How to start a (social) startup — CS183B — Part 1
Hello, my name is Mickey Kovari, I identify as many things, but for most of my adult life, I have mainly identified as a budding social entrepreneur. I’m taking CS183B — How to start a startup and I’m going to try and apply it to building a new social enterprise. I’m going to share my journey here.
I co-founded a social enterprise called Flashpoint Labs in Sydney, Australia. From 2011 – 2014 I have been the volunteer CEO and bootstrapped the social enterprise from $0 in revenue to around $10,000 in revenue per month. Flashpoint Labs is a socially innovative photography agency and training academy. We focus on delivering professional photography services to corporations while training young people from diverse backgrounds to be creative professionals.
Due to awesome personal reasons (I had a daughter in Hungary) I have moved to Budapest to be close to my little girl. I’m of Hungarian decent so Budapest is like a second home. As Flashpoint Labs is based in Sydney, I have decided to start to step back as CEO and pass on the responsibility to a brilliant photographer and professional who is equality passionate about photography and social impact.
Now based in Budapest, I’m presented with a completely different opportunity landscape. Many of the connections and networks I developed in Australia are not worth much here, so I’m basically starting from scratch. It’s not an easy situation, but I’m trying to be optimistic about it. The obstacle is the way as the title of Ryan Holiday’s new book so elegantly puts it.
I’m a social innovation consultant and I have consulting work that will see me through to the end of the year financially, but after that, I’m not sure where my next pay check is coming from. That’s a scary realisation when you have a new young family to support. I might have been able to continue consulting if based in Sydney, but Budapest is a different story. With weak networks and a less mature market for social innovation, finding consulting work locally could be a real challenge.
In the past, when developing social enterprise ideas, I had the luxury of knowing I was on a good wage (from my work at small and medium sized NGOs and social enterprises in the Indigenous Sector) and it was a side project I could gradually grow. This meant I could experiment more and do more direct impact work without waiting for funding. Now, I don’t have that luxury.
I need to think of a social enterprise that will be socially beneficial, environmentally sustainable, and economically viable from the start. Of course, I will want it to be culturally stimulating and politically influential too, but for starters, I need it to generate at least $5,000 per month for wages to be economically viable so that I can support my family.
A big question that the CS183B course put up in the first lecture is, do you want to start a small business to support your lifestyle or do you want to start a mega business with hyperexponential growth? I’m not sure how important this dichotomy is? Can I aim for the first as a matter of urgency while planning for the second. Or do I go for the second and hope I make enough early to support myself. Is there an in-between? Is hyperexponential growth even a reality for social enterprises which are fundamentally different to traditional startups, which don’t always put people (and specifically people from diverse and less fortunate backgrounds) and planet first?
I guess we’ll see. This course nicely coincides with the Shopify business competition so I’m thinking of placing some constraints on my new social enterprise startup experiment. Including, it has to be a Shopify website. This means I’m probably looking at a drop-shipping social enterprise.
Two ideas have sprung to mind.
The first is organic and sustainable cotton baby clothes, via subscription, targeted at single dads. You basically sign up and get sent clothes as your baby grows. You can send back the clothes they have out grown in the same package and receive a discount on future clothes. The focus is on sustainably, simplicity and convenience. For busy, but socially and environmentally conscious dads who also want quality clothes for their kids. Even though my daughter lives with her mother, it was obviously inspired by my personal situation. I want to buy clothes for my daughter but I don’t like shopping and I don’t want to use up headspace searching for clothes on or offline. I want the clothes to be created in a way that is socially responsible and environmentally sustainable. I want the clothes to be super simple so she is comfortable and looks good too. I like the minimal look.
The second is a new business model that can be applied to multiple enterprises called BuyBack. You basically create a product, my initial thinking was a simple T-shirt, and you sell it, my initial thinking was through Shopify. The profits from the sale of the product, in this case the t-shirts, goes into a fund to buy back the factory where the t-shirts were made, allowing the workers to become owners of the factory and in control of their working conditions. We would essentially be buying the factory back from the owner and turning it into a worker cooperative.
In this way, through this model, we are enabling consumers to empower workers to take control of their work lives. Through buying a t-shirt, the consumer is contributing to the liberation of the people that made that t-shirt, by having the profits go towards buying the factory and gifting it to the workers. This whole model is inspired by a lack of workers rights and fair wages in developing nations which I want to address by giving them the power to take over the company they work for. As sustainability is important too, we would also provide support to turn the company/factory into a sustainable one. And if management expertise were required, we could budget for that too. This would all be a very complex and sensitive process, but that’s the crux of the idea.
P.S. I haven’t thought about the documentary The Take for years but I think it partly and subconsciously inspired this idea too.
