Social Enterprise For the Masses
Like many in the startup space, I have been reading the circus of commentary on Twitter’s not-so-quiet public offering filing since September 12, 2013. The startup advocate in me is happy for the founders and early investors. I know they took risks, made sacrifices and created something that the market seemingly finds value in. The social entrepreneurship zealot in me is however unimpressed and frankly, getting increasingly impatient. We can all agree that curing social ills through business is an ingenious model. But while the wave is slowly building, why are we not paddling furiously to the social entrepreneurship swell we know could transform our world?
I am here to challenge Americans to take social entrepreneurship out of the corner of our enterprising spirit, unwrap it from its gift box tied with a cause-related ribbon and bring it out to play with the big wigs of American business. I want a social enterprise IPO that towers over LinkedIn, Pandora, and whatever we can guess Twitter will land at. I’m charging this nation to make social enterprise not just the norm, but the main contender.
Who am I to make such a demand? I’m a former litigator who experienced personally and professionally money being used as a weapon – if you can outspend your opponent, you can run them into the ground. So four and a half years ago, I left traditional law firm life and founded Esse Law, a boutique firm servicing social entrepreneurs. My mission is simple: to build a world where social justice and sound economics powerfully go hand-in-hand.
I dare to imagine a world where we take the efficiencies of business and apply it to the most pressing social problems. For example, Better World Books resells used books and funds literacy programs. It’s raised over $10 million for literacy programs and reused or recycled more than 66 million pounds of books. Likewise, Seventh Generation sells sustainable cleaning, paper and personal care products. Or take Organic Valley, a cooperative of organic farmers that pays guaranteed pay-prices to farmers regardless of market fluctuations to keep farms from going under. Respectively, these companies logged $45.5 million, $150 million and $622 million in revenues for 2010. A recent JP Morgan study predicts that the social enterprise sector has the potential to generate upwards of $600 billion of profits over the next 10 years.
These stats are based on our current relationship with social enterprise. We could have exponential progress above this if we intentionally align our economy with a moral compass that encourages us to look out for our next generations just as much as ourselves.
My clients like InVenture, ONEHOPE, and Plebys International (the first investor in WaterHealth), show me over and over again that the model endures because it is affordable to consumers, profitable to businesses, and puts in at least as much as it took out of society. But like any business, they require a great team and sufficient capital. Talent is abundant. Funding for social enterprises is not. Shortsightedly, most investors see a social enterprise as nothing more than a sexy charity. They miss the sustainable, win-win gold-mine entirely.
Let’s capitalize on the civic mindedness of the Gen Y’ers – the generation that raised Blake Mycoskie of TOMS Shoes to celebrity status.
So---budding entrepreneurs, solve pains in the market in creative ways to have a social impact other than simply creating profits and jobs.
Consumers, be discerning and support companies that commit to giving back.
Investors, pony up and fund the true innovators of our time.
Constituents, demand tax reform that makes getting funding easier and reflects that social enterprises take on tasks typically set aside for governments.
To be sure, there are those who will mark this challenge as some Pollyanna pipe dream to shift the fruits of business into the hands of the 99%, or at best, as commendable efforts best left to a noble few. This doesn’t have to be marginalized as a hippie cause; it can be a path for vibrant economic reform. All such ways started with the particular few who stood on the side of justice – women’s suffrage in the early 20th century, civil rights in the 60’s, social entrepreneurs of today.
We are at the precipice of great change and if we are mindful, we can capitalize on this opportunity to make social justice so integrated into our economy that they are one and the same. Social entrepreneurship is the game-changing piece to create tremendous economic and social reform.