Making money by doing good
Put simply, social entrepreneurship is about making money by doing good. The model has been trending in recent years, as increasing numbers of creative minds try to use market economy to fulfill their philanthropic ideals. And many organizations want to support them. But what are the best ways to support entrepreneurial creativity? Read More
Put simply, social entrepreneurship is about making money by doing good. The model has been trending in recent years, as increasing numbers of creative minds try to use market economy to fulfill their philanthropic ideals. And many organizations want to support them. But what are the best ways to support entrepreneurial creativity?
Ruby Cup, a social business that provides menstrual cups to young women in Africa; Speakset, a service to help older people video call family and friends; and Vehement, a vegan boxing gear brand all have a few things in common: They're social businesses, and they have proven very successful in their first years of operation. And they've received support from a social entrepreneurship support organizations.
Our digital age of cloud computing, social networks and mobile technology has made starting a business a lot cheaper. We no longer face high up-front investments into brick and mortar business structures to test and validate/reject minimum viable products. But don’t be fooled. Local support organizations and networks are key to helping fledgling social entrepreneurs get off the ground.
Amelia Friedman, a social entrepreneur in Washington, D.C. told me about her experience receiving support from the Halcyon Incubator: “When I first started working on the idea, I didn't see myself as an entrepreneur. I think that's what it comes down to: People who run support programs need to be genuine and transparent, and care about the entrepreneur, not just the venture. Halcyon is great. They have a good program and a great community, they are really good at finding the right people to be mentors, peers, experts. Halcyon does an incredible job in selecting the right people for the fellowship. There is only one person in the world I would start a company with, and I met him through this program.”
I have worked in social entrepreneurship support myself and was looking for a recipe for the secret sauce essential to impact-driven support programs, the right mix and balance of training, investment, personal development, mentoring and coaching to create successful social entrepreneurs. In short: the best formula for local support organizations to help social entrepreneurs start strong.
Finding Europe’s social venturers
In January 2015, I set out in search of best practices and common challenges in capacity building for social entrepreneurs. Mostly, I was keen to meet the people behind the scenes: professionals who design and implement support programs for social entrepreneurs. I call them social venturers. I wanted to hear their views of the sector, what works and what doesn’t. I wanted to learn more about their programs - what happens outside of websites and annual reports. I was looking for insights and connections not captured by research surveys. I wanted to hear what program teams considered the current trends and challenges. I wanted to learn a lot!
After six months, I had interviewed more than 30 social venturers at 27 support organizations for social entrepreneurs across Europe. With my red backpack – I named him Spivet – I caught 11 flights and slept in 23 different beds at friends’ houses, AirBnBs, and hostels. I covered 3,200 km by train and another 1,150 km by car and bus to speak to social venturers in Ireland, the UK, Germany, Sweden, Denmark, Belgium and the Netherlands.
I like asking about success factors. There is a moment in each interview when I get to ask the person sitting across from me, “So… what do you think makes a program effective in empowering social entrepreneurs?” And while the answers vary, three themes stood out across all interviews in Europe: facilitation rather than a generalized curriculum, founders’ personal development, and leading by example as a support intermediary.
Facilitation. At Unltd’s Big Social in London in January 2015, the main questions circled around whether to offer generalized training to as many social founders as possible, or focus on individualized support to selected individuals. Throughout my trip I found that the majority of support organizations have embarked on a third route. They make resources accessible for founders to self-select what to study up on, and act as facilitators.
“I believe in just-in-time learning. Founders simply don’t have the time to learn about topics that aren’t relevant to them at the time. ”
“Social entrepreneurs that join our program come equipped with very different skill sets and backgrounds, so we focus on what they need help with at any given point in time,” Mareike Mueller at Social Impact Lab Berlin explained. Richard Brownsdon at Impact Hub Westminster expressed similar sentiments: “I believe in just-in-time learning. During the startup phase, founders simply don’t have the time to learn about topics that aren’t relevant to them at the time. We give them support when they need it.”
This trend towards facilitation was also apparent in how social venturers perceive their role in working with startups. Kristina Notz at Social Entrepreneurship Akademie in Munich views her job as “asking the right questions, questions that identify the blind spots,” and otherwise “giving founders the mental space for testing and learning.” Birgit Schunke at Heldenrat – a pro-bono consultancy for social initiatives and entrepreneurs in Germany – said: “Every individual or organizations we work with comes to us with a different need. Our role is not to solve their problem, but to help them develop their own ideas. We believe that founders already have the answers, we help them get to that realization, and access this knowledge.”
The team around Kaat Peeters at Sociale Innovatiefabriek in Belgium takes the facilitation approach to a whole new level. Social innovators involved in their program support each other. With an alternative currency system in place, Sociale Innovatiefabriek provides training templates and content, but the actual mentoring takes place among peers. “Social entrepreneurs can better relate to each other’s challenges, make relevant connections, and have credibility as mentors.” The program team supports them where necessary, while their peer system has given rise to a tight community and strong network with external experts, both of which last way beyond the program itself.
Founder development. Kai Hockerts at the Copenhagen Business School explained to me where he sees the biggest hurdle for the social enterprise sector: “We aren’t short of people from the social sector, but they often lack entrepreneurial/managerial training. As a leader of any organization, you are responsible for the people around you; at the same time you can share your concerns with hardly anyone (investors, beneficiaries, employees). We need to invest more in developing leadership skills.” Siobhan O’Keeffe at Social Entrepreneurs Ireland thinks along the same lines: “We focus on turning social entrepreneurs into strong leaders. At the end of the day, it is up to them to secure public approval and get a cohort of followers and supporters behind them. Most social entrepreneurs aren’t equipped for that. They must be as solid as the team they are leading to run their business.”
Practice what you preach. When Leon Reiner and his team opened their new space for Impact Hub Berlin, he made a simple yet surprising observation: “We are designing the Hub according to the needs of our members. After all, customer discovery and validation is what we challenge founders to do – why shouldn’t WE?” “We try to be as customer-oriented as we require from our founders,” Bastian Mueller at Yunus Social Business chimed in. “As part of this, we survey them to figure out how relevant each program component is to them. We were surprised by some of the findings.” There we have it! Practice what you preach. Be critical. Solicit feedback.
Vincent de Coninck at Oksigen Lab in Belgium and Kristina Notz raised a similar point with regard to financial sustainability. They both argued that support organizations need to be financially sustainable if that is what we expect from our founders. This is probably one of the biggest questions I came across during this trip. Figuring out business models for support organizations tops my research list, and I cannot provide any definitive answers just yet. What I have gathered so far is that the most promising models have diversified their income streams, worked with corporate partners, managed to secure government contracts and embedded themselves in an active angel investing community. This is clearly a starting point at best. I have accepted that most support organizations currently rely on philanthropic funding. But let’s be honest here: In order to be credible role models for the founders we work with, we need to become a lot more creative in generating revenue.
Here are some recommendations based on what I learned. This research is transient and far from complete, of course. So I have boiled it down to one single piece of advice: Act like a social entrepreneur.
- Design your programs around the needs of your founders.
- Create a safe space for lean experimentation, failure, and learning.
- Be a facilitator and offer support where and when needed.
- Lead by example, no more and no less.
Plug founders into your local ecosystem and you will create more than just a successful support program. You will grow a living, breathing community of socially-conscious founders and supporters.
I would love to share more of the observations and insights I gained during those six months. I invite you to be my guest and come explore organizational trends and personal stories on SocialVenturers.com.