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Social entrepreneurship, or the creation of startups to address social and environmental issues, appears to be the future of business. Blending profits with purpose, social entrepreneurs experience professional and financial success by effectively serving others. Does social entrepreneurship sound like a path that you would like to pursue?
The 6 P’s of starting a social enterprise will provide you with a roadmap for becoming a social entrepreneur. Rooted in design thinking and lean startup principles, the 6 P’s simplify the process for launching a social venture.
1. People: Identify Your Target Beneficiaries
Social entrepreneurship starts with one simple question…
Who do you want to help?
From inner-city youth to low-income villagers, people around the world face substantial barriers to health, happiness, and opportunity. Social entrepreneurs build ventures to break down these barriers. However, unlocking resources and opportunities is no easy task since cultural constraints often stand in the way.
The best social entrepreneurs pick a population and gain an intimate, empathetic understanding of their lives. Conducting immersive market research, these entrepreneurs identify key objectives, struggles, and social norms within the population. By starting with the people, social entrepreneurs can leverage their human-centric expertise to target pressing problems and design creative solutions.
2. Problem: Select an Issue to Address
What is the most pressing problem for the people you seek to help?
People’s lives are always full of problems, and the problems are often interconnected. Since social entrepreneurship is about generating meaningful impact, it is essential to focus on a significant problem. How do social entrepreneurs select the most pressing problems to solve?
Let’s look at an example. According to market research, women in remote villages face problems providing adequate nutrition, sanitation, healthcare, and education for their families. Additionally, these women would be better equipped to address all of the problems if they generated more income. A smart social entrepreneur would empower these women to earn more money so that they could begin fulfilling her family’s needs.
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3. Plan: Develop a Social Enterprise Strategy
How do you plan to solve the problem?
The next step in starting a social enterprise is to create a solution plan. Using ideation and research processes, social entrepreneurs plan out solutions that will be effective, sustainable, and (ideally) profitable.
Rather than developing extensive business plans, smart social entrepreneurs create concise models to help identify key assumptions, the unknown factors that could jeopardize their solutions. Planning tools, such as the business model canvas, are extremely valuable during this stage.
4. Prioritize: Examine Your Business Model
What are the most critical assumptions in your plan?
Innovative solutions always contain unknown factors. Social entrepreneurs must fill information gaps to refine and validate their solutions, but they cannot afford to waste precious time and resources gathering endless information. To nimbly launch a social enterprise, entrepreneurs must identify the most critical assumptions to test.
For example, a social entrepreneur who seeks to help women in rural villages generate more income may want to improve the women’s agricultural revenue with higher value crops and improved farming techniques. Here are some assumptions that the social entrepreneur could test:
- Can higher value crops be grown in the women’s geographic locations?
- Would the women be willing to alter their farming practices?
- Do better farming techniques exist than the women’s current ones?
- Would it be possible to teach the women new farming techniques?
- Is there a local/regional market for more crops and/or new crops?
- Would revenue increases be greater than cost increases?
- Can the social enterprise afford to deliver the proposed solution?
As you can see, there are many potentially critical assumptions…
Which one would you test first?
5. Prototype: Test Your Business Model
How can you test your most critical assumptions in the cheapest and fastest way?
The Lean Startup methodology teaches tech entrepreneurs to build minimum viable products (MVPs) to test key assumptions in their solutions. In the world of social entrepreneurship, developing effective MVPs/prototypes can substantially accelerate the problem-solving process.
Strong MVPs are not finished products. They contain essential solution features, and nothing more. The main idea behind prototyping is to use small experiments to test key assumptions.
During this stage, social entrepreneurs strive to gather information, rather than deliver full-fledged solutions.
6. Pursue: Develop Your Social Enterprise
What worked, and what failed?
After the prototyping stage, social entrepreneurs take time to evaluate their MVPs and gather market feedback. They identify correct and incorrect assumptions so that they can pursue solution features that work and redesign ones that do not.
Social entrepreneurship is an iterative process, so entrepreneurs will continually refine their solutions, cycling back from the prototyping stage to the planning stage. Ideally, social entrepreneurs will eventually validate their solutions and proceed to deliver them at scale.
Get Started with Social Entrepreneurship…
f you enjoyed this post, you may want to consider enrolling in Social Impact Startup, Social Sector Network’s course on launching a social enterprise. In this self-paced online program, you learn the step-by-step process for starting a social enterprise. Plus, you’ll receive one-on-one mentoring!
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