Figuring Out the “Enterprise” in Your Social Enterprise (Because A Mission Is Not Enough)

Now that you understand how your business will benefit from having a social mission, think about what value your business can provide others.  It’s not enough to build a business on your social passions and values alone; your business must also meet a demand in the marketplace.  Jeffrey Hollender of Seventh Generation suggests asking yourself:

“What does the world most need that I as a business am uniquely suited to provide?”

Your answer does not require a patent. There are scores of successful companies that improved on or tweaked existing services or products to meet a new demand.  Office supply company Give Something Back wasn’t the first online retailer of office products, but co-founder Mike Hannigan began the business by identifying what he and his partner could uniquely provide:

Both Sean and I had a significant amount of experience in the competitive area of office products.  The company we were running was bought by a big multi-national and we had a choice to make. We both felt we could use [the model of Newman’s Own] in a competitive, hard-nosed industry to make a profit, but do it on behalf of a different set of stakeholders.

Mike and Sean’s unique market proposition was their contacts, experience and understanding of the industry, coupled with a social mission that differentiated them from their competitors. Since 1991, Give Something Back has donated more than $4 million to nonprofit organizations and earned $26 million in sales in 2007.

Start with product or start with social need, but have both when you go to market

Purpose-driven companies can originate with a social mission or with a product or service, but ultimately both are needed for a successful social enterprise.  One Laptop Per Child is an example of an enterprise that began with a social mission–a product was developed specifically to provide the world’s poorest children with educational opportunities.  Conversely, the clothing company Patagonia grew from a demand for high-quality outdoor clothing.  Because Patagonia’s founder Yvon Chouinard is a passionate environmentalist, he integrated his personal values into the company’s mission.  Today, Patagonia is driven as much by its commitment to quality as by its commitment to equality and environmentalism.

Determining market demand

How do you determine market demand?  Ganesh Rengaswamy, Vice President of Unitus, a nonprofit supporting microfinance institutions, emphasizes preparation and research.

Focus on getting the best possible information/ data in your market study.  The value of understanding your market and how you would fit in will make itself evident in [your company’s early] stage in both financial and social return.

It’s a simple formula that you’ve heard before. Research the industry you’re interested in and what other companies are doing; talk to people; be open about your ideas and ask for feedback; objectively look at the need you are trying to satisfy.

Why trumps What

As you identify what the world most needs that your business can provide, think about and present why you are creating a product or service, not just what it will do or how.  The idea of starting with why comes from Simon Sinek who says that “People don’t buy what you do, they buy why you do it.”   This is particularly useful as you shape how you think and talk about your product, but it’s important not to discount what you do.  Sell to people who need what you have, but get them to buy from you because they believe in what you do.  Mike and Sean sell competitively priced office supplies to consumers who need them. Customers choose to buy their office supplies from Give Something Back because they believe in the company’s social mission and enjoy being an active part of it.  Mike and Sean started with the value they could provide others and then layered their values over it.

Next up:  Your mission and mission statement.

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  1. Why Your Company Should Have A Social Mission - April 26, 2010

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