I smile when I see the United by Blue catalog in my mailbox because I know it will take me on an adventure. National Parks are frequently the backdrop for their clothing, accessories, and home and camping gear. For summer 2017, they photographed Ph.D. marine biologists with Bonefish & Tarpon Trust at a conservation fishing tournament who measured and tagged fish to investigate declining fish populations in Key West. They do so many good things as a company and when I went through their catalog, I couldn’t help but stop at the socks. Here is my full Bartram Socks review that you and the environment will love.
Bartrams Socks by United by Blue Review: Catching Fish Shooting Clothes
In the fall, UBB followed volunteers for Conservation Northwest who documented the crossings of bears, wolverines, and other wildlife by placing cameras triggered by motion sensors near I-90 in Seattle. Their goal, to build a sustainable solution to help conservation efforts and a company that sells ethical clothing. One of their initiatives, Tracking Bears & Wolverines With Conservation Northwest, is to help create a more suitable habitat for all sorts of animals in the Northwest:
“What’s easy for us to move on is easy for animals to move on,” explains Chase Gunnell, Conservation Northwest’s Director of Communications, as he unpacks his supplies. Chase and three of his coworkers, Laurel Baum, Alaina Kowitz, and Jason McCue, have led us down a regrown stretch of road to unearth which animals have moved through the area, some only hours before we arrived.
As a B Corp, United by Blue (UBB) not only removes one pound of trash from waterways for every product sold: the company supports conservation by telling these stories, hosting clean-ups, and making goods from long-lasting and sustainable materials.
I had admired the evergreen design and cross pattern in two styles of UBB’s Bartram’s socks online for several weeks before the fall catalog arrived. There, the array of sock colors was creatively featured.
(photo courtesy of UBB)
Reading the fine print excited me: 65% recycled cotton. The Fairtrade Foundation’s 2015 Cotton Commodity Briefing details the human, economic, and environmental challenges of cotton production. With 2,720 liters of water per cotton t-shirt and 10,850 liters per pair of jeans, conventional cotton production can easily deplete and pollute local water sources. The briefing also cites the World Health Organization’s classification as hazardous $819 million of the $2 billion spent annually on chemical pesticides for cotton. Since its start in 2010, United by Blue has used organic cotton, which does not involve chemical fertilizers or pesticides. Recycling cotton prevents further waste and damage from cotton production.
I hadn’t known how much UBB used recycled materials in their products, and I contacted them to find out more about Bartram’s socks. Here is my interview:
About Bartrams Socks
KJFG: Why are these socks named Bartrams?
UBB: Bartrams Garden is a beautiful botanic garden in our hometown of Philadelphia; it is also the site of our very first clean-up in 2010. It is still a spot that we visit often and have removed over 40K pounds of waste. The Bartram’s Sock Collection is a homage to one of our favorite places in Philly.
KJFG: Which came first: the design or the material?
UBB: Sustainability is at the core of our business so the material came first but the designs weren’t far behind.
KJFG: How is this cotton recycled? Where does it come from? What is the process for recycling it?
UBB: The yarn is sourced domestically from a company that uses a unique process of recycling textile waste. This company brings in cut scraps/textile waste from a variety of manufacturers, the material is then sorted by fiber content and color, and reclaimed into a fiber that can be spun with staple fibers to become yarn.
KJFG: What are the other materials in the socks?
UBB: The other materials are simply added for function or design aesthetics.
KJFG: Why did you choose the manufacturer in North Carolina?
UBB: When developing this collection, we had US manufacturing in mind and found a great partner in our manufacturer in NC.
Where You Can Find United by Blue Clothing for Yourself
Many of UBB’s other products feature responsible sourcing and North American production. In addition to the Bartrams socks, a beach blanket is made from recycled cotton. Recycled polyester pervades their products, being used in several styles of their beanies, jackets, bags, shirts, board shorts, and throw blankets.
Boots, tees, and fedoras are among many items made in the USA. UBB also recently shared the details of how they created an original supply chain for bison fiber, a by-product of the livestock industry that would otherwise be wasted. Journeying from Alberta and Ontario to Texas, the bison fiber is combined with recycled polyester and low-melt polyester to be used as insulation in outerwear.
The UBB headquarters and flagship store are in Philadelphia, 35 miles from where I live. I would buy from them if they were 3500 miles away because they built a conscious company and a community of consumer-volunteers to face the issue of water conservation.
Since 2010, they and more than 7500 volunteers have removed over 1 million pounds of garbage from waterways in 27 states. After Hurricane Sandy in 2012, they canvassed affected residents, distributed donations, and removed debris in Ocean City, NJ and Staten Island, NY.
In one of several collaborations with Subaru of America, Inc.—whose corporate offices and operations are nearby in New Jersey—they removed a sum of 37,000 pounds of trash from the Trinity River in Dallas, TX between 2013 and 2014. In 2017, UBB joined like-minded co-op REI for two road trips of cleanups: one on the West Coast in Southern California and one on the East Coast from Pennsylvania to Connecticut. They have also organized events in Canada and Taiwan.
They faced the sharks on the famous show Shark Tank and demonstrated how they could change the world one pair of flip-flops at a time!
Change Creator’s interview with the two founders, Lee and Griff, revealed strategies and insights we can all learn from. Find the full interview is at the end of this article.
Donald Lee and Matthew Griff, founders of Combat Flip Flops, not only built a successful retail business but also help underserved communities all over the world by empowering them economically with employment opportunities.
As social entrepreneurs, Lee and Griff created a business model that drives “multiple bottom lines” – profits, social change, and sustainable economic growth.
How did the company come about, what unique challenges did they face, and what’s their secret to success?
The Multi-Million-Dollar Business Idea
Similar to many social enterprises that help communities in developing countries, the initial concept for Combat Flip Flops was born out of the founders’ personal experiences when they were living among the people they serve.
Lee and Griff were two Army Rangers stationed in Afghanistan where they experienced first-hand the people and culture of the war-torn country.
However, what they saw were not people waiting for a handout. Instead, they saw a community that embodied the virtues of persistence, creativity, and respect.
They saw hardworking people making combat boots and other army supplies to support their families and communities.
Then they realized that these workers would need a job after the war ends. They saw an opportunity to “manufacture peace through trade” and a business idea was born:
Combat Flip Flops would send veterans to countries affected by war, identify facilities that were established to manufacture tools for war and transform them to make commercial products that support peace.
They’d ship the products all over the world and create employment opportunities along the way.
Today, the company has factories in a few developing countries – creating employment opportunities and economic advancements in many underserved communities:
Their flip-flops are made in Columbia, where all the materials are sourced locally.
They use metal from landmines dropped in Laos during the Vietnam War to create jewelry. The revenue further funds landmine clearance to keep more people safe.
Their women-operated factories in Afghanistan make all the sarongs and scarfs sold on the website. Each piece puts an Afghan girl in school – an effort to battle the 15% illiterate rate among Afghan women.
They’re funding veteran missions overseas as well as clinical aid work – giving 2% of their bottom line to causes they support.
Unlike giving out aids and donations, Combat Flip Flops’ factories are creating long-term economic changes in the local communities. The business model gets to the root cause of poverty and creates a virtuous cycle of empowerment.
Taking an impact-driven startup off the ground is rarely a walk in the park. There are many moving parts and it can be quite challenging when all you have is a few thousand bucks and a simple website.
However, that didn’t hold Lee and Griff back.
Getting On the Radar With a Compelling Brand Story
Lee and Griff made their first sales at a trade show. They only had a night to prepare – barely enough time to get a website, a merchant account, and a bank account set up.
The event became the turning point for the company.
Making the most of what they’ve got, Lee and Griff attended the trade show and shared their compelling brand story with some bloggers who took photos of the products and posted them online.
They highlighted the story of how simply buying a pair of flip-flops can help people in underserved communities by creating jobs and putting them through school.
The business model was easy to explain and people’s immediate reaction was, “we wanna support that!”
From there, they sold thousands of pairs of flip-flops to consumers all over the world.
Make Products That Sell
As a for-profit social business, you need to generate a profit. Otherwise, you’ll be out of business before long and unable to make the social impact you set out to achieve.
That means you need to sell something that people want. Whether it’s a product or a service, you have to identify a market and create something your customers want to buy.
For Combat Flip Flops, their customers want high-quality and well-designed fashion items that also have a great story to tell. They want to feel good about their purchases by knowing that they’re helping communities in need.
Scaling the Company – the Power of Publicity and Team Work
A compelling brand story won’t generate sales if the world doesn’t know about it.
Lee and Griff designed a brand management campaign and had a clear target on which publications to pitch and how to direct their advertising budget.
They worked with a PR professional to help them promote their brand story and landed an interview with Gizmodo. The interview gave them the stage to share their story and a platform to introduce their products to the market.
A producer from Shark Tank saw the article and offered them a spot to pitch on the show.
The duo prepared well for the show and took that advantage to tell the company’s story.
They succeeded in building brand awareness and driving traffic to the website. However, they also learned the hard way that with a boost in publicity, they also had to make sure they have the infrastructure in place to support the increase in interest and the spike in traffic.
Nonetheless, the “Shark Tank effect” was real and they enjoyed a steady flow of traffic for months afterward.
In addition to the publicity, Combat Flip Flops grew from one distributor to a million-dollar company, thanks to its great team composed of dedicated individuals who know each member’s strengths.
Each member contributes his expertise to the company, such as networking, operations, business plan development, and design.
Lee and Griff roll up their sleeves and get into the trenches. All the partners are knee-deep in the business because everything is interconnected – from product design to logistics and marketing – one thing can affect many others and ultimately, sales.
Finding the Sweet Spot
As a startup, pricing your products and services can be quite a challenge – and Combat Flip Flops wasn’t spared such growing pain.
Having a social cause doesn’t make them immune to market forces. If anything, they need to be more diligent with their demand forecast because of the business’s mission to support the wide net of local communities.
Lee and Griff did the research, analyze market trends, and made adjustments based on their website metrics so everything fell in line with the industry standards.
The advantage of being a small company is their ability to pivot and turn on a dime to respond nimbly to the market.
They were able to optimize conversion rates, maximize revenues, and fine-tune ad spending to increase their ROI.
Combat Flip Flops experienced a 450% increase in their annual revenue recently. But they also invested substantially in inventory and infrastructure to get there so they just broke even.
To make the business profitable, Lee and Griff had to find out which products were making money using existing data and creating forecasts. They cut out products that were losing money and brought in more winners so they can come out ahead.
Now they can accurately forecast their demand and make sure their supply chain is set up to meet the needs of the market while supporting the communities involved in the manufacturing process.
Combat Flip Flops is a great example of how a social venture can generate a profit and deliver profound social impact at the same time.
It follows the “multiple bottom line” concept that works well for many social enterprises.
Lessons For Startup Change Creators On Creating Profit and Progress
Here are a few lessons you can glean from the company’s success and apply it to your own social business startup:
Travel to learn about the world and your market.
Traveling gives you the opportunity to learn about the world. You can get inspired by your travel experience and turn it into a business idea that can help a community.
Spend time in the communities you want to serve.
Spending time in the community you want to serve allows you to understand their culture, environment, resources, and economic reality – information that will help you structure a sustainable venture that benefits those who are most in need.
Share your mission with everyone.
Share your mission with the world. Tell a compelling brand story that takes your product beyond “commodity” and turns customers into evangelists to further your cause.
