My name is Andrea Esteve Pedró and I’m a UPF International Business Economics graduate. During my bachelor’s degree I started asking myself if everything that we were being taught about maximizing profit at all cost was truly the only purpose of business. My semester abroad at UBC in Vancouver further reinforced my obsession with the idea that business could be done differently, as I had the opportunity of working alongside three social entrepreneurs as part of the Sustainability Marketing course I took there.
After I graduated, I started working at Ship2B, an accelerator for social entrepreneurs and impact investment fund, and three years later I’m even more convinced that business, technology and innovation can be used as a powerful force for good.
What is social entrepreneurship?
There is no single definition of social entrepreneurship, but we can agree that a social entrepreneur is someone that has identified a social problem, and that uses business and entrepreneurial tools to solve it.
Social problems are complex, and can be related to climate change, healthcare, education, employment of vulnerable groups, homelessness, gender equality, and many other issues we face as humanity. Entrepreneurial tools entail developing a new product or service, or a new technology, and bringing it to market. Therefore, social entrepreneurs bring these two worlds together, using business innovations to intentionally address a social issue.
Challenges social entrepreneurs face
During my time at Ship2B, I have worked with more than 150 social entrepreneurs and learned about some of the main challenges they face:
Establishing a business model that maximizes their impact
One of the most common challenges of all entrepreneurs (social or not) is finding a business model that allows them to get revenue and economically sustain their activities. Social entrepreneurs must deal with a double challenge: 1) developing a viable business model that allows them to be economically sustainable and grow, 2) finding a business model that is not only economically viable, but that is also aligned with their impact mission, so that the more profit they make, the more social impact they have.
If they don’t achieve the first one, they will have trouble sustaining their activity in the long run, or it will heavily depend on grants or donations. If they don’t achieve the second one, in moments of pressure or difficult decisions, impact could be sacrificed in order to make more profit, and therefore the importance of building a model that aligns both of them.
Measuring and managing their impact
Measuring impact data is as important for social entrepreneurs as measuring financial KPIs. Impact indicators allow managers of social enterprises to get key insights on the impact they are generating on their beneficiaries or on the environment, which in turn will drive business decisions.
Measuring impact can be a complex process and there is still no standard way of operating (even though the Impact Management Project is advancing at a fast pace!). Also, social entrepreneurs may have limited resources, so lean tools can be used to start measuring and managing their impact in an agile way.
Social enterprises usually need financial resources to grow and achieve their impact mission. For that, specific instruments to finance social innovation can be of use. From traditional sources of finance for social causes, like philanthropic grants and public funding, to new ways to channel private funds, like Impact investing and Venture Philanthropy, social finance is growing rapidly to provide funding for social businesses.
But to be able to convince social investors, entrepreneurs need to prove both the impact they are generating (thus the importance of measuring it!) and also the economic viability of their projects. Easy, right?
Social entrepreneurs needed!
In a world with increasingly growing polarities and increasing inequalities, with unforeseen challenges like coronavirus, and the threat of climate change knocking at our door, the role of social entrepreneurs is more urgent than ever to create the world we need.
And social entrepreneurs can be everywhere! I would like to invite my fellow UPF graduates to become social innovators wherever they are, and to think: How will you make a difference? How will you make this world a little bit better?
- If you are an entrepreneur or are thinking about starting your own business, why don’t you consider creating a startup with positive impact?
- If you are working for a corporation, how can you influence decision—making towards bringing impact in your area of work? Why don’t you become a social “intrapreneur” to make things better from the inside?
- If you are currently looking for a job, why don’t you consider putting your talent into an organization with a social mission that resonates with your own values? (if you need inspiration, you can look up this list of B-Corps – companies that create a positive impact on their communities, employees and the environment).