Module: Social entrepreneurship and social

enterprises
(including green entrepreneurship)
Introduction to Social Entrepreneurship,
Business Models and Local Examples
 Green entrepreneurship
• Entrepreneurship: The capacity and willingness to develop, organize and
manage a business venture along with any of its risks in order to make a
profit. The most obvious example of entrepreneurship is the starting of
new businesses. [Source: Business Dictionary]
• Green entrepreneurship is the activity of consciously addressing an
environmental and/or social problem/need through the realization of
entrepreneurial ideas with a high level of risk, which has a net positive
effect on the natural environment and at the same time is financially
sustainable.
• Green entrepreneur is someone who starts and runs an entrepreneurial
venture that is designed to be green in its products and processes from the
very moment it is set up.
How is green entrepreneurship different form common business
entrepreneurship?
Differences:
• The green entrepreneurs have environmental and social goals into their core business, these
goals are the reason their business exists, not just a side effect
• Education of the consumer towards the specifics of the green products/services
• Environmental values are part of the company values
• Green entrepreneurship can be (sometimes) associated with higher costs
• Financial profit is a goal insofar as it helps sustain the business so that it can go on fulfilling
its environmental goals and bringing benefits to the environment

Resemblances:
• Both have business goals, business plans, etc.
• Both are looking for profit
Social entrepreneurship
Social entrepreneurship is the use of the techniques by start-up
companies and other entrepreneurs to develop, fund and implement
solutions to social, cultural, or environmental issues.
It is the process of starting and growing a for-profit business to impact
social issues positively.

If you compare this definition to the definition of green

entrepreneurship, what do you notice?
• both are talking about solving environmental AND social problems
• both are very new domains and definitions are still being debated.
Social entrepreneurship is all about recognizing the social problems
and achieving a social change by employing entrepreneurial
principles, processes and operations.

It is all about making a research to completely define a particular

social problem and then organizing, creating and managing a social
venture to attain the desired change. The change may or may not
include a thorough elimination of a social problem. It may be a
lifetime process focusing on the improvement of the existing
circumstances.
The difference between social and common business
entrepreneurship
• While a general and common business entrepreneurship means
taking a lead to open up a new business or diversifying the existing
business, social entrepreneurship mainly focuses on creating social
capital without measuring the performance in profit or return in
monetary terms. The entrepreneurs in this field are associated with
non-profit
• sectors and organizations. But this does not eliminate the need of
making profit. After all entrepreneurs need capital to carry on with
the process and bring a positive change in the society.
Difference between entrepreneur and social entrepreneur
What Is a Social Entrepreneur?
• A social entrepreneur is someone who starts a business as a way to create
a positive impact on a social issue.
• The person who coined the term “social entrepreneur,” Bill Drayton, said,
“The life purpose of the true social entrepreneur is to change the world.”
However, social entrepreneurs often measure their success based on a
triple-bottom-line: social, environmental, and economical.
• Social: The business’s ability to create positive change, and its impact on
social issues.
• Environmental: The business’s environmental impact and carbon footprint.
• Economic: Social enterprises need to turn a profit to continue to operate and
grow.
Characteristics of a Social Entrepreneur
• Social entrepreneurs are individuals who start businesses to help a
particular social cause.
• According to the Schwab Foundation for Social Entrepreneurship,
social entrepreneurs share several characteristics. They:
• Achieve large scale social change.
• Focus on the social or ecological change they want to make while earning
money to support the change.
• Innovate when looking for a solution to a social problem.
• Use feedback to adapt and refine.
The Process of Social Entrepreneurship

1. Find an opportunity
2. Develop a business concept
3. Figure out what success means and how to measure it
4. Acquire the right resources
5. Launch and grow
6. Attain goals
• What challenge do you badly want to solve?
Business concept (business model)

A business model is an outline of how a company plans to make money

with its product and customer base in a specific market. At its core, a
business model explains four things:
• What product or service a company will sell
• How it intends to market that product or service
• What kind of expenses it will face
• How it expects to turn a profit
Types of business models
Most common types of business models
1. Subscription model
2. Bundling model
3. Freemium model
4. Product to service model
5. Leasing model
6. Crowdsourcing model
7. Retailer model
8. One-for-one model
9. Franchise model
10. Distribution model
Social enterprise model
POINTS TO PONDER
• The profit of social enterprises is its level of social impact.
• Good business now is all about being in the business of doing
good.

• What do you see happening in your community in the future?

• What is your big idea? What do you specifically offer?

• How will your business earn?

• What makes you unique?

• What is your target market?

Why does social entrepreneurship matter?
• Employment development: The first major economic value that social
entrepreneurship creates is the job and employment. Estimates ranges from one
to seven percent of people employed in the social entrepreneurship sector.

• Innovation/New Goods and Services: Social entrepreneurs develop and apply

innovation important to social and economic development and develop new
goods and services. Issues addressed include some of the biggest societal
problems such as HIV, mental ill-health, illiteracy, crime and drug abuse which,
importantly are confronted in innovative ways.

