Creating good: the rise of the social entrepreneur I find out what the world needs, then I proceed to invent it. –Thomas Edison The leaders of large global corporations, like those mentioned in the previous chapter, are only one part of the story behind the overall move to social responsibility and sustainability. Alongside powerful business leaders reassessing their role in society and acting for the greater good are scores of people, many of them young, who have decided financial profit is not everything and are starting brand new ventures. And there are also those at the heart of the developments in technology and social media itself. I would define them all as social entrepreneurs. And the world of big business has many lessons to learn from them.
But I do believe that the leaders of large international companies not only can but should be included in the definition of social entrepreneurs as well. The Oxford Dictionary defines an entrepreneur as ‘a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so’. I would argue that to take some of the biggest companies in the world and lead them down a socially responsible path, when the financial case and return for shareholders is as yet unproven, is as entrepreneurial as anything that you will see in the business world. Entrepreneurship is also not tied to small-scale business; some of the most successful entrepreneurs created the world’s biggest businesses – people like the late Steve Jobs and Sir Richard Branson, along with many others. Big business leaders have a critical role to play and they must be encouraged to be social entrepreneurs within their own companies, because the key to making social responsibility mainstream is ensuring it is a sustainable and potentially profitable proposition. In this chapter we look at four main types of social entrepreneur: –Those behind businesses that were founded in or around social media, with open business models. Jimmy Wales (Wikipedia), Craig Newmark (Craigslist), Andrew Mason (Groupon) and Mark Zuckerberg (Facebook) are all good examples. –Those in established, often huge companies, who are driving their businesses to be much more socially responsible, either from the top, such as Unilever’s Paul Polman and Walmart’s Mike Duke, or from within, working to convince the wider organisation. –Those running businesses that put social responsibility at their core when created. John Replogle, former CEO of Burt’s Bees, Yvon Chouinard, founder of Patagonia, Bono and Bobby Shriver, who created RED, and Anita Roddick’s Body Shop all fit in this category. –Those playing at the intersection of social media and social responsibility. This group includes initiatives such as One, Pants to Poverty and newer entrants like Facebook founder Chris Hughes’ new business Jumo, which has recently merged with GOOD and aims to connect people with causes. This group is where I believe we will see more and more examples being created over the next decade and from where I believe the next Facebook or Google may come. Together, these four types of social entrepreneur are transforming modern business and driving social responsibility to a new level.
Social Media Entrepreneurs
Mark Zuckerberg, one of the richest entrepreneurs in the world, wasn’t motivated by monetising Facebook. But the history books, read on whatever version of Kindle is around in 100 years, will portray him as one of the most important entrepreneurs in the revolution we are living through and Facebook as a major driver of societal change. Although, as Doug Richard amusingly commented, little did Zuckerberg know, that in his desire to get a date, he would change the world. The industrial entrepreneurs of the second half of the twentieth century were (generally speaking) focused on financial gain; in the new world the social entrepreneurs of the twenty-first century are focused on social change. If you compare today’s entrepreneurs with those from even just the previous generation, there are massive differences. People like Zuckerberg and his peers Jimmy Wales, Pierre Omidyar, (eBay), Andrew Mason and Craig Newmark place openness, sharing and collaboration at the centre of what they do, whereas their predecessors made ownership and closed business models their foundation. Zuckerberg, for example, simply gave Facebook to everybody who wanted to join. And I would argue that if he had charged for access, Facebook would more than likely have remained a small niche network shared across some privileged Ivy League colleges. But he didn’t – his is a free distribution model (for users, at least) and that is what he and his peers have in common. They scale their businesses by allowing easy, free access.
Zuckerberg is also probably the best example of the dramatic change in the importance and power of young people in today’s world. Imagine explaining to people a mere decade ago that Time magazine’s person of the year 2011 and star of the 2011 G8 meeting would be a 27-year-old – who actually only attended the G8 on the basis that he was granted a one-on-one meeting with each of the leaders of the G8 countries – and that this 27-year-old had become the youngest billionaire on the planet at the age of 24 on the back of a business he had launched when he was just 20 years old.
