Should we push Impact Enterprises to scale, or does that actually reduce their impact?
It’s been fantastic to see the growing engagement and support for impact focused business globally. My social feeds are full of people building incredible impact focused businesses, Donors are funnelling millions of dollars into Social Entrepreneurship projects, and NGO’s are building venture arms to engage in this growing ideas. It’s fantastic to see.
But, there’s a part of this drive that I’ve always wrestled with. Many times when we look at programs to support Impact entrepreneurs, we get stuck into ideas of start-up and tech approaches. Investment, Scalability, Incubators, Lean Methodology, etc.
And the reasons for this are clear, with billions of dollars needed to achieve the SDG’s, small scale solutions aren’t enough. Lean Methods (of which I do prescribe too) help us build solutions that are tailored to the problem, and not invest in incorrect models. Incubators help support multiple enterprises at once, and investors bring in much needed capital.
But, I can’t help but think that in many ways, this growth mentality doesn’t sit completely well with the idea of social enterprises as a vehicle for long term development. And I think my concern rest on this need to grow. Start-up culture is about finding the idea that can be scaled quickly, to build value. It’s the technology platform that will become a unicorn. And while that would be great in the SocEnt space, the social side of the equation doesn’t balance.
For a number of enterprises that genuinely solve social issues, its local social issues that they solve. And this localisation is critical to their success as a sustainable approach to development. They understand their communities, they are deeply connected to both the problem and the people involved. Not just that, but the solution also impacts them as well. It is this connection that makes them so powerful, and successful in what they do.
When the support ecosystem drives these localised enterprises to scale, they may lose the key part that made them successful. An investor isn’t as interested in an enterprise that doesn’t want to grow outside their community. But once away from their community, the social aspect of their business becomes more difficult. It can lead to building a business, which only tangentially has a social impact that may not scale, instead of the impact business with social impact at its core.
So how do we support these businesses? Are traditional SME approaches better? Franchise models? Is it about supporting Business Networks, rather than scaling individual businesses? Is it sharing knowledge? Is it building value chains?
While all of these are pursued at different levels, the current focus on Social Entrepreneurship leaves many other models in the background. Personally, I’d love to see thousands of small social enterprises creating genuine impact in their communities, than a few unicorns solving some issues. We do need a few doing it perfectly, but many doing it imperfectly.
In reality though, to achieve Sustainable Development and the SDG’s, we need a mix.
We need to support organisations that are doing good to continue. For some, thats through support to deepen impact in their community and remain sustainable. Others its to scale and engage with millions of people. It’s about providing support and not pushing them with single approaches. Providing access to opportunities and pathways where appropriate. For donors and ecosystem builders then, it’s critical to have a suite of approaches, and not just accelerators and investors.
Keprah approaches business support through a focus on the outcomes, what is the business (or industry, Government of NGO) trying to achieve, and what’s the best model. When we start with this outcome, which tool gets used will also change and adapt. If you are looking at engaging in development, wanting support as your develop your organisations or are transitioning a program away from grants, we would love to chat and figure out what the best model is for you.