Social Entrepreneurship: Week 3

• Week 3 is covering Social Entrepreneurship

Who's In?

• Active participation in class discussions is encouraged but optional
• It is important to understand the difference between intrinsic and extrinsic motivation
• If you wish to participate verbally, put your name is on a card
• The class will use the Random Socratic Method to guide discussions

Report Back

• MBA Social Entrepreneurship class visit
• Eliza and Rojeh will present

Group Project

• Students have already been assigned to teams. Check Quercus for group assignments
• Class time will be provided next week to meet, set goals, and establish deadlines
• Feel free to start communicating with your team members

Idea Review

• Last week covered ideas and seeding
• We covered defining social problems, objective and subjective features
• We differentiated between social and commercial entrepreneurship

Martin & Osberg

• Social entrepreneurship involves identifying an unjust and stable equilibrium
• It then shifts rather than tweaks it
• Social entrepreneurship includes testing, refining, and scaling an equilibrium-shifting change
• Social entrepreneurship results in a better quality of life for those operating within a system

Social vs. Commercial Enterprises

• Social enterprises primarily aim to create social value
  • Profits/revenue help them move forward the social aim
  • Examples of social enterprises are Embrace, and Fundación Capital
• Commercial enterprises primarily aim to create financial value
  • Social goals, help them forward financial aims
  • Examples of commercial enterprise are Facebook, and Google

Two Dimensions of Social Entrepreneurship

• Social value and financial value are the two dimensions
• The funding structure for social entrepreneurship relies on external funds, and sale of products/services
  • External funds can be Loans, Grants, Angel Investments, and own funds
• Social entrepreneurship is related to social value
• Commercial entrepreneurship is related to financial value

The Soc E'ship Landscape

• Social Entrepreneurs are not alone in addressing social problems
• Governments, activists, and social service providers also contribute
• Mapping the landscape, differentiates the players

Social Entrepreneurship in Historical Context

• Charities, religious organizations and social service organizations ameliorate the negative effects of the current equilibrium
• They apply balms to sore spots, but wholesale transformation is largely off the table

Varieties of Social Actors

• Social services are provided
• Activists/Advocates are present

SSPs, Activists, and Social Entrepreneurs

• Soup kitchens and clinics are examples of Social Service Providers
• Social Service Providers offer services within the bounds of existing approaches
• Social Service Providers attempt to change the existing system (equilibrium shift) rather than ameliorate the problem
• Nelson Mandela and Occupy are examples of Activists
• Activists influence others through pressure, media, consciousness-raising
• Activists speak the language of people in power, know how to work from the inside, and direct change

Other Players in the Landscape

• Bloom & Dees (2008) call this mapping the ecology
• Identify the players: resource providers, competitors, collaborators & allies
• The additional players are: customers/beneficiaries, opponents/problem-makers, "Bystanders" (no influence now, but might affect things later)

Bloom & Dees (2008): Self-Help's Ecosystem Map

• Environmental conditions include: Political and Administrative Structures - Community Reinvestment Act (CRA), Economics and Markets - Growth of mortgage-backed security market, Geography and Infrastructure - Relatively easy physical access to banks, Culture and Social Fabric - Distrust of creditworthiness of poor

Other Players in the Landscape: Key Ideas

• SEs should be aware who else is working in or shaping the space
• Is the space crowded? Resource-rich? Overpopulated?
• If you think something is a problem, others probably do, too
• Is it collaboration or competition?

Embrace

• It is important to consider main factors contributing to infant mortality
• It is important to know, what specific problem is the team addressing? Of what larger problem is this a symptom?
• Can India be a strong market for incubators?
• Are there other market players?
• What are you concerned about?
• Reverse innovation is required
• What are Embrace's competitive advantage(s) relative to GE?
• Is this advantage sustainable?

Embrace: Timelines and Stats

• Embrace was founded in 2008 as a nonprofit organization
• In 2010, Embrace partnered with GE
• In 2012, Embrace Innovations the for-profit social enterprise was launched to manufacture the warmer
• Today, Embrace warmers are being used in 20 countries across Africa, Asia, & Latin America.

Recap: Today

• Social entrepreneurs are not the only ones addressing social problems
• Historically, many groups & institutions have addressed social problems
• Today, many players create a landscape around a set of social problems
  • Social entrepreneurs
  • Commercial entrepreneurs (e.g. GE)
  • Governments
  • Social service providers
  • Activists
  • Others
• SEs need to be curious about their landscape
  • Who else operates in the space?
  • Is it crowded? Resource-rich?
  • Would you simply be duplicating what already exists?
• They have to ask: to collaborate or compete?
• The Embrace case highlighted a difficult choice
• Ultimately, SEs want to maximize social impact. This may be most effective via partnerships

Up Next

• The stem: building the intervention
• What does the SE actually do?
• What is the "theory of change”?