The Most Impactful Startup Society In The World
And Why They Should Be Part of TNS/Web3 Ecosystem
The Brazilian organization Gerando Falcões, led by Eduardo Lyra, is one of the most innovative and promising startup societies in the world, even without self-identifying as such.
You may have never heard of them before but they are poised to become one of the most impactful social organizations in the world and potentially the first Brazilian Network State in the coming decades.
Breaking down walls and building bridges
Gerando Falcões is an innovative and fast-growing social organization that is literally transforming Brazilian slums into smart neighborhoods from scratch.
Under the leadership of Eduardo Lyra, Gerando Falcões was founded in 2011 as a regular NGO with a focus on educational initiatives for underserved communities. However, unlike most social organizations, they’ve chosen another path and have become a social startup that aims to eradicate poverty in Brazil.
Funded and closely mentored by dozens of the most successful Brazilian founders, including Jorge Paulo Lemann (founder of Ambev and Brazil’s richest man) and Flavio Augusto (billionaire founder of WiseUp and the former owner of Orlando City Football Club), Edu Lyra has built a world-class social development framework.
This system has transformed not only local favelas’ infrastructure (social hardware) but also provided basic education, market skills, and culture for the locals (social software).
It’s a full-stack social technology scaled up through an acceleration program called Falcons University, which has graduated +1300 leaders across the country using its methodology.
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Gerando Falcoes has several initiatives, including Favela-X, a Roblox Game whose players’ goal is to build public infrastructure in order to win the game; Bazar GF, a thrift shop that sells donated items (several by famous people) and reinvests the proceeds back to the organization; and Conecta Trampo, a web app for matching job opportunities to professionals trained by Gerando Falcões, which has employed +2000 people only in 2022.
The social revolution sparked by Gerando Falcões has attracted the attention of leaders from around the world, such as Satya Nadella and Mackenzie Scott (Jeff Bezos's ex-wife), who donated R$27M to the organization in 2022.
Moreover, they have proven to be highly cost-effective and transparent in their efforts. For instance, while the average cost of capital raising by the biggest NGOs globally is $0.26 for each $1 spent, Gerando Falcões’ cost is only $0.06. Also, they have a lot of internal initiatives to generate revenue, such as the previously mentioned Bazar GF and several branding partnerships.
To date, Gerando Falcões has impacted +717.000 Brazilians living in 6407 favelas, which corresponds to 42% of all Brazil’s favelas territories.
In 2022 alone, Gerando Falcões generated over R$28M (about $6M) in income. The average unemployment rate across all favelas supported by the Favela 3D program is now less than 5%.
From Bytes to Atoms
The most impactful and ambitious project of Gerando Falcões is Favela 3D (Digital, Dignifying, and Developed).
It is responsible for transforming favelas into digital smart communities, that is, pulling down old shacks, building up an entirely new infrastructure, and running several social programs with the citizens in order to make economic development sustainable.
Favela Marte (Mars Favela), in São Paulo, is going to be the first community to be transformed and will be finished by the end of 2023. There are more three projects running in parallel as well. Each one of these will have a slightly different approach in order to A/B test new strategies and measure results in the long run.
Favela Marte will provide 240 houses for 673 citizens, 80% of whom lived until then in conditions below the poverty line. These houses will be equipped with refrigerators, cookers, microwaves, and showers. Additionally, the community will have sewage and sanitation facilities, which is a dream for all residents.
The community will also be self-sustaining in terms of energy through the use of solar panels and have 100% 5G coverage. Each resident will receive a compatible smartphone, which was made possible through a private partnership.
In addition to the infrastructure, the innovative program is responsible for developing economic independence for its residents. Since the beginning of the project with Favela Marte, unemployment has dropped from +20% to 0. Everyone in the community now has a job or has started a business.
This has been achieved through several programs focused on market skill development, digital education, and cultural activities.
