social delta

Consulting and support for social enterprise in Canada

Category: Commentary (Page 2 of 5)

Good pricing practices for Social Enterprise

November 27, 2020 /

Perhaps one of the most common question social entrepreneurs have is how to set prices for their goods or services.

Pricing is a particular challenge for mission-based social entrepreneurs; in a mission-based social enterprise, the consumer is the beneficiary. For example, the product they sell (whether a good or a service)—such as environmentally friendly paints–is serving the social enterprise’s environmental mission directly. For them, good business means not only maximizing net revenue (using a higher price), but also maximizing the number of rainbarrels sold to mitigate water run-off. (using a lower price)

This can be a real conundrum.

However, pricing is not a guessing game, and need not be feared. Here are six basic principles for the new social entrepreneur to keep in mind when setting prices:

  1. Determine your pricing strategy: Are you trying to attract customers in a crowded market? Are you trying to maximize profits to fund social programs? Are you trying to get rid of excess inventory? Are you trying to maximize sales while covering costs? Each of these goals will inform your pricing strategy. Market penetration might require a loss leader, where your selling price is lower than the competion, but also may be below your cost. Freemium pricing allows you to give excess product away if another product is purchased at regular price. Value-based pricing will set a price based upon a consumers perceived value of your product, and will typically maximize profits, but this often requires strong marketing.
  2. Know your costs. No matter what pricing strategy you employ, you will need to know your unit cost. This is calculated by adding the fixed costs (overhead) to the variable costs (typically input costs of goods sold) and dividing by the volume produced. Generally speaking, prices that are lower than unit costs are unsustainable over time (loss leaders, door crashers, freemiums), prices at unit costs (absorption pricing) will sustainably maximize sales, and pricing above unit costs will endeavor to maximize profit (cost-plus, value, or premium pricing). An entrepreneur will always know and understand the unit cost of their products, and their pricing will invariably orbit around those costs depending on their marketing goals.
  3. Understand your competition. If others are selling something comparable to your product, know their prices, and take time to understand their value proposition. Their packaging, their branding and their public outreach will likely be designed to allow them to increase their prices based upon perceived value. If you know your costs, and you have a strong value proposition to compete with them, you can set your price closer to theirs (or above, see next point) in order to maximize revenue, or closer to cost to maximize market penetration.
  4. Be bold. Trust that your product is as good (or better) as any competor. Design it to be both needed and wanted by consumers. Don’t lower your prices out of humility. (only lower prices if it is jeopardizing your marketing strategy goals)
  5. Be flexible. If you lower your prices to below cost, do so with a limited time horizon. You may need to reduce prices if the market changes. Conversely, if demand is stong, you may want to incrementally nudge your product up to increase net revenues.
  6. Follow proven practices. Be aware of the value paradox, where consumers will not see your product as having any value if the price is too low (or free). Consumers see rock bottom prices as an indicator of poor quality or flawed goods. Try some pricing tricks like bundling (where multiple products are sold together), nudging, or decoy pricing. (read this great article on the decoy effect). There are many proven approaches to pricing and researching which best practices can be applied to your business is time well spent.

A word on sliding scales…many social enterprises express an interest in setting prices based upon the consumer’s ability to pay. They often ask about sliding scales or occasionally “pay-what-you-can” options. Although this approach may be seen as a way to promote equitable access to your product, it is a very difficult way to maintain a business, because input and overhead costs rarely are set on a sliding scale.

However, there are approaches that are more sustainable, while still being inclusive. Tiered pricing (also known as price discrimination) allows for a series of stepped prices based upon proven criteria: tiered prices can be set by age, by income level, by profession (like current preferred pricing for front-line pandemic workers), or by services offered (first class, box seats, etc). Social Delta frequently recommends setting the price, and then offering discounts or bursaries to those who qualify. In this approach, the perceived market value of your product is clearly associated with a specific price (which would cover costs), but your business is willing to sacrifice revenue to ensure that it is responding to the needs of excluded customers.

