What does an entrepreneur look like?
And what does this mean for entrepreneurship?
It’s time for a redefinition of what it means to be an entrepreneur that is less exclusive and makes more room for non-profit or more-than-profit forms of entrepreneurship. I talk to Centro Community Partners — “the non-profit that moves like a tech startup” — to see what they think.
What do you think of when you hear the word ‘entrepreneur’? What are the first images that come into your head? What does this person look like, how does he behave?
Hold on a second, “he”? That wasn’t very feminist of me. But, out of interest, how many of you did think of a man? Twenty-something (or still trying to pass for one)? MacBook, flat white and a premium membership at a nice co-working space?
Or how about — for those of you whose worldview hasn’t been entirely shaped by four years of living in East London — the maverick in a pinstripe suit that you find on Dragons Den-style TV shows, with dollar signs in his eyes? (‘He’ again, sorry). A ruthless business(wo)man, who will stop at nothing to win. The one who dreams of being the next Richard Branson — or at least of having his lifestyle?
Not everyone will have the same kind of associations, but if you did — great! You’re my target audience. Because, until recently, that’s what I thought too. And the non-extensive market research I carried out as I wrote this article confirmed that, for at least seven other people I know, the word ‘entrepreneur’ either meant Silicon Valley (or Roundabout) hipster, or self-made millionaire; i.e. someone who probably already has a financial safety net, or someone who’s desire for wealth is equal, if not superior to, their desire to innovate.
What does it matter to me what other people associate with the word ‘entrepreneur’? As every third person you know says they’re working for a startup, the word has become so ubiquitous that it is taking on a whole host of new meanings. Despite, or perhaps because of this, ‘social entrepreneurship’ is a term that still causes confusion and provokes debate. And given the amount of time I now spend talking, thinking or writing about the subject, I’ve become a lot more interested in what people think and wonder whether it’s time to change some of our preconceptions.
It’s only relatively recently that I became interested in this topic. If I could go back one year and tell my former self that Future Louise had decided working with entrepreneurs was a great way to bring about social change, former self probably would have thought:
- “How does helping some individuals to become rich benefit society at large?”; and
- “If they’re so entrepreneurial, why would they need my help anyway?”
With all the benefit of hindsight, I have two answers ready for her. First off, I’d hone right in on the assumption that all entrepreneurs are financially driven. If entrepreneurship is about spotting and exploiting opportunities to create something new and valuable, the same mindset can equally be applied specifically to solving social or environmental challenges. More often than not, social entrepreneurship is about leveraging financial incentives to deliver non-financial benefit.
But even if entrepreneurs can create innovation in the social sector as well as markets, the question remains: why do they need my help? The very essence of entrepreneurship, in theory, is democratic — an antidote to inherited and entrenched social privilege. It’s potential rather than experience, and passion rather than formal qualifications that count. You can’t help the self-made man or woman to make themselves.
Or perhaps, for anyone who entered the job market post-2008, the issue is slightly different. For my peers, there’s the sense that it’s only a certain type of person who can ‘afford’ to be an entrepreneur these days. After all, a key driver for entrepreneurs is their attitude towards risk, or ‘affordable loss’. “What’s the worst that could happen?” means one thing for someone who has family as a safety net to fall back on, and something else entirely for someone who has a family to support.
Everything I used to think about entrepreneurship was inevitably shaped by my experience — or, more accurately, perception — of entrepreneurship in London. That was before I went to Rio de Janeiro with Social Starters and found out how wrong I was.
It was in Rio that I heard the phrase “underserved entrepreneurs” for the first time, during a talk by Naldo Peliks from Centro Community Partners , an Oakland-based organization which helps entrepreneurs from low-income or marginalized communities build their businesses. Like me, Naldo had come to spend the summer in Rio to learn more about the links between entrepreneurship and social change in a Brazilian context. Although Social Starters and Centro came across each other by chance, it transpired we had a lot in common.
Centro’s mission is to make entrepreneurship accessible to entrepreneurs from “underserved communities”; social groups with low levels of income or formal education, minority groups, women or immigrants. Social Starter’s first social enterprise accelerator programme in Brazil paired consultants like me with entrepreneurial young people from Rio’s marginalized communities whose projects tackled issues acutely relevant to Brazilian society, such as racism and unplanned pregnancy.
As Naldo spoke about Centro’s work, it became clear that Centro’s vision and approach were very much aligned with those of Social Starters. Rather than setting out to mould underserved entrepreneurs into any existing traditional model, Centro offers a collaborative training model that provides structure for the entrepreneurs to grow their idea in a way that is in line with who they are and what they want their businesses to be.
Centro’s core activity is providing advanced business training to the entrepreneurs who are accepted on to its programme in San Francisco. The programme participants, the vast majority of whom are low-income women or minorities, attend group classes and receive one-on-one tutoring by local MBA students. The aim is for each entrepreneur to graduate from the programme with a workable plan to reach $100,000 in revenue within three years. Successful graduates will also receive an endorsement from Centro for a zero-interest loan on KivaZip, a peer-to-peer crowdfunding platform.
Last year Centro started to grow its impact beyond the Bay Area with the development of a free mobile app which guides users through a step-by-step intuitive process to create a basic business plan, budget and income statement. Instead of presenting users with a blank template and saying: “this is what an income statement looks like, go and fill in the gaps”, the app breaks down each component into yes/no questions or asks for information in a format that is more recognizable or meaningful. For example, some people may have a good sense of their sales per week or how much rent they pay per month, but struggle with reconciling this information on an annual timescale or knowing how to categorize these transactions. The app walks them through each stage and generates a personalized, professional document at the end.
