In the past few years the idea of applying smart business practices to drive social change has been on the rise.
But what exactly is social entrepreneurship? And what does it mean to be a social entrepreneur?
There has been a flurry of activity to define this field. One much-referenced article, “The Case for Definition” by Sally Osberg and Roger L. Martin, was published by Stanford Social Innovation Review in 2007. Osberg and Martin posit that social entrepreneurship takes place when a social value proposition (a solution of some kind) provides wide-scale, lasting systems change for the benefit of society. When the solution helps move a system from an equilibrium that is unjust (where there is suffering, exclusion or marginalization) and helps establish a new, more just, equilibrium then social entrepreneurship is at work.
Acumen defines ‘social enterprise’ as any enterprise that prioritizes transformative social impact while pursuing financial sustainability. Social enterprises can have nonprofit or for-profit legal structures, but they must have two key elements:
A social impact mission: a clear goal to improve lives or the environment
A business model: a strategy for how an enterprise will create, deliver and capture value in a sustainable way
Ideally, social enterprises contribute to transforming the systems that keep people trapped in poverty. However, a larger ecosystem of actors and policies can all contribute to the success and failure of a social enterprise.
Social entrepreneurship is about disrupting existing markets that aren’t working, and creating new ones to improve the status quo.
While academics have debated the scope and terms of the fields, students and aspiring social entrepreneurs have learned much from early famous examples like Grameen Bank and Aravind Eyecare.
These early innovators showed that it was possible to run a company that prioritized the wellbeing of employees, the community as a whole, and the environment -- all without sacrificing profitability.
In the 2007 article, Osberg and Martin point out that, “people are attracted to social entrepreneurs like last year’s Nobel Peace Prize laureate Muhammad Yunus for many of the same reasons that they find business entrepreneurs like Steve Jobs so compelling – these extraordinary people come up with brilliant ideas and against all the odds succeed at creating new products and services that dramatically improve people’s lives.”
Highlighting the stories of individuals who trailblazed new ways of doing business has helped bring social entrepreneurship into the forefront and demonstrate concrete examples of what it can achieve.
The trailblazers of social entrepreneurship have been inspiring, but now it’s time for the emphasis to shift.
The future of social entrepreneurship is no longer about looking up to a select few who have some kind of rare gift for implementing innovative ideas.
Now the spotlight is on YOU.
One glance at headlines and it feels like an uphill battle to combat the current challenges we face. There’s no way one person can do it alone. Every individual and organization has a role to play in mobilizing skills, talents, and life experiences to move towards a more just and equitable world where all have what they need to survive and thrive in life.
If you’re reading this and still unsure how to contribute, consider this your rally cry to step into action. No matter your education, your heritage, your gender or your geography, the perfectly-you life experience you possess in this very moment is exactly what’s needed.
In +Acumen’s Social Entrepreneurship 101 course, it starts with you. The first module takes you through a life map exercise, where you think back to you unique experience - geographic, cultural, social, academic and professional - to notice the themes and turning points that have brought you to where you are now and will influence where you might want to go next.
Thulsiraj “Thulsi” Ravilla, Executive Director of Aravind Eyecare, describes how the best ideas for social enterprises come at the intersection of social problems and a founder’s concrete skills or technical competencies.
By weaving your passion and unique skills with a need or cause, and standing with the people you want to serve, you will be well-positioned to make a meaningful dent in the world.
With social entrepreneurship offering a new road to catalyze change, social enterprises are the vehicles that propel us towards more equitable destinations.
Social entrepreneurs themselves are the drivers. They are individuals who possess the financial and operational skills to successfully launch a business while prioritizing social impact.
Let’s break that idea down and look at how to get started as the driver of social change through social entrepreneurship.
1 - Prioritize impact
Leaving a positive mark on the world is the goal of social entrepreneurship, not a byproduct of another focus (like profits). Successful social entrepreneurs have the vision, perseverance and creativity to keep impact goals at the forefront at all times.
Maintaining this focus is two-fold.
On one side, it’s about reflecting on who you are as a person, your skills and experience, and your motivation for pursuing this path. This will ground you in your ‘social enterprise sweet spot’, which lies at the intersection of the cause you wish to impact and your unique perspective and experience to be part of the solution.
If you are reading this, chances are you have already identified issues in your community that you want to improve. If not, the workshops inside the Social Entrepreneurship 101 course give plenty of prompts and suggestions to explore what cause you might want to zero in on.
“I urge you, in whatever sector you work, in whatever job you do, to start thinking about how we might build solutions that start from the perspective of those we’re trying to help. Rather than what we think that they might need.”
—Jacqueline Novogratz, CEO of Acumen
On the other side of keeping impact a priority, there is a dedication to deeply understand the problem that you want to improve and the people who are affected by it. From the person you spoke with yesterday who wrestles with this issue day-in-and-day-out to the other individuals and organizations who have a role in tackling the same challenge, it’s a commitment to understand the ecosystem as a whole and your role within it.
