When most individuals think of creating a startup, they dream of the riches that have been accumulated by the likes of Mark Zuckerberg and Bill Gates. Increasingly, when the Millennial Generation thinks of creating a startup, they are not only looking at the financial gain of such an endeavor, but are also looking at how the startup benefits society.
While the concept of a socially beneficial corporation has been around for centuries, the interest and demand for socially conscious startups has recently steadily increased. There are an increasing number of entrepreneurs who are attempting to fulfill both their passion and their dreams of working for a startup while keeping a firm grasp on their personal morals.
Social entrepreneurs are an interesting and, in many respects, a hard-to-define breed. Their principles do not fit neatly into the predefined parameters that have been established in for-profit entrepreneurship or charitable organizations. These constantly evolving principles of social entrepreneurship include:
(1) It's Not Just About The Financials: Social entrepreneurs are attempting to balance the altruistic purposes of their startup with the financial requirements of running and growing a business. Indeed, many social entrepreneurs are adopting concepts such as the triple bottom line (e.g. profit, people and planet) into their social startups to demonstrate that one can have a successful startup while benefiting society as well. These two concepts aren't mutually exclusive.
(2) Merging Personal Ideals with Professional Ones: Increasingly, thanks to the millennial generation and the wild success of startups, an epiphany has emerged where there is increasingly no need to subsume one's personal ideals for professional ones. Today's workforce knows that life is too short and their careers are even more precarious due to automation and outsourcing. This allows the workforce to increasingly demand that their work is compatible with their personal values. No longer are individuals going to subsume their hopes and dreams to "pay their dues" when so many individuals have demonstrated they can fulfill their dreams earlier.
(3) Building a Sustainable Business Model: Many social entrepreneurs are attempting to use market-based metrics and concepts to disrupt the non-profit sector. Instead of relying on government or foundation grants, many social entrepreneurs want to demonstrate that startups can help solve a social problem while also being financially self sustaining. Indeed, while many social entrepreneurs would like to completely solve the societal problems they are attempting to address and eventually put themselves out of business, they know that such dreams will take a significant amount of time, resources and effort. As such, building a self sustaining startup that is capable of addressing the needs of society over time is perhaps the most prudent course of action.
(4) Bringing Tools to Help a Greater Number of People In Need: For centuries, the non-profit sector has provided the necessary aid and comfort to those in need. Unfortunately, with the current economic paradigm undergoing a dramatic and fundamentally profound shift, the need for the non-profit sector has never been greater. As such, to ensure that the non-profit sector has the capabilities to keep up with unprecedented demand, it is critical that new ideas and new concepts are brought into the non-profit sector, which is what social entrepreneurs are doing.
(5) Building New Bridges Between For Profit & Non Profit: Due to the changing work attitudes of the millennial generation, the lines between the for-profit and non-profit sectors are slowly disintegrating. As such, new and highly beneficial bridges between the for-profit and non-profit sectors are being formed. These bridges include new concepts, new resources and new ideas that are beneficial for both sectors in order to humanize the new developing economic paradigm.
While social entrepreneurship is a noble calling, it is also a relatively new endeavor that has not been fully tested on a significant scale. As such, being a social entrepreneur means a number of drawbacks and issues will be encountered, including:
(1) High Degree of Skepticism Concerning Untested Models: The separation between the non-profit and for-profit sectors has been in place for decades and has a successful track record. Each sector has its specific key performance indicators (KPIs) that have stood the test of time and have worked for decades. The merger of non-profit and for-profit models is a recent development and lacks the same track record as the established model. As such, social entrepreneurs will not only have to prove that their startup is successful, but also the business models they are based on.
(2) Limited Resource Availability: The number of incubators and accelerators continues to grow on a global basis, but the number of incubators and accelerators dedicated to social entrepreneurs is still small and in its nascent stages. While significant resources are being poured into social media and other hot industries, social entrepreneurs must continue to push forward with their startups as resources are slowly built up.
(3) Complicated Morale Conundrum: One of the most significant issues with social entrepreneurs is balancing the continuing success of the social startup while maintaining its altruistic purpose. In traditional startups, growth is key and thus the operational focus remains tightly on user growth. With social startups, it is not user growth that needs to be managed but the growth of the organization itself. Growing organizations lead to growing payrolls and expenses. With social startups this could mean a perilous morale conundrum if an increasing amount of funds are diverted away from the primary social goal towards operations.
Even though social entrepreneurship is in its infancy, it is increasingly a reality in today's dynamic economy. Thanks to the growing desire of the Millennial Generation to work in an environment that not only fits their personal values but also gives back to the community, social entrepreneurship will continue to grow in stature and importance.