Setting a price for your product requires a clear understanding of your business goals, a rock solid knowledge of your business costs, and an awareness of your competition. There are no rules to setting the right price, and if there were rules, there would be many exceptions to each rule. However, setting price is not a guess, nor is it magic. Setting prices is 90% diligence and 10% good fortune

Social Delta can help you with determine which pricing strategies and approaches to consider to meet your goals.

Build Back Better

October 27, 2020 /

These are times when starting or expanding a social enterprise is either a fantastic opportunity or an impossible folly.

There are unquestionably many challenges facing people and communities locally, nationally and globally as a result of the COVID-19 pandemic. At the same time, and perhaps not entirely by coincidence, we see cracks and fissures appear in the social fabric: polarized and angry democracies, growing income disparities, wildly unsustainable consumerism, incredibly potent and punishing environmental changes, more xenophobia and irrational fear of “others,” increasing intolerance and racism, and a sincere lack of resources as our economies are (and have been) shown to be fragile constructs.

If social action is borne of injustice and and fomenting of the desire for positive change, then surely we must look at new ways of creating a just and sustainable society. Social enterprise is potential tool to make that happen, although starting any sort of business in a pandemic is risky; fantastic or folly, indeed.

I have many thoughts on how we can redesign business and movements and individual actions and responsibilities. However, I believe that my colleague and friend Vinod Rajesekaran, of Future of Good, expressed it brilliantly in his recent article “Stop idolizing your sector and demonizing another.” I quote from him directly:

Let’s build back better by asking different questions. When an organization or a project inspires you, don’t ask about their legal structure. Instead, look deeper and ask about their values, intentions, and actions. Look at the ratio between the highest and lowest paid workers, look at their carbon footprint, look at how diverse their leadership teams and boards are, look at how they act on reconciliation everyday, look at how well they include and give voice to their stakeholders, and follow the money — look at where they save and what they invest their money in. 

One of the first questions I get from aspiring social entrepreneurs is about how (and when) they should incorporate. I always tell them “form follows function” and that they should wait as long as possible before they formalize their social purpose in an organizational structure. Only once they’ve identified and lived by their values, intentions and actions (ie determined their function) will they know the best structure to support their work. In fact, once they’ve started their work in earnest, the form of their business is almost always determined for them.

We are, regrettably, stuck with largely antiquated legislation that enshrines for profit, co-operative, or non-profit structures, myths, and expections. However, we can–and must–push the parameters of each of these structures to create businesses that measurably improve social conditions, justice, fairness and protection of the environment.

In the coming years, we can, person by person, build back better.

The art of getting people to do what they don’t want to do.

October 15, 2020 /

Social entrepreneurs operate businesses that create social benefits. Surely, selling services and products in the pursuit of justice, environmental sustainability, and support for the marginalized should be easy. After all, doesn’t every consumer want to make the world a better place?

Well, no, actually.

Most consumers buy to satisfy some personal need. They may be hungry and buy food. They may desire to smell nice and buy body products or perfumes. They may want to be entertained and buy a video streaming subscription. They may want the cheapest price and buy from huge online retailers. Not many make purchases based upon maximizing social welfare.

There are some consumers, of course, who shop based upon a set of community values, but as much as we’d like to think otherwise, these conscious consumers remain in the minority. We must also remember—particularly now during economic challenges for many—that some consumers may not be able to afford to purchase according to their altruistic values.

The art of encouraging citizens to undertake something that creates social value is called social marketing. Whether it is to reduce speeding, or to encourage voting, or to purchase ethically sourced food, social marketers use commercial marketing techniques and concepts—advertising, traditional and social media, direct mail, email broadcasts, word of mouth, customer journey, relationship marketing, etc—to bring about and support social change.

A recently read article provides some useful guidance to anyone trying to convince someone to do something that they don’t instinctively want to do. Summarizing somewhat, the recommendations were as follows:

  1. Break down the activity into small steps
  2. Provide progress indicators (or an understanding of the cost/commitment required)
  3. Provide incentives for completion (intrinsic rewards whenever possible)
  4. Instill competence (allow people to learn or share their knowledge)
  5. Allow for autonomy (people resist being controlled)
  6. Ensure they understand the context/purpose (relatedness).

