Discover the 10 traits of highly successful social entrepreneurs
1) They start-up for the right reasons:
The road to social enterprise failure is paved with the right intentions. Starting a social enterprise because you have a mid-life crisis, your corporate job has hit a dead-end or you think that it is your ticket to self-actualization are all the wrong reasons to start a social enterprise. (Read: 5 reasons not to become a social entrepreneur) The most successful entrepreneurs venture into social entrepreneurship because they have an itch to solve a problem that’s gnawing away at them. It is not just a fleeting feeling that possessed on the weekend you visited a slum for a stint in corporate volunteering. Real social entrepreneurs have stewed in their feeling on wanting to start-up, understand the problem that needs solving inside out and have worked out what needs to be given up to in order to succeed.
2) They understand the risks and know how to mitigate them:
Social entrepreneurship is perhaps fraught with more risk that conventional entrepreneurship, and takes longer to achieve success, and won’t earn you a million dollar exit at the end. Funding is difficult to secure, hiring the right talent is tough, field-testing your product or service can take time, effort and cost a lot of money, and your revenue stream is always uncertain. The best social entrepreneurs don’t let their social mission blind them to the harsh truth of running an enterprise. They set out with their eyes open and have the required arsenal to deal with any contingency.
3) They have a social heart and an enterprise mind:
Most social entrepreneurs start a company because they are burning with a social mission. They may have witnessed a social problem that left an indelible mark on their psyches and have spent time to arrive at a solution. If the reason to get started is a strong emotional urge to solve a social issue, then getting on with the mission will require the entrepreneur to don an enterprise hat, and use his head. To succeed an entrepreneur will need strict planning, be financially prudent, network professionally, evangelize the cause and bring on-board others who think similarly. Not to mention build strong teams, be able to deal with the reporting requirements of impact investors, understand market dynamics, display leadership and be able to manage scale.
4) Build a solid management layer under them:
When just getting started, all that’s needed is the singular vision of the founder or founders to get the motor running and hit the road. But if the organization has to grow and scale, it will require many more hands on deck, performing different roles. Individuals with the ability to successfully infect others with the importance of their cause and build teams will find it easy to grow their company. Growing teams require second-line managers who can take on the reins if the founders are absent or have moved on to doing other things. Plenty of organizations fail or don’t fulfill their complete potential because founders fail to build strong leadership layer below them.
5) Don’t shape the organization in the image of themselves:
Individuals who decide to start social enterprises are usually very strong personalities. Either consciously or unconsciously they begin mould the organization in the image of their own image. There are many reasons why this is a great idea, an social enterprise with no identity, has no backbone. While this is a good idea in the short-term when there is a void and a blank canvas. But with a growing organization, and new team members joining in, there is continuous stirring of the pot. Continuing to build the organization with the imprint of the founder can prove to be detrimental. The DNA of the organization should be build as a brand that reflects the struggles, triumphs and the learning of the organization. This will help build a lasting brand that will last beyond the tenure and lifetime of the founder.
5) They know when to delegate:
Management 101 will teach you to delegate, delegate and then delegate some more. Social entrepreneurs with their infectious energy and boundless enthusiasm are sometimes wary of letting someone carry out the work. This is either because they are unsure of the task not being carried out in the way that it should be or they fear losing power. Frankly any growing organization should have enough top-level leadership, who should be able to carry out any task, without the intervention of the founder. Delegating helps founders focus on other critical tasks: like long-term strategy .
6) Focus on the cause and customers, and not their investors:
Funding is very important to investing in the growth of a social enterprise. Successful founders realize that getting money is just the means to an end and they are not a slave to the demands of their investors. Some social impact investors may nudge social entrepreneurs to focus more on growth at the expense of impact, they are at liberty to do that, because they are answerable to their limited partners (LPs) to whom they are accountable. Building long-term value through a social enterprise requires time, careful planning, being able to negotiate unexpected forks on the road and dollops of patience. Listening and acting on the advice of social VCs will mean taking the eye off the ball.
7) View collaboration as one of the keys to success:
Social entrepreneurs sometimes toil away in isolation, working extremely hard on every part of their enterprise, to make it a success. Even though a lot of them are experimenting with new products and services, which perhaps don’t exist and are being innovated from the ground up, they could end up reinventing the wheel in some situations. Talk to social entrepreneurs and most of them will tell you the success of the product, service or business innovation they are trying to sell may fail not because its not up to scratch but because there was something else that let them down. This could be anything from a non-existent supply chain, lack of technology solutions, no financing options or lack of awareness. Collaboration could be the missing piece of the puzzle here. Clever social entrepreneurs realize that if they focus on the core of their business, they could get partners to solve other pieces of the puzzle. Companies like Husk Power Systems that practically engineered every part of its product, infrastructure and supply chain are an exception rather than the rule.
8) Aware of the pitfalls of mission drift:
Once those rose-tinted glasses get scratched and the fire in the belly starts to flicker due to various reasons most founders might be willing to take a short-cut. This could include taking money from the wrong set investors, veering away from their original target segment, exiting to a mainstream business or diversifying to a new set of products and services. This is classic mission drift, sometimes it happens slowly, gradually eroding the original cause and sometimes, in the case of a merger or acquisition it happens overnight. A true social entrepreneur understands that mission drift could pop its ugly head anytime. Being prepared is the key, and having a Plan B can be the difference, between selling out and staying true to the cause.
9) Understand the concept of blended capital:
Whether you like it or not, the ability to attract funding at different stages of a start-up’s growth, will be key to judging whether an founder packs genuine entrepreneurial chops. Most social enterprises take time before they are ready to generate revenues. At the pre-revenue stage, investments come usually from friends, family and founders, and if lucky, an angel investor. Well-informed founders realize that their start-up is not in a position to attract institutional capital and therefore turn to other means. This could be participating in business plan competitions, applying for grants or even considering debt as an option. Most successful entrepreneurs delay equity infusion and instead use other forms of capital to tweak the product or service to make it market ready, do impact analysis, gather market feedback and create the necessary awareness.
10) Find a co-founder, CEO or strong number two:
There are perhaps more single founders in social entrepreneurship (think Acumen founder Jacqueline Novogratz and Grameen Bank founder Muhammad Yunus) than in mainstream entrepreneurship. It is easy to understand why. Most social enterprises start off as half-baked ideas in the head of the entrepreneur, and its not easy to share this vision with a potential co-founder. But if you want to the heed the advise of experts. You may have a higher chance of being successful if you had a co-founder by your side. Having difficulty finding a co-founder or don’t fancy one? Headhunt a CEO or mentor somebody in your staff to become a strong number two, this will take the burden off you in terms of doing all the work by yourself. On those dark days when nothing seems to go right, the co-founder maybe the sounding board that’s needed and the mentor who offers advise.