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Stephen DeBerry's presentation at Masters of Scale Summit 2024 revealed a striking pattern: communities facing the greatest disparity are disproportionately located on the east sides of cities worldwide. From East Palo Alto to East Baltimore, from East London to East Jerusalem, this phenomenon stems from a simple geographic reality that has profound social implications.
Key Takeaways
- The "East Side Dilemma" occurs because Earth's counterclockwise rotation creates eastward wind patterns, historically pushing pollution and industrial waste toward eastern neighborhoods
- Vulnerable populations with the least power end up living in these less desirable, pollution-affected areas - like sitting on the smoke side of a campfire
- Unlike natural wind patterns, much of today's urban disparity is designed through human decisions in infrastructure, zoning, financial systems, and policy
- Bronze Investments created VC funds specifically targeting disparities that can be profitably transformed into solutions
- Virta Health exemplifies this approach: their 60% diabetes reversal rate (vs 0.4% medical standard) creates both massive returns and disproportionate benefits for vulnerable communities
- The East Side Alliance uses AI systems to identify capability combinations that can unlock capital and drive impact faster than traditional networking
- A recent example: finding a $500K tax-exempt investment to create IRS precedent that could unlock $1.5 billion in commercial finance
The Geography of Inequality
DeBerry's campfire metaphor captures the essence of urban disparity: "Imagine it's freezing cold outside. There are 10 of us. We need to huddle around this campfire, but the smoke is blowing east. Which one of the 10 sits with smoke blowing in their face all night? The answer is people with the least power in the group."
This natural phenomenon - Earth's counterclockwise rotation creating consistent eastward wind patterns - has shaped human settlement patterns for centuries. Industrial facilities, power plants, and waste sites historically located on the western edges of cities, knowing prevailing winds would carry pollution eastward. The result: systematic environmental burden on eastern communities.
The pattern appears globally consistent. East Palo Alto sits 35 minutes from the Masters of Scale Summit venue, yet has only two places residents can eat with metal utensils - one in a Four Seasons Hotel technically within city limits, the other in an IKEA cafeteria. The rest is fast food and convenience stores, creating a food desert that contributes to dramatically higher Type 2 diabetes rates.
Designed Disparity vs. Natural Forces
While wind patterns provide the initial framework, DeBerry emphasizes that modern disparity results from deliberate human design choices. "Unlike the wind, much of the disparity that we see in our society is designed by us," he explains.
This design manifests across multiple systems:
Infrastructure placement: Highways, rail lines, and industrial facilities continue to be sited in ways that burden eastern communities disproportionately.
Financial systems: Historical redlining maps show clear clustering of restricted lending areas on eastern sides of cities, limiting wealth accumulation opportunities.
Zoning and development: Land use policies that separate commercial amenities from residential areas in eastern neighborhoods while clustering them in western areas.
Transportation networks: Transit systems that connect western suburbs to city centers while leaving eastern communities underserved.
The solution, like the campfire metaphor, can be elegantly simple: "If you just sit in a horseshoe and get closer, no one has the smoke blowing in their face."
Profitable Solutions Through Strategic Investment
Bronze Investments applies this systems thinking to venture capital, specifically seeking companies whose success inherently benefits marginalized communities. Their thesis: the largest market opportunities often exist in addressing the most significant disparities.
Virta Health exemplifies this approach. The company achieves 60% diabetes reversal rates compared to the medical standard of 0.4% - a 150x improvement. Because diabetes disproportionately affects lower-income communities and communities of color, scaling Virta necessarily creates outsized positive impact on vulnerable populations.
"Because of the epidemiology of diabetes, who has the disease, you literally cannot build that company to be at its maximal scale without having an outsized positive impact on the folks who are most vulnerable," DeBerry explains.
The company achieved unicorn status while pursuing its mission to reverse diabetes in 100 million people, proving that addressing disparity can generate both social impact and exceptional returns.
The East Side Alliance: Network Effects for Social Change
DeBerry's next evolution involves the East Side Alliance, a human and organizational network designed to identify and assemble capabilities for maximum impact. The approach moves beyond traditional venture capital to create systematic solutions for systemic problems.
The alliance operates on a key insight: certain forms of value only exist when different network members combine their capabilities. No single organization can address complex disparities alone, but strategic combinations can unlock disproportionate impact.
Recent example: identifying a tax-exempt organization willing to invest $500,000 to create a specific tax filing that establishes IRS precedent. This small investment could unlock $1.5 billion in commercial finance for broader impact investing.
Traditionally, such connections happened through manual networking - emails, phone calls, and personal relationships. The new system uses natural language processing and retrieval-augmented generation (RAG) to identify optimal capability combinations faster than human memory and networking.
AI-Powered Impact Acceleration
The East Side Alliance's AI system represents a practical application of multi-agent systems for social impact. Rather than abstract technological development, it addresses specific networking and coordination challenges that limit impact investing efficiency.
"Certain forms of value in this alliance network only exist when they sit next to other members of the network," DeBerry explains. "The system is better at identifying those sorts of combinations than I am today. I'm in the way. I'm slowing the progress down."
This approach acknowledges that human limitations - memory, networking capacity, cognitive load - often constrain social impact initiatives. AI can process larger networks, identify non-obvious connections, and maintain awareness of capabilities that humans might forget or overlook.
The system enables faster iteration on impact opportunities while maintaining precision in matching problems to solutions. Rather than broadcasting general requests to entire networks, it can identify specific capability combinations for specific challenges.
From Theory to Practice: Real-Time Implementation
DeBerry concluded his presentation by announcing immediate implementation. The East Side Alliance would host a lunch session at the Masters of Scale Summit, conducting a 24-hour design sprint on these concepts with conference attendees.
Volunteers would join a three-week design sprint culminating in a meeting at the Federal Reserve Bank of New York with 20 other design teams working on similar initiatives. This practical approach transforms conference networking into actionable collaboration.
"This is not abstract. It's happening right now. It's happening with the people in this room," DeBerry emphasized, noting that the example system was built the previous night by someone attending the conference.
Implications for Impact Investing and Urban Development
DeBerry's framework suggests several strategic approaches for entrepreneurs and investors:
Geographic awareness: Understanding historical settlement patterns and their ongoing effects can reveal investment opportunities and social impact potential.
Systems thinking: Addressing root causes of disparity rather than symptoms often creates more scalable and profitable solutions.
Epidemiological alignment: Companies whose success requires serving vulnerable populations may achieve both impact and returns more effectively than those requiring separate social impact initiatives.
Network orchestration: AI-powered capability matching can accelerate social impact initiatives beyond traditional human networking limitations.
Policy integration: Strategic engagement with regulatory and policy systems can unlock capital and impact at scales beyond traditional business approaches.
The East Side Dilemma framework offers a systematic approach to understanding and addressing urban inequality while generating sustainable returns. By recognizing that much disparity results from design choices rather than natural forces, entrepreneurs and investors can create solutions that transform rather than simply ameliorate systemic challenges.
