28 November 2016

BUSINESS - Successful Business Models for Social Innovation

Millennials and other young entrepreneurs are linking their business with their politics through social innovation.

Forbes says that “sixty-one percent of millennials are concerned about the state of the world and feel personally responsible to make a difference.”

Despite this generational drive towards social innovation, there has historically been resistance to social entrepreneurship.

Businesses that seek to bridge the divide between non-profit and for-profit business models generate both social change and revenue face particular challenges.

Despite these challenges, many young entrepreneurs are developing successful social innovation business models.

They’re responding to a growing awareness among consumers of the impact of consumption, both locally and globally.

Social media and the proliferation of information mean that consumers can check up on how a business treats its staff, and whether its products are sourced ethically.

These questions are becoming more important, especially to younger consumers.

Focusing on social impact makes sense for new businesses, and will increasingly become important for established businesses.

Three key points identified by entrepreneurs at the Under 30 Summit 2016 are to establish yourself as an expert, give back to your community, and participate in both sides of the mentorship equation.

Each of these three strategies for success as a social innovator make specific demands on an entrepreneur’s emotional energy.

Although establishing yourself as an expert, or your brand as exceptional, has always been important for entrepreneurs and businesses, giving back and actively engaging in mentorship require resilience and emotional investment.

This is a significant shift within the social innovation business model, and it’s one that social innovators should be consciously aware of.

Businesses like Sweetgreen understand that their consumers want both “that deep connection to [the product] while holding onto the on-demand convenience of the Uber era.”

The salad chain focuses on sourcing as locally as possible, and offering their consumers transparency in where the food comes from and who is growing it.

Sweetgreen focuses on “intimacy at scale” – meaning that they want connection to their customers, and to provide their customers with a sense of connection to the food.

This allows the company to “give back” by supporting local farmers and suppliers, and facilitates the consumer also feeling like they are giving back.

Warby Parker is another company focused both on social change and corporate profit.

The company is currently valued at $1.2 billion, and has distributed more than 2 million pairs of glasses to people around the world.

They focused their early business model on providing online-only sales, and have since expanded to 38 physical locations.

They’re an example of a business that maintains a focus on social impact while also adapting quickly and efficiently to the contemporary consumer’s demand for accessible, on-demand products.

And, echoing the idea that one successful business model is to “be an expert,” they stay focused on eyewear rather than expanding too quickly into other wearables.

Building successful and sustainable businesses that offer investors and entrepreneurs social and financial rewards is challenging, but it’s a way forward for global capitalism.

Giving back, staying focused, excelling in your area, and providing sustainable mentorship chains will have long-term payoffs for economic, social, and environmental sustainability.

By Tiffany Sostar
Tiffany is a writer, editor, academic, and animal lover who came late to her appreciation of pets. At 18, a rescue pup named Tasha saved her from a depression and she hasn't looked back. She has worked as the canine behaviour program coordinator for the Calgary Humane Society, and was a dog trainer specializing in working with fearful and reactive dogs for many years. She doesn't have any pets right now, but makes up for it by giving her petsitting clients (and any dogs she comes across on her frequent coffee shop adventures) extra snuggles.

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