Since shutting down Citizen Effect at the end of last year, I have had the luxury of working with three organizations I think are doing good and I’m helping them do good better. The topic that keeps coming up is, “what is a social entrepreneur?”
Wikipedia states, “an entrepreneur (i/ˌɒntrəprəˈnɜr/, a loanword from French) is an individual who organizes and operates a business or businesses, taking on financial risk to do so.” Merriam-Webster agrees, defining entrepreneur as, “one who organizes, manages, and assumes the risks of a business or enterprise.”
Ok, but how do we add the “social?” Here is where I think most people make a huge mistake. Most simply tack social on to the end, say that social entrepreneur is someone who organizes, manages, and assumes the risks of a business or enterprise that has “a goal of doing social good.”
I totally disagree with this. It is misinterpreting what makes an entrepreneur special. An entrepreneur is not defined by “operating a business.” Entrepreneurs are special because she/he, “assumes the risk.” Entrepreneurs assume the risk because they see an opportunity and believe they can do something better, either because they are more efficiently than others or because they have an innovation that is new.
So yes, there are plenty of self-proclaimed social entrepreneurs that have spotted an opportunity to make money and do things a little less bad or throw off a little more good than their competitors. They use social good marketing to increase their market share and create a price premium. But they are entrepreneurs is sheep’s clothing. They are still operating by the current profit-driven rules and feeding the insatiable and unsustainable appetite of the consumer-driven market system. Most start with the best of intentions. Blake Mycoskie started TOMS to provide shoes to kids who were at risk of getting Podoconiosis (an elephantiasis-like disease of the feet and legs). That is an awesome social problem to address. However, his one-to-one solution to sell cheap-stylish shoes to predominately young women isn’t going to end Podoconiosis; and feeding a young women’s consumer addiction with five or six pairs of TOMS is not sustainable for the planet. Most social enterprises put a band-aid on the surface of one social problem while perpetuating the same old market factors that underly other major social ills.
These pseudo-social enterprises are operating within the same system and playing by the same rules that created the social problem in the first place. If mass consumption is causing carbon emissions, obesity, and water scarcity, no social enterprise that leverages the consumer market can solve climate change, end childhood obesity or provide clean water to everyone in the world. As Einstein said, “We cannot solve our problems with the same thinking we used when we created them.”
So is there such thing as a social entrepreneur?
Yes. But they are defined by their innovation, not their business enterprise. Real social entrepreneurs look to change the system this is causing a social problem – that is the starting point – and that mission never waivers or is compromised by other market-driven goals. What makes them an entrepreneur is not that they set up a business – it is that they are a risk taker and believe their innovation can change the system, solve the social ill, and win.
All to often, a budding social entrepreneur is asked, “are you a for profit or nonprofit?” That is the wrong question because it is market-driven thinking and comes with too much baggage that stifles innovation. At the beginning, social entrepreneurs should care less if they are a non-profit, for profit, government agency, international policy making body, or a hybrid of all of those put together. Once they have identified their problem and created their solution, they then study the legal, regulatory, and funding options available and then mold their strategy to fit the structure that gives them the highest likelihood of success.
Social entrepreneurs start with a social problem, come up with their innovation to solve it, and then create the strategy and plan by which to win. They are innovators. If everyone else thinks that “social entrepreneurs” are business owners who tack a social good objective onto their business mission, then I say we don’t need social entrepreneurs because they are just entrepreneurs with a cute social marketing message leading us the road to hell paved with their good intentions, while leaving the root causes of social problems healthily in play.
We need “social innovators” who attack the systems causing social problems and create new systems and ways of thinking that make people’s lives better. If they are a business and use the market, awesome. If they don’t, who cares. Either way, they need to be able to raise enough money to keep their idea going. Some will find success in raising money from others. Some will find a way to sell goods and services in the market. Others will do both and whatever else is required to win.
If we begin by limiting our thinking to market-based solutions, we are stuck with within the existing system that is part of the problem. This is not to say we should adopt government-based thinking, or community-based thinking, either. It is that we need to adopt a much broader, systems thinking approach that looks at all the tools available (and tools yet to be imaged) to us to fix the system so that social problems are solved at their root cause.
So here is the to the crazy ones, the social innovators, who are crazy enough to change the world – through any means possible.