Blog | Entrepreneurship

Small Solutions, Big Impact

Don’t try to solve the world’s biggest problems. First, focus on solving the smaller problems in your life

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In my previous post, I introduced you to Better World Books, Inc. (BWB). They help repurpose and distribute books to those in need. Co-founders, Kreece Fuchs and F. Xavier Helgesen, didn’t create their business to ride the wave of social entrepreneurship. Rather, they discovered a solution to a need that happened to have a good purpose behind it.

Partner and founder of Spencer Recovery Centers, Chris Spencer, did something similar. Chris had someone close to him who suffered from a mental illness. Deciding to leave the restaurant industry behind him, he went on to establish a service to help people who were mentally ill.

Non-profit or For-profit Model?

After opening the Spencer Recovery Centers, Chris discovered a close tie between mental illness and addiction.

Though Spencer intended to become a non-profit entity (to provide affordable treatment options while continuing to increase alcohol and drug abuse awareness) he chose to maintain for-profit status to enable him to continue the valuable service he provides.

Xavier Helgesen explains further in The Social Capitalist:

  • “A nonprofit doesn’t have the power to grow and fundraise as fast. With a for-profit, you have the power to grow quickly, as long as your customers allow you to … NGOs and nonprofits play an important role, but a lot of it has to do with creativity. You have to be creative and decide how you’re going to maximize profit. My preference has been to create profit maximizing businesses that create good as a natural by-product. I think it’s more about finding what you actually want to do and figuring out whether there’s a way to make money doing it. If not, build a nonprofit, fundraise, that’s great, too. But I think the biggest social enterprise in the world might be Google, because social organizations improve the world by their existence and are absolutely profit-maximizing.”

Companies like Toms Shoes provide a pair of shoes to a child in need for every new pair of shoes purchased. Patagonia, the long-time outdoor apparel retailer, vigorously protects and policies the environment. Companies like these stemmed from a strong sense of dissatisfaction with the status quo—from founders who not only thought things could be better, but should be better.

The concept of building a business with a strong social consciousness increased dramatically over the past decade. It’s no wonder. Founders of these companies are increasingly disappointed with the inability of governments to solve problems and the rewarding of Big Business’ bad behavior.

Investing for Social Change

But it’s not only the humble founders of socially conscious businesses that see the need for developing solutions with a greater purpose than profit.

Investors have come to appreciate the social entrepreneurship business model, too. A new kind of investment capital, impact investment, as become a hot industry.

Before You Build, First You Must Learn

It makes sense that the educational community embrace the tsunami of social entrepreneurship as a viable career path for its students.

Some of the top business schools in the country including Harvard Business School, the Stanford Graduate School of Business, Northwestern’s Kellogg of Management, amongst others, have built programs for social entrepreneurship, social innovation, or social enterprise management.

In the wake of the financial crisis hitting its height in 2008, students are forgoing the riches promised them in careers such as finance or accounting. Instead they're turning to organizations like Net Impact which have cropped up to connect world-changing ideas that they can put into practice their beliefs with corporate social responsibility initiatives.

Net (Profit) Impact

Liz Maw, CEO of Net Impact, had this to say about the reason for starting her San Francisco-based 501(c)3 nonprofit:

  • “A small group of friends on several different business school campuses wanted to focus on more than just money-making, which was a radical concept for MBAs at the time… They believed the business skills they were developing could—and should—be used for more than simply generating shareholder profits; they should be used to generate a triple-bottom line supporting people, planet, and profit. They got together mostly to provide each other with support and ideas, faxed around an invitation to other campuses, and ended up with about 100 students also interested in socially responsible business at Georgetown University. This was the first Net Impact Conference.”

Through its local chapter events and annual conference, Net Impact connects members across the country. These members locate career opportunities with a purpose.

What about you? Have you found a solution to a small problem you’ve noticed in your life? Is the solution so simple you think it can’t possibly turn into a business model?

Grab a copy of our book The Social Capitalist to find more real life examples of people who discovered a simple solution to a socially driven problem.

Original publish date: October 22, 2018

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