ENTR4800 Class 1: Definitions and Examples of Social Entrepreneurship


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Definitions and Examples of Social Entrepreneurship

Theory: What is social entrepreneurship? What distinguishes social entrepreneurship from traditional entrepreneurship?
Practice: What is social enterprise? How is it different from social entrepreneurship? How does it differ from traditional business?


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ENTR4800 Class 1: Definitions and Examples of Social Entrepreneurship

  1. 1. ENTR 4800: Social Entrepreneurship Class 1: Introduction to Social Entrepreneurship and Social Enterprise Monday, September 13, 2010 1
  2. 2. 2
  3. 3. Before we begin… This course is designed for those that want to start a social venture 3
  4. 4. Course Director – Norm Tasevski 4
  5. 5. Course Director – Karim Harji 5
  6. 6. What Makes YOU a (Social) Entrepreneur??? 6
  7. 7. Agenda • Class Intros • Syllabus and Class Structure • Ground Rules • Defining Social Entrepreneurship • Defining Social Enterprise • What did we learn? • Next week 7
  8. 8. ENTR 4800: Syllabus 8
  9. 9. Class Rules – Participation - quality, not quantity! – No stupid questions (only stupid answers) – Respect your classmates – attend and be punctual! 9
  10. 10. Defining Social Entrepreneurship… 10
  11. 11. First, we need to understand entrepreneurship... 11
  12. 12. Entrepreneurs… …are motivated 12
  13. 13. Entrepreneurs… …are innovative 13
  14. 14. Entrepreneurs… …are resourceful 14
  15. 15. Entrepreneurs… …take chances 15
  16. 16. How is Social Entrepreneurship Different? 16
  17. 17. How is Social Entrepreneurship Different? Motivation Innovation Resourcefulness Risk Taking 17
  18. 18. But… …motivations are different 18
  19. 19. Barefoot College 19
  20. 20. But… …innovation is different 20
  21. 21. Registered Disability Savings Program 21
  22. 22. But… …resourcefulness is different 22
  23. 23. “Civic Engagement, Scaled Up” 23
  24. 24. But… …risk taking is different 24
  25. 25. “Banking for the Poor” 25
  26. 26. Other Differences “Social entrepreneurs are not content just to give a fish or Focus on “systems how to teach fish. They will not rest until they have thinking” and revolutionized the fishing industry” “systems change”: Bill Drayton “(Social entrepreneurs) work in areas where there is partial or total market failure…what distinguishes them is that they are Seek “profit” in prepared to strike a very different balance when it comes to traditionally unprofitable pursuits: creating value for those who would not normally be able to afford it” John Elkington David Bornstein: “Why do you work on the kinds of projects you do? Why don’t you just want to make a lot of money?” Possess a strong “ethical impetus”: Fabio Rosa: “I am trying to build a little part of the world in which I would like to make people live. A project only makes sense to me when it proves useful to happier and the environment more respected, and when it represents a hope for a better future. This is the soul of my projects.” 26
  27. 27. Some Definitions • “Social entrepreneurs identify resources where people only see problems. They view the villagers as the solution, not the passive beneficiary. They begin with the assumption of competence and unleash resources in the communities they are serving” David Bornstein • “A social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to make social change” Wikipedia 27
  28. 28. Break 28
  29. 29. Defining Social Enterprise… 29
  30. 30. 30
  31. 31. What is a Social Enterprise? • Organizations (non-profit or for-profit) that imbed both social purpose and business purpose into their organization • Returns are both Social (i.e. impact) & Financial (i.e. profit) • Key distinguishing factor: How deep social & business purpose is imbedded 31
  32. 32. A Question… What makes a business a business? 32
  33. 33. Components of a Business A transaction A product/service A goal A legal form 33
  34. 34. How is Social Enterprise Different? 34
  35. 35. Social Enterprise has… Yep Absolutely A transaction A product/service This one’s complicated Yeah, but… A goal A legal form 35
  36. 36. The SE Product/Service It’s still… But… • “Social benefit” is added somewhere on the value chain 36
  37. 37. What is Social Benefit? • For our purposes, social benefit may arise when one attempts to overcome an injustice or inequity in society that the market, on its own, cannot respond to – E.g. creating employment opportunities for individuals that may not otherwise be employable in the marketplace • A similar concept – “environmental benefit” 37
  38. 38. Exercise • Add social benefit to: 38
  39. 39. The SE Transaction Traditional Business Social Enterprise Customers Customers “Clients” 39
  40. 40. TurnAround Couriers 40
  41. 41. The SE Goal - Social vs. Financial Purpose Social Purpose – Creating a “social return” by making positive change within an inequitable social system • Examples: Reduced Poverty, Improved Literacy Financial Purpose – Creating a “financial return”, usually through the sale of products/services in the marketplace Blended Purpose – Effecting social change by combining social and financial return – Also called “Blended Value” 41
  42. 42. A Common Dilemma • Usual: Social enterprises feel they need to sacrifice social purpose for financial gain, or vice versa • Ideal: Financial returns depend on social mission (and vice versa) 42
  43. 43. Viewing SE Through a “business lens” • How you think about cost – Additional costs borne on business that achieves a social benefit (how do you incorporate? Valuate it?) • How you think about investment – Opportunities to get investment through traditional models, but because your business is hybrid, the investment needs to be hybrid (i.e. layering of different financing mechanisms) • How you think about success – Part of the social enterprise motivation is social, so you need to consider success in a dual lens. How do you articulate success in both of these spheres? 43
  44. 44. The Legal Form • No clearly defined legal form for social enterprise in Canada • “Form follows function” 44
  45. 45. A test… 45
  46. 46. What about… 46
  47. 47. What does this mean? Social CSR Enterprise Social Complexity Enterprise 47
  48. 48. What SE is and is Not Social Enterprise Is Not… Social Enterprise Is… • A fundraising strategy (i.e. a “give” • A business line (i.e. a “sales” mentality) mentality) • Solely focused on either “customers” • Focused on both “customers” and or “clients” “clients” • Dependent on restricted funds for • Sustainable (ideally “self-sufficient”) operations (i.e. not sustainable) • An event or one-off activity (e.g. • A continuous, market-driven activity conferences, bake sales) • Providing value to clients only • Providing value to both “clients” and “customers” (and distinguishing between both!) • Quick • A venture that may take several years to become profitable/sustainable 48
  49. 49. Some Definitions • “An organization or venture that achieves its primary social or environmental mission using business methods.” Social Enterprise Alliance • “Business ventures operated by non-profits, whether they are societies, charities, or co-operatives.” Enterprising Non-Profits (enp) • “… social mission driven organizations which apply market-based strategies to achieve a social purpose. The movement includes both non-profits that use business models to pursue their mission and for-profits whose primary purposes are social.” Wikipedia 49
  50. 50. What did we learn? 50
  51. 51. Next Week • Bill Young – Have Questions Ready!! • 1st deliverable – your social enterprise idea… • Readings 51