And the great thing about physics is that it’s about the movement of things, which includes human beings. So in physics, we can find an answer to the question of why human beings move in the way they do. Once you go down that route, certain answers become mathematically obvious.
Frischen: What are those answers?
Echeruo: It’s all about reducing the entropy in the system. The goal of any organization is to reduce entropy, to collapse the complexity for the people in it. Complexity blocks agency, it blocks action. So our objective is to make things as easy as possible, so movement becomes easier. That way we can bridge the gap between where people are and where they want to be, where their stories can come true. For example, take an unemployed woman who wants to become fully employed. The organization’s job is to reduce the complexity that prevents her from getting there, and to give her the agency to move from point A to point B.
Frischen: And how do you do that?
Echeruo: Let’s look at my newest endeavor, the Beloved Ecosystem. We will use data science and systems to build startups from scratch in distressed communities that will sell to U.S. government. These communities are the bottom 20% of the American population and the U.S. government spends a trillion dollars every year to provide services and payments for 50 million people who live there. So why can't those companies, that provide those services, be co-owned by and employ people who live in those communities they serve?
Frischen: That is a principle most social entrepreneurs work with—put proximate leaders, those with the lived experience, in charge, rather than outsourcing the fulfillment of alleged needs to externals.
Echeruo: Yes. My goal is to co-create wealth in these communities, through entrepreneurship, and by using those principles from physics to build the most efficient startups possible. And by measuring success towards human stories. That’s the metric. It’s not the money we spend or the amount of construction we build. We need to measure whether the people who live in those communities, their lives are now better, their stories are coming true. So our only challenge is understanding what those stories are that people want to come true. That’s our work, that’s empathy. And once you can do that, you can tap into unlimited energy. Because people have unlimited energy to pursue their stories.
Frischen: Your company is called the Beloved Ecosystem. You talk about “beloved customers.” Why the word “beloved”?
Echeruo: If you think beloved is unusual, my previous company was called the Love & Magic Company. But yes, “beloved.” Because if you want to design an organization that aligns with the human story, it starts with deep empathy. You need to truly understand what people desire, before you can create some kind of structure to help them achieve that goal. So that’s why we talk about beloved customers. Having beloved customers increases retention, it increases employee engagement, it increases clarity of strategy. It enables you to have alignment between your activities and furthering your customer’s story.
This article originally appeared on Forbes.