I would like to preface this entire post with saying that for the past 4 or so years I have been preaching the gospel of social entrepreneurship, social innovation, social enterprise, ice creams socials, etc. However, after really diving into this space, looking at more business plans and seeing the questions investors ask, I’m wondering when we’re gonna drop the “social”.
Let’s be honest with ourselves, the hype around social entrepreneurship and impact investing is overkill. This is not our silver bullet to solving all the world’s problems. In fact, the hype is detrimental to these businesses. Too much is expected out of these ventures. High returns, lifting thousands of families out of poverty, oh yea, and staying in business. Furthermore, most of these businesses are built around selling a product. At the end of the day, the people at the Bottom of the Pyramid can only buy so much.
Of the businesses that are successful and really are able to make money and provide a product or service that helps lift people out of poverty or improves their lives in some meaningful way— what is the difference between those businesses and your normal, run of the mill company? Both have found a opportunity to provide something that people are willing to pay money for. The former is not supposed to be an asshole, but really the latter shouldn’t be an asshole either.
Are we putting the social in front of enterprise in order to allow for a shittier business with far smaller margins? At the end of the day, to survive and especially to get funding, you need a solid business, that maintains market rate returns. So maybe we should drop the social, look for market opportunities and all stop being assholes.
**These are just some initial thoughts I have that I may or may not believe next week. This article from the Economic Times started me on this brain tangent. Let me know your thoughts and maybe I can actually form an opinion.**