Favela dos Sonhos, another community in the program, are taking digital technologies as priorities as well, implementing free wifi and Google Powered digital address.
The Operational System Problem
Gerando Falcões has not only built a very powerful social development technology but also a very talented and passionate network of leaders, advisors, and members capable of actually executing it. It is a great political piece of software.
But, doesn’t matter how good your app is. If the underlying platform upon which it was installed is flawed, it will never work.
Unfortunately, Brazil’s political operating system has serious problems. Bureaucracy, chronic corruption, techno- and free market-aversion, socialism, and so on.
This means that all of Gerando Falcões' hard work could be destroyed by some political “virus” or “firewall”, as we have seen happen repeatedly in the last century across the World. Ten years of effort and innovation can suddenly be undone by bad political decisions and a few strokes of a pen, unless we start planning now how to migrate in the long run to a new political operation system, aka a Brazilian Network State.
The Missing Bridge
If Edu Lyra’s catchphrase is to break down walls and build bridges between poverty and prosperity, maybe now is the right moment to create a bridge between Gerando Falcoes toward the Crypto/Web3 and Startup Society ecosystem.
The benefits in the short and long term for both communities are very clear.
First of all, Gerando Falcões would be connected to the Web3 ecosystem, which has a DNA of helping the emerging World and funding several types of public goods through projects like Gitcoin, which is the largest quadratic funding platform in the world, whose grants program has distributed $50M in funding to date.
Also, in periods of crisis, we have seen large mobilizations from Crypto communities to provide relief to the people affected by disasters, for instance, Crypto Relief for India, which raised almost half a billion dollars, and the Ukrainian government which has raised $184 million through more than 120,000 cryptoasset donations since the start of the Russian invasion. This includes a $5.8 million donation by Polkadot founder Gavin Wood, and a CryptoPunk NFT worth over $100,000.
The 29-year-old billionaire, Vitalik Buterin, founder of Ethereum (the biggest Application Blockchain in the world), is renowned for his support of social projects worldwide, like here, here, here, and here. He has shown particular interest in Latin America, meeting with Former Argentinian President Macri and participating in Brazilian events.
Within the realm of Startup Society, there have been numerous political and institutional innovations that could potentially benefit Gerando Falcões in the long run. Afropolitan, Culdesac, and CityDAO are only a few on the list of projects revolutionizing the traditional notion of a city.
Balaji Srinivasan, one of the most brilliant minds of our times and author of The Network State - How to Start A New Country, has been a major source of inspiration and capital for many of these projects. He has been aggressively advising and funding social innovations, creators, and digital technologies across the world, including Asia, Africa, and Latin America.
It is important to note that not only would the Brazilian organization benefit from the Web3/Network State ecosystem. The opposite is also very true.
The Web3 ecosystem is struggling to build and engage online communities and would greatly take advantage of Lyra’s experience. And The Network State, in turn, needs to attract talented and committed political entrepreneurs.
Edu Lyra with no doubt is one of them.
He is one of the most talented political founders in the world. A community leader with a digital and business-driven mindset. Someone who has created a world-class organization, aligned several stakeholders (private sector, government, and civil society), and crowdfunded hundreds of millions of dollars. A founder who started this project from the favela shack where he lived with his single mother ten years ago.
He already has the One Commandment (“Favela 3D - Digital, Dignifing and Developed”); has a recruitment and educational process (Falcon University); a network union (+1300 graduated leaders, world-class mentors, dozens of employees and voluntaries, and good a relationship with politicians) that is self-evidently capable of collective action; and is building a network archipelago composed by dozens of smart digital neighborhoods.
Bringing together Edu Lyra’s community and political skills and his ability to build infrastructure in the physical world, with the digital and crypto expertise of Balaji, Vitalik, and other leaders would have a tremendous positive impact on the world.
If we are living in times of breaking down walls and building bridges, my hope is that this article can serve as a bridge between two ecosystems that together can accelerate the process of turning poverty and injustice into museum items forever.