ENTR4800 Class 4 - Assessing Business Potential for Social Enterprise
ENTR4800 Class 1: Definitions and Examples of Social Entrepreneurship
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Transcript of ENTR4800 Class 1: Definitions and Examples of Social Entrepreneurship
ENTR 4800: Social Entrepreneurship
Class 1: Introduction to Social Entrepreneurship and Social Enterprise
Monday, September 13, 2010
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Instructors: Norm Tasevski ([email protected])
Karim Harji ([email protected])
© Norm Tasevski & Karim Harji
2 Source: http://socialentrepreneurs.typepad.com/the_school_for_social_ent/2009/01/how-to-be-a-social-entrepreneur-poster.html
© Norm Tasevski & Karim Harji
Before we begin…
This course is designed for those that want to start a social venture
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© Norm Tasevski & Karim Harji
Course Director – Norm Tasevski
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© Norm Tasevski & Karim Harji
Course Director – Karim Harji
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© Norm Tasevski & Karim Harji
What Makes YOU a (Social) Entrepreneur???
6 Source: http://www.fahad.com/2006_10_01_fahadinc_archive.html
© Norm Tasevski & Karim Harji
Agenda
• Class Intros • Syllabus and Class Structure • Ground Rules • Defining Social Entrepreneurship • Defining Social Enterprise • What did we learn? • Next week
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© Norm Tasevski & Karim Harji
ENTR 4800: Syllabus
8 Source: http://www.teamemblem.com/comp140/Student%20Midterm/sources.html
© Norm Tasevski & Karim Harji
Class Rules
– Participation - quality, not quantity!
– No stupid questions (only stupid answers)
– Respect your classmates – attend and be punctual!
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Defining Social Entrepreneurship…
10 Source: http://www.picti.ps/NewsLetter/View.aspx?portalid=1&cpage=~\Newsletter\View.aspx&tabid=1&tabindex=0&lang=en&mid=157&itemid=32&verno=1&pino=32&pvno=1&pl=en&page=~\NewsLetter\NewsLetterArchive.aspx&pmid=157
© Norm Tasevski & Karim Harji
First, we need to understand entrepreneurship...
11 Source: http://forum.belmont.edu/cornwall/archives/2004_10.html
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Entrepreneurs…
…are motivated
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Entrepreneurs…
…are innovative
13 Source: http://itcilo.wordpress.com/
© Norm Tasevski & Karim Harji
Entrepreneurs…
…are resourceful
14 Source: http://www.zazzle.ca/what_would_macgyver_do_tshirt-235258167582150199
© Norm Tasevski & Karim Harji
Entrepreneurs…
…take chances
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How is Social Entrepreneurship Different?
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How is Social Entrepreneurship Different?
Motivation Resourcefulness Risk Taking Innovation
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But…
…motivations are different
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Barefoot College
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But…
…innovation is different
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Registered Disability Savings Program
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But…
…resourcefulness is different
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“Civic Engagement, Scaled Up”
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© Norm Tasevski & Karim Harji
But…
…risk taking is different
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© Norm Tasevski & Karim Harji
“Banking for the Poor”
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© Norm Tasevski & Karim Harji
Other Differences
Focus on “systems thinking” and
“systems change”:
“Social entrepreneurs are not content just to give a fish or how to teach fish. They will not rest until they have
revolutionized the fishing industry” Bill Drayton
Seek “profit” in traditionally
unprofitable pursuits:
“(Social entrepreneurs) work in areas where there is partial or total market failure…what distinguishes them is that they are prepared
to strike a very different balance when it comes to creating value for those who would not normally be able
to afford it” John Elkington
Possess a strong “ethical impetus”:
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?”
Fabio Rosa: “I am trying to build a little part of the world in which I would like to
live. A project only makes sense to me when it proves useful to make people happier and the environment more respected, and when it
represents a hope for a better future. This is the soul of my projects.” 26
© Norm Tasevski & Karim Harji
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
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Break
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Defining Social Enterprise…
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© Norm Tasevski & Karim Harji
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© Norm Tasevski & Karim Harji
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
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© Norm Tasevski & Karim Harji
A Question…
What makes a business a business?
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Components of a Business
A transaction
A product/service
A goal A legal form
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How is Social Enterprise Different?
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© Norm Tasevski & Karim Harji
Social Enterprise has…
Yep �
A transaction
A product/service
A goal A legal form
Yeah, but…�
This one’s complicated�
Absolutely�
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© Norm Tasevski & Karim Harji
The SE Product/Service
It’s still…
But… • “Social benefit” is added somewhere on the value
chain
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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”
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Exercise
• Add social benefit to:
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The SE Transaction
Traditional Business Social Enterprise
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Customers
Customers
“Clients”
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TurnAround Couriers
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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”
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© Norm Tasevski & Karim Harji
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)
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© Norm Tasevski & Karim Harji
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?
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© Norm Tasevski & Karim Harji
The Legal Form
• No clearly defined legal form for social enterprise in Canada
• “Form follows function”
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A test…
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What about…
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What does this mean?
Social Enterprise
CSR
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Social Enterprise
Complexity
© Norm Tasevski & Karim Harji
What SE is and is Not
Social Enterprise Is Not… Social Enterprise Is…
• A fundraising strategy (i.e. a “give” mentality)
• A business line (i.e. a “sales” mentality)
• Solely focused on either “customers” or “clients”
• Focused on both “customers” and “clients”
• Dependent on restricted funds for operations (i.e. not sustainable)
• Sustainable (ideally “self-sufficient”)
• An event or one-off activity (e.g. conferences, bake sales)
• A continuous, market-driven activity
• 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
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© Norm Tasevski & Karim Harji
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
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© Norm Tasevski & Karim Harji
What did we learn?
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Next Week
• Bill Young – Have Questions Ready!!
• 1st deliverable – your social enterprise idea…
• Readings
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