Groupon’s founder Andrew Mason began his journey as a social entrepreneur by founding The Point, which united people around collective action and fundraising. The idea was that people should do well or do good, but only when it matters. As its website explains: ‘Whether you’re asking people to do something or give money, people only contribute if they think it makes a difference. On The Point, all campaigns have a “tipping point” – people pledge to give money or do something, but no one does a thing until the conditions are met to make contributions worthwhile. That way, you can gather all the resources needed to be successful before anyone is asked to take action’, and so only when sufficient numbers of people had signed up for a cause of fundraising donation did any action occur. From production-led to consumption-led
The Point was intended to help people congregate around issues they cared about, but it didn’t take Mason long to realise that he could deploy the collective power of the group to commercial aims to get discounts from local businesses. This formed the basis of Groupon: collective bargain hunting. The potential for Groupon and similar businesses is enormous. Whether it is uniting the power of massive groups of people to drive huge cost-savings for consumers or taking advantage of location-based technology for hyper-local deals, it has the potential to change the dynamic of producer– consumer relations. And if the Industrial Revolution was a production-led revolution, then the social revolution will be a consumption-led one.
It’s perhaps also not surprising as we talk about the need to do well and to do good in today’s world that the inspiration for Groupon, the fastest business in history to reach $1 billion in revenue, came from a business that was designed entirely around doing good. In the twentieth century businesses set out to do well and then sometimes later focused their attention on doing good. Here is a business leader who has done well because he set out to do good.
While the main business of companies such as Facebook, Twitter, Craigslist, Groupon and Wikipedia may not be focused on providing aid to those in need or in alleviating poverty, like some of the businesses we look at later, these businesses are inherently social because their core is all about bringing people together, and in many cases it is also their interaction and connectivity that is giving a voice to millions and helping to drive positive change.
We can see the impact social platforms had in the revolutions and protests that swept the Arab world in spring 2011, where the combination of technology, youth and offline protest caused previously unshakeable regimes to topple – and it was a real sign of this new era that a key figure in Egypt was 30-year-old Wael Ghonim, a Google employee leveraging Facebook to help spark the revolution with the ‘We are all Khaled Said’ page. In recognition of the group’s importance in the Arab Spring uprising, Ghonim was named in Time magazine’s ‘Time 100’ list of the 100 most influential people of 2011. The role of social media was critically important in showing people that they were not alone, in organising them, in uniting large groups behind the movement – and also in helping it cascade, like digital dominoes, from one country to the next. Businesses such as Facebook and Twitter are social businesses in the sense that the social media platforms they have created and made available to all have empowered millions in all kinds of ways, and their collaborative mindset is at the heart of the social revolution.
They are creating social change at an unprecedented rate and this will only continue to accelerate.
Social entrepreneurs from big business
Not all global businesses are headed by forward-thinking leaders like Unilever’s Paul Polman or Marks & Spencer’s Sir Stuart Rose, who are themselves social entrepreneurs given the entrepreneurial changes they are driving through their companies. But within large corporations there are often senior executives who understand that a move towards social responsibility and sustainability is the way forward. At the Global Social Business Summit in Germany in 2010, delegates were predominately from the non-profit sector, but there were also a number of people from major corporations looking for ways to adopt social business initiatives and apply them to their own businesses. A senior executive from one of the world’s top consumer goods companies said that he was looking for ideas about sustainable ways of creating social benefit. He shared that the global company he works for had shrunk its corporate social responsibility budget during the downturn and that it was now restricted to straightforward philanthropy in the form of charitable donations, disaster relief and the like. He said his biggest issue, as an individual working in a huge organisation, was how to move socially beneficial activities from being part of a siloed CSR operation to being part of the wider business, how to do that in a way that was sustainable, and – most difficult of all – how to convince the wider organisation that it was not only possible but also desirable.