Don’t hold back until you are ‘ready’. Move forward now.
Take every opportunity you can and make the most out of it. Don’t hold yourself back just because you don’t have all the bells and whistles in place.
Generate the right kind of publicity for your products.
Generate the right kind of publicity for your products. Keep putting yourself out there and you never know who may see your article or interview!
Be prepared. When an opportunity comes, you’ll want to be ready!
Be prepared. When you come to the opportunity to promote your brand, make sure your infrastructure – such as website and shopping cart – are set up to handle the increased traffic.
Build a strong team.
Build a team of dedicated individuals who share your vision and understand each other’s strengths. If you are looking to fund your idea, investors will look at your team and ask: Can I see this team executing this vision? If not, what areas of your team do you need? Can you hire someone else? Get advisors?
Know the metrics that matter.
Analyze your website metrics to find the sweet spot in pricing, ad spend, and other marketing activities. Don’t waste time tracking metrics that do not matter to your brand, or company right now. Get to know how to read the reports, and how to make smart marketing choices.
Stay on top of market trends.
Stay on top of market trends and forecast demand so you can effectively manage your supply chain, sell products your customers want, and implement the right promotion strategies.
Get involved in the operations of the business so you know how your business works.
Get involved in the operations of the business and understand how all the moving parts affect each other and ultimately, sales. Keep an eye on the revenue as well as the profit – you’ll have to invest in inventory and infrastructure to grow but you also need to make sure they’re paying off.
What’s your million-dollar idea for an impact-driven business? How will you turn it into reality?
If you like this article you might want to check out our full interview with the Combat Flip Flops founders – Listen to the Full Interview Here
Speaking of the full-scale collapse of major media, we thought we’d share this article from our friends at www.activistpost.com which discusses this issue. Want to be more informed? Why are you reading the resources that are in your news feeds? Who is really paying for these conglomerates? Let’s investigate the full-scale collapse of major media and why you need to know about it.
As I indicated in a recent article, the B-team, or even the C-team, is now heading up the national evening news in America. These anchors’ faces and voices (Muir, Glor, and Holt) are not even faint reminders of the so-called Golden Age when father figures like Cronkite and Reasoner fed official truth into the brains of viewers. The new C-team is vague gloss from a paint job on a used car. This is an ominous sign for the news bosses in the upstairs suites. They can’t find adequate hypnotists anymore.
What happened to Major Media?
Many things—among them, the father figures left the fold. They decided to sell real estate or take corporate work in PR. They saw the handwriting on the wall: the networks were fostering a youth movement, seeking younger and prettier talent.
Why?
Because Madison Avenue was convinced the younger viewer demographic was the important one, in terms of consumer buying power. Therefore, on-air news faces had to be younger as well. This sounded right, but it overlooked one vital fact. The young news anchors couldn’t pull off the appropriate level of mind control. They were merely bland robots. Friendly, nice, literate to the point of being able to read copy. (Lester Holt at NBC is a bit older, but he comes across as a corpse someone dug up at a cemetery for a role in a Frankenstein remake.)
There is another gross miscalculation. The commercials, between news segments, are overwhelmingly pharmaceutical. Those drugs aren’t intended for the youth demographic. They’re for the middle-aged and the seniors, who want to toxify themselves for the rest of their lives.
So the commercials are playing to the older crowd, while the faces of the news are supposedly attracting younger viewers. It’s a mess. The news execs and programmers really have no idea what they’re doing.
They’re basically hoping their game somehow lasts until they can retire.
There’s more.
Terrified by “visionary” Ted Turner, who started CNN as a 24/7 cable news outlet in 1980, NBC decided they had to spin off their own cable news channel. This move, on its own, splintered the unitary hypnotic effect of having one anchor deliver one version of the news to one audience. Suddenly, there were several hypnotists on stage, all talking at once. It was a disaster in the making.
Then you had the various financial news channels, and FOX, and the sports channels, and the weather channel, and Bloomberg, and C-SPAN, etc. Plus all the local news outlets.
This fragmentation began to erode the programmed mind of the viewer. If, hoping to retreat to an earlier time, he sought out one face and one voice and one great father figure on ANY of these channels, he came up empty. The archetype was gone.
In a pinch, a viewer on the political right might opt for Bill O’Reilly, and a viewer on the Globalist left might choose Charlie Rose. But they’re both out of the picture now.
Enter, from stage left, the goo-goo behemoth, the CIA-connected Facebook, which, amidst building a tower of likes for infantile posts, is trying to convince its adherents that it IS the Internet and a source of tailored news that is sufficient unto the day. Unanchored news. No single voice or face.
Big media, no more.
Big media, in all its forms, has lost the mind control war.
It has lost it from inside itself.
Into the vacuum have swept the million of voices of independent media. I’ve written about that revolution at length, and won’t recap it here.
Consider the Youth Phenomenon
Instead, consider the Youth Phenomenon. You could peg it at the Beatles’ US invasion of 1964.
Why? Because that was the moment when children began to be entertained by other children. Seriously, deeply, religiously.
Add in the drugs, and other factors, and you had the groundswell of the 1960s.
Stay young forever. Never grow up. Adults are dull dolts.
These children eventually became parents, and their children became parents…and you have the whole generation-to-generation, societal, eternal-youth package. “I want to be young. I want to be happy forever.”
How do you sell these people the news?
You put a nice face on it.
And you lose the hypnosis.
You still have all the lies and cover-ups and diversions and omissions…but the trance element at the core grows weaker over time.
Like the snowfall from a great blizzard, the aftermath shows patches of snow disappearing, piece by piece.
This is happening, and the news titans can do nothing to stop it.
It’s a long-term trend, and it’s called good news.
The author of three explosive collections, THE MATRIX REVEALED, EXIT FROM THE MATRIX, and POWER OUTSIDE THE MATRIX, Jon was a candidate for a US Congressional seat in the 29th District of California. He maintains a consulting practice for private clients, the purpose of which is the expansion of personal creative power. Nominated for a Pulitzer Prize, he has worked as an investigative reporter for 30 years, writing articles on politics, medicine, and health for CBS Healthwatch, LA Weekly, Spin Magazine, Stern, and other newspapers and magazines in the US and Europe. Jon has delivered lectures and seminars on global politics, health, logic, and creative power to audiences around the world. You can sign up for his free NoMoreFakeNews emails here or his free OutsideTheRealityMachine emails here.
There’s often the impression that for-profit business models and positive social impact are at odds with each other.
Before you draw any conclusions, consider these results achieved by Living Goods, a Skoll Foundation Social Entrepreneur Award winning company:
Reduced under-five mortality rate by 25% for less than $2 per person per year
Reduced drug prices by 17% at clinics and drugstores in areas where it operates
Reduced the supply of fake drugs by 50%
Living Goods made all these powerful impacts and more by applying a for-profit business model to a non-profit organization.
Founder Chuck Slaughter brought together the best of private and public sectors and, in his own words, “used business tools to solve big hairy social problems.”
Before we dissect Chuck’s success secrets, let’s briefly look at what Living Goods does:
Living Goods operates in sub-Sahara Africa, supporting a network of community-based health entrepreneurs—women living in the community—to go door-to- door to teach families how to improve health.
These health entrepreneurs are equipped to make a living by selling low-cost, high-impact health products such as malaria and diarrhea treatments, healthy foods, and family planning products, so they can make a difference while making a living.
Living Goods even designed and developed its own line of products aimed to create substantial and long-term social changes.
For example, they offer a line of fortified food for toddlers six to 24 months of age because children in sub-
Saharan Africa often experience stunted growth that leads to a lifetime of underperformance in school and income
generation.
What makes Living Goods so successful?
What did Slaughter learn from his days in business school and as an entrepreneur that he applied to this non-profit organization?
Here are six lessons every social entrepreneur can learn from Living Goods:
1 – Apply Proven Business Concepts to Solve Inefficiencies
When Slaughter first got involved with an NGO in public health, he observed that owners of small drugstores and clinics were sitting around in their stores, waiting for customers to show up.
As a result, they were not as profitable as they should have been while people in the community were not getting the health care products they needed. There were a lot of inefficiencies in the system.
He devised a proactive solution to get those owners out of the store and into the community, providing the resources they needed to turn “sick care” into healthcare.
He then built on the success and leveraged the proven business model of person-to- person selling perfected by Avon, Amway, Tupperware, and the like to help rural women create a source of income while making essential health care products accessible to more people at a low cost.
According to Slaughter, Living Goods’ products are “cheaper than free” because of the efficiencies they create; instead of having to spend half a day and a few dollars to travel to a clinic for free medications, people can now get healthcare products delivered to their doors for just $0.50.
2 – Adopt a Cost-Efficient, Profit-Focused Model
Instead of blindly following a non-profit business model, Slaughter took the best of both public and private sectors to design his organization.
Even though Living Goods is registered as a non-profit, they adopted a for-profit business model for their operation.
Living Goods received funding from investors by showing a proof of concept and by leveraging Slaughter’s reputation in the private sector.
They use the same best practices, knowledge, and know-hows to run a non-profit organization as a for- profit business.
Instead of grants, they generate ongoing income from selling products to customers which proved to be more cost- effective than a public sector solution in which employees are salaried and services are free.
As a result, Living Goods is able to provide effective services at a fraction of the cost.
3 – Do Your Homework
Slaughter didn’t go into the market blind.
He did a lot of research on the potential market, the principle cost of mortality, the diseases to target, local conditions most conducive to his business model, population density, income and spending per capita, as well as political stability in order to identify the best market in which to start Living Goods.
He also noted that there’s a delicate balance between doing research and getting stuck in doing research.
Apple wouldn’t have invented the iPod if they simply did research and tried to come up with product ideas based on customer survey and market demands.
When you’re creating new solutions, you often can’t find the answer just by asking people. You can only find out if your idea works by offering a version of the product or service in the market to garner real feedback.
4 – Use the Lean Approach
Slaughter advises testing a business concept in the market by following the Lean Approach when developing a startup plan.
He tested the business model for Living Goods by scaling just large enough to test the market and getting reliable answers.
He was able to validate his concept quickly and cheaply; during the first 6 months, he only had one full-time employee while proving that the market was viable.
With this proof of concept—a hybrid model that covers 100% of the cost through the sales of products—he was able to get funding from investors to scale up.
Living Goods partnered with local NGOs that already have an established footprint to test their business model. This approach greatly reduced the amount of time and money required to understand the market and fine-tune their approach.
From there, they were able to build their own network which, from day one, focused on monetization to speed up their growth and impact.
6 – Leverage Technology
Two years ago, Living Goods put an Android phone in the hands of every entrepreneur in its network. The phone comes with a custom Living Goods app which automates how the agents carry out their diagnosis, enables them to follow up with customers, and allows the organization to track the performance of every agent.
The use of mobile technology has tripled the speed Living Goods do performance management, and vastly improved the quality of the work on the ground.
Living Goods owes its success to Slaughter’s ability to quickly and cheaply test a business idea and adapt to the market using local resources and technology.
Slaughter’s focus on partnership, relationship, and collaboration also helped the company succeed at a rate that rivals the best startups in the world.
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Chuck Slaughter and Living Goods were featured in issue 10 of Change Creator Magazine. Stop by iTunes or Google Play to get the app and read the rest of issue 10 for free!
Ryan Foland is a master of communication who’s creating change one word at a time.