These recommendations work well if you are convincing a child to get immunized (the example used in the article), to encourage someone to get sober, or to complete a university course.

But how do we use these recommendations to encourage consumers to make the right purchasing decisions? Below is a rephrasing of the recommendations to support social marketing efforts for the social entrepreneur:

  1. Don’t try to explain your entire social value proposition at once. Recognize that consumers may need to understand elements of your mission, not the entire social challenge you are addressing.
  2. Whenever possible, link their purchase to a tangible goal. “By purchasing this product, you’re providing a young person with job training.”
  3. Use loyalty programs, discounts, contests or other “prizes” to reward your customers. Use these extrinsic rewards whenever the intrinsic rewards—like the knowledge that they are helping to support their community—are insufficiently motivating.
  4. Provide your consumers with links to further information, crowdfunding, ways to get involved, or other learning and empowering tools. Think of each consumer as a potential ally in your social mission, and use language, images, and information that give them competence.
  5. Do not undermine your competition, or use negative advertising messages to insinuate to your customer that they need to buy your product over the competitor’s product. If you engage them based upon their own needs and expectations, that provides them with the autonomy to make the (right) choice to buy your product.
  6. Provide context for your social enterprise. It is a challenge to not overwhelm your customer with details while informing and engaging them in your mission. Providing succinct context can help them relate to how their purchase contributes to not only meeting their needs (for example, great coffee) but also the community needs (for example, fair wages). Context links their action as a consumer with your mission.

One last note that we frequently share with our social enterprise clients: Do not assume that your social mission alone will sell your products or services. The vast majority of purchasing decisions are affected by price and market perceptions of quality (which also includes convenience and availability). If you aren’t competing on price and quality, social marketing strategies and activities will have only a marginal effect on consumer choices.

Finding your passion. Meh.

June 3, 2020 /

       At some time in the latter 20th century work became something that identifies who we are. The first question between strangers is often “So what do you do?”  The newest incarnation of this preoccupation with work as one’s purpose is now to aspire to have purposeful work. Expectations and aspirations in the changing workforce appear to tend towards some sort of cross between corporate billionaire and altruistic social worker.  Having your cake and eating it too.

I actually don’t believe in this new religion. I believe that work is an avocation; it is a job needed to pay the bills, put food on the table, and lubricate all the good things in life like health, education, community and love. It is perfectly reasonable to enjoy what you do, and in fact, I recommend making every effort to find joy in what you do, but don’t expect it to define you.

Work…whether as a social entrepreneur, a government bureaucrat, a corporate executive, a teacher, a builder, or a garbage collector…is likely going to be 10% amazing and 90% meh (and of that 90%, some significant percentage may be absolutely awful.)  If you are lucky, you might get to a 25/75 split…

Entrepreneurs are celebrated when they succeed, but 4 out of 5 fail. And those who do succeed often work 60-100 hours a week, and sometimes those hours are spent doing the most banal of jobs: issuing invoices, filing paperwork, responding to confusing client needs, managing your (social) media, waiting in an airport lounge, editing documents,  or even simply buying office supplies or other inputs for your business. For some, each of those tasks might be a gleeful challenge, but for most, they are just the nuts and bolts of business: necessary, unremarkable, obvious—or even punitive—when left undone, and less than inspiring.  Hardly finding one’s passion.

Remember that most value in our communities comes from the informal sector. Parenting, social gatherings, conversations, kindness to a neighbor or a stranger, reading, painting, crafting, cooking, exercise and other hobbies all help to create a strong community fabric and personal value, yet none of them are necessarily well compensated financially, if at all. As my grandfather said, meaning most often comes in simple actions, not grand gestures. For most of us, the informal sector will be where we will leave our mark and where we can reasonably expect to find/create personal joy and purpose.

Social enterprise offers a promise that business can—and should—be conducted with a greater community purpose. This is a lofty and laudable goal. But make no mistake, business is hard work, and some days you’ll have to really think hard about the positive vision you have for the future in order to motivate you to carry on with the present.

