Cheryl Conner
A guest post from my great friend Devin D. Thorpe, author of Your Mark On The World. A Cornell-educated senior executive with more than 25 years experience as an investor and in senior corporate roles, he made the major life decision a little more than a year ago to refocus his life, beginning with a year of teaching in China, leading to the rediscovery of a purpose-driven life. Now he is a social entrepreneur.
More and more, entrepreneurs are not satisfied with creating a business that delivers a great product, generates a profit and creates value (read wealth), but instead want their enterprise to directly impact a social problem from poverty to global warming.
Some social entrepreneurs are running for-profit businesses with a clear and specific social mission integrated into the business model while others are launching traditional not-for-profit businesses.
Blake Mycoskie, founder and "Chief Shoe Giver" at Toms epitomizes the movement, launching his "buy one, give one" shoe company in 2006 and quickly growing it to a $100 million annual run rate?and donating over 1 million pairs of shoes along the way.
In either case, planning for success mimics the requirements for success in any new venture: a plan, customer focus, and execution.
The Plan
The greatest fallacy in business planning is that there is a good template or software that will help you create a winning business plan. The very opposite is true. While there are some standard topics that must be covered in a business plan, borrowing language from a template or software is simply self-defeating.
The primary purpose for a business plan is not so that an entrepreneur can tell someone else about the plan to raise money, find customers or recruit talent it is so that the entrepreneur can figure out what the heck she's doing. The greatest insight I ever found in business plan writing is that if you can't write down how you'll do something you really don't know how you'll do it. Therein lies the real value of the business plan: it is the exercise an entrepreneur completes with her team to help figure out exactly what to do.
A great business plan doesn't have to be long; in fact, the shorter the better. It just needs to be complete. I've seen a one-page plan that was more complete than fifty-page plans. The plan needs to articulate the problem the business proposes to solve, a vision for how that will be accomplished, and what uniquely qualifies the enterprise to do that. The plan should also include an introduction to the management team, a marketing plan, a product development schedule, and financial forecasts, including cash requirements. Good business plan outlines are plentiful on the web.
Customer Focus
For a traditional business, customer focus is relatively straightforward. The customer is the person who trades her money for the product you sell. For a social venture, there could easily be three customers: 1) a donor or sponsor who derives little or no personal benefit from the exchange, motivated by altruism, 2) a traditional customer who buys a product or service from the business, and 3) a beneficiary of the organization's mission. All three customer types require focus and attention.
Some social ventures operate without volunteers, donors and/or sponsors and operate as for-profit businesses but nonetheless have a social mission. Virtually all not-for-profit businesses elect that status in order to make donations tax deductible because the mission of the enterprise can't be sustained without financial help from people other than those who receive the benefit. In such cases it is vitally important to identify those psychological rewards that donors seek when making donations. For some, it is recognition, for others connection to the mission. Ultimately, the company will want to create comfortable, rewarding ways for different sorts of donors and volunteers to get involved. Over time, success may depend on steadily increasing the commitment and involvement of the volunteers and donors.
For-profit social ventures depend primarily on traditional customers who buy a product or service that results directly or indirectly in a social good. Toms sells shoes with a promise to donate a pair; StartSomeGood helps start-up social ventures raise money; UBELONG places volunteers all in development opportunities around the world. All these ventures have to focus on the needs of their customers to provide a fair value in exchange for their products and services. In all cases, the social mission attracts customers, but they couldn't keep customers if they didn't offer a valuable product at a fair price.
Virtually all social ventures seek to help third-party beneficiaries who pay little or nothing for the help they receive. It is imperative that social ventures not lose sight of this group while focusing on the first two. The willingness of the first two groups of customers to participate in the social venture will depend in no small part on the impact the venture has on the intended beneficiaries of the venture. As social entrepreneurship grows in popularity, so does the criticism of some of the business models. Social entrepreneurs will do well to identify ways to help their causes in sustainable, fundamental ways.
Execution
It is tempting to argue that social ventures require flawless execution. The fact is, however, they don't. They don't need to do something better than anyone else is doing it; more fundamentally, as with any great start-up, they should seek to do something that no one else is doing.
If you tackle a problem that no one else has tackled or you approach a problem in a completely new way, comparisons go out the window. Just like the Apple II represented a completely new product, a personal computer that could be operated by a non-engineer, if you tackle a problem in a new way or tackle a new social problem, you can focus not on flawless execution, but simply on execution. If Steve Jobs had waited until he could release a MacBook Pro before he released a product, we would never know the company. Similarly, if you wait to launch your social venture until you can execute flawlessly or solve all of the world's problems, you'll never have an impact at all.
As Guy Kawasaki, the Silicon Valley guru, famously counseled, "Don't worry, be crappy." The focus of a new venture should be on getting to market. Early adopters will gladly accept flaws in a real innovation; the model can be perfected with scale. The same holds true for social ventures. Think of it this way, will the endangered species you save, care about the logo you use on your website? Will the starving child you feed, care about the thickness of your business card? Will the infant who receives life-changing surgery care whether or not you even have an office? Execute the best you can. Focus on what matters most.
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