Community Ventures and Investing in Impact
From a talk I gave in Ljubljana, Slovenia, March 2017, for ‘Hive for Better Investments’, a programme led by Zavod Viva to address the lack of skills and know-how on the demand side of social enterprises in the country. The project is supported by the EU Programme for Employment and Social Innovation.
Public ventures that involve communities are often spoken of in hushed tones, as worthwhile, meaningful acts of ‘engagement’ — democracy at its most holy.
However, beware. Ventures that involve the community and look authentic can be fickle, fake acts of accountability, even self-delusion. As American economist Tyler Cowen said in a recent interview, “Be suspicious when something feels good.” It could be culture creating just another alluring ‘cocoon’.
Since creating and running an architectural competition in 1996 to breathe new life into a dead public place — a project broadcast by the BBC — I have founded or managed some seventeen projects that have sought to involve the public in the design and delivery of the world around them . ‘Little gems’ that deliver transformational change.
Community ventures can create a sense of belonging and uplift the commercial offer and viability of a place. They can bring experiences and moments to places, not just messages. They can extend audiences and users of a place. And they can make a long-term social impact.
But how can community ventures be financed by innovators, activists and social entrepreneurs? And are there certain things that will help the raise?
I’ve raised around £13m to create and deliver community ventures over the last twenty years. They’ve yielded £350m+ in additional follow-on public and private investment, created many new full- and part-time jobs and opened my eyes to the value of community ventures.
Community ventures can create a unique sense of belonging to a place, for residential and commercial tenants alike. Over the last year, I have been advising a real estate landlord in London on creating an architect-designed pavilion that will grow food entrepreneurship. The place will offer opportunities for retail, recreational, educational and other entrepreneurial activity, and develop in time an e-commerce and food delivery platform. If successful, the off- and online platform will create its own marketplace, social as well as economic.
Community ventures can create new participants in the public life of a place. In 2013, I founded a private ‘angel’ investment network in Kensington and Chelsea, West London to uptick entrepreneurship in the area. To date, members have made 18 investments valued at £1.5m. An additional £2m has been raised to grow the venture. The membership includes many entrepreneurs and professionals under fifty years of age, who were not born or brought up in the area and would not ordinarily participate in local civic life. Private investment in entrepreneurship is the entry point for this new cohort of ‘urban actor’.
Community ventures can uplift the commercial value of a place. In 2010, I co-founded The People’s Supermarket in Camden, North London, a co-operative that operates a membership subscription and an exchange of volunteer-time-for-discount model. Thanks to the current management, the venture still trades today, has created many new jobs and generated exceptional additional value, such as recycling food waste through its popular People’s Kitchen. Since the store was opened, the value of the retail offer in Lamb’s Conduit Street has risen steeply, with the arrival of new retailers to the street, such as the fashion chain J Crew Group. The Supermarket has helped turn the street into a destination for indie businesses and customers.
Community ventures can associate places with moments and experiences, not just marketing messages. In 2007, I co-founded the Middlesbrough Urban Farming project, a venture in which thousands of people in the town grew food in public places, learned how to cook it and then created and shared an epic meal in the town square. Accompanied by an open-air ‘food art’ exhibition, the event was curated by the artist Bob and Roberta Smith. The venture has been repeated every year since. People seem to enjoy learning about healthiness through experience, rather than tuition.
One of the key challenges in creating and growing these ventures is that each and every one is a start-up that needs financing. The social good that they seek adds risk and inefficiency to their offer and makes the creative, flexible finance that all early stage entrepreneurs crave all the more important.
In my experience, there are several ways to finance such social impact ventures, and you’re often obliged to create a blend — through sales revenue, public private partnerships, membership subscription, equity investment, public subsidy, outsourcing and then using new instruments, such as rewards-based crowdfunding.
As with any enterprise, it is essential that the entrepreneur creates a business plan - and certain things will help the financial raise.
- Create a scaled, ‘multi-site’ vision for the venture.
- Set down a consumer-orientated, non-ideological, over-earnest narrative.
- Outline an e-commerce and online content strategy, alongside any physical infrastructure or offline work.
- Show how you will maximise promotion of the venture but minimise ‘net promoter costs’. In other words, follow word of mouth economics.
- Identify who will invest in your venture, picture their return on investment and express outcomes in their language, not yours.
- Express narratives of the new economy, with an emphasis upon entrepreneurial flexibility, rapid experimentation and doing more with less
Of course, as advocated by Ron Johnson, the retail innovator behind the Apple Store, it is important to understand the science, then separate it from the humanity and foster through your venture a comfortable, humane experience, rather than a faceless, cold one.
But in framing and starting up a venture, it doesn’t hurt to be Napoleonic also. Fight for a cause, bring to your venture a new sense of shared destiny, build a new mythology of society through it, and reinforce the vision with the creation of a new way of living, or culture of doing things.
A little overblown? Yes — but so what.
Social impact entrepreneurs are in the business of making progress. In the words of philosopher Henry David Thoreau: “Do not worry if you have built your castles in the air. They are where they should be. Now put the foundations under them.”
Thanks to Zavod Viva, Anja Serc, Tadeja Bucar, Ursula Butkovic, Sandi Češko and others who facilitated my visit to Slovenia.
Images: #notestostrangers campaign, Browns Fashion, South Molton Street, London, Instagram, and elsewhere — search the tag. It’s a great meme.