Don’t be fooled by a glib instruction to “find your passion” in your job. Instead, choose to work that is meaningful and beneficial to others, do it well, remain diligent, and reward your passions by having a strong work-life balance. I believe that we all have a responsibility to add value to our community, and I believe that social enterprise is one tool that can help us contribute. Nevertheless, never pretend that every daily task as an entrepreneur will fill you with joy and passion.

Be defined by who you want to be, not by solely by where you want to work.

Redefining Success

May 26, 2020 /

“What this pandemic shows…is that we can stop everything in a moment’s notice. I hope that rather than panic and try to rush back to normalcy, people will reflect on what it is we should leave behind, rather than resume.”

Journalist Sam Blum expressed this hope in a recent article in VOX magazine. It complements the UN aspirations to “Build Back Better, ” which is “an approach to post-disaster recovery that reduces vulnerability to future disasters and builds community resilience to address physical, social, environmental, and economic vulnerabilities and shocks.” (Read the full resource here)

Everyone–and let’s fully grasp what that means–everyone on the planet is affected by this pandemic. The numbers of deaths and illness may be small relative to the global population of over 7.8 billion people, but they are significant and scary. Every house and refugee camp, every person rich and poor, and every community urban and rural are having to adjust what they do, how they do it, and how to adapt to fear and uncertainty. This global response is unprecedented. Even the world wars were not fought on battlegrounds in every country. Previous global health scares in the last century (AIDS, SARS, MERS) seem to have had far less of an immediate impact on every family. The Spanish Flu had a similar reach…and far more deaths associated with it…but it existed at a time of limited global interactions and travel.

COVID-19 has made apparent the stark disparities in our world. Front line workers–from grocery clerks to health professionals to law enforcement–are forced to work and put themselves at risk for a greater good. The poor (whether relatively poor in developed countries or abjectly poor in other parts of the world) are at a sincere disadvantage as they simply can’t afford to not work, nor to socially isolate. Some ethnic groups and age groups have reportedly been disproportionately infected. Political figures are disguising their authoritarian tendencies behind the shield of “protecting their people” by applying emergency measures, or even boldy proclaiming power. Access to information, in spite of the ubiquitous Internet, has been confusing as conspiracy theory and mis-information is mixed seamlessly with the data-driven health edicts and expert, reasearched opinions.

For those who have health and wealth, the pandemic creates a mind game that might question one’s purpose. For those who are struggling to just get by, the pandemic is a frightening daily reminder of our own frailty and mortality.

Economies are opening up now; some are taking modest steps, other are more bold. Health professionals warn of a second wave of infection and each society or community must weigh the risks of infection against the necessity of employment and liberty.

Social Delta, with many others involved in helping to create just societies in which work has both individual purpose and community benefit, sees an opportunity to indeed “build back better.” Our businesses must be more focused on meeting the basic needs of citizens: health, education, nutrition, sustainability, justice and minimizing poverty.

Our global economy has had a heart attack and we collectively have the power to resuscitate it and nurse it back to good health.

There will undoubtedly be many changes in the way we define work, where we work, the value we place on family and social interactions and security. Indeed, if we redefine success such that we focus on what is good for us as individuals living in community, then the future after the fear may well be more humane, forgiving and sustainable.

Don’t go old, go ancient.

May 5, 2020 /

Chicago has a water problem. Sections of the city flood often, and even more often in recent decades as climate change has intensified rainstorms at the same time that the city’s concrete engineering marvels have created an impervious crust on the earth.

It was shocking to learn that Chicago is actually at the “top” of two water routes to the sea. Lake Michigan drains through the Great Lakes and into the St. Laurence River and empties into the North Atlantic. At the same time, a mere 10 kms from Chicago’s downtown core are the headwaters of the Des Plaines River, which flows southward and into the Illinois River which eventually joins the mighty Mississippi at St. Louis and eventually empties into the Gulf of Mexico. Apparently, historic records indicate that before Chicago existed, it was a swampy area of land that frequently flooded, allowing for an actual waterway that bisected the continent. No wonder that they have water problems.