In this interview we discuss the power of good communication and some tips that will help you get to the next level.
Some of the topics covered include…
How he built his personal brand as a communication expert.
His 3-1-3 theory.
What he’s learned about communication that has been breakthrough.
What you need to know about effective communication – what people look for.
What makes people listen to you less?
What it means to break the frame
Plus so much more!
Some more background on Ryan:
Ryan can be seen on stage as Master of Ceremonies at some of the largest startup events in Los Angeles including TechDay, Expert Dojo Investor Festival, IDEAS LA, Green Festival LA, Digital Hollywood, and more. He is a sought-after TEDx host, and has worked with TEDxUCIrvine, TEDxSantaMonica, and most recently TEDxLA. Well-versed in the Irvine and OC community – he is a radio show host for Get Notified on KUCI and in early 2015, helped organize and launched the Irvine chapter of 1 Million Cups, a weekly startup pitch event that has featured over 200 entrepreneurs to date.
When not onstage, Ryan coaches leaders worldwide on the art of simplifying spoken and written messaging for greater impact. Ryan has been recognized by Inc. Magazine as a Top Youth Marketer in 2016 and named by Entrepreneur Magazine as a Top Personal Branding Expert in 2017. Ryan’s company InfluenceTree, specializes in helping individuals discover, build and grow their personal brands.Ryan is a communication strategist who loves helping people convey their businesses and personal brands more efficiently.
Ryan is also the Communications Manager for the Office of the Vice Provost for Teaching and Learning at the University of California, Irvine. Ryan writes for Fortune, Influencive, TechDayNews, and Richtopia richtopia.com. He is the host of the World of Speakers podcast and of the Get Notified radio on KUCI. Ryan also enjoys helping startups learn to craft their value proposition more effectively using his unique 3-1-3 coaching system.
If starting a for-profit social venture seems quite daunting, you’re not alone. That’s why it is our mission to keep giving you inspiration. How to choose a social enterprise idea that will fire up your life? Read here to figure this out and get solving the world’s problems through business!
There are many aspects to consider. Not only your business idea needs to be commercially viable but it also has to deliver a meaningful social impact that’s sustainable.
Most successful social ventures are grounded in the founders’ visions, have a memorable brand story built on their missions, and are structured to deliver impactful social changes in the communities they serve.
Choose a Social Enterprise Idea that Works for You
There’s no one-size-fits-all answer to what constitutes a “good” social enterprise idea. It all depends on you and those you want to serve.
Here are some criteria to help vet your ideas and find the winning formula:
Your Passion, Talents, Strengths, And Experiences
When you’re in the startup mode, you’d likely be rolling up your sleeves, putting in the hours, and wearing many hats.
If you’re not passionate about your mission and the community you serve, the business could easily turn into a grind and you’d no longer be motivated to stick with it.
When a business idea taps into your (and your team members’) talents, strengths and experiences, you’d have a better chance and an easier time to take it off the ground.
Consider your natural skills and abilities, as well as your formal training and education, to see how they fit into the big picture.
Your social enterprise business idea should be motivated by your vision and passion while being powered by your talents, strengths, and experiences.
It takes a lot to start a business and you should leverage as much help as you can get. What do you have at your disposal that can make things go smoother?
What resources do you have access to? Who do you know that can put you in touch with the right people?
These connections may not be immediately obvious so it pays to build relationships with a wide variety of people. Don’t be shy about sharing your vision!
In addition, your business idea should allow you to create a work environment that matches your personality type.
According to Holland’s Theory, you’ll have greater success and derive more satisfaction out of your career in a work environment that supports your personality type.
The Market
Unlike non-profit organizations, a for-profit social enterprise needs to generate revenue and make a profit to stay in business.
In short, you need to define who will be paying for your products or services and how to position your offering so it’s appealing to them.
Just like any marketing activity, you need to define the problem or challenge you’re solving and understand what’ll motivate your customers to purchase from you.
In addition, what distinguishes your product or service from others in the market and why would your customer want to buy from you?
Many social entrepreneurs incorporate the social impact of the businesses into their brand stories to set themselves apart while building brand loyalty.
Does your business idea tell an intriguing story that appeals to your ideal customers?
The Cause
Obviously, as a social entrepreneur, you have a cause you want to support.
If you’re starting out with a broad-stroke approach to a cause, you may need to refine it and give it a specific focus – e.g., by giving it a spin so it’s relevant to your market or tailoring it to the community you serve.
You should feel strongly about the cause behind your business. This personal drive will help you stay grounded when you’re pulled in a hundred different directions and keep motivated when things get tough.
Examine your business ideas and identify the one(s) that are most in alignment with your cause.
The Project’s Viability
Great ideas are just ideas until they’re put into action.
When you evaluate business ideas, consider the ease of implementation and the potential profit it can generate.
To build a sustainable for-profit social venture, it’s important to evaluate its potential to turn around a profit – not simply revenue.
What’s the cost of bringing the product to market (e.g., R&D, manufacturing, logistics)? How much do you need to invest in promoting the business? How long will it take for revenue to surpass these expenses – and do you have enough funding to reach that point?
How much is the initial investment and what are your options to secure the funding?
Shortlist a few business ideas and write up a business plan for each. The process will help you get a bird’s eye view of all aspects of the business, including competitive analysis, risk assessment, operations, and financials.
Sustainable Social Impact
Last, but definitely not least, your business idea needs to be relevant to the community you serve.
Successful social enterprises create sustainable impacts. They solve immediate problems for underserved communities while empowering them to thrive so they can become economically independent.
Unlike many non-profit or charitable organizations, which tend to focus on aids and donations, for-profit social ventures emphasize on generating economic activities that not only provide employment but also allow revenues to be reinvested into the local communities and create a virtuous cycle.
Does your business idea solve a pressing problem faced by the community you want to serve? Does it encourage employment and skill training at the local level? Does your business model allow for revenue to be reinvested into the local economy?
Finding the Sweet Spot For Your Impact-Driven Business
Your social business represents a convergence of your values, beliefs, convictions, talents, skills, experiences, your market, and the community you want to serve.
The sweet spot for your social enterprise is where all these factors overlap.
Nailing the winning business idea may take some time and effort but it’ll be worth it when you find the sweet spot that allows you to create a profitable and impactful social venture.
Ask several different people and you might get a lot of variation in the answers.
Maybe the better question is: What kind of entrepreneur do you want to become?
Every time I interview someone I have the honor of learning from them just as you would any mentor. The more I talk to a wide range of amazing people the more I find a common and consistent message.
Great entrepreneurs are on a mission and they play for something bigger than themselves.
The motivation they have is not spawned by the idea of money. No, it’s from something bigger, a cause or a mission in their life that they become obsessed with. Money is only the means to pursuing the mission.
Nothing or nobody can derail them from pursuing it. Their vision is clear and desire strong.
Passion is an important part of the equation but to succeed in scaling an idea and creating a good lifestyle you also must know your competency and market.
“aside from your love, your labor is the most sacred give you can give, so find something that you’re here to play for that’s bigger than yourself”
People like Sasha Fisher, who was featured in issue #11 of Change Creator Magazine, will leave you in awe with her story of great leadership at Spark Microgrants.
Sasha Fisher moved to East Africa in July 2010 to develop the Spark MicroGrants model. Her previous experiences in South Sudan, South Africa, India, and Uganda have led to her passion for community-led development. Spark has designed a novel approach for launching communities facing poverty into action and has partnered with 150 villages across Rwanda, Uganda, Ghana, Burundi and the Democratic Republic of the Congo.
Spark strengthens the fundamental vitals each village needs to succeed, building the base infrastructure for families to discuss, deliberate and make local progress. Spark takes each village through a six-month facilitation process where families set village goals, brainstorm projects to reach one goal and plan a project. Each village opens a community bank account and receives an $8,000 seed grant to launch their project into reality. The six-month process is outlined below.
Now, as you might already know, marketing expert, author, and brand ambassador, Guy Kawasaki is no stranger to the startup world.
We had the honor to talk with him on a range of topics and what we got in return was an overflowing amount of priceless strategies that will help any entrepreneur step up their game.
One of my favorite quotes from Guy is:
“Great companies start because the founders want to change the world… not make a fast buck. Call me a romantic, but I think entrepreneurs should try to change the world.”
What decisions are you making? How do you know you are making good decisions?
Understanding why you want to make a difference and the internal and external options you have right now to make it happen can show you what you can do today to get on the path to bringing your vision to life or narrowing down what it is exactly.
However, it’s one thing to say I want to change my life—or the world—and another to follow through with it. Life happens no matter what we do. And if we don’t bring consciousness to our decision making, we will forever live based on external stimuli and internal patterns we don’t recognize as they are playing out in our daily lives.
Daniel Kahneman, arguably one of the most important contemporary psychologists, demonstrates clearly how we like to think of ourselves as rational in our decision making while the truth is that we are subject to many biases in his book “Thinking, Fast and Slow”.
As Change Creators, we can’t afford to ignore the intricacies of our decision making.
The Twin Sister of Decision
When Ilaina Rabbat and Roshan Paul decided to build Amani Institute, they were both working at Ashoka. They used their vacation time to do initial sensing, spent nights working on the concept, connections and strategies, hosted meet-ups to come up with a name and logo and finally moved to Nairobi, Kenya to start building the Institute on the ground.
In the process, they had to make a million different decisions. Literally.
The most important one, however, was to commit to making it happen.
Commitment is the twin sister of decision.
Your fears, internal and external options, your strengths and interests, and real or perceived opportunity costs all color the decisions you are making. What makes them count, however, is your commitment.
The Visible and Invisible Leap of Faith
Decisions don’t have to be literal leaps of faith.
Roshan and Ilaina didn’t immediately quit their jobs to start their social enterprise; they took time to prepare the ground. The visible leap of faith—relocating, starting the program, and such—was preceded by an invisible one that was the commitment to creating an answer to a problem they perceived: the lack of the equivalent to a medical training school for people who want to build careers of meaning and impact.
For some people, it helps to publicly say they want to run a marathon to actually follow through with it.
But others experience a sudden lack of energy after sharing with someone that they want to write a book, for example, or want to tackle a difficult problem in the world.
Sometimes, sharing your invisible leap of faith too early and with too many people can also take energy out of it as you get confronted with everyone’s opinions about your decision.
Ground yourself before you make it public.
A compass for decisions:
1. The Cause
When I asked Tosh Juma, who is launching Nairobi Design Institute, an Impact Design Academy in Kenya, what he thinks when he hears “decision making,” his answer was fast as lightning: “The cause.”
If you are aligned with something that is bigger than you, your fears, and your shortcomings, you will figure things out.
Sometimes, that means continuing with your job and moonlighting your idea.
Sometimes the “cause” is not a specific social change topic but just the commitment to doing work that is impactful.
Or it means figuring out that you actually are not a social entrepreneur but rather an intrapreneur, and there is nothing wrong with that if it still furthers the cause you are committed to.
2. Fears, Values, and Happiness
Double-check your story to see if your decision is disguising a fear that you can actually face.
In my last column, we spoke about a fear practice you could develop to make sure you are familiar with your fears and build courage to face them.
For example, one of our alumni decided to build a career working in the nonprofit sector but realized that she would really have more impact in her previous company that wanted her back.
She faced her fears of falling into old patterns and negotiated a new role that allows her to innovate from within and create cultural impact through a very large media company in Europe.
