Whether you are running a social enterprise or more traditional business, the challenges in selling products or services are similar across the board.
At the 2nd Ashoka Support Network Summit held last month in London, more than 150 successful entrepreneurs from both the business and social sectors came together to share best practices and discuss how their combined forces can create even more transformative action…
Telling Your Story
Successful storytelling goes beyond a touchy-feely narrative and even beyond powerful imagery. To pack a punch in a crowded market, gripping stories need to be backed by hard stats and data. The best storytellers can also tell their stories simply. For example, Ashoka Fellow Luke Dowdney’s start-up, which brings boxing classes to the favelas of Rio de Janeiro and the streets of London to keep children out of neighborhood gangs, is appropriately called Fight for Peace. Speaking about his work, Luke says, “the key for me was making a lot of people a excited about what we do.” Fight for Peace is creating innovative and financially sustainable ways to support young people in communities affected by crime and violence around the world.
Since Luke founded FFP in 2000, the organisation has supported over 10,000 young people at its Academies in Rio de Janeiro and London and is currently training 120 community based partner organisations globally by 2015 that support a total of 70,000 young people.
Launching your Social Business
To be set up for success, a new social business needs a strong mission backed up with passion – only then can one start to devise a clear plan on how to achieve the vision and theory of change. Luke Downdey comments that strong roots for success are dependent on a ‘commitment to shared vision,’ while Fellow Kovin Naidoo agrees – “It’s a two-way street. If there’s a disconnect, the magic doesn’t happen.” Secondary to this is a strong ‘go to market’ model – with a strategy for impact measurement in place, collecting data becomes habitual and purpose-driven.
Pathways to Scaling
Each enterprise will take a different path to scale – the challenge lies in deciding which one is most appropriate and where to scale first. Especially with regards to location, taking the path of least resistance may be a good first step: it takes less energy, and success stories can open new doors. For Ashoka Fellow Madison Ayer, scaling is at the basis of his model: Farm Shop focuses on the “last mile” in the delivery of agricultural inputs to rural households in Africa.
Farm Shop customers, smallholder farmers in Kenya, become more productive with access to professional training, education, and information programs, including demo days with product suppliers and farm visits from area agronomists. Ayer’s franchise network provides farmers with all the tools they need to be successful, wherever they may be.
“We are very encouraged by Farm Shop’s original model and we believe that this idea, in Madison’s hands, is going to spread throughout East Africa,” Salim Mohamed, Ashoka’s Representative for East Africa, said about the newly elected Fellow in 2011. “Madison is a classic example of a social entrepreneur; he defines success as passing savings associated with economies of scale to smallholder farmers, and we believe that the new model he is creating will transform the field.”
Transition and Succession Planning
Founders have to understand the life-cycle of a business and that different skills will be required at different stages. Avoiding ‘Founder’s Syndrome’ is often harder than it sounds, yet establishing clear values and surrounding yourself with the right team can ease the transition period. Although things may be run in a different way when someone new takes over, the fundamental goals should remain intact.
Access to Corporations
Even if you think you know the “right people,” approaching corporations has to be done strategically, with a clear idea of what the corporate partner will gain from the relationship. This is why the most successful partnerships will revolve around shared value or even scope forHybrid Value Chains in which the social enterprise directly links into the corporation’s work.
The term Hybrid Value Chain (HVC), coined by Ashoka, refers to the process of collaborative entrepreneurship designed to combine the strengths of businesses and social entrepreneurs in order to repair value chains currently broken for large numbers of people. It is about creating win-win partnerships where companies access new markets while social entrepreneurs can scale up and accelerate the social impact they seek
An example of how successful this can be is Ashoka Fellow Asher Hasan’s social enterprise, Naya Jeevan, providing quality, private health insurance to low-income domestic workers in emerging economies. Such informal sector workers typically don’t have access to any form of health insurance, but Naya Jeevan captures them by involving a chain of stakeholders and spreading the cost: In the first step, large multinationals are offered a package deal to insure their own workers – saving them money through lower rates of absenteeism. The next step is to offer insurance to the workers’ families and in the final round to also include domestic staff. The cost of this insurance is split between the end-beneficiary (the maids and cooks), their employers (the corporate employees) and the corporation. Tens of thousands of informal sector workers have been enrolled in health insurance schemes by this win-win solution, and there is scope for even more. As insurance is pooled risk, adding more people to the insurance scheme reduces risk and thereby cost. Thus corporations can now look into harnessing smaller businesses further down in their supply chains.
Sustainable Income Streams
The key to financial sustainability is to find the balance between diversifying income streams but not diversifying too much. A large base of regular donors gives more security than hunting one-off deals, but expanding it may require new marketing techniques. In an ideal situation, however, the source of income acts as a marketing tool in itself and links in directly with the purpose of your business.
Ashoka Fellow Mark Johnson recently showed how this is possible by setting up CanDo Coffee. The coffee sold in the streets generates income for his project User Voice that empowers prisoners – and the people selling the coffee are ex-convicts. Not only has Johnson created jobs for the vulnerable people he serves, the vendors will also gladly tell their customers how User Voice and CanDo Coffee have helped them turn their lives around.
Recruiting, Developing and Retaining Top Talent
Recruiting top talent must be matched with recruiting a strongly motivated staff. A clear value proposition helps a self-selection of applicants, but once they’re part of the team, they need opportunities to grow and try on “new hats” as an incentive to stay. It is, however, a common misconception to believe that training staff only pays off in the long run: too much training can cause information overkill, but the right amount will help new staff find footing more quickly and improve their efficiency.
Editor's Note: This article was written by Margherita Philipp, Ashoka UK Communications and Marketing Associate, and content was collected from the Ashoka Support Network Global Summit. It was originally published on Forbes.
Photo Credit: Charlotte Anderson Photography