Entrepreneurship has always been about the ability to turn an idea into a successful business. Now a new generation of entrepreneurs is praised for the ideas themselves: leaving a positive impact on society. These pioneers funnel their passion and talent into start-ups and projects, from clean water to ethical tea. But combining business and social impact is no easy task, leaving this sector riddled with challenges, failures, success stories and plenty of insight.
The social impact entrepreneur
Social entrepreneurs are individuals who lead any kind of economic activity with a social or environmental objective, operating in the market and prioritizing impact over financial value. Unlike non-profit organizations, it involves making money, which in turn can enable even bigger projects, and hence bigger impact, and so on. The average prevalence of social impact activities is just above 1%, and that number is growing, especially due to recognition of the role they can play in tackling societal and environmental challenges and stimulating inclusive growth.
Social impact entrepreneurship is nearly gender-blind, with 55% of entrepreneurs being men and 45% women, a ratio twice as small as in commercial entrepreneurship. In other words, women seeking to become entrepreneurs have a relatively high motivation to choose initiative with a positive impact.
Getting started
While the end result is glamorous, the social impact entrepreneur treads a meandering path. As Davida Ginter, CEO of Enkindle Global, puts it,it all begins with a passion about a cause and the desire to address it professionally, which might spark a Eureka moment. Take FRÉ Skincare, for example: its founders, Michael Azoulay and Mickael Bensadoun were at the beach when a jogger passed by, elegant and resplendent but for the thick white sunscreen covering her face and running into her eyes. The sight of discomfort invoked the idea for a facial skincare solution that accounts for aesthetic and athletic needs. FRÉ Skincare was thus born, challenging the existing skincare industry by spotting an unanswered need, but also protecting the environment and empowering Moroccan women who grow Argan, one of FRÉ’s main ingredients, via a partnership with High Atlas Foundation. Ideas apt for social impact seek to do business in a virtuous way, bringing a positive impact on society or the environment.
Once such an idea has come to mind, the first thing the potential entrepreneur does is check if it could answer some need out there in the world. Your friends, family and the world wide web are your primary sources for feedback. Besides passion, it’s urgency that sets the pace: particularly in impact entrepreneurship, we feel that the right time for our idea to contribute, whether to global warming or the failing economy, is now – or never; but developing a business takes time. The product will be developed and prototyped. Once ready, the future entrepreneur must invest or find investors, start marketing, and eventually start selling.
From an idea to a business
After finding your idea and confirming the need for it, it’s essential to identify the target audience. While you want to tap into a demand that is wide enough for impact and for profit, narrowing your target audience is essential, as we can learn from Wesley Meier, CEO of EOS International. This young entrepreneur was spreading himself too thin by attempting to reach too broad of an audience too quickly. During the first few years, he was working with artisans in many different countries, suffering from limited resources and limited reach. One of the most valuable lessons he learned was focusing on a product and a target audience. By doing so, his company became the first to offer their water quality solutions to rural communities in Central America, and establish themselves as experts in their focused field.
Besides developing a product, it’s important to remember you’re also developing a team. Rebecca Jacobs, CEO of Anika Works, a matchmaking platform for leaders of small non-profits, worked on her business as a solo entrepreneur and struggled to balance work and life. Thinking that everything was urgent and that she needed to be an expert at everything she did led her to constant burnouts and a poor output. Once she focused her energy on building a skilled team around her social enterprise, things went a lot smoother. Her new approach facilitated scaling and helped gather the solutions and resources that her projects needed to grow.
The successes and the failures
What makes social impact entrepreneurship so thrilling is that success goes hand in hand with the wellbeing of others. Vancouver-based JusTea team, led by Paul Bain, has partnered directly with Kenyan tea farmers to provide ethical, antioxidant-rich, and sustainably produced fair-trade tea. This beautiful transatlantic relationship started with a little father-and-son trip, ending with the first-ever farmer-owned artisanal tea factory in the country, which produces two hundred jobs for locals in rural Kenya. For Paul, the taste of true success was most palpable when the farmers, who had been growing tea for decades, savored the first batches from their training sessions, telling the young CEO that this was the first time ever they had tried the tea they grow.
But while one can learn from success, it is failure that fosters wisdom. Social entrepreneurs work on important problems that humanity has worked on long before them and failed to solve, so risk-taking and experimentation are the only path to success. A business might fail, but with the right spirit, the entrepreneur only gets smarter with every attempt.
While social impact entrepreneurship is the long-awaited marriage of business and philanthropy, this young trend is not easy to achieve. The social impact entrepreneur must be armed with passion and a sense of purpose and urgency; they must be ready to face obstacles and failures and stand back up – not for his or her own sake, but for the sake of a world in dire need of new solutions.