What It Means to be a Social Entrepreneur
Grameen Bank. The Salvation Army. Mercy Corps. The African Leadership Academy.
Unlike the typical technology entrepreneur who is spurred on by innovation and the lure of riches, the social entrepreneur is inspired by a noble desire to make a difference in the world. They are action-oriented idealists – sensitive enough to see a need in the world, and tough-minded enough to decide to do something about it. While many social enterprises have a missionary or religious outlook (indeed the Catholic Church feeds, educates and cures more people than any other organization in the world), many social enterprises have grown out of a more secular, but no less humane, orientation.
At several points in my career, I’ve worked in local and international social enterprises and these roles have been amongst the most fulfilling parts of my entrepreneurial journey. Most recently, I was the Program Manager of the African Women’s Entrepreneurship Cooperative (AWEC), an initiative of the New-York based Centre for Global Enterprise. The program was funded by a generous grant from Bloomberg Foundation which enabled us to bring world-class entrepreneurial education to two hundred women from the world’s poorest continent. Best of all, the training, which included two all-expense paid trips to leadership conferences in Africa, was provided free of charge to all cohort members.
The success of social enterprises is usually measured not merely by financial metrics, but by the good they have done in the world – the impact they have had in the lives of their beneficiaries. That said, they also pursue growth and profits in support of their broader social mission.
To that end, they are often characterized by the following business implications:
- Social enterprises are usually funded by the founder(s), friends, family, banks and in some cases, angel investors or venture capitalists (if the investors sense growth potential)
- The growth trajectory of the business depends on the founders and investors.
- Since they are focused on solving social problems, a formal exit is rarely envisioned, with the exception of an acquisition by a larger socially oriented firm
Lifestyle implications for social entrepreneurs vary, depending on the type of venture which the founder envisioned, its reach and its funding (friends and family vs. formal investors)
The social entrepreneur is usually driven by lofty ideals, expressed in charters such as the United Nations’ Sustainable Development Goals – gender quality, eradication of hunger, poverty, protection of the environment, etc. Profit is usually pursued, to ensure sustainability, but most times the profit motive is subordinated to the larger impact motive.