The future of enterprise is social enterprise

Anna Guenther, PledgeMe founder/CEO, on why the future of enterprise is social.

The problems humanity currently face are complex. Climate change. Poverty. The growing inequalities between rich and poor. The refugee crisis. With the internet, we see these problems first hand, but solving them isn’t easy.

On the other side, business used to be easy. It was about one thing: making money. Everything was measured in numbers and your finances, and increasing your profits was the name of the game. You focussed on making a product (or a service) that people loved or needed, and a dividend for your shareholders.

But, with the increasing awareness and complexity of problems, we’re seeing a change to the face of enterprise. It’s called social enterprise. No longer is business just about the financial impact it has, but the social impact as well.

That’s hard. Measuring a social impact is much more nuanced and subjective. Doing it well is difficult, in a lot of ways even harder than just making money.

But, it’s not impossible. While ‘social enterprise’ as a term is new, the concept of a self-sustainable company that has a social impact isn’t. You could say that a workers’ co-operative in UK in the 1840’s pioneered the way, providing good food to Rochdale factory workers in otherwise exploitative conditions. And, over the last thirty years, the world has really stepped up their game again, with co-ops, charities, and community groups setting up businesses specifically to create social change. Think Trade Aid, think Patagonia, think TOMS shoes, think the Grameen Bank.

And not only are social entrepreneurs trying to solve some of the big problems using the tools of business, they aren’t afraid to collaborate to solve those problems. Because if the problems are solved, everyone wins.

Anna Guenther (center) with some of the PledgeMe team.

More and more up-and-coming entrepreneurs want to follow suit. They want to know that they are not only doing well but doing good. Here’s a roll call of some of my favourite social enterprises in New Zealand:

Eat My Lunch follows the buy one gift one model made famous by TOMS shoes. But instead of footwear, they are gifting a lunch to a Kiwi kid in need for every lunch bought. In their first year of operation, they gifted over 180,000 lunches to kids in need in Auckland and Hamilton, and they don’t want to stop there. Founded by Lisa King, Iaan Buchanan and chef Michael Meredith, they are raising money at the moment on PledgeMe to scale their impact. Instead of traditional rewards, they are offering ‘Lunch Bonds’ to their crowd, meaning pledgers will have their money paid back, possibly with interest.

Ethique is a solid hair care company. Why, you ask? Well, a bottle of shampoo is 70% water, but you walk into a room of water when you’re showering. Because of its solid form, Brianne and her team have already stopped 50,000 bottles from going to landfill. And they’re not just stopping there. Ethique donates 10% of their revenue (not profit!) to the SPCA, as animals are often the worst hit by testing in the cosmetics industry. Ethique was one of the first B Corps in New Zealand, and are striving to increase their impact both here in New Zealand and overseas.

Flick is an electricity provider with a difference. It really wants to reduce the amount of power consumers use, and the fees that they pay through honest and transparent pricing. It has created an app that lets you purchase power at its cheapest point, and they also show you where that power is coming from. Not a fan of fossil fuels? You can choose to purchase when they aren’t part of the power mix.

Patu Aotearoa is a national social franchise model for a group exercise programme designed for Māori and Pasifika. It describes itself as a new type of gang, with its own “Patu Up” patch – but its fighting obesity. Patu kicked off in Hastings and is now in Napier, Wairoa and soon to open in Kaikohe. It's more of an urban marae than a gym, and offers budgeting and nutrition advice - plus it monitor results through a health indicator tool called the “meke meter”.

Loomio is a decision-making tool that wants to ensure everyone’s voices are heard in a decision. It's been used by everyone from rebels in China through to LGBT groups in Haiti who are trying to legalise homosexuality. Loomio wants to make sure that its product is accessible to all, so have a pay-what-you-can model. Stemming from the Occupy movement, these Loomio kids are pretty staunch on their values.

The Karma Kola team are the masters of branding. Looking at their product, you might not realise all the social good they’re doing by doing the cola nut a bit different. While other cola-based drinks might never send a cent back to the villages where their cola nuts come from, these kids are making sure a percentage of every bottle sold is going back to the Bome village in Sierra Leone. They are providing well-paying jobs in Africa, funding schooling for at-risk kids, and creating a product that is healthier than its counterparts.

Support for social enterprise in New Zealand is still young, as is the understanding of the changing face of business. Half the battle is raising awareness that this is a viable way to do business.

In the UK and the US this movement has (visibly) been happening for longer. The conservative government in the UK even started financially supporting social enterprise, and the US even has its own legal structure for social enterprise.

In New Zealand, we have the Ākina Foundation. They are pretty much the NZTE of social enterprise, charged with growing social enterprise in New Zealand. They have been working long and hard to make sure social enterprise is not just supported at a company level, but relevant at a policy level in government as well.

If you’re down with a more grassroots approach, the Enspiral Network are all about creating a virtual and physical community of people and companies working together to “create a thriving society”. They are mainly Wellington based, but have members all around the world. They are always up for a Skype (and a cuddle puddle). If you want a more hipster approach to changing the world, they are your kids.

This is the future of enterprise.