Her decisions pivoted as she worked through her fears, but the commitment to the cause (creating positive social impact through her work) didn’t change.
What is crucial when we talk about fears and commitment is Peter Senge’s distinction between creative and emotional tension. Your fears can create an emotional tension causing you to lower your vision or giving up altogether in the worst case.
Focusing on your commitment, accepting reality, and remaining open to different ways to making your vision come alive will help you build the ability to remain in creative tension that inspires finding better solutions to achieving your goals.
Sometimes, we think we don’t do something because of a lack of courage.
An interesting reframe of such a situation happened when I ran into an alumnus who remained in his family business instead of starting his own social enterprise as he initially envisioned.
He shared with me that he realized it wasn’t really a lack of courage but a very strong value around family that kept him there. A clash of values doesn’t have to create “either-or” situations for you.
In my last column, I shared the “Third Horizon” framework that can help in such a situation: You can build towards a more significant shift of your work in the future by including small things in your daily or weekly routine that help you build expertise and experience.
Read here for more about how values affect your decisions.
Harvard Psychologist Dan Gilbert presents some very interesting research on how our beliefs about what makes us happy are often wrong and how that translates into bad decisions.
Watch his TED talk – Why We Make Bad Decisions
Decision-making tools are only as good as you know yourself
There are many tools that can help you with the actual decision making, ranging from flipping a coin to elaborate frameworks that can help you weigh your options. I particularly like these 52 skills on mindtools.com or this great “Beginner’s Guide to Better Decision Making” by James Clear.
Oftentimes, you won’t know all the answers and have to follow your gut instinct, or you are someone who always does that but needs to start being more analytical in how you are making decisions.
In the context of the Inner Journey, this type of self-reflection is crucial to understanding where your strengths and weaknesses lie. And in the context of social change work, this sometimes translates into a matter of life and death of people you are working with, or puts you in an ethical dilemma that you can’t resolve but still have to act on.
Decision fatigue is a reality and can be a serious problem. Taking a hard look at all the decisions you make on a daily basis and seeing which ones you can eliminate can be very helpful. Remember: Habits replace willpower and making decisions requires a lot of willpower!
Community of Practice
Last but not least, a community of practice and support is incredibly important when you are making important decisions.
Join a group of likeminded people such as the Change Creator Facebook Group – I Am A Change Creator, a Fellowship, or make a point of getting your friends together to support you when you are taking the leap.The ones that will pick you up when you get knocked down and encourage you to try again.
As Brene Brown puts it in her talk “Why It Isn’t Your Critics Who Count”:
“yes, it was as terrible as you thought it was, but you were brave, and now let’s go try it again.”
Don’t let noise distract you.
Know who the people are who are also in the arena and keep on building a better world!
Ready?
Asking for feedback from experienced professionals and friends, finding your blind spots, and checking your assumptions have to become habits if you want to improve your decision making.
You can google decision-making tools, but they are only as good as your ability to self-reflect and your commitment to making change happen.
Understanding why you want to create change and exploring both your internal and external options to making it happen can help you understand what decision you need to make next as a Changemaker.
Expanding your ability to be increative tension instead of letting emotional tension snap you back is crucial to honoring your commitments.
He’s been a leading voice in entrepreneurship and evangelism for years, beginning at Apple in 1983. Kawasaki has cultivated a unique perspective on what it takes to start a company. He’s particularly adept at helping startups and early-stage companies get off the ground—and guiding them towards becoming well-known, successful businesses.
In this interview we discuss what it takes to succeed as a startup.
Some of the topics covered include…
How to start identifying your key strengths
How Atlas is funding causes with their running app
How to approach your startup and test markets
Why timing matters in product development
A hot program tip for hacking your startup growth
Uncover if your startup is ready to scale impact
Plus much more!
Given the impressive list of companies for which Kawasaki has worked over the years, you might think there’s some complex formula or secret behind his success and influence. But in his mind, it’s much simpler than that.
There’s a section on Kawasaki’s website that lists the various companies for which he’s worked called “Guy’s Golden Touch.” Yet Kawasaki noted that “‘Guy’s Golden Touch is not ‘whatever Guy touches turns to gold.’ It’s ‘whatever is gold, Guy touches.'” This distinction is core to being a successful evangelist because, as he says, “it’s easy to evangelize something great and it’s very hard to evangelize crap.”
In a previous article I went over ways for aspiring entrepreneurs to come up with social business ideas. Find your social business idea here!
That article focused on ideation, or creating new ideas from scratch, or else finding opportunity to reapply and reinvent old ideas. If you haven’t read that article, I encourage you to do so, as this one is a sort of continuation.
Social Entrepreneurship Ideas
I’m going to jump into more specific examples of where and how you can come up with social business ideas.
Don’t feel bound to this list! If you find your interests, passions, and ideas drifting in different directions, you owe it to yourself to explore your own ambitions. Many times the path to a great idea is winding and indirect.
Sometimes, you’ll have to “strike gold” to find a good idea. A bit of random luck can go a long way but won’t happen if you’re not at least looking.
That being said, there are steps you can take, including ideation, to increase your chances of success. I don’t want to spend too much time rehashing ideation for social business. However, there is one point that every social entrepreneur should uphold: know and respect the communities you are working in and the causes you are working on.
Where do social business ideas come from?
To be blunt, there are a lot of would-be Change Creators and do-gooders out there who have their heart in the right place but don’t understand their community and causes. As a result, resources are squandered and sometimes communities are harmed. As they say, the road to hell is paved with good intentions.
Another factor to consider is yourself.
What are your passions? Where do your talents lie? Can you align your talents and passions to improve a community or further a cause?
Is there an opportunity to bring market forces into play to support your efforts? If so, you may have a great social entrepreneurship opportunity at hand.
Look For Cross-Compensation Opportunities
With Cross-Compensation initiatives one group pays for a product or service. The profits of these products or services are then directed back to an underserved community. This way, those who can afford to pay end up paying. Meanwhile, resources are directed back to an underserved community.
Inequality has increased dramatically over the same several years. As Bill Kramer notes in his Change Creator article “The Regenerative Economy”, eight men now hold as much wealth as the world’s bottom 50 percent, and the top one percent own more than everyone else.
Fighting income inequality is a fantastic cause, and cross-compensation be an excellent tool because those who can afford to pay, will pay. Those who can’t can still get access to resources.
Often, those who pay won’t view the reallocation of their spending as a detriment. Just the opposite, they could be spurred to make a purchase precisely because they know their hard-earned money will be put to good use. As such, cross-compensation can become a part of your marketing and brand.
What does a cross-compensation social enterprise look like?
What would a cross-compensation social entrepreneurship business look like? Consider a restaurant. You start a restaurant and then donate 15% of your revenues to support soup kitchens and food banks. Customers who can afford to pay are treated to a great meal. Meanwhile, struggling families and individuals will enjoy greater access to resources.
Or perhaps you can build an educational app. Customers in Europe and the United States can pay for the app. Instead of pocketing the profits, however, you can fund technology and education projects in developing countries. There are many possibilities. As your business takes root, you can use your donations as a way to distinguish yourself in often crowded markets.
Find Ways to Connect Markets
If you’ve had the opportunity to travel to exotic and far-flung regions of the world, you may have come across some truly amazing local products, services, and other things. Is there a way to connect those resources with other markets? For example, let’s assume that a country is building up its eco-tourism market. You stayed at some truly awesome eco-lodges, participated in awesome local community-building projects, and various other activities.
Is there an opportunity for you to connect markets? Even simply spreading awareness of the eco-tourism opportunities you enjoyed could be making a difference. Even a simple post on social media would help.
Never underestimate the impact of social media.
Never underestimate the impact of social media. Michael Berean explores social media’s impact, from real-time emergency response to digitizing donations, his article “The Power of Social Media Tech During Times of Need”. You can read about it in the Change Creator Magazine, issue #12
Have Some Business Acumen Behind You
How about building an actual business?
Can you create an app that helps backpackers and other travelers find great ecologically friendly places to stay? By doing so, you may be able to greatly help the local community or organizations, generating revenue growth and perhaps kickstarting the local eco-economy.
Of course, connecting markets can mean a lot of different things. Perhaps while hiking through central America you stumble across an amazing coffee farming co-op. Can you plug that co-op in with bean roasters back home?
Speaking of apps, how about Atlas, they developed a running app that supports important causes and were able to raise funding for their program. You can read about them in issue #11 of Change Creator Magazine.
Turn Existing Businesses Into Social Enterprises
Starting a social enterprise doesn’t necessarily mean reinventing the wheel. Of course, if you do find an opportunity to do something all-new and never done before, go ahead and pursue it. However, another route is to look at already established business models to see if there is a way to establish a social enterprise based on the same (or similar) models.
Consider grocery stores. They have been around for years and years. In the United States alone there are roughly 40,000 grocery stores. How about building a sustainable grocery store that sells all-natural foods, is powered by solar panels, and focuses on selling local produce and other goods? There’s nothing particularly groundbreaking about this concept, but the sum impact could be substantial.
The same is true with many different business models. Perhaps you’re a business skill coach, helping everyone from junior employees to CEOs with a variety of personal and leadership skills. Fantastic. Now how about setting up workshops for disadvantaged communities, such as refugees, to teach them basic business skills? Better yet, maybe you can find corporate sponsors. Perhaps a department store chain will help pay for the events, and in exchange, you could refer potential employees?
There are so many ways to turn existing businesses into social enterprises that this list could go on near infinitely. Think about your own consumer habits. What do you like to do? What do you like to buy? Now, can you add social aspects in unique ways to create value for communities and causes?
Another option is to get existing, non-social enterprises to donate goods and services. Many companies would be willing to donate resources, such as software and computers, but they need a social entrepreneur to help out. Consider “TechSoup”, which works with software companies to donate software and hardware to nonprofits and other organizations. TechSoup also provides other forms of technical assistance, such as training. You can learn more about TechSoup in “Powering Up Social Impact” in issue 7 of Change Creator Magazine.
Don’t Forget Digital Opportunities
A lot of social entrepreneurs love getting their hands dirty. Get out in the community, live there, get to know the challenges first hand. This is fantastic, and to the greatest extent possible, social entrepreneurs should get hands-on experience. However, this “on-the-ground” approach often results in a perhaps too intensive approach to creating physical products and solutions.
The Internet, smartphones, and other tech devices have emerged as very powerful tools in recent years. Just ten years ago, if you needed a ride somewhere and didn’t own a car, you’d have to hail a taxi. Now, you can dial up Lyft or another rideshare right on your phone and get a relatively cheap ride.
A lot of people looking to help a community will focus on physical solutions. Let’s say you want to provide employment skills to a disadvantaged community, such as single mothers. Holding classes at the local neighborhood center is great, but what if mom can’t come because of her work and family schedule? For single moms, time is often in short supply. How about developing some Youtube videos that mom can watch on her phone or computer? Even if she has to go to the library to access a computer, she will have more flexibility than if you just held physical classes.
This is a really simple idea and one that you can implement even if you’re not all that technologically savvy. If you happen to have more well-developed tech skills, you should consider developing an app. What about creating a carpooling rideshare program where people can provide free rides to disadvantaged people on their way to work?
