Social enterprise folks have a religious belief in a blended profit/charity model. Normally structured as a Community Interest Company or with a similar function, which are neither good for raising equity, nor donations. Most of them struggle financially and cannot scale to create any significant impact.
UK is one of the leading markets for social enterprises famously coined by Freer Spreckley in 1978, a market that Boston Consulting Group projects to reach £1 billion in 2016. If we put this in contrast to the $3 billon acquisition offer for the two-year old Snapchat, the social enterprise market seems rather minuscular - and it is.
We need to overlook the current social enterprise dogma, and shift our focus to the two areas that matter: people and markets. We need people that get shit done in a just way, also called “21st century leaders” - to fill the demand for better market solutions. A demand largely driven by increased transparency, and efficiency enabled by technology.
We need infrastructure to create working markets in the developing world, improve inefficient markets that are directly connected to the wealth of a society, and radically disrupt markets that are directly screwing the planet.
We need companies like Grameen which takes proven business models for vital societal functions in the developed world, and innovates models that work for costumers with less purchasing power, and organizations like Nokia that has sold close to 2 billion phones, used largely in developing countries. These on the surface very different organization have both created vital infrastructure to build markets in developing countries.
If you compare today’s classrooms with the ones 200 years ago, it has not changed much. Knewton is doing a tremendous job to tackle the education market, and has in the process added tons of talent to it. We need more companies to disrupt difficult markets like these, and add talent to sectors such as healthcare, education, and government.
The western world is still paralyzed by leadership that was nourished during the industrial revolution, which has created some of our most damaging markets, the finance system, energy production and manufacturing, creating inequality and environmental damage at scale. Look out for companies such as Kickstarter, Iberdrola Renovables and Cradle to Cradle, all innovate companies that are tackling our most damaged system.
No, there will not be a giant revolution when business leaders magically change their for profit machines to semi profitable, semi charitable organizations known as social enterprises. The only way to get out of this mess is to get good people to focus on the right markets.