Stanford Business Magazine February 2006

It’s been said that the fastest way for any billionaire to lose his fortune is to try to make it in Hollywood. The cutthroat world of the film industry is notoriously difficult to navigate, and the uninitiated are particularly susceptible to sinking their money into risky projects or bad deals. Which is one of the things that makes Jeff Skoll’s recent achievements so remarkable. The co-founder of internet auction hub eBay, Skoll, MBA ’95, opened his own media venture, Participant Productions, in January 2004 with an eye toward investing in four to six feature films annually with budgets under $20 million. In less than two years, he developed a reputation around town as a committed, knowledgeable financier with a clear vision and an enviable track record. Not only did Skoll manage to hang on to his sizable fortune—his 7.9 percent stake in eBay was reportedly worth about $3.7 billion as of April 2004—he also had in a hand in creating three of the most critically acclaimed films of last year: Good Night, and Good Luck, North Country, and Syriana.

That Skoll should succeed where so many others fail should perhaps come as no surprise. At age 41, the native Canadian repeatedly has demonstrated an aptitude for spotting new opportunities and harnessing emerging technologies to exploit them. Not long after earning his MBA, he teamed with friend Pierre Omidyar on eBay in 1996, and in less than 10 years, earned enough from the site to be ranked by Forbes magazine as the 94th richest man in the world. But it was never Skoll’s ambition to become simply wealthy. Even as a teenager, he wanted to make a difference and decided that storytelling was his preferred medium to reach that goal.

“By the time I was about 13 or 14, I had formed a worldview,” he says. “There were all these trends in the world, overpopulation and terrible new weapons and diseases. I really wanted to do something about it. Part of the onus for this was feeling that the people who could intervene in these problems, the wealthy nations or the wealthy individuals, were turning a blind eye. I really thought that what I wanted to do was to write stories and influence people to get educated on these issues and then take an active involvement to make a better world for everyone.”

Although he chose to study engineering over creative writing, Skoll nevertheless believed that once he became financially solvent, he would write “stories that show the world as a small and interconnected place and hopefully compel people to get involved in these issues that affect us all.” And while he still hasn’t spent a great deal of time putting pen to paper, Skoll has unquestionably taken an active role in attempting to right injustices throughout the world, primarily through two avenues: Participant Productions and its nonprofit sibling, the Skoll Foundation. He is at the forefront of the social entrepreneurship movement, a growing trend among professionals who don’t just donate to philanthropic interests—they set out to develop new, potentially more sustainable solutions to social problems using their own money.

That notion of social entrepreneurship lies at the heart of Skoll’s pursuits. Take, for example, the Skoll Foundation’s donation of $7.5 million to found the Centre for Social Entrepreneurship at Oxford University’s Said Business School. The school hosts the Skoll World Forum every March to provide social entrepreneurs from around the globe a chance to meet and find encouragement from one another. The second summit in 2005 attracted roughly 600, but as Skoll Foundation president Sally Osberg points out, “It’s not about the numbers. It’s about the connection between the funding community as well as the social entrepreneurs and the academic communities. It’s about bringing those communities together to build the knowledge that can fuel ever more effective on-the-ground work. Jeff’s belief is that social entrepreneurs can be the frontline drivers of change that address the really troubling trends in the world at large.”

In her lead role at the foundation, Osberg oversees the day-to-day evolution of the organization’s numerous initiatives including Social Edge, an online community designed as a resource for social entrepreneurs, and the New Heroes program, which began as a way to celebrate the pioneers of social entrepreneurship. Before long, it spawned a four-episode television series, which aired on PBS to some 2 million people. Narrated by Robert Redford, each installment was devoted to several “heroes” who are bringing life-changing tools and resources to the poor and marginalized—people like Muhammad Yunus, who founded Bangladesh’s Grameen Bank nearly 30 years ago with the idea of lending small amounts of money to the very poor to help give people the means to start their own businesses. Over time, the bank’s practices became credited with lifting more than 70 million people out of poverty.

