Keep the idealism for yourself! Let´s make cash and crash malign industries.
Courage, commitment, strategy — our small group had listened to some sweet survival tips for entrepreneurs from Andy Goldstein, co-founder of the Social Entrepreneurship Academy in Munich. I wanted to trigger the following Q&A with a bit of a provocative question: „Could you name a social entrepreneur that got filthy rich with her or his business?“. For a moment, there was silence in the room. „That´s not what it´s about, you´d reinvest revenues in your organization. Stay decent, you´re in it for the cause!“ the director of one of the rare stable and scaled social businesses in Germany told me.
The co-founder from one of Germany´s most sucessful digital/social enterprises jumped to my side: „Well, it does matter if you want to attract the best people to your organization. And it also proves you have a strong business model, since most social businesses rather struggle to sustain on their own profits (needing donations on top)“ and often are really no more than leaner NGOs disguised as smart, social businesses. Interestingly, she added that 8.000€ is the top monthly salary her organization is paying — interesting since you seldom speak about those things in public in our country and interesting also as a benchmark. What I didn´t feedback to the group is that half of that salary would be my personal definition of decent wealth and would keep me totally happy…
Winning battles, loosing the war
And so my focus during these days at the „BMW World Responsible Leaders Forum“ got stuck on topics such as wealth, power, impact. Now 10 years working in and consulting the NGO sector, I wonder if another niche social business does help to stop e.g. big oil from doing what they do — being so much more wealthy, powerful, influential. Will the disobedience and divestment campaigns from 350.org and others — which I´m pretty much a fan of — really end the coal industry? Can wonderful recycling innovators like „Precious Plastic“ or the great work of OuiShare or the Ellen McArthur foundation towards a circular, zero waste economy save our oceans in time from drowning in plastic?
For sure these things are hard to bet on. In the blink of history that you actually live in and that your mind is able to grasp, the change that´s happening might always feel to slow, to scattered, to „evolutionary“ vs. „disruptive“. But what I´m trying to convey here is: If we do not get the cash a.k.a. power a.k.a. impact into our change-the-world sectors, humanity might just not change fast enough to prevent climate catastrophe, big scale modern slavery or polluted oceans for generations to come. Kumi Naidoo from Greenpeace once said it and it still rings true in my ears: „We´re winning battles — but we´re loosing the war“.
Where does the morale start and end?
The day before I joined a tour through the Allianz Arena, the shiny, white egg of a stadium that is home to the FC Bayern Munich, one of the richest and most-well managed soccer clubs in the world. The numbers our guide was sharing were stunning: Having paid back the credit on the stadium that was built in 2006 with the help of powerful sponsors such as adidas, Allianz and Audi much earlier than expected, each home game now means a plain revenue of 2.000.000 Euros for the FCB. He was telling us about the spacious „skyboxes“ in the stadium that can cost up to 30.000 Euros rent per month — for a maximum of four games to see! These can be (free)styled like your second living room or corporate kindergarten. And there was the story of that Sheik demanding a few more parking lots under the stadium for his friend´s limousines and just does not care about the skyrocketing fees the club is charging for that. I don´t mean to demonize the rich here, but why in the world can´t they invest in something better than a bit more luxury soccer fun? Why are morale and modesty such binding rules for us world changers but would never even occur to the minds of those people?
And here we come back to the good old question why an investment manager, a corporate engineer, a soccer player earns so much more than a nurse, a teacher or most of our beloved social entrepreneurs. Who defined that in the „idealism business“ you´re in it „only for the cause“ — as if idealism could feed your kids or pay your rent? Let me say it plain: I suggest that people running a strong business OR fundraising model to create a powerful positive impact for society deserve a damn Tesla in their garage more than anyone else.
From Social Business to Badass Systemic Businesses
Since the Panama Papers we can be rest assured that some elites in the world do not only ignore or laugh about the 99%, they actually spit in all taxpayers´ faces (excuse the strong picture). So IF the social sector needs to work on its morale, I´d argue it should be less pointing fingers at fellow do-gooders („my social biz is purer than yours according to the ABC reporting standard“) and better be far more bold and aggressive towards the industries that leave morale, people and the planet completely out of the equation. I´d say: Let´s be more badass! Let´s build businesses that have the potential to make those asshole companies obsolete!
Because reducing the harm is not enough anymore, we need to look at the whole system and completely reinvent it“, said Andrew Morlet from the Ellen McArthur foundation on the last day of the forum. Though he referred here to the issue of plastic production, I would generalize this systemic viewpoint to all sectors that are nowadays driven in the wrong direction, malign for species and/or the environment. Looking at the stop clock of history, we´re running out of time to prevent some sectors such as oil and plastic to not completely fuck up our ecosystem with no return road left. So here´s a tip to the dedicated young entrepreneurs out there: Spare the pain of building your own company, maybe better call your richest friend to call her/his richest friends and make them invest in the most powerful entity that threatens one of the dangerous industries out there. And if you can´t find such an organization, then go build it yourself. But better make it badass — and challenging a deeply rooted systemic failure. Ask yourself: How could you be the worst competitor in the best sense for our common sustainable future?
To sum up, here are 5 things to rethink for social entrepreneurs:
1. If you do not put profits on top of your list, you´ll never create the serious impact the world needs (since money translates into staff, infrastructure, marketing etc.)
2. Consider to pay you and your team the same or even more salary than the malign businesses that mirror your actions, but cementing an outdated industry. How could you make it happen?
3. Small is not beautiful: Team up with other great social entrepreneurs to create bigger impact. If you want to stay lean without mergers, please take care that your joint powers are visible (e.g. through the media) and can truly disrupt the big players
4. Badass means you do NOT compete within the social sector, but thrive to attack the asshole industries. Don´t get stuck on perfection or idealism, better bootstrap as fast as you can — because time is running against us
5. Systemic means you´re not satisfied with reducing the harm or just doing a little bit better. You have researched and understood the roots of the problem and thus may have a longer road to go, but one that is worth it