What I talk about when I talk about social entrepreneurship

When I scanned the social enterprise news this morning, I was once more startled to come across an article titled “There’s no Such Thing As Social Entrepreneurship” followed by “How to Infuse Social Entrepreneurship Into Your Business and Still Make a Buck”. Both rubbed me the wrong way.

  • Organizations such as Ashoka and Echoing Green have been working with social entrepreneurs in the field for several decades. Their entrepreneurs have made a difference around the world through entrepreneurial ventures and innovation. We have proof.
  • You can’t “Infuse Social Entrepreneurship Into Your Business”. You can integrate Corporate Social Responsibility, a Sustainability or community program, but social entrepreneurship defines the innate nature of a venture at its inception, it’s not an add-on to make your business greener or more socially responsible.

While both titles are not only contradictory, they are chronic symptoms of the debate around a common understanding of what we talk about when we talk about social entrepreneurship. If you stop reading here, I can’t blame you. I am all too familiar with the dozens of definitions out there and it’s not my intention to come up with yet another one. Having worked with social entrepreneurs for most of my young career, I developed an understanding for myself that allows me to teach, to work with them, and explain to some founders and activists that that’s in fact what they are.

The debate over a definition for social entrepreneurship is never-ending. No matter how many we come up with, chances are we’ll never agree on one; we may just have to accept that. In 2015, I taught a master’s-level class on social entrepreneurship at a University and while my students were presenting and analyzing example after example of social entrepreneurs — they kept asking me for a definition. This baffled me. We teach students that grades are given based on repeating definitions, dates and formulas ad nauseam. But it was right in front them. I refused to give them one. Based on the cases they had worked on I challenged them to come up with one.

#1 Form follows function

The debate about what counts as a social entrepreneur too often gets hung up on the venture’s legal status: for-profit or not-for-profit. Here’s my advice: Understand the problem you are trying to solve, develop a solution that addresses the pain points and gain creators of your target customer, and THEN let’s decide which legal form is the most effective to deliver your solution. In some cases, the business model lends itself to for-profit — it might provide employment and produce goods and services that can be sold in the market place. In other cases, a 501(c)3 with tax exempt status makes more sense because the venture depends on foundation grants or corporate partnerships. In other cases, go with a hybrid structure and incorporate both elements. My point is: Defining a venture by its legal structure is like ordering desert before you even know which restaurant you’re going to. Form follows function.

For our Unreasonable Lab, we don’t distinguish between for- and not-for-profit. We look for individuals and teams that want to address a social or environmental issue in an entrepreneurial way. That means they

  • are open to learning and applying the lean startup method
  • go through the process of customer discovery-validation-development,
  • build early versions of their product or service through rapid prototyping and
  • willingly test test test the outcome against customers’ expectations (read more about the Lean Startup for Entrepreneurs here).

The point is, a legal status is nothing more than a vehicle to effectively deliver an entrepreneur’s solution.

#2 It’s entrepreneurship, really

The first article I referred to earlier makes a good point that social entrepreneurship is just that: entrepreneurship. Once a year, I guest-lecture in an entrepreneurship class and find Dees’ “The Meaning of Social Entrepreneurship” (2001) extremely helpful. He argues that the notion of entrepreneurship as put forward by Say, Schumpeter and Drucker is to recognize an opportunity in the market that nobody else has recognized and build a venture to capitalize on that opportunity. In the case of a social entrepreneur, this opportunity revolves around a social or environmental issue. As a consequence, the social entrepreneur defines success by how well the venture leverages the opportunity in terms of creating social or environmental impact. Nothing more, nothing less.

A sidenote on the notion of “social”: Creating jobs is not a social mission in this context. It’s one of the main purposes of any business. When I talk about “social” in the context of social entrepreneurship, innovation or change, I mean serving communities that are currently marginalized and underserved by business as usual. Often, these communities are people with special needs, the elderly, migrants and refugees, poor people, the homeless or ex-convicts. What counts as “underserved” or “marginalized” depends on the context.

#3 Systems matter

No social or environmental problem can be solved by one person or business alone since they are often rooted within a faulty system Successful social entrepreneurs spend a lot of time building alliances and partnerships with businesses, nonprofits, governments, community organizations, activists and so on, to change parameters of that faulty system. If your objective is to create social change rather than making as much profit as possible for yourself, collaboration with other actors is crucial, and becomes much easier. It doesn’t mean a social entrepreneur is trying to please all stakeholders but (s)he understands that this type of change and progress needs cross-sector collaboration and time. I highly recommend Martin and Osberg (2015), “Getting Beyond Better: How Social Entrepreneurship Works

#4 It’s not about you

While my door is open to every entrepreneur who wants to drive social progress in our community, I live by one rule: If you want to start a business because you want to be an entrepreneur, I will not work with you. IT sounds counter-intuitive and harsh but here’s the thing: I have worked with a number of founders who wanted to launch a business because it was their dream, they wanted a career as an entrepreneur, or more so — a heropreneur (thanks Daniela Papi-Thornton at Skoll Centre/Saïd Business School for putting this into words!). It’s no fun. More often than not, they want to start a venture at any cost and find it too much work to consult with their key stakeholders and beneficiaries/customers. I usually never hear back from them once I outline what’s involved in human-centered design and launching a social enterprise using the Lean Startup Method.

With that said, I enjoy working with founders who put themselves into the service of their beneficiaries/customers. They listen, they explore, they iterate, they try not to fall in love with their idea, they constantly seek feedback from their customers. They will do whatever it takes to solve the issue at hand. That may mean launching a business, or it means supporting someone else’s effort, building coalitions or advocating for a cause. They understand it’s not about them.

I know I can come off as condescending or arrogant in this respect, and I have bumped heads with friends and people I respect over what makes a social entrepreneur. But to me, this distinction is important. If anyone who decides they want to be a social entrepreneur calls themselves that, the meaning diffuses and I worry that we end up not supporting the right people in the right ways.

Let’s get this straight: I respect anyone who wants to be an entrepreneur and, luckily, I know some great mentors who can support these founders all day long. But launching a social enterprise is not about you and requires a lot of homework before you even look the business model canvas for the first time.

I know, I know, I wasn’t going to re-define social entrepreneurship and I hope I didn’t. The last thing we need is another one of those, I couldn’t agree more. I firmly believe that the best way to explain social entrepreneurship is by showing it. In part, that’s what we are trying to do through the Unreasonable Lab VA. Instead of arguing whether this nonprofit or that B Corp “counts” as a social enterprise, I want to help mission-driven founders develop solutions to our most pressing challenges WITH their beneficiaries — whatever the legal structure — that create social and environmental impact in our communities by leveraging the existing infrastructure and partnerships.

Stay critical.

Further Reading:

Kirsch, Bildner, Walker (2016), Why Social Ventures Need Systems Thinking, Harvard Business Review

Dees (2001), The Meaning of Social Entrepreneurship, CASE at Duke

Horn (2016) “The Lean Startup for Social Entrepreneurs”, The Changer

Daniela Papi Thornton (2016), Tackling Heropreneurship, Stanford Social Innovation Review

Martin and Osberg (2015), How Social Entrepreneurship Works, Harvard Business Review Press

Schatz (2015), Can Start-ups Change the World?, Sage Business Researcher (accessed online)

Light (2006), Reshaping Social Entrepreneurship, Stanford Social Innovation Review

Martin and Osberg (2007), Social Entrepreneurship: The Case for Definition, Stanford Social Innovation Review (accessed online)