Skoll has crafted his own social entrepreneurial campaign, the Gandhi Project. Partnering with Iranian-born venture capitalist Kamran Elahian, founder of the Global Catalyst Foundation and a number of other philanthropic organizations, Skoll created the program as a means to bring Gandhi’s principles of peaceful resistance and civil disobedience to Palestinians living in the Middle East. True to his passion for cinematic storytelling, he turned to a film to convey his message. Columbia Pictures granted the pair the rights to dub the 1982 Academy Award-winning Gandhi into Arabic. Working through his own foundation and Elahian’s Relief International, among other agencies, Skoll has been able to reach out to local community leaders who have organized screenings of the film in refugee camps, schools, even homes throughout Ramallah, Jerusalem, and Bethlehem. The first screening took place in April 2005, and the goal, say Skoll and Elahian, is to reach 1 million people before the end of 2006.

“It’s had an amazing impact,” Elahian says. “There have been kids who have come and said, ‘How can we be more like Gandhi?’ There have also been some negative reactions on a much smaller scale. You cannot convince everybody. But even if we can get 10, 20 percent of the population to see the film, I’m sure good leaders will come out of there. The majority of people are good. They just need some role models to follow.”

Gandhi aside, modern-day role models don’t come much more impressive than Skoll. He displays none of the ugly trappings that can sometimes envelop those who have risen to the top of their field with relative ease. He’s sweet natured, humble, and refreshingly down to earth. When he talks about his own various philanthropic pursuits, he frequently describes remarkably important work as “pretty cool,” reserving more verbose praise for the undertakings of others. He’s the boy next door made good, the straight-A student who struck it rich and now spends his time with A-list celebrities like George Clooney, who starred in Syriana and starred in and directed Good Night, and Good Luck.

Of course, Skoll, unlike a number of other would-be movie moguls, didn’t set out to be rubbing elbows with the stars. He says his real motivation back in those early teen years grew out of what could have become a family tragedy. “My dad was an entrepreneur,” Skoll says. “He had started his own business—and then out of the blue one day, he came home and announced that he had cancer. For a teenager, that was very unsettling. But I also remember my dad saying that he wasn’t so much afraid that he might die but that he hadn’t done the things he wanted to do in his life. That really got me thinking at that young age: What do I want to do with my life? Without that, I’m not sure it would have been as much of a call to action.”

Skoll’s father overcame the disease, but his son never forgot that singular experience. He graduated from the University of Toronto with a degree in engineering and founded two companies in Canada—a computer consulting firm, Skoll Engineering, and a computer rental business, Micros on the Move Ltd.—before enrolling at the Stanford Graduate School of Business. He completed his degree and soon was devoting long hours to the launch of eBay with Omidyar. The site grew faster than either of them could have anticipated, and two years later eBay became a publicly traded company. By then, Skoll had managed to create the eBay Foundation through the allocation of pre-IPO shares (which was then a revolutionary concept), and he began to devote more of his time to meeting with those in the social sector. In 1999, he was inspired to launch his own philanthropic arm funded entirely by himself, and in 2005 was estimated to have assets in the neighborhood of $600 million. “Every year I contribute more and more and more to it,” says Skoll, who is a bachelor. “The idea was to do it on an installment plan throughout my life and get started early.” Rather like saving for retirement in reverse, he admits.

Skoll came up with social-action campaigns that reside online to give movie viewers opportunities to take action on issues portrayed in his movies. This website was launched for the critically-acclaimed movie Syriana, which deals with political intrigue in the Middle East connected to the oil dependence of industrialized countries. The website offers information on oil dependence but also links to groups that want to get people to “tell Congress it's time for an oil change,” learn how to reduce their own dependence on oil, invest in renewable energy, or work towards ending human rights abuses in Nigeria's oil region.

But Skoll wasn’t content to stop there. While the mission of the foundation “is to seek out, invest in, connect, and celebrate social entrepreneurs,” Skoll hadn’t yet fully been able to realize his dream of telling stories that “would show the world as a small and interconnected place.” And so Participant was born.

