Photo by Charles Forerunner
What is social entrepreneurship and how does it really work?
Is it a special kind of business form? Is it something about the business model? Or is it just a marketing strategy?
The short answer to this is; “It depends”. The above questions are all relevant aspects of social entrepreneurship, but they are of course relevant for any type of entrepreneurship. What distinguishes Social Entrepreneurship is that it is about being a “Good” company in all of these aspects.
Do you take care of the community around your company in any way? Are your products produced without doing harm to the environment and are you paying honest salaries for honest work? Is your main objective not to increase percentage to the stockholders without also increasing the return to the employees? Well then my friend, then you are a good company! Congratulations.
One interesting misunderstanding I am often asked about is the possibilities of making profits. It´s a business, of course you need to make a profit, preferably a large one. Otherwise it´s charity and not a sustainable business.
There is a strict definition of “Social Entrepreneurship”, and the one used by the Nordic Ministry Council and the EU-council is the most accurate considering the balance between the academic and de facto social enterprises. What I am arguing is that this is not relevant, other than for governmental support programs. And since a business model should never be dependent on financial aid it is definitely not relevant to the entrepreneurs, customers and investors.
I consider myself to be lucky, I am fortunate to do what I love and get paid for it. Go me.
For me it´s about leaving the world a better place than we found it. I support entrepreneurs, organizations and companies with launching and running different social ventures and projects through a platform for socialentreprises 24/7 (because I am also an entrepreneur).
For me that translates to: That’s a cool way to make the world better, let’s do it!
In one of my projects we went down to Minsk, Belarus earlier this year to check out how the area of Social Entrepreneurship is developing there. Why? Why not, it’s a cool place and for us a big contrast in terms of structural support for businesses, so we thought it would be enlightening. And it was.
One company we visited has 400 employees and is one of the largest suppliers on the market for their products, and they are internationally competitive. All employees have some type of visual impairment. The whole manufacturing was designed to overcome this by special aids, floor markings for maneuvering by touch and so on. The company also provides access to a community for personal growth, such as staff musical, help with depression due to condition and summer camp possibilities. Amazing. By definition a social business. What we found interesting was that this was not anything special for them, and the fact that even though they have done this since the 1920´s, it is not advertised in any way and is scarcely know by their customers. When asked “why” they replied that their customers only care about the price, it’s business.
Another interesting case is a venture in Norway we are starting to collaborate with. It´s a business for ex-convicts. The provided service? Demolition! They are growing to be a major subcontractor in this area, all while having the focus on actively supporting the transition into society for ex-convicts. The social business aspect is a major component of their marketing strategy. And with the largest venture capital fund in Norway supporting them, it is safe to say that they have built a sustainable business model. I love it.
Making profits and changing the world are not in contrast for the entrepreneurs planning and building their ventures today. It is a necessity. Customers, regulations and to a large extent, investors, are in the process of more increasingly demanding profits together with positive impacts. By positive impact I mean being good to your surroundings.
A short summary of Social Entrepreneurship I found that works in all cases is; “Business will always be business, but don´t be an *sshole.”
I like that. It´s accurate, fun and a bit provocative. Just like all entrepreneurship ventures should be. Including social entrepreneurship ventures.
So don’t stress about how you categorize your venture or business. Make it happen, involve others through great places like IdeaHunt and have fun. Just remember, don’t be an *sshole.