Defining social entrepreneurship

I would contend that Google has done more for social good than the Gates Foundation, Oxfam, and Salvation Army combined. The dissemination of the world’s knowledge to anyone with a computer, ability to organize people and causes, and development of billions (trillions?) of previously non-existent markets has yielded incalculable social benefit.

Are Larry Page and Sergey Brin social entrepreneurs? Not sure.

Are they considered social entrepreneurs by most? Probably not.

I was around a table with some folks trying to define social entrepreneurship last week. It’s a slippery concept. Someone offered the classic cop-out “like pornography, I know it when I see it.” Someone pointed to performance in metrics of social impact (lives saved, people fed, low-income jobs created). None of those definitions felt quite right.

Then someone offered this one (paraphrased): “A social entrepreneur is someone who is runs a sustainable, scalable business without requiring chartable funding and is willing to sacrifice their bottom line in favor of social good.”

Everyone nodded their head and seemed content. Let me rephrase:

A social entrepreneur is someone who values profits at a Utility X and social good at a Utility Y.

For a regular entrepreneur:

1) X > 0

2) X > Y

For a social entrepreneur

1) X > 0

2) Y > 0

3) Y > X

Whether or not the definition is a good one, I do not like the inherent trade-off of “profit” and “social good” implied in this or similar definitions. These two dimensions are at worst independent and more likely highly correlated. We have only scratched the surface of ideas and business models which do not need to consider the trade-off. Profit begets social good begets profit — rinse, wash, repeat. The social entrepreneur is one who uncovers these opportunities, NOT the one willing to make the most sacrifices. He/she just doesn’t need to at this point. Until we’ve exhausted all options where social good automatically falls out of profitable operation, speaking of trade-offs is premature. My definition: The social entrepreneur of today is someone with an idea that creates social good in the pursuit of profits.

Tags: Phil