Finding your social enterprise sweet spot will help you get started in social enterprise - and the first steps are worth a lot - but when your actions directly impact the environment and communities you work with, good intentions are not enough. Prioritizing impact means asking the tough question: “Is this work truly making a difference for the people I serve in the way I think it is?”.
One tool social entrepreneurs use to tackle this question and assess success is a ‘Theory of Change’. This framework helps to better understand the short and long term impact of a social enterprise’s activities and outline how it can reasonably expect to achieve measurable change.
“My dream is to find individuals who take financial resources and convert them into changing the world in the most positive ways.”
2 - Embrace smart business and develop entrepreneurial skills
As a social entrepreneur, smart business practices are core tools in your toolbelt for generating impact.
If you shy away from earning revenue, financials, marketing, selling, streamlining operations, or other foundations that have been refined in the for-profit sector for hundreds of years, you are leaving potential progress on the table. A willingness to take an entrepreneurial approach is what allows social entrepreneurs to uniquely contribute to eradicating issues as compared to traditional charity and philanthropy.
Smart business centers around providing the customer with a product, service, or experience that is relevant and meaningful to them. Without this connection, no exchange of value is possible.
With some creativity and a keen awareness of the system as a whole, social entrepreneurs have the ability to find synergies between players in an ecosystem that were previously invisible or overlooked. These mutually beneficial connections between players can then be matched together, like pieces of a puzzle, to design revenue engines that allow a social enterprise to eventually reach financial sustainability (sometimes in combination with traditional philanthropy).
Smart business practices are not really about business in and of itself. Money exchanging hands is simply the gas needed to keep the social enterprise vehicle running on the road towards its destination of a better world.
Revenue engines that power social enterprise include structures that can be similar to traditional business, such as selling goods or providing services for a fee. Or, they can be more creative, like cross-compensation models where one target market or product line generates enough revenue to cover the costs of delivering to another group who might not have the same ability to pay.
“Once social enterprises have a diverse and stable set of income streams they are better placed to have greater social impact.”
—Dan Zastawny, in The Guardian
3 - Look for potential to transform the system
Social entrepreneurs catalyze system transformation by finding new twists on old ideas, or by imagining and implementing new ideas that have the potential to shift the status quo.
To accomplish this, they do two things really well.
Social Entrepreneurs Innovate
Broken systems need fixing but as Einstein famously said, “we cannot solve our problems with the same thinking we used when we created them.” New thinking and new approaches are needed to create a more just and equal status quo.
Inside +Acumen’s Social Entrepreneurship 101 class, students are encouraged to create a solutions map. This is an exercise that prompts you to identify who else is working in the same space or towards solving similar challenges. The goal is to see the landscape of the specific ecosystem you are working in more clearly and understand your place in it. This understanding allows each player in the ecosystem to claim their ‘slice of the pie’ while working in tandem and in collaboration with fellow players. When everyone is providing distinct value in cooperation with others, there is the benefit of fostering innovation within the entire ecosystem.
“Social entrepreneurship finds overlooked power in low income communities and then changes the system to tap that power.”
—JB Schramm, Co-Founder of College Summit
Social Entrepreneurs Scale Impact
Once a new approach is working, the social entrepreneur’s next task is to figure out how to take the learning and experience and use it to magnify the impact. Scaling impact can be reaching more people who will benefit from it (breadth), making a deeper or more meaningful impact for those you already serve (depth), or a combination of both.
When the goal is sustainable impact, scaling in social entrepreneurship is not limited to growing the social enterprise itself. In the past, social entrepreneurs have used a variety of strategies to scale across all sectors, from franchising to knowledge sharing. Sticking to what your organization does exceptionally well, and passing knowledge and ideas outside of the organization can be an efficient way to move change forward.
“Every social entrepreneur— with organizations large or small—will need to find a way to go beyond making progress to solving the problem. Instead of growing their organizations, they need to think about making the problems go away.”
—Katie Smith Milway, How Social Entrepreneurs Can Have the Most Impact
See an example from Acumen's #OneGreatIdea series of an organization working to transform the cacoa industry in Colombia:
Now It’s Your Turn
If you want to use your unique blend of skills and passions to create meaningful change in your community and the world, sign up for the next cohort of +Acumen Social Entrepreneurship 101 and get started today.
“For too long we’ve limited the way we talk about entrepreneurship to the profit-maximizing business sense. What’s so exciting about social entrepreneurship is that it allows us to exercise our entrepreneurial capacities for the betterment of humanity.”
—Leila Janah, Founder of Samasource
Spread Positive Change
About The Author
Danielle Carruthers is a business coach who guides social entrepreneurs on the journey of designing focused, thriving social enterprises so they can make a greater impact on the world. As founder of The Sedge and co-founder of Changemakers Association, her expertise is sought-after by impact events, purpose-driven organizations, and learners of all ages. Her favorite +Acumen courses are Business Models for Social Impact and Lean Startup Principles for the Social Sector.