The Three Most Important Things for Social Entrepreneurs
To make an impact, social entrepreneurs need to remember three important things when starting out.
1. When in the trenches, there is no difference between social entrepreneurship and entrepreneurship.
It’s easy to get caught up in the mission of a social venture, but at the end of the day, the only thing that matters is finding product/market fit as fast as possible before you are out of runway (i.e. money). Don’t get me wrong. I’m not trying to trivialize the value of your mission. The hard truth of the matter is that without a solid business model, your impact will be minimal, or at the very least, much less than it could have been if you had a thriving business. It’s worth it to you and the success of your mission to think of yourself like an entrepreneur from the beginning, and act like one.
2. You will be wrong about everything.
The most common story in all of entrepreneurship is “we thought we would do X, but we ended up doing Y instead.” When you start your social venture you start it with a hypothesis about a workable business model that will create some benefit. You are almost certainly wrong about your first hypothesis, and that’s okay. You might be wrong about #2 through 10 as well. The real trick is to fail forward.
Your job as an entrepreneur is to test your hypotheses about your business using as few resources as possible (including time!) to test as many of these hypotheses as you need, each getting better and more refined than the last, until you find what works.
This feels counterintuitive when the consequence of failure is not providing some valuable service to a community you care deeply about. Doctors have a healthy attitude towards failure that’s embodied in the idea “do no harm.” It’s okay to fail in order to learn. It’s not okay to fail in a way that leaves lots of people worse off than they were before they encountered your company.
3. The only way to learn is by doing. Research is relatively useless after launch.
I think of entrepreneurship as the art of marrying doing and thinking. But with some social ventures there seems to be a third discipline that entrepreneurs want to pursue - research. Research has a role to play in social ventures, but the best use of research is to help you come up with your hypotheses -- one that you will test once you launch your business.
There are two problems with research for social ventures that I have seen time and time again.
The first is that it should not come at the expense of validating your hypotheses in the real world. If you are a social entrepreneur with a research background, then you may be way more comfortable doing research than asking people to pay you for goods or services. That’s fine, but if you choose to be comfortable by learning 110% of what there is to know about your issue area as opposed to selling, you will go out of business. Get out of your comfort zone.
The second is that research is only valuable insofar as it’s a useful guide for your business decisions. In other words, it’s only valuable if it works in the context which you apply it. You think micro-credit will lift some demographic out of poverty because the research tells you it will? Great. Go validate it. There are a million ways you might be wrong in this particular case. Thieves may steal the cash. It might be impossible to find borrowers that are a good fit. There may be local laws that make it difficult, or you might not be able to raise enough cash to make the loans in the first place.
The research might tell you micro-finance is a great business model with positive social outcomes, but that research has to survive contact with reality too. Lesson: make sure your research works in practice.