Dreaming with Your Head Screwed on Tight: 10 Lessons from and for Social Entrepreneurs

By Carol M. Tuite and Miki S. Noguchi

You might have the fix to end world hunger, but if you haven't figured out how to pay your bills, no one will ever hear about it.

Mission, Model, & Money

The perennial question for social entrepreneurs: How to build a business model that achieves the trifecta of social impact, financial viability, and growth. Passionate people everywhere have come up with excellent (and not-so-excellent) ideas for improving people’s lives. But successful social entrepreneurs have identified both a game-changing solution to a market gap and a solid business model. A unique idea, financing, and patience are needed to build a successful social business that can go the full distance.

Built to Fail

After a year or two of slogging through, many entrepreneurs finally allow themselves to fail. Social entrepreneurs take on the extra burden of thinking they’ve also let humanity down. Sometimes the failure is because great ideas ≠ business acumen, sometimes great ideas ≠ true market knowledge, and sometimes the funding runway ends too soon after too many pivots.

Warning: Pitfalls Ahead

The best learning comes not only from knowing what to do but also from knowing what not to do. 10 lessons from the trenches for the aspiring social entrepreneur: 

The forecast for social enterprise has never been more favorable. Multinational companies are recognizing that “greenwashing” won’t cut it with ever more socially minded consumers. Environmental, social, and governance factors (ESG in corporate parlance) are increasingly important to institutional investors as their clients (We, the people!) demand that companies look beyond profit to the effects their activities have on communities. Finally, there is a growing level of commitment from private sector institutions and development organizations to create the necessary ecosystem to support for-purpose businesses. The landscape is still somewhat uncharted, but good ideas that hit the trifecta will always be welcome and get funded.

If you read only one thing about scaling up social enterprises, go for this Brookings Institution paper: Scaling up Social Enterprise Innovations: Approaches and Lessons

And remember to RSVP for Sustainable Business Models for Mission-Driven Enterprises on Wed., Dec. 6th in NYC!