An social entrepreneur is someone who actively develops and launches a business; a person that founds a company upon an idea, aspiring to provide better solutions, create an efficient product, or benefit their industry.
There are many motivations for becoming an entrepreneur. Some strive for financial gain, and others seek humanitarian support rather than profit-making.
Many also define entrepreneurship differently. Are you founding a business if you don’t have any products? What if your business focuses on social issue projects rather than goods and services?
No matter how many definitions you may have for “entrepreneurship,” we can identify at least two distinct types: Traditional, also known as business entrepreneurship, and social entrepreneurship.
How are business entrepreneurs and social entrepreneurs different?
Social entrepreneurs, like business entrepreneurs, follow a path to success. They both exercise their passion for innovation and business by exploring new business concepts, creating products, and of course, making money along the way.
Profit and motivation
Despite the similarities, there are a few noteworthy distinctions of social entrepreneurs. Rather than creating a product for profit, social entrepreneurs create a solution for a social problem and then make money to sustain the solution.
This is how they change the world: social entrepreneurs and the power of new ideas. Social entrepreneurs prioritize fostering positive changes in society.
The difference between social and traditional entrepreneurship is ambiguous in some situations, especially for humanitarian and aid-focused organizations.
Investors
In traditional entrepreneurship ventures, businesses often seek capital from venture capitalist firms, emphasizing return on investment over almost any other factor. However, startup social entrepreneurs seek funds from philanthropists who invest in businesses they connect with or wish to support. While a return on investment is necessary, an investor’s involvement is commonly deeper than a financial level.
Their definitions of success
How do you define success in a company whose mission does not revolve around profit? What is the appeal of social accelerators, and what do social entrepreneurs value?
Both business and traditional entrepreneurs work towards devising change, innovating, and disrupting their industries in the process. Following these behaviors, traditional enterprises measure success through money made. Profit is their priority.
Even though social entrepreneurs value their profit, these new-wave businesspeople measure success based on how effectively they can execute their vision. This is why social entrepreneurship is important in both our economy and society.
Regardless of their societal motivations, we are plagued with hundreds of well-intentioned social entrepreneurs that can’t get off the ground. Why do you think access to capital is an increasing challenge for social entrepreneurs?
Social entrepreneurship vs nonprofit organizations
You may think, “How is social entrepreneurship different from nonprofit organizations?”
Nonprofit organizations, also known as not-for-profit organizations, operate for social benefit. However, they must profit to be financially stable and pay their members.
In other words, nonprofit organizations conduct their activities for profit, whereas income is secondary to societal motivation in social enterprises.
Examples of social entrepreneurs
Let’s look at how social entrepreneurs rise to prominence and make change happen.
TOMS
While TOMS wasn’t the first social entrepreneurship organization, they were one of few that popularized the cause. In 2006, TOMS began the one-for-one social business model that for every shoe they sold, they gifted one pair of shoes to children in need.
Since TOMS launched the one-for-one program, they have donated over 95 million shoes to those in need. They have since expanded their social entrepreneurship scope to include safe drinking water, eye surgery, bullying, and safe births.
Lush
Lush is another well-known brand with prominent social business models. Lush proudly supports animal rights and similar causes as a vegetarian and vegan cosmetics brand. One of the primary ways lush commits to its mission is by strictly sourcing products from companies that do not conduct, fund, or commission animal testing.
Lush also has a “Charity Pot” campaign, which donates 100% of the proceeds to small animal rights and welfare organizations. Additionally, Lush exclusively tests their products on human volunteers before selling them to consumers.
Fifteen
Fifteen offers disadvantaged youths opportunities to create better culinary futures for themselves. Since Fifteen’s inception, they have delivered quality Italian food to investors, patrons, and people in need, trained over 200 young cooks in the art of good food and hospitality, and sources all of its ingredients from local sellers, and uses ethical restaurant and cooking techniques.
These brands show us how to change the world as social entrepreneurs. Even though many enter the entrepreneurship world for profit, there are countless opportunities for others to change lives, society and protect any aspect of our green planet they want.