• Equity Promotion: Social entrepreneurship fosters a more equitable society by

addressing social issues and trying to achieve ongoing sustainable impact through
their social mission rather than purely profit-maximization.
How to measure the success?
• For-profit entrepreneurs typically measure performance using business
metrics like profit, revenues and increases in stock prices. Social
entrepreneurs, however, are either non-profits, or they blend for-profit
goals with generating a positive "return to society". Therefore, they use
different metrics. Social entrepreneurship typically attempts to further
broad social, cultural, and environmental goals often associated with
the voluntary sector in areas such as poverty alleviation, health
care and community development.
• What is profit?
• How do we count it?
• What is “social return on investment” for venture philanthropists?
• Can we compare investments?
 Challenges, opportunities, trends and risks of social entrepreneurship
• Main Challenges at Present: • Main Trends at Present:
• Money • Explosive growth
• Competition • Attention to marketing and management
movements
• Demonstrating effectiveness
• Commercial ventures
• Technology
• Development of umbrella organizations and
• Trust
formal education
• Human resources
• Effectiveness in competing economically
• Public-sector relations and politically
• Main Opportunities at Present: • Main Risks at Present:
• Demographic shifts • Identity loss, “mission creep”
• New philanthropy • Industry concentration
• Heightened awareness of sector • Pressure on managers for results
• Increased social welfare spending through sector • Loss of public trust
(entitlement expansion, welfare reform)
 Three main challenges of social entrepreneurs
• Because the world of social entrepreneurship is relatively new, there are many challenges facing those who
delve into the field.
• First, social entrepreneurs are trying to predict, address, and creatively respond to future problems. Unlike
most business entrepreneurs, who address current market deficiencies, social entrepreneurs tackle
hypothetical, unseen or often less-researched issues, such as overpopulation, unsustainable energy sources,
food shortages. Founding successful social businesses on merely potential solutions can be nearly impossible
as investors are much less willing to support risky ventures.
• The lack of eager investors leads to the second problem in social entrepreneurship: the pay gap. Elkington
and Hartigan note that "the salary gap between commercial and social enterprises… remains the elephant in
the room, curtailing the capacity of [social enterprises] to achieve long-term success and viability." Social
entrepreneurs and their employees are often given diminutive or non-existent salaries, especially at the
onset of their ventures. Thus, their enterprises struggle to maintain qualified, committed employees. Though
social entrepreneurs are tackling the world's most pressing issues, they must also confront skepticism and
stinginess from the very society they seek to serve.
• Another reason social entrepreneurs are often unsuccessful is because they typically offer help to those least
able to pay for it. Capitalism is founded upon the exchange of capital (most obviously, money) for goods and
services. However, social entrepreneurs must find new business models that do not rely on standard
exchange of capital in order to make their organizations sustainable. This self-sustainability is what
distinguishes social businesses from charities, who rely almost entirely on donations and outside funding.
Discussion point:

• What are the main differences between social entrepreneurship and

corporate social responsibility.
Social Entrepreneurship Examples
• Some contemporary well-known and lesser-known social entrepreneurs
include:
• TOMS: When the company was founded, it applied its “one for one” concept
to shoes. For every pair of TOMS shoes purchased, the company donated a
pair to a needy child. The company has since expanded the one for one
concept to eye wear, coffee, and tote bags.
• Grameen Bank: Founder Muhammad Yunus provides micro-loans to those in
need to help them develop financial self-sufficiency. Yunus received a Nobel
Prize for his work in 2006.
• Badala.org: Founded by Joelle McNamara while she was still in high school,
Badala.org is an e-commerce site that creates jobs for African women by
selling the products they make. Products range from jewelry to wooden
kitchen utensils.
Discussion points:

1. Is there a local green entrepreneur that you know of and like? If yes,
what do you like about him/her?
2. What about a national or international one?
3. How do you apply the “think green” principles in your daily life?
Conclusion

The field of social entrepreneurship is rapidly growing and attracting

the attention of numerous volunteers. It has now become a common
term in university campuses. The reason behind the increasing
popularity of this product is that individuals get to do what they have
been thinking for long. The extraordinary people put their brilliant
ideas and bring a change in society against all odds.
Additional links
These are additional resources that you as a teacher can use in order to prepare for the lesson broadening your
knowledge. You can also use these resources by assigning them to the students as out-of-class
reading/viewing.
•22Awesome
Socialhttps://jamboard.google.com/d/1cFfX76qKdCq3AFfyFO1RoS3gvHqMN7Blghh52sjPOE/edit?usp=sharing
Enterprise Business Ideas: https://www.thesedge.org/socent-spotlights/22-awesome-social-enterprise-
business-ideas.
• 23 Green Business Ideas for Eco-Minded Entrepreneurs: https://www.businessnewsdaily.com/5102-green-
business-ideas.html#sthash.B26NlEvr.dpufhttp://www.businessnewsdaily.com/5102-green-business-ideas.html
• RayAnderson:
The business logic of sustainability:
http://www.ted.com/talks/ray_anderson_on_the_business_logic_of_sustainability (15:44 min.). In one of the
most powerful talks ever about the need for businesses to transform, Ray Anderson, CEO of Interface, gives a
convincing account of the business case for sustainability. At his carpet company, Ray Anderson has increased
sales and doubled profits while turning the traditional “take / make / waste” industrial system on its head. In a
gentle, understated way, he shares a powerful vision for sustainable commerce. (Subtitles available in
Romanian, Greek and Bulgarian)