Becoming a social enterprise – a for-profit organisation that operates with a social or environmental mission – can bring myriad positives.
But while social entrepreneurs may be passionate and well-intentioned, Geoff Gourley, founder of the new One10 accelerator, says they may not have the acumen to build a business.
Gourley wants to give them a “toolkit” to build their enterprise.
The 3-month accelerator program will offer budding social entrepreneurs mentoring, networking, workshops, and help with legal documents, intellectual property, product development and go-to market strategy. In the end, it hopes to help with investment as well.
“We may not invest in all of them, but we certainly do look to invest in them and provide them with seed capital in return for equity. We also reserve the right to invest at later stages as well, we want to stay with them for the journey,” says Gourley.
The positives of social enterprise are there to see – rather than a strict non-profit, it allows for outside investment to enable rapid growth and a product line to ensure sustainability.
Instead of being reliant on good will, the idea is to harness the profit motive.
For entrepreneurs and companies, becoming a social enterprise can offer a greater purpose to the business.
“People setting up businesses are saying ‘What’s our why? What’s the purpose of our business? Why are we really doing this? What is the good act we are doing for society?’ says Gourley.
“Its not just about selling widgets and shareholder return.”
And this isn’t confined to new entrants. Several established, well-known companies, like Kickstarter and Etsy, have legally incorporated a social mission into their businesses.
Thank You Water and Who Gives a Crap are the Australian examples that Gourley says we should keep in mind. Both organisations sell products and the profits are used to fund their projects – together they have provided access to food, water and sanitary programs for hundreds of thousands of people.
But to get to this stage is a struggle, and part of the problem is a failure to think commercially from day one.
“Social enterprises when they are starting out don’t have any money. I think the philosophy they adopt is probably not the right approach for them,” says Gourley.
“They need to take a commercial approach right from day one. If they become dependent on donations then the long-term financial sustainability is at risk.”
“If you setup your business as any normal commercial business – you might need a loan, you might need an overdraft, credit card facility, you need to look at sales. Then you have a much better chance of being financially sustainable.”
One10 is itself a social enterprise, and while it is being funded by Gourley for now, it hopes to create a sustainable operation through these investments. It has partnered with Ernst and Young and some co-working spaces to offer space and advice to its accelerator companies, and so it can keep working with them once the 3-month program is over.
“The whole purpose of One10 is to enable purpose driven business,” says Gourley. “We recognise there are a lot of passionate people out there who need a bit of a hand.”
“Just like in the tech and fintech spaces, there are a lot of people sitting in their home offices or garages with amazing ideas that will change the world that are probably thinking ‘How do I just get some help to get this happening?'”