It is one thing when the chief executive of a big company is sold on the premise of socially beneficial business, but there are some companies where those leading the decision-making process are not completely convinced. This makes it incredibly challenging for an executive in that company to get a green light even to experiment. Clearly, not every business in the world is going to come on board. If executives are frustrated by the lack of willingness within their organisation, then there is another option: if you can’t change the company, then change company. Nevertheless, I have personally seen a number of executives who have, over time and through dogged persistence, eventually convinced the rest of the company to come round to their way of thinking. And as the world heads increasingly in this direction, it will become easier to win the battle. The executive at the summit said he was considering various options but that he didn’t really want to operate a distinct ‘pilot scheme’ set to one side of the business. He wanted to understand how to make what he called the ‘jump’ from sidelined CSR to incorporating social value into the mainstream business. ‘I need to know how to create social benefits in the markets that I am already in and with the products I am already selling,’ he said.
While an understandable reaction, a pilot scheme is one way of experimenting to get proof of success: Adidas and Danone are both operating social business schemes, set up as discrete business units. The Danone scheme began after a meeting between Professor Yunus, founder of the Grameen Bank, and Franck Riboud, chairman and chief executive of Groupe Danone, which resulted in the former convincing the latter to invest in a social business. The business provides fortified yogurt to malnourished Bangladeshi children.
One of the benefits of entering the Bangladeshi market and South Asia, where Danone previously had no presence, is that the company can learn more about the market and then apply those learnings to the broader business. So while the social business itself is thought to still be making a loss and has attracted a number of critics, there are other benefits to Groupe Danone. It can also provide valuable learnings, as we have seen from the case of Groupon and its predecessor The Point. In another example Adidas has also embarked on a joint venture with Grameen, which sells shoes to poor people in Bangladesh for less than one euro a pair. The mission of the Grameen–Adidas company is to make sure that no one, child or adult, goes without shoes.
French water company Veolia has launched a joint social business with Grameen to serve poor people with nutrition and safe drinking water. Germany’s BASF SE and Intel of the USA have entered joint venture social businesses to produce chemically treated mosquito nets and provide information and communication technology for poor people, respectively.
These schemes are not without their critics, and commentators often query the ‘purity’ of motivation behind some initiatives that involve big business. Some dismiss them as ‘tactical’ and are sceptical that big business is fundamentally committed. It is easy to criticise a big brand attempting to do good on the grounds that there is something ‘in it’ for the brand. I would say, firstly, who cares what the motivation is, or whether there might be some benefit to the brand, if the end result is good and creates positive change in the world? Secondly, the whole point is actually that there must be some positive benefit to the business or brand. If we truly want business to change, then socially beneficial business must add value to the company, otherwise it will be impossible to convince the more reluctant companies, shareholders and board members that it is a viable route.
One senior executive working on Adidas’s footwear project in Bangladesh described difficulties with NGOs, financial institutions and consumers in developed markets who question how committed big business really is to being part of changing the world. I want to restate my concern about the potential danger that as business genuinely tries to be more responsible, rather than embracing and encouraging that, NGOs and other parties actually distance themselves and criticise the attempts, thereby acting as a major dampener to the movement. Obviously, business needs to be genuine about it. But if it is, then its efforts should be welcomed. I am not suggesting that there should be no scrutiny or accountability, far from it, but if real people who are in need are getting real help in a transparent way, then this has to be a good thing. My view is that these early drivers of a change of focus within the corporate sector and change for social good should be encouraged at every step.
Yes, there will be failures. No, not everyone’s intentions will be as good as they should be. But only the inclusion of the corporate sector in the development of social business will ensure that social business, as a concept, will become truly mainstream and really can help effect positive change in the world.
