Understanding Social Entrepreneurship

By | July 25, 2009

Last week, I wrote a small article for Pluggd.in. They featured this article as Understanding Social Entrepreneurship and Characteristics of Social Entrepreneur.

For regular readers of my blog, here is the same article…

We use the term “Entrepreneur” for a person who has created something which has a value preposition to the stakeholders in big/small way. Now, I am not going deep into defining Human Entrepreneurship, however, will stick to getting more understanding of “Social Entrepreneurship” over the course of this article.

There are three key “parameters” to the Entrepreneur – Problem, Solution, Value – what I call PSV.

Problem – Every Entrepreneur has identified a problem and wants to provide the most effective and efficient solution to the Problem.

Solution – Is it the most effective and efficient solution to the identified problem is what defines the success of the “Entrepreneur”.

Value – Does the solution create value to its Stakeholders (Self, Investors and End-Users)

Ensuring a “right angled triangle” ensures the success of the Entrepreneur and the Solution. Look at any example from JRD Tata to C.K.Ranganathan (CavinKare). Every person and every organization has brought a great value preposition to their/it’s “entrepreneurial” skills.

What is Social Entrepreneurship?

This topic has been visited by many eminent personalities and I am no authority to define this again. However, let me link you to the well-accepted definition and also few of my analogies.

Social Entrepreneurship: The Case for Definition published by Stanford Social Innovation provides an in-depth understanding of the subject.

In this paper, the author drills down the meaning of Entrepreneurship and quotes quite a few names that go synonymous with the word “Entrepreneur”. Entrepreneurs have existed since the time life came to earth. If you go back to the beginning and the most accepted names of the first life – Adam and Eve are definitely Entrepreneurs. Everything what Adam and Eve did was Entrepreneurial! Eating, Sleeping, giving life, living a life and eventually death. Every thing and every aspect is Entrepreneurial. Each one of us are Entrepreneurs in one way or the other. Then what is different?

The term “social” has been pre-fixed to “Entrepreneurship” long ago. The best and great example of Social Entrepreneur is Mahatma Gandhi. There can be no other best synonymous personality to attach the definition to. What is the difference you see in Mahatma? It is very simple,

  • Problem – Free India
  • Solution – Non-Violent fight to ensure that the British Rule ends
  • Value – Value for Stakeholders and Time

Stakeholders – Citizens, Rulers, Self. In this case, the Investor and End user are the same (Citizens of India).

Time – ~40 Years

Just look at how the problem has been addressed – Gandhiji never retorted to any violent act and always sticked to his principal of non-violence. He “enrolled” his stakeholders (citizens of the country and also the Rulers) to arrive at the solution.

Result – The Rulers went back and the Citizens achieved their freedom. What did Gandhiji get? The satisfaction of the solution to the problem he identified and also setting an example of solving life problems with peace.

This is exactly what Social Entrepreneurship is all about. Here, the entrepreneur identifies a “pain point” and continuously works on providing a solution by refining the solution time and again. This is what happened exactly in the “freedom struggle”. We saw many protests, freedom walk, showing our displeasure with silence etc etc. All these are the parameters and factors where the methodology went through many cycles of refinement before the end result is achieved.

A social Entrepreneur works on the similar aspects. He/She does not mind the time and effort, but works only towards refining the solution to the problem identified.

I would like to touch upon few classic examples and I urge you to research more into how the solutions were derived (the scope of this article would not allow me to go into deep of each of the solutions)

Jaipur Foot, ITC’s e-Choupal, Trichy Police (A classic Example of Social change in a short-span of time) and Dr. Sudharshan of Vivekananda Trust are just few to mention. There are many other eminent personalities working for the change they believe in.

And if you want to look at Technology Social Entrepreneurs we have Orlando Rincon Bonilla of PraqueSoft, based in Columbia and Saloni Malhotra of DesiCrew, based in Chennai.

If I keep listing down, the names do not end. What do they do different and How do they do it? You have to really understand their ideologies from the bottom see how they changed lives of many people around them.

Characteristics of Social Entrepreneur

  • The usual ideologies and principals do not holdback social Entrepreneurs. They are always looking at breaking them.
  • Social Entrepreneurs are impatient. They do not go well with the bureaucracy around them.
  • Social Entrepreneurs have the patience, energy and enthusiasm to teach others.
  • Social Entrepreneurs combine Innovation, Resources and Opportunity to derive solutions to Social problems.
  • This should be first in the list, Social Entrepreneurs DO NOT loose their FOCUS anytime.
  • Social Entrepreneurs always jump in before having their resources in place. They are not traditional.
  • Social Entrepreneurs ALWAYS believe that every one can Perform and have the capacity to do so.
  • Social Entrepreneurs ALWAYS display DETERMINATION
  • Social Entrepreneurs can ALWAYS measure and monitor their results.

There are many other unique characteristics, but the above stand out.

In their book “The Power of Unreasonable People“, John Elkington and Pamela Hartigan mention that Social Business can be categorized in three models:

  • Leveraged Non-Profit Ventures
  • Hybrid Non-Profit Ventures
  • Social Business Ventures

A Leveraged Non-Profit Venture focuses on addressing a Social Problem, which might benefit the Economically Vulnerable.

Classic Illustration of this kind of venture is the Barefoot College.

A Hybrid Non-Profit Venture focuses on delivering goods/services to the section of the population which has been ignored or left out by the mainstream products/services.

Classic Illustration of this kind of venture is Arvind Eye Clinic.

A Social Business Venture provides goods/services with a specific mission. This venture makes profits by providing its services, but the focus is not in making more and more profits, but to ensure the good/service reaches as many as possible.

Classic Illustration is the Grameen Danone and AMUL.

Where do we go from here?

The concept and subject of Social Entrepreneurship is most astonishing. There are loads to do and very less people and time. Today, there are Universities and Educational Institutions teaching Social Entrepreneurship. Can you learn Social Entrepreneurship in class? I am not highly qualified to comment on this, but the essence of Social Entrepreneurship is the PASSION, DETERMINATION and FOCUS. What you learn in class are just instruments for you to change the world…

One thought on “Understanding Social Entrepreneurship

  1. Omprakash

    The concept is always intriguing, considering the fact that it will be impacting so many people directly. I’m a great admirer of Grameen Bank and Muhammad Yunus. The sectors into which they’ve diversified after Grameen Bank is truly inspirational. Very well articulated Hari.

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