We asked each of our special guests for our March 4th chapter meeting on Social Ventures to answer a few questions prior to the event. Their responses are below (and will be posted at the venue). Check out their thoughts, come out to Cafe International this Wednesday, and help us continue the conversation!
WHO ARE THESE FOLKS:
Jonathan: Jonathan Harrison – Director, Rubicon National Social Innovations – (www.rubiconprograms.org/rnsi.html)
Leila: Leila Chirayath – Founder and CEO, SamaSource (http://www.samasource.com)
Alison: Alison Bailey Vercruysse – Founder, 18 Rabbits Granola – (http://18rabbits.com/)
(1) Why did you start this venture?
Jonathan: We believe that for social enterprise to have a significant impact on poverty and jobs in America, it must be re-imagined on a much greater scale. We are proving out nationally-scaled social purpose businesses which rely on market forces to achieve financial sustainability while maximizing social returns for working poor and disenfranchised communities. The goal is for community based organizations to have greater success building and scaling social enterprises throughout the U.S. and create exponentially more jobs, more impact and, in the green space, greater environmental impact as well
Leila: Small service businesses in poor regions create valuable jobs for skilled workers, but they lack the tools to connect to global markets. Producers of commodities and handicrafts have the benefit of fair trade labeling; as yet, nothing like that exists for services. After speaking with a number of tech entrepreneurs in Kenya who couldn’t find clients for their services because of geography, we decided to launch Samasource.
Alison: 1. I found that there was a disconnect between organic and “gourmet” food. Packaged food was either one or the other. With 18 Rabbits, I chose to elevate the category (granola and granola bars) while bridging gourmet and organic.
2. There also were no granola or bars in the market that I liked and made me feel good when I ate them.
(2) What aspect of your work most excites and inspires you?
Jonathan: I am most inspired by our trainees and employees — the folks who are trying to rebuild their lives one day at a time and despite the fact that they keep hitting roadblocks – no access to good jobs, to affordable housing, to decent social services, they continue to persevere. It is this resiliency of the human spirit to want a better life for oneself and ones family. We’re just building the scaffolding for major personal reconstruction—creating a decent job in a decent business with access to supportive services.
Leila: We’ve now brokered over $90K in contracts for small businesses in Kenya– many of our companies are owned by women, people from rural areas, and others who faced a very tough time trying to market their services on their own. It’s thrilling to know that our work directly creates jobs for skilled young people in very poor places.
Alison: My work demands that I continue to evolve and grow. Educating and inspiring others to follow their own paths. Having amazing customers who work with me to launch new products. Realizing the vision that I had when I started the company. When I let the universe work and then hear the buzz that comes as a result.
(3) What is the biggest worry or challenge that you face?
Jonathan: We are always challenged by a surplus of exciting ideas and opportunities that need to be tested on a small scale—prototyped in a way, and then abandoned if they don’t work. Our foundation and philanthropic funding sources are not accustomed to this kind of ‘enterprise r&d’ so we look to a small cadre of enlightened funders who will allow us to ‘fail forward, fast’ towards market-based solutions. I am encouraged that there are folks working on creating social investment marketplaces to match entrepreneurs with investors, but am worried that investor expectations for appropriate financial returns will leave out social enterprises that are highly labor intensive and generally low margin businesses.
Leila: It’s hard to name just one. I suppose the biggest challenge is raising seed capital for a venture that sits in the gray area between a charitable effort (to help skilled, poor people) and a profit-making business– though we’re incorporated as a nonprofit and charge very little for our services, some donors are turned off by the fact that we don’t work with the poorest of the poor, or that we make money. We believe in social business as defined by Mohammed Yunus– a venture that is profit-making, as opposed to profit-maximizing, and designed to solve a social problem.
Alison: Worrying and trying to control, rather than letting the business flow.
(4) What was the biggest surprise, or misconception, that you’ve faced?
Jonathan: We are a hybrid of sorts—one foot on the social benefit side, but the other with a business focus. From our bakery we learned that you can’t sell a lousy tasting cake with a good social mission. So, we go into our business meetings with for-profit value propositions and models. What surprises me is how often these prospective business partners are yearning to give back and participate on an internal staff level in business activities that make a difference. Workers are tired of the one day a year team building community volunteer model and want to find ways of integrating the core competencies of a business with social good.
Leila: The biggest misconception people have about Samasource is that there are no skilled people in poor regions. African universities graduate hundreds of thousands of young people each year who have no productive outlet for their talents in stagnant job markets. The OECD estimates that India alone has 130 million skilled workers who are under-employed. Wasted talent is endemic in poor regions.
Alison: Misconception: Profitability can be achieved quickly.
(5) What advice would you give to people who may be interested in starting a social venture but haven’t taken the first step yet?
Jonathan: These are a few highlights from a recent lecture I gave to Wharton undergrads–
* Starting a social venture is generally considered entrepreneurship without the financial upside; think about your life and how you see this growing venture fitting in to your long term plans—if it is successful it will consume you. (I mean that in a good way)
* Write a business plan, (sounds like eat your vegetables, but really, it helps)… it can be in slides, but get it in writing
* Start your own Board of Advisors- call your friends and family and associates and formally ask them to be on it—share the plan, ask for feedback and you may get money. Surround yourself with experts.
* Choose sustainability over self-sufficiency as your business model. Remember, if you are too profitable you are probably not a social entrepreneur.
* Share leadership but be prepared to lead for the long haul if you want the venture to be successful.
* Focus your innovation- you will be spread thin, don’t be too opportunistic.
* What the world does not need now is another 501 c-3 – find a strategic fiscal sponsor – another nonprofit you can align with. Let them do your payroll and pay them a small admin fee – concentrate on your program.
* As cooks know, the flavor is in the fat. Being a lean, mean social venture machine isn’t that attractive to funders and supporters when your core drivers are compassion for the poor or solving world hunger. So try to soften up, lighten up and always remember in whose name you are working so hard.
Leila: First, do your homework. It’s incredibly hard to start an organization and it’s not worth doing if you don’t serve a clear need with a unique solution. Second, be realistic. Secure a source of funding for a year so you can focus fully on your venture rather than on making ends meet. Don’t assume that you’ll get funding from foundations or VCs with no proof of concept– sometimes, getting to that point can take a year. Third, read Guy Kawasaki’s Art of the Start and Mohammed Yunus’s Banker to the Poor. Oh, and be prepared to sell your stuff, move back in with your parents, work out of a garage, and otherwise make sacrifices to get your venture off the ground– some of the best ideas have long gestation periods.
Alison: Not to sound trite, but you have to just do it. The more planning and preparation, the more you can talk yourself out of it. Be flexible, you may need to change courses a few times until you get the formula that will be successful in the marketplace. Be humble, while having a high self worth.
