In a 2018 survey conducted by Deloitte, 77% of executive respondents rated “Citizenship and social impact” as being critical or important priorities for their respective organisations. This is one of the many statistics that highlight the global entrepreneurial shift towards social enterprises.
In the previous edition of Oddup’s two-part series on social entrepreneurship, we took a closer look at the recent uptick in ‘social good’ startups around the world. In this second and final part, we explore the social entrepreneurship business model in greater depth and highlight a few highly successful ventures in the domain.
The Business Model of a Social Enterprise
Thanks to a growing sense of commitment to civic causes, social entrepreneurship has started to become an increasingly popular choice among adults of all ages and backgrounds. Simultaneously, it has also proven to be a highly successful business model. This is especially true in smaller and developing economies, where solving environmental and social challenges can help lay the groundwork for a better future. This is one of the reasons why a whopping 18.1% of Senegal’s population is engaged in some form of social entrepreneurial activity and also why 25% of all new startups in the EU are social enterprises.
While many entrepreneurs with a social focus may have some regard for profitability at the beginning, the primary driving force behind their venture is usually an underlying social issue or problem. Once such an issue is identified, they can focus on formulating plans and strategies to accrue sufficient revenue and tackle the problem. Given the scope of most social issues, enterprises often have to scale before they can make a sizeable impact. As a result, many well-known ventures are, in fact, highly successful in the commercial landscape as well, with a large number of employees and assets.
How Social Entrepreneurship is Changing the World
Ido Leffler, founder of the startup, Yoobi, decided to create a social impact around him by making school supplies more accessible to students belonging to impoverished sections of society. According to a 2015 study, a student living in poverty is 13 times less likely to graduate on time. By equipping millions of students with the necessary tools to complete their education, Yoobi says it has made a tangible difference at schools across the US. The startup has partnered with the Kids in Need Foundation to donate a school supply item for every successful transaction and has managed to become a household name in North America.
Indian marketing startup, Corporate360, took a slightly different approach and established a separate NGO to focus on its social efforts. So far, the company has supported several initiatives related to healthcare, education, and development in the Indian village of Padam. Corporate360 is using the resources at its disposal to provide free ambulance services, sponsor the education of students from low-income backgrounds, build houses for those living in makeshift sheds, and establish a bus service to reach the only public school in the village.
Social Startups: The Way Forward
According to a statistic by the British Council, co-operatives with a social focus in Kenya account for 45% of the country’s GDP, which is larger than the public and private sectors. Furthermore, we have already seen that a growing number of social startups are turning cash-positive, while still maintaining their founding ideologies.
In turn, more and more founders are now committing themselves to the social entrepreneurship model. This has opened a unique opportunity for venture capitalists and investment firms looking to invest in an up-and-coming unicorn. Unlike traditional for-profit startups, however, obtaining data on social ventures can be an extremely difficult process due to the relative lack of quality insights.
Oddup helps decision makers overcome this challenge by offering a suite of startup monitoring products, services, and metrics. This includes Oddup’s flagship real-time data monitoring platform that tracks startup activity across all major industries and locations. Additionally, Oddup empowers decision-makers with proprietary metrics such as the Oddup Score and Benchmark Valuation, which act as barometers of startup health and valuation respectively.
Take advantage of Oddup’s solutions by sharing your details here or dropping us an email on enterprise@oddup.com