What piqued my interest about the app — and the reason that Naldo was in Rio — is that it is being translated into Spanish, Portuguese and Russian. In conjunction with building the app Centro has been developing partnerships with NGOs in the US, Latin America and Eastern Europe which are also using business and entrepreneurship as a means of tackling social and economic exclusion. The idea behind these partnerships is to allow organizations with limited budgets — for example, La Cocina in San Francisco and Eixo Rio in Brazil — to deliver a basic entrepreneurship curriculum which will be all the more effective when used in conjunction with the app.
Centro’s approach resonated with me so much that I followed up with Naldo and his colleague DJ over Skype once I was back home. I wanted to run a few thoughts past them as I tried to digest everything I’d learned from the Social Starters programme.
First off, I’d seen first-hand some of the difficulties that Social Starters’ clients faced in launching and running their projects on a day-to-day basis due to their lifestyles. Long and unpredictable commutes, childcare or other family responsibilities and demanding day jobs were all common drains on time and energy. I wanted to know what, in Naldo and DJ’s experience, were the main challenges facing Centro’s entrepreneurs: was it the confidence and resources to start something in the first place, or practical or social barriers preventing projects from growing beyond the initial stages?
While agreeing that a lack of confidence and access to resources are both key problems that Centro seeks to address, Naldo believes that their focus is on the former. “A lot of the participants don’t know where to start. They actually have a lot of the answers themselves, but they don’t know that. More than teaching them, Centro’s role is to ask the right questions to bring these answers out, so that ultimately it’s a matter of them knowing the right questions to ask themselves”.
He gives the example of a group of Brazilian woman who wanted to open a restaurant. Their original mission statement was: “to open a restaurant”. After a workshop with Naldo, the women came up with a well-articulated and inspirational mission statement that was entirely their own making — they just needed some direction.
I was also interested in whether Naldo and DJ thought of Centro’s participants as ‘social entrepreneurs’ rather than just ‘entrepreneurs’ — or if there’s a difference — or if that even matters? According to its website, applicants to Centro’s programme must have a mission both to provide social benefit and seek profit. Does this social mission have to be at the core of the business, or does any business that specifically involves or caters to underserved communities provide a social benefit just through… well, existing?
As Naldo explains, social entrepreneurship can happen on a macro and a micro level. There are social entrepreneurs who seek to make permanent, systemic changes in society on a grand scale. But there are also people who, through the very act of setting up and running a successful business, are able to make changes on a local level: through raising household income, creating sustainable jobs in their community, even serving as a role model to other entrepreneurs from underserved communities.
DJ counters that, working in the Bay Area, a lot of applicants come to Centro with a great social idea — the area they need help with is making it profitable. This was often the case at Social Starters, where a lot of our clients’ projects weren’t income-generating businesses; they had been running so far on grant funding or volunteers. The challenge was building a business model around an essentially social project. The ability of Centro’s participants and Social Starters’ clients to successfully overcome this challenge demonstrates that we can and should move away from the “either/or” model — either public or private sector, either people or profit — and recognize the role that entrepreneurship plays in bridging that gap.
So, finally, what do Naldo and DJ make of my “entrepreneurs have become synonymous with hipsters” theory — after all, living in the Bay Area, they should understand the stereotype better than most? I put it to them that through building a bottom-up approach Centro was helping to redefine entrepreneurship and what it means to be an entrepreneur.
Actually, for Naldo, Centro’s mission is more about redefining how we help underserved entrepreneurs. Centro is disrupting the traditional model of entrepreneurship training, which, he thinks, is not sustainable. The current system relies on non-profits who can offer limited training, or MBA students or consultants who do pro bono work. Centro charges the entrepreneurs on its programme a small affordable fee, which not only goes towards sustaining the quality and growth of its own work but also increases the sense of value that participants attribute to it.
DJ — who previously spent five years in Eastern Europe teaching business English and volunteering in the Peace Corps — envisages creating a new international ecosystem for entrepreneurship training that is similar to that of English as a second language: a TEFL equivalent for teaching entrepreneurs, if you will. DJ will return to the region next spring to start implementing pilot programs using Centro’s training tools with microfinance institutions and other organizations.
So what does an entrepreneur look like, then? I think I was asking the wrong question because, actually, it doesn’t matter. It was interesting for me to examine my own preconceptions about entrepreneurs, but perhaps other people have less of a hangup about not being able to afford a decent Impact Hub membership yet.
It’s more important to ask, what do entrepreneurs do? Because I would wager that most people still wouldn’t put ‘social impact’ at the top of their lists. But entrepreneurship can and does drive innovation in the way we approach social and environmental challenges — on a macro and a micro level.
But it’s still easier for some people to be entrepreneurial than others. It’s a risky and expensive business. Stimulating entrepreneurship in underserved communities not only provides more opportunities for talented entrepreneurs who lack confidence or resources to realise their potential, but sets in motion a virtuous cycle. As more entrepreneurs from underserved communities become visible and successful, confidence and resources in these communities will increase.
Thanks to the work being done by organizations like Centro, the models we have for supporting underserved entrepreneurs are about to get a lot better.
Follow these links to find out more about Centro and how you can support them.