So you want to change the world? Congrats on your ambitions. Market-driven social enterprises are proving to be a powerful force for change. Each and every day, social entrepreneurs are working to make the world a better place. With the right idea and a healthy dose of commitment, you can join their ranks. But first, you need to come up with that “right” idea. So, here we go Here is how to find ideas for your social enterprise that you’ll want to pursue!
Discovering Your Passion is Not Enough
Passion and a desire to help is great. However, by itself, these factors are not enough. If your social enterprise is going to succeed, it has to be grounded in the real world, and specifically the markets and local communities you want to work with.
Passion is an important part of the equation but to succeed in scaling an idea and creating a good lifestyle, you also have to know your competency and market.
There’s no sure-fire process to generate a great idea. However, there are some steps you can take to make your brainstorming sessions more productive. There are also some tried and true methods you can use to test your idea to see if they are viable. Before we get into that, let’s talk about how to approach an idea in the first place.
My approach with this article: Develop the methods to create new ideas first!
I’m going to approach this article from an “ideation” standpoint. In other words, I’m going to help you try to develop methods to create new ideas and solutions. However, this glances over another way to find ideas: borrowing. You should never steal someone’s intellectual property, but you can take tried-and-true methods and products and then apply them in a new community or in a new way.
How about setting up a local farmer’s market? Or a zero or low-waste grocery store or restaurant? Maybe your restaurant could donate some or all of its profits and unused food to soup kitchens? These ideas aren’t 100% new, but they could make a big impact in a community.
So how should you start with coming up with an idea? First, don’t start with your own wants or needs. Sure, you can and will have your own areas of expertise and interest. Yes, you should leverage these assets. However, if you want to help a community, that community has to take precedence. How can you use your skills to help the community?
The best social entrepreneurs know the communities they are trying to help. If your social enterprise is people focused, meaning you want to directly help people, it’s important to understand the local community. Many charitable efforts, international development projects, and social enterprises have failed, or worse, cause harm, because the people in charge didn’t understand the community.
On the flip side, those leaders who understood the community they were working with have been able to maximize the impact. They understood the community, its needs, its wants, and local conditions. By understanding these factors, social entrepreneurs can craft solutions that will both address local needs and will be adopted by the local community.
If You Don’t Know Your Community You’ll Struggle to Create Change
One of the Change Creators featured in our magazine, Makana Eyre, was working on a project in Cairo. The idea was promising: through Ashoka: Innovators for the Public his team would provide local women with entrepreneurship skills training. As the old saying goes: Give a woman a fish, and you feed her for a day. Teach a woman to fish, and you feed her for a lifetime.
So they set up an entrepreneurship training class, reached out to the community, and invited participants to come to a scheduled training class. No one showed up. Why? Turns out that her team never bothered to ask the local women what times would work best for them. The time they had picked for the training session conflicted with bus schedules, local norms, and other factors.
Fortunately, the solution for this problem was pretty straightforward: communicate with the community and find out what times work best. Gather a bit of data, then act on it. However, keep in mind that the consequences can be direr than simply rescheduling a training workshop. Organizations that don’t understand the local community and conditions can waste vast amounts of resources.
Consider the 2004 Asian tsunami, which claimed a quarter million lives and destroyed ocean-side communities across South East Asia and Africa. The devastation sparked one of the largest humanitarian relief efforts in history. Unfortunately, much of the money, resources, and effort was wasted.
For example, companies and organizations sent countless boats to Indonesia, Sri Lanka, and elsewhere, intended to replace destroyed fishing fleets. Many of the boats simply rotted away on beaches because they were not fit for the South Indian Ocean and other Asian waters. They were too small for fishing and for the local water conditions.
The list of other failures is too long to recount, but the primary source of failure isn’t hard to pick out: many of the organizations trying to help did not understand the local conditions.
Travel to That Community and Submerse Yourself to Get Ideas
So how can you actually get to know a community? Or don’t know which community you want to help? Consider traveling to one. Of course, not everyone has the money or ability to simply pick up and move to a foreign locale. However, communities don’t have to be far away and exotic. There are almost certainly nearby communities that need your help.
Are their local refugee communities? How about soup kitchens, or homeless shelters? The world is full of need. You can find a community to help right in your backyard. Often, it will be a bit easier for you to help these communities because on some level you’re likely familiar with them.
Even if you don’t have an idea right now, as you get to know your community the gears will start turning. You may stumble across ideas on your own, or you might find an organization to team up with. Often, members of the community can share their needs, and even offer solutions to fix them. They might lack resources and skills, but perhaps you can help them find the needed inputs.
Identify Needs and Potential Solutions
By now, you know that the community is important. Consider different communities. Often, it’s best to start with communities that you already know very well. If you’re based in New York City, perhaps it’s best to first focus on the local community rather than a far-flung one that you don’t know or understand.
When it comes to selling in markets, your good or service will need to solve a need or address a want. Many social entrepreneurs focus on “needs” rather than wants. Usually, needs are simply more pressing than wants.
A need can be thought of as a challenge or problem that must be addressed. If left unaddressed, conditions will worsen. So consider the problem you want to address. You can start at the highest level. For example, “I want to help poor communities in New York City.” The challenge is poverty.
Now, ask yourself why? Why are people poor? Why is that a problem? Generally, people are poor because they lack access to a good income.
Maybe they lack the education needed to secure a high-paying job. Maybe they are elderly or handicapped and cannot work? On and on the list goes. How can you address such problems? Community training programs? Educational apps? Assistance for those in need? Where can you get that assistance? Perhaps by taking food that’d be thrown away and delivering it to the doors of the elderly?
After you understand a community, you can identify needs, and then you can come up with solutions. Make sure you talk with community members. They might know of solutions. And they might know of challenges that you haven’t seen yet.
Keep The Market In Mind
The market has proven to be one of the most powerful forces for good in history. Simple economics dictates that good ideas will succeed and bad ideas will fail. Charities sometimes run into trouble because they do not necessarily respond to market forces. Donors can and will fund bad ideas.
Social entrepreneurs, however, can and must embrace the market. If your goods or services are failing to drum up interest, you need to revisit them and make sure they are addressing the local community. Something isn’t working. It might be that your marketing campaign simply isn’t effective. Why? Are you misunderstanding the community? For example, you might be trying to reach out to a Latino community, but your adverts are in English.
On the other hand, the product or service you are selling might simply not be addressing the pains and meeting the wants and needs of the local community. You’ll be able to know by measuring market adoption rates. Are people buying your product or service?
Look At Existing Products and Identify Social Aspects
The modern market economy has generated a tremendous amount of technologies and solutions. Most of these were driven by a pursuit of profit. As a result, many technologies and solutions lack a true social aspect. Can you take an existing business solution and add a social element? If so, you may be able to launch a social enterprise without needing to reinvent any wheels, and without having to open up new markets.
Further, you might even be able to find businesses will to invest in your social endeavors. Not only that, but you may even be able to draw in some talented private market talent that can provide a lot of skills. Consider microlending programs, including those run by the Grameen Foundation, that provide cash-poor people with access to funds. These funds can help them break the cycle of poverty by allowing them to invest.
The people who started these funds, such as Grameen founder Muhammad Yunus, didn’t do anything overly revolutionary. The idea of lending to people has been around since the earliest days of money, and even before. Yet Yunus and others realized that cash-poor people often lack access to traditional lending institutions.
By offering a new model they were able to extend lending to these communities. In turn, this allowed the communities targeted to invest in and uplift themselves.
Another great example is Yvon Chouinard, the founder of Patagonia. Chouinard realized that his steel pitons were damaging rock-climbing surfaces. So Chouinard decided to create sustainable climbing gear, and thus Patagonia was born. You can learn more about Chouinard on the Patagonia website.
Addressing “Small” Problems Can Make a Big Difference
The challenges you take on don’t have to be grand. Environmentally friendly climbing gear is the type of idea you’re likely only to discover if you’re part of the mountain climbing community. The average person might not even be aware of the challenges posed by gear that isn’t environmentally friendly.
Just the same, you might find solutions to seemingly small or niche problems. That’s a fantastic place to start. By taking on smaller problems, you might tackle issues that people aren’t even aware of, or don’t think is worth their time to address. However, if you’re solving a challenge and making the world a better place, it’s worth the effort.
Next Steps: Getting Your Ideas Off The Ground
Rather than concluding with the usual summary, let’s consider how you can bring your ideas to life. Makana Eyre outlined “Five Things That Could Kill Your Startup Social Enterprise”. Along the way, he also outlined some great tips for getting your social enterprise rolling.
First, get your idea down on paper.
If you followed the above steps, you have hopefully identified needs and potential solutions. Now it’s time to start refining your ideas, considering concrete solutions, challenges, and other factors.
Next, start building a team.
As Makana notes, it needs to be balanced. You need both visionaries and business experts and people with technical skills. From there, you have to check your assumptions. I can’t do Makana’s work justice in a few sentences, so make sure you check out his article. Point is, coming up with an idea is great, but once you have an idea you have to get it rolling, or it’ll just waste away.
Listen to examples of others you can learn from.
There’s nothing quite like the learning that comes from others who are on the ground, doing what you want to do. If you are just starting your journey, you need to learn all that you can from others who have been there, done that. That’s why we created the Change Creator Podcast series. Adam Force goes deep into how these amazing Change Creators started their companies, where they discovered their ideas and many, many lessons on how they grew their companies as well. I strongly encourage you to get listening! Podcasts are great on long drives, or Sunday afternoons, just fyi!
Conclusion: So Many Ideas and So Many Places and Ways to Find Them
This list is far from exhaustive. Wherever markets are at play, there is likely a social business or angle opportunity. Rather than worrying about specific ideas, take some time to step back and look at both yourself and the market. Figure out where your passions lie. Figure out what your skills truly are. Then, examine the market for opportunities to use those skills and passions to create change and to produce profits.
Remember, the market is the social entrepreneur’s friend. Markets determine which ideas and opportunities are viable and profitable.
Profits, meanwhile, can be used to generate positive change.
However, make sure you don’t sell out your causes and communities in the name of profits.
Your causes and communities should always take precedent.
Our list of social business ideas to further inspire you! Let the ideas flow!
Contributing to recycling by producing toys for pets that are made from textile waste and giving opportunities to come back to the society to those who are in jail, VINOOK — http://vinook.com.mx/
This article was originally posted by Grant Trahant on Caustartist
Meet Aloha for People. The mission of the brand is to provide clean water and jobs to people in need around the world and in the brands home state of California. With every product sold, Aloha for People provides a person in need with access to clean water for 2 years minimum.
Aloha for People was founded during the summer of 2016 when the company founders, Brian and Emily, were inspired after learning about the lack of clean water and jobs available in Guatemala. The brand prides itself on creating jobs in both Guatemala, Nepal, and in the United States. All of the shirts are made in Los Angeles, California.
Brian and Emily have partnered with the organizations Ecofiltro and Wine To Water to help people in Guatemala and Nepal receive clean water. Ecofiltro makes water filtration systems that are used to provide water to children in schools as well as educate the children and their families on the importance of clean water. Every Aloha for People shirt that is purchased provides a child access to these water filtration systems for 2 years. Wine To Water focuses primarily on permanent water solutions and infrastructure in rural villages of Nepal.
Below is an interview with Brian Poage, co-founder of Aloha for People.
What inspired the idea of Aloha for People? Tell us your social entrepreneurial story!
