Fair-Startup – The future of social entrepreneurship

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This blog post was written by Jean-Louis Laporte, founder at Spotrotter (Zenkeri) at Start-Up Chile (Gen 8.2). You can email him at contact@spotrotter.com. This was originally posted on fairstartup.com

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When it comes to social entrepreneurship, everyone agrees to support your cause but you will hardly find any investor to back your project. This is because most people don’t believe in social business as a way of building the next billion dollars company. They might be wrong. And, even if they were right, I humbly think that this confusion raises another concern. Do we need more startups to join the very exclusive club of one billion dollars companies, which glorify the Unicorns and fill the pockets of just a happy few? Or, do we just need an initiative to nurture one of a thousand one million dollars companies, improving millions of peoples’ daily lives? I don’t want to fall into the ‘Wall Street versus Microfinance’ trap here, because it’s not that simple. But, I would like give more credit for local, social and fair entrepreneurship in general. As Richard Branson said, “entrepreneurship isn’t about selling things – it’s about finding innovative ways to improve peoples’ lives”.

SHOW ME THE MONEY, SOCIAL ENTREPRENEUR

Social entrepreneurship is commonly associated with the voluntary and nonprofit sectors, a fatal mix-up. The fact that social entrepreneurs take into account a positive return to society does not make financial and social benefit mutually exclusive. The principal rule of entrepreneurship would argue that to start a business you have to solve an existing problem. Then, the bigger the problem is, the better the business opportunity should be -Right? Addressing a major global challenge should be the Holy Grail – be it regarding the social solidarity economy, the environment, or any mission served with an eye on sustaining broader social progress or a responsible cultural goals. So why is it still so hard for social entrepreneurs to achieve their dream?

Possibly, it’s hard because it takes time to make the liberal switch to sectors that used to rely on subventions and donations. As Richard Branson said, “Entrepreneurs often struggle to raise seed money for such ventures, as it is far tougher to get funding for social enterprises than their commercial counterparts, despite the fact that the financial returns can be just as big.” I would even say that “the financial returns can be bigger.” So please feel free to show us the money, social entrepreneurs! More and more companies are trying to tap into the estimated trillions of dollars in opportunities at the bottom of the pyramid. A few of them are becoming successful, and I bet in short many more will be. Social entrepreneurship doesn’t imply a charitable motto.

FAIR TRADE, NOT FAIRY TALE

Private companies are looking for a meaningful goal to pursue. This is not only because they really want to defend a cause, but because they need to stand out as visionary organizations to better attract employees and customers. All the tech giants are putting social technology to work on a global scale. Facebook doesn’t only want to make the world more open and connected; they want to bring the power of the internet to every person on earth. For example, Google.org is the charitable arm of the search engine, which started back in 2004, has the vision of investing $1 billion in projects that deal with climate change, global public health and global poverty. We are not talking about just a “buy one, give one” marketing mechanism of some sort. We are talking about social consciousness within the biggest players in our modern society which is a result of the growing power of socially and environmentally conscious consumers. This allows the rise of the social intrapreneur. And all this is blurring the line of demarcation between social enterprises and traditional businesses. Democratizing philanthropy challenges both the nonprofit and for-profit sectors, making social entrepreneurship even more relevant and essential for tomorrow. Without an end-goal that makes sense for the human race, any organization is not viable.

Is Facebook just trying to rule the world through big data mining or is it really trying to put the World Wide Web in the hand of every human being? Is Google really on its way to monopolize nanotechnology, the bio-engineering, or computer science and the internet of devices? Another possibility is that it shaping the “smartman” of the future through a wise mix of cognitive and artificial intelligence? I’m not a pessimist nor a conspirationist. I sincerely believe in successful entrepreneurs’ ability to do good and not just fit in with the picture. In the end consumers are getting more and more skeptical against cash-machine tech pioneers turning into Transhumanism leaders.

I think this makes the case against recent protests against the tech industry. We’ve been living too much under a full tilt innovation-driven culture during the past decades. We’ve been putting technological progress as the end-goal and totally forgetting about moral advancement for the society. Tech companies create stuff that we don’t need; only targeting the top of the pyramid, the early adopters of the global consumers market. They try to disrupt the market but sometimes only create pointless products or services, spending a huge amount of invaluable resources to draw in, money, and talent to gain enormous media fanfare. What is more, I am sorry to hear smart entrepreneurs trying to replicate the all-in exit strategy of what we excessively call “social app hits”. Hopefully corporations and governments are becoming more earnest in their support of social entrepreneurship. Social entrepreneurship is still a rough concept, where everyone used to see it as a way to serve different business-or-not-related purposes. The trend we see is that more and more social entrepreneurs are really fighting to put social improvement into their venture, from conception to business development, to management and ultimately make a global impact. And that is the idea behind the Fair Startup model.

THE FUTURE IS NOW WITH FAIR-STARTUPS

Many significant trends are demonstrating that the startup model is reinventing itself to make the world better. The crowdsourcing ecosystem has launched a revolutionary means to make ideas happen. The sharing economy has nurtured an innovative way to make the most of existing assets. The crypto-currencies have opened a new way to rethink the monetary and payment system through peer-to-peer and decentralization. I’m not saying that all startups operating in those markets are fair, but that they have a solid basis to be so and it’s up to every founder to go further.

Social entrepreneurship is getting more organized year after year. Now is the time to begin marketing. Collaboration between social enterprises is increasing. The first success stories are bolstering a positive networking effect. Some game-changing investors and gov-funded structures are getting their hands dirty. The Fair Startup model is on the rise.

Now let’s make this idea break out of the startup scene and go beyond. As Muhammad Yunnus said, “All human beings are entrepreneurs. When we were in the caves, we were all self-employed… finding our food, feeding ourselves. That’s where human history began. As civilization came, we suppressed it. We became “labor” because they stamped us, “You are labor.” We forgot that we are entrepreneurs.” And he added, “Human beings are much bigger than just making money.”

 

I have been involved in social entrepreneurship for several years now, managing both a company and a NGO back in France. Now, I’m launching my own startup within the Startup Chile community, trying to fulfill both my for-profit and non-profit expectations in one single venture. I had the chance to meet with many inspiring social entrepreneurs, in Europe and recently in Latin America. I sincerely love the fresh and pioneering mindset here in Chile. I’m sure we could bring up a “FAIR-STARTUP” model and I have the deep feeling that we can make this concept go one step further and engage more social entrepreneurship advocates in this venture. Lastly, I’d be glad to read what you think in the comments, and maybe get your input during the upcoming event during the upcoming event ( www.thesocialeventchile2014.com)  I’m organizing on 8th and 9th April in Santiago, Chile, to kick off this movement.