Located on the outskirts of Beverly Hills, the Participant offices could belong to almost any young company, except for the Hollywood trades resting on the tables in the reception area and the movie stills hanging on the foyer walls. It’s comfortable but stripped-down, with a large central conference room and a number of desks out in the open. On a good day, one might even receive a greeting from Noodle, a very sleepy Labradoodle mix, who occasionally ventures out to visit newcomers.

“It’s amazing how small the movie business actually is,” Skoll says from the confines of his office. “If you think about it, it’s maybe about $100 billion worldwide. Next year, I think people will trade that much on eBay. As small as it is financially, its impact on the world is gigantic. It has such a huge impact on culture and norms and behaviors and beliefs, and many look at it as one of America’s main exports to the world. In terms of trying to find something that has a huge leverage, that could really make a big difference. I felt not just movies but TV and other forms of media ultimately make such a big difference in the world. I was shocked that nobody was doing what I’m now setting out to do, which is to create a media company that’s focused on issues that matter.”

Skoll, however, is no blind idealist. He puts his business savvy to use evaluating each potential feature film investment on three criteria: its quality, its social impact, and the likelihood it will engage an audience to take positive action. In practical terms, that requires finding solid scripts that will attract name actors who in turn will get moviegoers into theaters. Thanks to a team headed up by Skoll and Participant president Ricky Strauss, the company has accomplished just that with films like Clooney’s Good Night, and Good Luck, the story of veteran newsman Edward R. Murrow’s stand against McCarthyism, and North Country, which recounts the events surrounding the first class-action sexual-harassment lawsuit and stars Oscar winners Charlize Theron, Frances McDormand, and Sissy Spacek. “The trick,” Skoll notes, “is that it has to be compelling entertainment. If it’s spinach, nobody’s going to want to see it.”

“[Jeff] seems to have a fairly measured approach to things,” says Mark Gill, president of Warner Independent Pictures, which released Good Night, and Good Luck. “He’s always co-investing with the studio or another investor, so it’s not like he’s the only one at risk. That’s wise. Also, there are a lot of good scripts out there that studios have been nervous about making because those are tricky and they’re not always easy to get right. His willingness to take some risk will cause a lot more of those [challenging films] to get made.”

To give viewers the tools to get involved on a particular issue, Skoll came up with the notion of creating social-action campaigns that would live online, with websites launching in time for a film’s release and remaining accessible indefinitely. The sites feature in-depth information about an issue presented in a given film and include links to relevant nonprofit agencies. For example, Stand Up, the campaign for North Country, features more details about the real-life case and information about the National Organization for Women, the Feminist Majority Foundation, the Family Violence Prevention Fund, and others. “We’re doing something that no one else has done,” Strauss says, “by offering up these value-added social action campaigns, so that audiences who are inspired by the themes of the movie can actually have a place to go to learn and participate in making a difference.”

Participant Productions is readying new films, Strauss says, that include two documentaries—The World According to Sesame Street, which explores the global impact of the long-running PBS children’s series, and C7, about the seven protesters charged with inciting violent riots at Chicago’s 1968 national Democratic Party convention. Also, Participant is one of the financial backers of director Richard Linklater’s feature adaptation of Eric Schlosser’s nonfiction best-seller Fast Food Nation, which examines the impact of the fast food industry on American culture.

Given that virtually all Participant projects have a political edge, one might assume that Skoll chooses to make films that fall in line with his own personal beliefs. But when pressed about where his views fall on the political spectrum, Skoll will say only that he prefers to remain neutral and that there are people on the right and on the left working at Participant and the Skoll Foundation. So, despite the current glut of Hollywood insiders running for office, Skoll’s name isn’t likely to appear on a ballot anytime soon. After all, he has his own means of affecting change in the world, and at this point, he says, he couldn’t be more pleased that his methods appear to be making a difference.

“I come at it from the point of view of trying to be as apolitical as possible in presenting information about issues that affect everybody and trying not to be too biased one way or another on what the solutions are,” Skoll says. “I’m Canadian, so I’m very centrist in my view of the world. Ultimately, you have to agree that there’s a problem before you take an action on the problem, and whether that problem is third-world poverty or global warming, it’s really important that the light bulb goes off.”

Silver Screen Activist: Making Movies that Matter