During the spring of 2016 Emily and I were searching for deeper meaning in our careers. She was working in the apparel industry and I was working in construction management. Both of us felt unfulfilled and wanted to have a more positive impact on both the environment and for people who were in need. We were inspired after reading Blake Mycoskie’s book Start Something that Matters and began to seriously brainstorm how we could create a company that we would love and that could help improve the world around us. I have always loved aloha shirts. Their ability to tell stories, be conversation pieces, and represent a culture of people has always fascinated and inspired me and I have a closet full of aloha shirts with vibrant colors and unique images.
Emily and I thought that we could create a similar type of shirt that represented the culture of a group of people who could also use our help. We both had some friends from Guatemala and knew they are famous for having vibrant and unique textiles. After also learned that they had a terrible water crisis, we discovered our business model. Aloha for People was born to create new ways to provide clean water and jobs to people in need by making aloha shirts in downtown Los Angeles from fabric hand-woven in Guatemala. By using fabric from Guatemala we provide employment for sewers and textile workers in the country.
We make all of our shirts in downtown Los Angeles which provides jobs here in the United States.
One of our main focuses was to help bring manufacturing jobs back to the United States and specifically California. We are proud that all of our products are made here in our home state and that all of our manufacturing partners are paid fair wages.
How did you get in contact with your current textile suppliers?
The amount of technology we have today is absolutely incredible. We can communicate with people all over the world without leaving our homes and that is exactly how we were able to create our network of suppliers and manufacturers for Aloha for People. Emily and I began our search on Google trying to find reliable fabric suppliers from Guatemala at a competitive price. We reached out to probably a dozen wholesale suppliers to discuss pricing, availability of patterns, quality of fabric, and to understand their business model and standards for their workers. We finally found an incredible supplier out of Florida through David Green. He has been an invaluable partner and has continued to provide us quality Guatemalan fabric at competitive prices. The textiles are incredibly well-made and he has a fantastic relationship with the sewers in Guatemala.
Tell us a little about the water issues people in Guatemala are facing.
Guatemala is truly facing a water crisis. Currently, 95% of the water sources in the country are unsuitable for human consumption and their leading cause of death for children is water borne illnesses.
In their cities, water infrastructure is far inferior compared to our systems in the United States and there is a high water tax for anyone who wants fresh water. This means that only wealthier families are able to have continuous access to clean water while most families cannot afford it.
Outside the cities, there is very little infrastructure and almost zero access to clean water. Many of the villages and communities use the same water sources for drinking, cleaning, and as bathrooms. This water is then filled with bacteria and the majority of people are not educated on the importance of clean water and hygiene. This is one of the reasons we are so proud to partner with Ecofiltro. The company was founded by Philip Wilson and focuses on providing water filtration systems in schools and homes in mostly rural areas of the country.
They make all of their filters in Guatemala out of materials native to Guatemala and they focus on not only providing clean water, but on educating the children and their families on the importance of clean water and hygiene to stay healthy. To date, Ecofiltro has provided over 400,000 children in Guatemala with clean water and their goal is to reach 1,000,000 by 2020. Aloha for People is here to help Ecofiltro reach this incredible goal.
Why do you think it’s important to provide clean water specifically to children?
Children are the future of any civilization or community. One of our most important duties in life is to educate children and prepare them to live a fulfilling and productive life. By providing children clean water, it keeps them healthy and allows them to attend school and have a chance to improve their lives. In countries like Guatemala, children are the key to pulling communities out of poverty and improving the overall conditions of the country. Clean water is necessary for life and Aloha for People’s mission is to help ensure that all children are able to have clean water access so they have the chance to grow up and improve the world around them.
Tell us about your team in Los Angeles assembling your Aloha for People shirts.
We are a tight-knit team here at Aloha for People. After founding the company in 2016, Emily and I brought on our friend and roommate Jeff Michaels. We each have our own roles and play off each other’s strengths and weaknesses to help build the brand. Jeff is our Chief Branding Officer. He created our logo, leads all design efforts, and helps guide the overall feel and direction of the brand.
Emily Sansom is the Chief Design Officer. She leads the design and fit of our products and has leveraged her relationships within the apparel community to help Aloha for People get into retail stores and build a reputation among the other brands here in the Los Angeles area. Brian Poage is the Chief Aloha Officer. He helps to establish our sourcing channels, manufacturing partnerships, and seeks out water partners while also focusing on the future goals of Aloha for People.
Beyond the three employees, we have developed an incredible group of Aloha Ambassadors. These individuals truly embody the Aloha for People mission and represent the brand in a radical way. They help to promote the brand and spread the aloha everywhere they go. We would not be where we are today without their incredible support!
In this interview we talk with marketing superstar and founder of Click Funnels, Russell Brunson.
He explains how he builds businesses that are funded by his audience
Our last question brings up his travel to Kenya where he shares the incredible work they are doing to support kids in that community and how it’s impacted his perspective.
Brunson is also the author of Expert Secrets and Dot Com Secrets. Both book are making waves in the marketing world and are must reads.
What direction does Russell see business going today?
What role do vulnerability play in business?
Should you tell people about your successes or failures?
How did Russell make money before Click Funnels
Why he launched 12 companies in 12 months
How Click Funnels was built and started building their customer base
Why Russell is anti-funding
How to approach a new niche get the audience to finance your work
What is the difference in selling a product versus an offer?
Plus much more!
Russell Brunson is full of energy and expertise. If you want to get inspired to take your business and life to the next level you’ll love this interview.
For the first twenty years of my career I was a techie. And it was an amazing two decades to be in tech, spanning the dot com bubble, the ubiquity of the personal computer, the Web, a mobile phone in every pocket, smartphones, tablets, social media, and the cloud.
Six years outside of tech, it is interesting to watch how that market seems to be reaching a zenith. My computer is almost six years old, and doing just fine. There is nothing an iPhoneX does that my iPhone6 doesn’t already do. I use the same apps on my 6 as I did on my 4. For that matter I use the same apps on my notebook as I did back in 2010.
Of course, that is conflating all startups with tech, which is the type of hubris that gets former techies in trouble when they venture out into other industries.
One such industry is the world of social good, a.k.a. impact, a.k.a. social enterprise, a.k.a. regenerative capitalism, a.k.a. conscious companies. This is the industry where I now work. I do that not only because it is inspiring and because it needs to be done, but also because it feels like an industry that has decades of growth ahead of it.
Looking around the industry and there is growing excitement everywhere. More entrepreneurs than 750 inculators can help. So many new funds forming that the industry needs an accelerator for fund managers. New national and global events each year, all while SOCAP grows its attendees more than 25% year after year.
It could simply be that we have 1-3 billion people left to pull out of poverty (depending on your poverty line), 10 billion people to feed in the next decade or two, 95% of electricity production to replace with renewables, dozens of diseases to eradicate, fisheries and forests to save, and a whole planet to cool back down.
Or it could simply be that tech focused on the low hanging fruit for the last four decades, overlooking the other 99.6% of opportunities. See Ross Baird’s The Innovation Blindspot for that thesis.
If you have a desire to work with underserved communities and promote sustainability along the way, starting a social business will give you the opportunity to get involved with the people you want to serve at a grassroots level.
What are the unique challenges of starting a social enterprise? That’s a good question. Is it like other kinds of businesses? Or more like a non-profit? What makes starting a social good business that much more difficult than a typical for-profit business model?
That’s what we are examining today.
Can you make a living and change the world?
It’s becoming easier to help more people, change the world, and make a living at the same time through social businesses, which are set up such that communities can get the help and resources they need, in a way that works for the local culture and environment.
The business models of many social enterprises ensure that profits are reinvested back into the communities and funding is directed to those who need it most.
However, it takes more than a product or a business model to start a social venture.
At the root of any successful social business is the founder’s vision and desire to serve a community that he/she cares about.
The Unique Challenges of Starting a Social Enterprise
One of the unique challenges many social entrepreneurs face is coming up with a business idea that’s exciting for them, speaks to their passions, and is profitable in the long run.
Meeting these challenges also led to many innovative ideas for social enterprises that are inspiring and game-changing.
For most social entrepreneurs, the birth of a business often comes about as a result of living among the people their businesses aim to serve and allowing their passion to take shape organically.
For example, Maggie Doyne was working with Nepalese refugees in Northeast India when she discovered her passion for working with children, which later evolved into her foundation, BlinkNow.
But she didn’t go from having an idea to creating a foundation overnight. She took baby steps – specific actions that were focused and not overly complicated – and allowed her idea to take shape so she could recruit partners and realize her vision.
Another unique challenges of starting a social enterprise is coming up with a business model that’s sustainable and profitable without compromising their vision.
The key is to combine your passion with sound business concepts. Get inspiration from other social enterprises, see what works, and apply the ideas to your venture. Remember, it’s all about solving a social problem first, the business plan, the growth, everything entrepreneurial will come second.
Each social enterprise has its unique vision and audience. We’ve grouped these business ideas into larger themes to help you focus on their commonalities and underlying principles rather than the specifics of the individual ventures. Many of them can start off as a small business, then expand as the market demands, so if you’re just starting out, you will still want to think about the type of social enterprise you want to have moving forward.
1. Products With “Dual-Markets”
If you have a product that can solve a problem for people in both developed and developing countries, you can leverage the commercial component of selling the item in the developed world and subsidize the initiatives in the developing countries.
For example, Gavin Armstrong’s Lucky Iron Fish is designed as a convenient and cost-effective way to solve health issues caused by iron-deficiency, which is common in both developed and developing countries.
The website has an eCommerce store that sells its products to consumers in the US, UK, Canada, Europe, and Australia. With the profits from the store, Lucky Iron Fish can continue to work with local partners in developing countries and make sure the product reaches those in need.
The company also has a prominent “Give Lucky Iron Fish” section on the website where customers can donate the iron fish to families in need.
2. Buy One, Give One
The beauty of this model lies in its simplicity. Whenever a consumer purchases a product, a similar item will be given to someone in need.
The model can be easily explained to customers and it can be applied to a wide range of products – from TOMS (shoes) to Warby Parker (glasses), Lucky Iron Fish, and Mealshare (food).
This model, however, isn’t without its critics as it often fails to address the root cause of poverty or undermines local producers.
As a response, social enterprises are “souping up” their BOGO initiatives to deliver a more profound local impact:
Source the “give one” items locally to support communities in need by creating employment opportunities.
Charge a small fee for the “give one” item, empowering beneficiaries by changing them from a dependent to a responsible consumer.
Use the proceeds of the “give one” item to fund local initiatives that alleviate poverty.
Partner with local businesses or organizations to deliver the “give one” items.
What kind of sustainable development goal is your impact business trying to solve? Thinking about the big reason WHY you are doing this business in the first place can help you decide on your model? If your business model doesn’t help the local community you are trying to help, and the sustainable development goal, perhaps it is time to rethink your model from the beginning.
3. Marketplace To Facilitate Commerce
You don’t have to produce a product to become a social entrepreneur.
You can create a marketplace to connect consumers with items produced by artisans in communities you want to help.
This model gives access to consumers to ethically produced goods that are unique and of high quality, while allowing craftsman to get a fair reward for their work and educating the public about the culture in other parts of the world.
In addition, you can donate the proceeds from the sales to charities in need. For example, Society B gives to Action Against Hunger and Kids In Need Foundation.
Such marketplace model can also be used to support local producers such as independent farmers who are often at a disadvantage since they don’t have the bargaining power of Big Foods.