Why does this matter to social entrepreneurs?

Well, Chicago (and in fact many cities prone to flooding around the world) has spent billions of dollars on infrastructure projects like tunnels and reservoirs to, as one article put it, “bottle rainstorms.” However, there is a strong movement worldwide to think about ways to work symbiotically with nature rather than to fight to control it. “Sponge Cities” is a term that refers to urban designs that help absorb water. There are multiple ideas borrowed from the past: encourage the development of urban parks that can flood during monsoon seasons, use permeable pavements, plant trees that can soak up (and even clean) waste water, or develop rooftop and backyard gardens to absorb rain where it falls.

To the social entrepreneur, this spells opportunity. But don’t look to technology. This article highlights that we need fewer “smart cities” and more common sense in our design. Indeed, we should make “dumb cities” that use ancient techniques to work with nature to prevent catastrophe. Shoshanna Saxe of the University of Toronto, states the notion clearly:

“For many of our challenges, we don’t need new technologies or new ideas; we need the will, foresight and courage to use the best of the old ideas,” Saxe says.

So, if you are a social entrepreneur in spirit and you are looking for a product or service to sell that will significantly improve our co-existence with a changing climate, consider reviving and adapting old ideas. After all, there are literally BILLIONS of dollars available to prepare for and manage rainwater, flooding, sewage treatment and natural disasters.

Don’t consider creating an app to register the depth of the problem, consider (re)creating and selling a product that addresses the root causes.

Marketing for social change

April 27, 2020 /

I was reviewing my notes from 2007, and unearthed this short paragraph:

For social marketers intent on changing individual behavior and the opinions that guide behaviors, we can—and must—apply new thinking. Simply trying to project a new opinion will be futile. We must identify the accepted opinions in order to identify a lubricant to merge the new idea into the “flywheel” of old opinions. Indeed, to help promote social change, we must not only convey the message, but also provide the assistance to help people reconcile their own opinions (beliefs, actions, ideals) with the new.

Social marketing is a related cousin to social enterprise, of course. Where social enterprise is a business designed to create positive social change, social marketing is the use of commercial marketing techniques to create social change.

As such, this recalled note has direct relevance to all social entrepreneurs. Indeed Social Delta has worked with many clients to adjust their marketing strategy to ensure that they don’t only “push” messages to their target audiences, but that they learn more about their audience before defining their key messages.

The notion of a “flywheel of old opinions” is as pertinent today as ever it was. We all live with a sustained set of rote actions, cultural traditions, family learning, and resistance to change. There is inertia to these beliefs, and in order for a new idea to take root, social entrepreneurs need not fight against that inertia, but rather lubricate the insertion of the new idea into the old.

We need to have the ability to let off the clutch slowly to merge the new idea with the speed of the lives of our audience.

The peril of social entrepreneurship

March 19, 2020 /

Even the most potent idea will be watered down to nothing if you put it in a turbulent sea.

Social Delta is in the business of helping organizations and individuals create business solutions to social problems. We believe in social entrepreneurship as one possible, powerful tool to sustainably create change. But we don’t believe in fads nor do we believe that social change happens because one person thinks that they have developed a quick fix.

Increasingly, we meet and work with young people (ages 14-40) wanting to become social entrepreneurs out of a sense of disenfranchisement in the free market economy, buffeted about by political fictions and misinformation, and feeling either beaten or inspired by their perception of the world going off the rails.

When we work with these new, or aspiring, social entrepreneurs, we want them to grasp a few basic concepts before they launch into their dream career:

  1. Be ready to work harder than ever. Social entrepreneurship is hard work and 99% of the time has very little glamor. Starting and maintaining any business is hard, but starting and maintaining a business with a non-negotiable social bottom line is very hard work.
  2. You are not the solution. Social change can be catalysed by individuals, but it is created by many people, often working in an imperfect cauldron of partnership, competition and collaboration.
  3. Anything you can think of has (likely) been thought of before. Our best piece of advice for new social entrepreneurs is: study what others have done and are doing to address the social concern that is the foundation of your business. It is shocking what an internet search will reveal. Years of study and learning about the issues and the root causes of the social problem are often necessary for you to truly understand why the issue is so hard to solve. Sometimes it is better–as in more effective–to join and existing team of passionate social actors than to create your own business.
  4. Be prepared for the long haul. An app will not solve plastic waste problems. A year of selling coffee will not save a youth at risk from addictions. A single day hack-a-thon (sic) will not solve poverty in your community. Intractable social problems are called intractable for a reason: they often have no quick or easy solution. If you are choosing a career in social enterprise, you will more than likely need to devote multiple years (perhaps a lifetime) to realize the change you envision. We live in a world motivated by expediency, but social change of any sort doesn’t happen overnight…even with a business mindset.
  5. Don’t be fooled by success stories. Every social enterprise is on the knife edge of survival, and success is both a relative term, and a difficult status to maintain. Rather than lauding the successes of contemporaries, learn from their daily challenges and seek to maximize your own social impact.
  6. Measure what you are doing. From day one, set measurable social goals and evaluate if you are doing the best you can to address the social problem that inspires your business. Measurement has to include both business indicators like sales or inventory levels, but more important is to set social goals and measure if you are getting close to them. If not, you’ll likely need to change your operational (business) decisions to ensure that your social mission is, in fact, being served best.

We recommend that every new social entrepreneur read a recent Stanford Social Innovation Review article entitled “Tackling Heropreneurship.” The author expresses concern that social enterprise is becoming so fashionable that it is—like a potent idea in a turbulent sea—being watered down by those who want fame, fortune and a better world crafted by their own hands.

Building a social enterprise requires a balance of egotism and altruism. You need to be self-confident, committed, and something of an idealist. However, at the same time, you need to be humble, patient, collaborative and willing to rely on the efforts of others.

Social entrepreneurship should be considered less of a career and more of a calling, and in our experience, academic institutions, media, government and intermediary organizations are increasingly spouting that entrepreneurship is THE new tool for solving social problems. As a result, many of our most idealistic young colleagues are not fully understanding the social fabric that needs to be changed before they embark on their personal entrepreneurial journey to change it.

The marketplace of social deficits

April 30, 2019 /

Most social enterprises start because an individual or an organization sees a problem in society—a social deficit—and they want to find a sustainable way to improve that deficit.   

Just as inventions historically have helped to address perceived personal needs—from the radio to the steam iron—so too are innovations required to address social deficits, and if those innovations can be commercialized, then they are fodder for a strong social enterprise.

In the last few years, I’ve met an increasing number of people—both seasoned and young—who want to pursue social enterprise as a meaningful career path. However, many haven’t necessarily taken into account the marketplace of social deficits. In the last decade or more, there are some clear, growing areas of need in our society for which a social enterprise might be the right tool.

Below is my quick list of the challenges facing our society; this list describes a fertile field for social enterprise development to start.

Ageing populations will create needs for new financial tools, intergenerational wealth transfer, housing, urban design, mobility and new methods of countering isolation in a world of technology, fading social structures (like the church) and greater longevity.

A diversified global citizenry requires new approaches to schooling, language and cultural training, housing and ways to address conflict.

New health care needs for chronic illnesses and afflictions, including diabetes, arthritis, depression, obesity. Even some of those diseases which were considered acute (and typically life threatening) such as cancer and heart disease are increasingly being considered chronic, as survivors may require ongoing supports to live well.

Our energy needs are extraordinary. With a technologically advancing society, all our lives are affected by available electricity and locomotion. Our shelter, our food, our lifestyle, and even our money are all perilously threatened if we loose power, or if energy costs spurred by limited supply and increasing demand become unaffordable.

Water and other environmental challenges are also looming concerns of the next generation. Clean water is an ecosystem requirement and a threatened resource as the population grows, and as our continued polluting contaminates the limited freshwater reserves on the planet.

Increases in gambling, poor diets and inactivity, violence (gang, domestic, and other abuse), and the (mis)use of both illegal and prescription drugs are requiring us to reconsider the way the society must address social behavioral problems.

