Monday, 29 July 2013 11:48

How I Fell in Love with SocEnt (Social Entrepreneurship)

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How I Fell in Love with SocEnt (Social Entrepreneurship)

At first graduating from college in 2010 during a recession seemed like a pretty big bummer. I wanted to go into the field of international development, inspired by my father’s stories throughout his career in agricultural development. Yet every night at the dinner table I would hear that donor governments might make dramatic cutbacks on aid soon. Even in the good times I knew that the organizations my father worked for spent much of their efforts chasing funds, I thought with budget cutbacks it could only get worse. I thought, great this is just like Congressmen that have to spend forty-percent of their time hounding donors. There must be another way.

In college I had become familiarized with microfinance and of course the Grameen Bank. Here was a large scale social development project that was self-sufficient. A concept I found extremely appealing. I got involved and began making Kiva loans in January of 2009 and created a Kiva team at my college. Yet I didn’t make the logical leap to social enterprise on my own. I saw microfinance as a potential career path, but I was more interested in energy, human health and information and communication technologies than banking. It wasn’t until early 2011 that I decided to give microfinance another try, so I read Muhammad Yunus’ Banker to the Poor. A fantastic text, but most remarkable is its twelfth chapter: Beyond Micro-credit A New World of Grameen Enterprises. Here I found the Holy Grail that is social enterprise, a new concept for development that doesn’t require donations, doesn’t require government participation, doesn’t require a legislative majority to enact and subsequently cannot be eliminated by an opposition party a few years down the line. I was hooked, I read Yunus’ Building Social Business: The New Kind of Capitalism the Serves Humanity’s Most Pressing Needs and David Bornstein’s How to Change the World: Social Enterprise and the Power of New Ideas. There was no going back, my love affair with SocEnt (as the twitterverse and I fondly call Social Enterprise) was rapidly evolving into the love of my life.  I could already envision our lives together. SocEnt and I will travel the globe, meet inspiring innovative people with stories of resilience and perseverance, and give them the resources they need to leverage their expertise into building beautiful high-impact, high-volume social enterprises.

How do I make this romance with SocEnt work out? Or rather, how do I develop a practical career plan which closely resembles my romantic ideal? I envision spending at least my first two years working with fairly small organizations in a few different places around the world developing an understanding of the challenges that face fledgling social businesses. Only by first gaining such an understanding do I think that I will be of any use in the area I want to focus the majority of my time; bringing social enterprises to scale.

The three methods of scaling that I am inspired by and would like to pursue are venture, partnerships and replication. I suspect that though each requires a different skill set I would love to work with each method at some point in my career. Ashoka is by far the leader in venture support for embryonic social enterprises. Their fellows program whereby they identify individuals with great ideas and provide them with a stipend to cover living expenses and pursue their dreams offers perhaps the best return on investment of any support program I can imagine and I would be honored to work with them. Developing ideas and models and testing them is critical to the growth of the entire field. Nevertheless I believe the venture capitalist model holds great untapped potential in scaling successful moderately sized social businesses through much larger investments.  Yunus and others have proposed a social stock exchange in order to meet the capital needs of these social businesses. I find this idea moving but I remain skeptical, particularly of the speed with which such exchanges can be developed. I fear that it might require a decade or two of growth in the social business sector to support robust social stock exchanges that meet the capital needs of today’s most promising enterprises. I believe we can fill that gap quickly through a fairly traditional application of venture capitalism strategies modified of course to value social impact rather than profits.

I believe partnerships such as the Grameen Danone program that produces the nutritious Shakti Doi yogurt for impoverished Bangladeshi children or the Grameen-Addidas program to sell extremely cheap tennis shoes are also a major opportunity for growth in the social business sector. Both of these programs would have been quite impossible without the expertise provided by the corporate employees. In the absence of such a partnership these programs could only be created by wooing away these highly paid employees to social enterprise or by depending on their free time for assistance. Neither seems like a viable strategy at this time, though in the future it may become easier to convince employees to join the social enterprise sector as social businesses become well established and can afford more competitive salaries. In the meantime partnerships with for-profit corporations offer incredible access to expertise and thereby open up countless possibilities to the social sector.

Replication is probably the most straight forward method of scaling social enterprise. Somewhere in the world a social entrepreneur has developed a viable business plan and seeing as how they are not interested in profit, they share this plan with the world. Microfinance has indeed replicated globally, Kiva alone has 147 partner organizations in 61 countries. Replication offers the greatest short-term growth in the social sector and given that you already have a model to follow, is a great place to start and gain some experience before setting out to create your own innovative program.

Reviewing these exciting options I can envision how my romance with SocEnt might unfold. I would start in the field working with small start-up social businesses learning the ins and outs of launching a successful enterprise in the developing world. What sort of regulatory issues will I need to look out for? How do I reach my customers? What sort of support will my employees need to be effective? Who might oppose my work? Then I would seek to help replicate a tested social enterprise model in a different part of the world, facing a new environment and new challenges. By this time I should have accumulated a firm understanding of the support social entrepreneurs need and a good eye for good projects. This expertise will allow me to join or launch a social venture capital fund which gets involved with and supports the recipients of its capital. In this capacity I could also pursue my ambition of establishing partnerships with the corporate world. Seeking out and building such relationships could be an excellent role for a supportive venture capital fund to take on. 

Read 4598 times Last modified on Tuesday, 30 July 2013 14:58