FoodConnect in Australia connects consumers with seasonal and ecological produce and food items from local farmers.
Today’s technology allows for easy coordination of logistics and deliveries, making it feasible for fresh local produce to reach more people at a reasonable cost.
4. Fair Trade Products
Consumers are becoming more conscious about the origins of the items they purchase and many are looking for fair-trade, responsibly sourced products made from conflict-free materials.
These socially conscious items are produced in a better working environment than their counterparts (e.g., with increased wages and better safety) while being sold at a reasonable price.
These social businesses are often based in the communities where the craftsman, artisans, or farmers live to make sure most of the proceeds from the sales are reinvested into the local community.
For example, Rachel Faller’s zero-waste fashion line tonlé brings together craftsmanship and the latest in fashion. Its products are reasonably priced and appeal to a global clientele.
5. Access To Natural Resources And Other Basic Needs
Today’s technology makes it very affordable to deliver natural resources such as clean water and solar power to communities in developing countries at low cost.
If you have a knack for tinkering and inventing, you can find opportunities everywhere!
There are many social enterprises hard at work in making sure those in need have access to these resources:
org brings safe water and sanitation to communities through access to small, affordable loans. When people have access to safe water, they have time to go to school, earn an income, and take care of their families.
Soma sells beautifully designed water filter. For every water filter sold, they donate to charity: water projects.
Husk Power is a rural empowerment project that creates a self-sustaining ecosystem in the villages it serves, enabling economic development along with environmental protection, physical wellbeing, and strengthening of the rural communities.
Smart Solar Box is a program that teaches users how to build a power-producing device at home for less than $200.
Environfit, founded by Ron Bills, offers a global product line of clean cooking technologies that cook faster while reducing fuel use, smoke, and toxic emissions.
6. Sustainability-Focused Products Or Services
Besides economic advancement for underserved communities, sustainability is another important component of social entrepreneurship.
There are many ways to promote an environmental cause through social businesses and here are some examples:
Help people in your community recondition batteries to reduce toxic wastes and save money.
Start a business constructing affordable homes with shipping containers either at home or abroad. These houses can provide shelter to the homeless, people affected by natural disasters, or battered women in need of temporary residence.
Become a community event planner to connect local businesses or a digital event planner to work with social businesses all over the world. You can specialize in events that support the causes you’re passionate about, generate revenue with sponsorship, and use the proceeds to help charitable organizations of your choice.
Microlending, made possible by the widespread use of the Internet, has become a popular social enterprise business model.
It allows entrepreneurs in the developing world access to loans they’d otherwise be unable to obtain so they can start a small business and sustain themselves.
Microlending institutions help administer such lending for humanitarian purposes and ensure that the money is being put to good use.
These organizations, such as Kiva, allow lenders to choose categories or borrowers they want to support. Lenders will get updates on their loans and later see the amount, plus interest repaid to their accounts.
The use of data allows microlending organizations to select borrowers with a high likelihood of repaying the loans. In fact, Kiva boasts a 97% loan repayment rate.
Lenders often get a return that’s higher than putting money in a traditional savings or CD account. They can fund a portfolio of many dozens of microloans to help disperse the risk.
8. Social Crowdfunding
Crowdfunding has become a popular way for many social enterprises to get seed money without having to go through the lengthy process of obtaining VC funding or loan application.
If you’re passionate about helping other social entrepreneurs realize their dreams, you can start a crowdfunding platform dedicated to helping social businesses, such as Alex Budak’s Start Some Good.
Besides access to supporters, social crowdfunding platforms can assist social enterprises by offering resources and access to additional funding opportunities.
9. Sourcing And Skill Training
You don’t have to be inventing social good products to make an impact.
In fact, many of these products already exist, yet they don’t get to the intended communities due to the lack of distribution systems and proper training.
If you have a talent in organizing logistics and training workforce, you can make a big impact by sourcing several social good products (e.g., clean cookstoves, affordable power solutions) and provide training to underemployed groups in a community to sell the products on a commission basis.
Livelyhoods uses a hub-and-spoke distribution model, with branches in slum communities that serve as training centers and inventory stock points.
In addition, it uses a micro-consignment and door-to-door distribution model to provide women and young people with a low-risk way to earn an income while making social good products available to the community.
10. Educational Travel
If you love to connect with different local communities and share your passion for traveling, consider starting a travel company that focuses on providing an intercultural learning experience and a positive social impact on the local communities.
For example, Evoluzion Travel partners with local communities to ensure that tourism revenue goes directly to guides and local entrepreneurs. They also work with grassroots organizations in the destinations to support community development projects.
They support the local economy by using local transportation, staying at local hotels, buying crafts and products from local artisans, and designing authentic travel experiences that promote cultural exchange.
11. Virtual “Assembly Line”
Outsourcing is everywhere in our society, but what if you can facilitate outsourcing while having a social impact?
That’s what Cloud Factory does. The company provides skill training to underserved populations in specific programming tasks and then create an “assembly line” that can put together a product or project, e.g., a website, in a way that’s faster, cheaper, and with a higher quality standard than conventional outsourcing.
Local workers not only receive job training but also have access to employment with higher wages than they would normally receive doing menial work.
Conclusion
As you can see, a social enterprise can take on many shapes and forms – it’s only limited by your passion and imagination!
There’s a world of possibilities when you connect the global society with local communities.
The success recipe for many of these ventures is sensitivity to the environment and culture of the local community. We can no longer just take what we think is “right” in the Western culture and impose it on other communities.
It’s important to do your homework and understand how a specific product or service can fit into the context to deliver the desired outcomes, as well as how it contributes to the continued growth of the community by investing resources into solving the root cause of the challenges.
It all starts with solving a social problem. What problem are you going to solve through business? What’s your big idea?
Many of us still think that social enterprise is synonymous with nonprofit, but that simply isn’t the case. There are many key differences between the two, and several myths still exist about the comparison between both. We asked one of the country’s leading experts on social enterprise, Luni Libes to share his thoughts on these myths. I know you’ll find this discussion compelling and informative. Social enterprise vs non-profit — let’s examine the myths that still exist.
Introduction by Amy Aitman, Change Creator Director of Content
1. The myth that social good is nonprofit social work.
Jump back 50 years, to the 1960’s before the Summer of Love, to a booming America, a western world emerging from the destruction of the first half of the 20th Century. A world with commonplace automobiles and air travel, where electricity water and phones were in most American homes, but where people’s grandparents could still tell stories of when those modern conveniences arrived.
This was the age of The Jetsons, when we were first promised flying cars, 4-hour work days, and push-button lives.
The Seattle World’s Fair of 1962 and New York World’s Fair of 1968 showcased this future.
Those fairs were specifically looking 50 years into the future. To the amazing future of the 2010’s. A time when all the world’s problems would be solved, and solved through advanced technologies.
Here we are in that future, and not all is well.
Half the world lives on less than $5 per day, and half of them at less than $2 per day.
A billion of those people don’t have enough food.
They are still dying from curable diseases.
They don’t have potable water, or running water for that matter.
They nearly all have phones, but no electricity to charge them, nor electricity to light their homes at night or to access the push-button lifestyle envisioned at those World Fairs.
Two things happened to get us here.
First, the population of the world doubled. There were just 3.2 billion people living on Earth in 1962, and 7.5 billion here in 2017. We did manage to go from 80% poverty to 50% poverty, but percentages don’t explain that we went from 2 billion poor to 3.5 billion poor.
Second and just as importantly, for the past fifty years we left it up to governments and nonprofits to solve the world’s problems. Neither of those sectors was given enough resources to succeed, and upon any success, neither have a model that scales to serve billions of people.
What we forgot over the last fifty years is that it wasn’t government or nonprofits that brought the first billion people out of poverty. It was business. Profit-seeking, for-profit, capitalism.
It was the Ford Motor Company and General Electric and U.S. Steel, along with a hundred other giant corporations and hundreds of thousands much smaller companies. It was the general store, issuing credit to the local townspeople. The garage inventor, making and selling a better plow or sewing machine or typewriter.
The For-Profit Cycle Creates a Middle Class
The for-profit cycle creates a middle class. A middle class then demands schools for their children. Roads. Police. Courts. Etc. And that middle class pays for that service themselves through taxes.
After 100 years, this cycle lets a company like Coca-Cola sell its sugar water in just about every village on the planet. But remember, it took 100 years for Coca-Cola to scale to that size. Coca-Cola was once a tiny startup with a single founder, serving one drink at a time in one shop in Atlanta, Georgia. And while that particular product may only bring smiles rather than good health, the same model of selling a product for a profit and using the profits to expand works for replacing three stone fires with efficient cookstoves, replacing kerosene lamps with solar power, for mechanizing farms, expanding distribution networks, and everything else needed to pull the last billions out of poverty.
This is the vision for the next fifty years. Mission-driven for-profits tackling poverty, hunger, and the other 15 UN Sustainable Development Goals. Companies that do good through business. Some which will scale up to the size of Coca-Cola, and millions more that are like that old general store, working solely in their local communities.
Mission-driven for-profit companies span every imaginable sector and geography. They range from breakthrough innovations, like recycling all cotton clothing, to providing basic necessities, like clean, flushable toilets in the slums of Kampala, Uganda.
What they all have in common is that they aim to make the world a truly better place, serving some social and/or environmental purpose, with that purpose embedded within their product or service. Or in other words, they are a business that does good in the course of doing its business.
I’ve had the pleasure of working with 82 such companies over the past six years. Let me tell you about just a few:
Evrnu: Technology that Recycles Cotton
The most impactful company I’ve seen so far is Evrnu. They invented a chemical technology that recycles cotton. Take old, used, worn-out cotton clothing, bedding, or towels, toss it in a vat, add Evrnu’s magic formula, and everything dissolves into a thick soup of fibers. Shoot the goo through a spinneret, and you have a fiber that is as good as the best cotton of the world. A fiber that can be spun into yarn, woven or knit into fabric, cut, sewn, and turned back into clothing, bedding, or towels. In other words, recycled. We expect this of paper, metals, and some plastics.
Now, for the first time in human history, we can do the same with clothing.
JOELEX: Making an Impact in Uganda
The company with the most obvious need is JOELEX, which builds and operates toilets in Kampala, Uganda.
There are three million people living in Kampala, two million in slums, in homes with no running water. Those two million people have access to just 1,000 flushable toilets. 1 toilet per 2,000 people. Or in reality just no toilets for most of the women and children, who spend most of their days in the slums.
Their solution is called open defecation. You’d recognize it as the same method Americans use with their dogs. Go on the edge of the path and put the poo into a plastic bag.
But unlike American dog walkers, there are no trash cans in Kampala and thus the bags are just tossed onto a far-away roof or behind the neighbor’s house. The obvious solution is toilets. JOELEX is doing just that.
Pay-per-use toilets, following in the footsteps of the public toilets which appeared in 1800’s London, when that city had millions of people, no toilets, and no sewers.
Arqlite: Tackling Plastic Waste
In between breakthrough and obvious ideas is Arqlite, which takes any and all plastic wastes and turns it into artificial rocks for use in and under concrete. There are 300 million tons of plastic waste generated each year, and just a small single digit percentage is recycled. A lot is collected for recycling, but the reality is that most ends up in landfills, incinerators, or the oceans.