Crime appears to be on the increase, although statistics prove otherwise. Of course, we need not be complacent, as preventing crime is worth our vigilence at the local, national, international, and even the metaphysical space of the internet. Identity theft, concerns of privacy and even fears of falling victim to fraud pervade our news, and thus our response to the world around us.

The nature of work is changing and this creates many social challenges. Increased wealth is not translating in to increased welfare. Communal workplaces, telecommuting, and decreases in manufacturing and skilled labour are affecting our communities and exacerbating wealth gaps.

It also appears that the next generation is losing purpose, faith and hope in the structures of past generations (marriage, work, universities, religious institutions, government, etc). 

Poverty and income inequality is also a global challenge. Our interdependent world means that poverty across the world will directly affect us all. Wars, famine, refugees, human rights abuses, and criminal activity are all reinforced by poverty, if not initiated by the curse of income inequality and injustice.

This list of social deficits should not drive us to despair. Statistically, global improvements to health, transportation, work, and international relations have enjoyed incredible gains over the last decades (“Factfullness” by Hans Rosling, will help reaffirm your faith in humanity).

Nevertheless, the traditional solutions to social deficits that have got us this far have often been direct interventions through the development of a new product or new service (or law!) by governments, non-profits, or private sector actors motivated by profits. However, the current multifaceted, systemic challenges are in need of more systemic solutions by engaging different sectors, different actors, new ideas, revised expectations, and new organizational structures.

Social enterprise is a tool—when done well—that can house systemic solutions that embody democratic (or collective) ownership, the focus of business thinking, the scale of the public sector and the compassion of the non profit and charitable world. By taking the best of all thinking, social enterprise is a vehicle to tackle both the new and intractable social deficits in our society.

Social entrepreneurs don’t just dabble in change.

March 18, 2019 /

For a good cause, wrongdoing is virtuous.

Publilius Syrus

I’m quite sure that this first century quote wasn’t about failing at a social enterprise, but it is worth taking the liberty now, in the 21st century, of reinterpreting this quote to mean that doing something incorrectly in pursuit of a social benefit is still a virtuous pursuit.

Or is it?

Social enterprise employs a business model to create positive social outcomes. It requires selling goods and services in pursuit of a “good cause,” seeking to change the world for the better. In the current heady discourse surrounding social enterprise and social innovation I often hear the phrase “to fail forward” to highlight that social entrepreneurs and social change agents can learn from mistakes in their social businesses to improve the products, services or social outcomes they seek.

The problem is that social entrepreneurs are playing with live ammunition. If social entrepreneurs don’t succeed, in my experience they often give up and close their doors. When a social enterprise fails and closes, our society is left wounded. People are hurt. Jobs for underemployed are lost. Social outcomes are not improved.

In fact in just the last few years, I’ve witnessed dozens of ambitious, intelligent, and idealistic entrepreneurs from all sectors fail at creating a sustainable social enterprise. Their failures are not seen as opportunities for some form of renaissance or rebirth. In fact, many of them fail quietly, in relative shame, and the lessons they learned are rarely shared with others. The social entrepreneurs find a new passion, or they retire, or they get drawn out of the challenge of entrepreneurship into a salaried position.

Therefore, this blog post is a warning to all who seek to become social entrepreneurs.

If you’ve identified some form of social justice, and you want to change it, you simply can’t give up.

The problem will persist or worsen without you. If social enterprise is not the right tool, then find another hammer to make a difference.

Business is hard work. Social enterprise is even harder work, because social entrepreneurs need to find financial sustainability in a market economy that has, in many cases, created the injustice they are trying to fix. One can’t just dabble in social enterprise. The stakes are just too high.

Social entrepreneur must know that they are fighting against a behemoth, and it simply won’t be easy. They must commit to their work as a calling “for a good cause.” They must know that social enterprise is a responsibility and will likely be a hardship. If you choose this life, you are likely going to get roughed up a bit. Steel yourself for this fact.

Doing the right thing is never easy. Don’t be fooled into believing that social enterprise is easy. And when it gets hard to push onward, don’t allow yourself to give up. Our common good is at stake.

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