Social responsibility at the core from the start
Some businesses were created with socially responsible values at their core, and in some cases as their entire raison d’être. Outdoor clothing company Patagonia, launched more than 40 years ago, was founded with an ethical and sustainable approach, which at that time was almost unheard of. Its founder Yvon Chouinard insisted on sustainability, proper employee care and products that were designed so that they would not need replacing. The company donates 1% of sales revenue to local environmental groups and in many ways is a model ethical business.
Other businesses, such as Whole Foods and Burt’s Bees are good examples in this category of businesses created on a platform of social responsibility. Burt’s Bees was founded as a company making home-spun natural products. Now owned by chemical giant Clorox, Burt’s Bees was, until recently, led by CEO John Replogle, who joined in 2006 and drove the business to an even greater level of social responsibility, proving it is possible to incorporate socially beneficial activity in a profit-making business.
He led a business that acts transparently, producing natural products in an environmentally sensitive way, and is an active member of the local community of which it is a part. The company has worked with local initiatives to help build homes and a playground for an affordable green housing community in North Carolina, where its headquarters are based. It recently achieved zero waste to landfill status and intends to be a totally zero-waste business by 2020 – a pretty remarkable achievement if they manage it.
Replogle talks about the impact this kind of activity has on employees. He believes that most people want to be good and do good things; all they need is to be given the chance. He says that he doubts whether many of Burt’s Bees staff could tell you the revenue figures in the company’s results, but every single one of them would be able to talk about the playground Burt’s Bees staff built in the local community. The result is that Burt’s Bees is a company whose staff feel passionate about working there and have become powerful supporters of the business. They spread the word without being asked to. Overt consumerism meets social responsibility: looking good and doing good RED is another interesting example in this space. Set up by Bono and Bobby Shriver, RED pioneered a new business model that created a continuing flow of money from the private sector to raise awareness about HIV and AIDS, by working with corporate partners to produce specific RED products. Apple, for example, created a RED iPod and Nike, Gap, Amex, Converse, Starbucks, Dell and many other brands have been involved, contributing up to 50% of all profits on RED products to the global fund. RED has been criticised by some for a lack of transparency and for too much money being spent on marketing, but it’s an interesting and pioneering example of putting overt consumerism alongside doing good. As its mission statement reads: ‘RED is a simple idea that transforms our incredible collective power as consumers into a financial force to help others in need.’ The progressive business model was perhaps ahead of its time when RED was launched in 2006, but conscientious consumption is absolutely what people are looking for today. We are now in a decade where if you don’t start to do this kind of thing, consumers will increasingly vote against you with the way they spend. I personally think RED’s best days are ahead of it: if they manage to retain momentum and keep people interested, they will have a more successful story in this decade than they did in the last one. Irrespective of RED’s critics, the $175 million they have raised since launch cannot be sneered at.
The intersection of social responsibility and social media – the movement generation The fourth group of social entrepreneurs is perhaps the most interesting and represents the future.
Some are founding enterprises based on principles of transparency and social responsibility; others are creating their own models where profits are shared across all stakeholders. These, often young, social entrepreneurs are driven by a desire to make a difference. It is very common for them to be able to pinpoint a pivotal moment that changed the way they viewed the world or provoked sufficient passion in them to transform a passing thought into concrete, tangible action. In many cases, this has been as a result of global travel, where they saw some of the bigger issues facing people in different parts of the world or simply found the time to get a different perspective on life. Opening themselves up to the world inspired them to create and innovate. My own trip as a 16-year-old around India opened my eyes to the lives some of the less fortunate people in the world have and was a major factor behind my albeit small efforts to do good.
Adam Braun founded Pencils of Promise, a charity that builds schools in conjunction with the local communities in locations where there is a great need for education. His moment of truth came on a backpacking holiday when he met a child begging on the streets of India. He asked the boy what he wanted most in the world. ‘A pencil,’ was the reply.