Arqlite instead wants the 90%+ of unrecyclable waste turned into something of value, a product that replacing the quarry stone mined from the Earth and ground into the ubiquitous stone we see in concrete. Plus it turns out plastic makes for great concrete, lighter in weight and thus in need of less concrete in total, with better acoustic properties and better at holding in heat. A win-win for the environment.
How Africans Can Grow Chickens
Back to the developing world, in 2016 Bill Gates said that if he were poor, he’d grow chickens. African chicken had already thought that idea back in 2015, and started working with 64 women to grow chickens for them.
Turns out the two hurdles for poor people growing chickens is the cost of feeding the chickens for months before they are ready for market, then access to a big market to grow the chickens. The feeding and care is easy. African Chicken does the hard part for these women, providing baby chicks, feed, vaccines, and veterinarian care. All for free.
They then buy 90% of the chickens three months later, leaving 10% for the women to feed their family, plus $1 per chicken for the women for their labor. African Chicken processes the chickens, ships and sells the chickens in Dar es Salaam, the biggest city in the country, to hotels, restaurants and supermarkets who would never buy small quantities directly from the rural poor. After all the expenses, the company and the women each earn $1, and the city goers get a steady supply of high-quality chicken.
Coffee Can Lead to Change Too
Down in Nicaragua, the cash crop if coffee, not chickens. Trouble is twofold. One, coffee prices are highly volatile, and the small producers have to sell at the market price. Two, every few years some disease comes along, and the small producers can’t afford the fungicides and other treatments. Enter Jicote, which teaches those farmers how to keep bees, and which aggregates and exports the honey from those bees.
Honey is an another international commodity product, but one with a far steadier price than coffee. Plus bee keeping increases the yield of coffee plants, boosting that income stream too. Like chickens, the hurdles for small growers is access to markets, and Jicote plugs these farmers into a market they otherwise couldn’t reach themselves.
There are dozens more companies I could talk about, and you can watch each of them tell their stories in their own words at fledglings.fledge.co. For now I’ll leave you with one more.
Shift Labs: Social Good Health Solutions
Shift Labs makes a simple medical device that clips on to an IV bag. It’s an electronic device that counts the drips, telling the nurse how quickly the medicine from that bag is entering the patient. Anyone not trained as a doctor or nurse would expect such a device had been around as long as IV bags. You’d be wrong. The normal way this is measured is by looking at the drips, counting them by eye and estimating. Sometimes checking for a specific time against a watch. In a lot of countries checking against a certain number of pulses in the nurse’s pulse. Often just guessing.
For less than $100, Shift Labs’s Drip Assist gets ride of the inaccuracies and the guessing. The nurse can set audible alarms if the rate slows down or speed up too much (which is does when the patient moves her arm). This is a battery-operated device tried and tested in India, Kenya, and Nigeria, as well as deployed in emergency rooms and hospitals in the U.S., Europe, and Asia. It’s simple. It improves health. And while Shift Labs seems like a tiny version of Philips, it is a social enterprise, with a mission of improving lives of everyone on the planet, with by designing and selling devices affordable by clinics everywhere.
3. There simply isn’t enough money for nonprofits to scale.
In the modern world, we look to the nonprofit sector to solve the problems of poverty, hunger, education, etc. This is starting to change, with projects like the UN Sustainable Development Goals inviting businesses and “the private sector” to join in, but when most people look at those goals, they see a list of topics for the NGOs and governments to tackle.
We’ve left those topics up to government and nonprofits to solve for the last fifty years, and they’ve not done enough. More people are poor now than were living on the planet fifty years ago.
The reason why is rather simple. There isn’t enough money for governments and nonprofits to provide solutions. A bit of analysis can clearly show this truth.
Let’s start with two companies, both based in Seattle, both founded by college dropouts.
One not too long ago was the largest for-profit company in the world (now even larger in value but ranked third).
The other is the world’s largest nonprofit.
An Examination of Two Companies: Social Enterprise vs Non-Profit
Turns out they have the same founder, Bill Gates, Jr. The for-profit is Microsoft, and that fortune is the basis for the nonprofit, the Bill & Melinda Gates Foundation.
What makes the Bill & Melinda Gates Foundation the largest nonprofit is $40 billion in assets. It’s endowment.
That is a huge sum of money, larger in size to most of the GDPs of most countries in the world. That is $40 billion, billion with a “b”. But it’s not as big as Microsoft’s revenues. In 2016 Microsoft sold $93 billion worth of products to its customers.
That, however, is comparing apples with orangutans, as the $40 billion is all the money the foundation has versus the new cash that came to Microsoft in just one year. An apples to pears comparison would be the foundation endowment versus the market capitalization of Microsoft, i.e. the value of all of Microsoft’s shares. That was $460 billion back in 2016 (now over $600 billion at the end of 2017).
But wait, the foundation has only $40 billion. They don’t give all of that away each year. If they did that, they’d be out of the charity business next year. Instead, they give away just 5%. Or more specifically, they give about $2 billion from their endowment, plus another $2 billion that is gifted to them by Warren Buffet, founder of Berkshire Hathaway and good friend of Bill Gates.
$4 billion is again a lot of money. That is still billion with a “b”. But rather than plot out what would be a barely visible sliver of a bar, instead go back and look at the difference in scale between one entrepreneur’s nonprofit and for-profit efforts. $40 billion on the left and $460 billion on the right. A ratio of more than 10:1.
Is that a meaningful number? Is there 1/10th the capital in the nonprofit world vs. the for-profit world? No, not even close. To see the a more accurate ratio, let’s compare the top 100 charities with the top 100 public companies.
A Further Look at the Numbers
There are far more than 100 charities and far more than 100 public companies, but for both sectors the size of the entities drops off quickly, and in both cases it is easier to get data on the biggest entities. What we find is striking. The sum total of the assets (a.k.a. endowments) of the top 100 public charities is $300 billion.
$300 billion is a huge sum of money, but note that it is not even equal to one public company, Microsoft. Add up the value of the other 99 biggest public companies and the result is mind boggling. $15 trillion. That is trillion with a “t”, a.k.a. 1,000 billion or 1 million million.
For this comparison, the ratio of assets in the nonprofit sector to for-profit sector is 1:500. For every $1,000 of value in a for-profit, there is only $2 in a nonprofit. $100,000 of investment in a for-profit, $200 donation to a nonprofit.
But this too is misleading, as the 101st largest nonprofit has a value less than 1/500th the 101st largest for-profit. There are over 3,000 public companies in the U.S., most of which with a value larger than the 100th largest public charity.
It gets worse, remember how the Bill & Melinda Gates Foundation only gives away $4 billion per year. That is 1/5th of all the giving of the top 100 foundations. In 2016 the sum total of giving was just $20 billion.
If 100% of that $20 billion were spent on the 3.5 billion people who live on less than $5 per day (and it’s not), that would be just $5.70 per person per year.
$5.70 doesn’t put a child through school for a year. It doesn’t replace the three stone fire with an efficient cookstove. It could buy a few chickens and some feed, but wouldn’t be enough to deliver those chickens out to the billion households who would use them. It simply isn’t enough to make a dent in global poverty, world hunger, etc.
This is why nonprofits fail to solve these problems. They simply don’t have the money.
But what about governments?
They have trillions of dollars. Yes, they do, but they don’t spend it on these solutions. In the U.S., the total budget for non-military foreign aid in 2016 (before the Trump administration’s budget cuts) was $24 billion.
That more than doubles the charitable giving, but doesn’t increase it by a factor of 5 or 10 or 500. It changes the total potential per person from $5.70 to $12.57. Still not enough money to even reach all 3.5 billion people in need, let alone bring them anything that could help.
Which is fine, as the giving model doesn’t work. Giving fish doesn’t teach people to fish. It leaves them and their children depending on charity.
For comparison, let’s look at the 100 largest American advertisers. These are all for-profit companies. Tide, Clorox, Dove soap, Budweiser, Verizon, AT&T, T-Mobile, Disney, Comcast, Visa, etc. They spent $110 billion in 2016 wooing the 310 million Americans. Spending that money because it led to more than $110 billion in profits.
This number sinks in better when viewed side by side with the $44 billion from USAID and the charities. This $110 billion was just spent in the U.S., on television, web, radio, and print advertising. Selling products we already buy.
The conclusion when you look at these number is clear. The money and power is in the hands of the for-profits. Their efforts dwarf the foreign aid and charities.
The good news is that a new wave of companies is doing just that. It will take them decades until they are big, public, and global, but this seed change is happening. The pioneers of social enterprise, Ben & Jerry’s, Stonyfield Farms, Whole Foods made it big, got bought by multinational companies and their ideas are infecting their new owners. Plus thousands of other mission-driven for-profits are following that path, doing good in the world through business, scaling up to reach the last few billion who will rise out of poverty and join the middle class in the next few decades.
It’s not a matter of if, just when. It’s inevitable.
4. Social Entrepreneurship vs. The Myth of Tech
Another myth circulating around the world is that all startups are tech startups. When you talk to the people organizing entrepreneurship ecosystems around the world (and I’ve met dozens of these people as they visit Seattle seeking to replicate the success of my home city), first and foremost they all want to bring tech to their cities.
The reality is that only a tiny sliver of startups are the high-growth, disruptive tech startups that get so much press. All of venture capital in the United States funds less than half of one percent of the companies started each year in this country.
The other 99% of startups get less than 1% of the attention of the press and of investors, and yet it is those 99% of new companies that employs so much of Americans. I’d tell you how many of those are mission-driven companies, but I can’t, as no one is measuring that and thus no one knows.
In any case, given the focus on tech it is not surprising that the plethora of incubators and accelerators and business plan competitions and Angel groups and other entrepreneurship programming is primarily seeking the next Facebook, the next Google, and the next Amazon. If you are a social entrepreneur, it can be difficult to find any help using Google, Facebook or Amazon.
It is there, it’s just hard to find.
Find a Good Accelerator Program
One place to start is the brand new Accelerator Selection Tool, created by Conveners.org through their Accelerating the Accelerator program. The goal of that tool is to allow social entrepreneurs to find a list of training programs that fit their geography, sector, stage, and more. Almost 1,500 program are known by that tool today.
These programs range from nonprofit focused on a single sector (e.g. agriculture) in a specific region of a specific country (e.g. northern Uganda) to global for-profit accelerators like mine (Fledge), which works with companies from all sorts of sectors based in any country of the world. The programs vary from 1 day to 1 year in length. Some fly you to gather with others in some city of the world. Others come to you over the internet.
Other places for finding like-minded entrepreneurs and investors are the big events like SOCAP, the world’s largest social capital conference, held annually in San Francisco. The SANKALP Forum, with annual gatherings in Mumbai, Nairobi, Jakarta, and the Hague. Foro Latinoamericano de Inversión de Impacto (FLII), annually in Merida, Mexico, and the largest of these events in Latin America.
Websites like ImpactSpace have listings of social enterprises and impact investors. Impact Base has listings of impact funds.
Organizations like the Global Impact Investors Network (GIIN) and B Lab create and publish systems for measuring impact in an organization.
And when all of those sources tell you are just too early, there is free entrepreneurship education and advice on my website, lunarmobiscuit.com.
It turns out that there is a lot of help for social entrepreneurs, it’s just not easy to find, hiding amongst the noise of the tech-focused startup landscape.
(photo courtesy of UBB)
Turn Existing Businesses Into Social Enterprises
