Posts tagged social enterprise
Just wanted to post the promo video of this superb project management tool and governance system for open, distributed, collaborative enterprises founded on social missions.
Below is an excerpt from an email I wrote on a thread
concerning chronic absence of early-stage funding for social ventures:
I wonder if we will find a solution by zooming out beyond the finances to include value streams of knowledge, relationships and underutilized assets/inventory/infrastructure. If these non-financial value streams can be made visible and measured, it will be easier to incorporate them into financial risk calculations.
A cherry tree releases thousands of blossoms, but only a handful will grow to full-sized trees. But the blossoms are not waste, they recycle nutrients in the ecosystem and feed the bees. So really we need systems for converting the energy of a “failed” startup into fertilizer for the whole system.
So assuming that many seed-stage social ventures will fail, how can we harvest the learning (usable knowledge and wisdom) from the founders such that it is a financial loss but an increase in knowledge and systems awareness? Or would this knowledge output be too noisy?
What other value exists in these “positive failures” that can be fed back into the system?
Also, many entrepreneurs start with an “idea” and try to resource this vision toward implementation. How can we leverage collective intelligence to vet ideas through the wisdom of the crowd so entrepreneurs can focus their energy on the most promising ideas and business models?
Am I stating the obvious here or being naive or cliche? Or is this worth a second look?
I’m in Prague today, the gorgeous capital of the Czech Republic. I’ve spent the afternoon at the Hub here, which opened only a month ago. I sat down with Petr Base, the founder of the space, and he gave me a succinct run-down of the Czech social enterprise space, which I’ve summarized below.
Since this is a former Soviet block country, the culture and politics are still strongly socialist, and the government delivers many of the social services, and also provides the bulk of funding to local NGO’s that do more niche social services that the government isn’t capable of doing itself.
As part of its transition into the European Union, the Czech national government will receive roughly €24 billion in the next six-year EU budget. Most of this funding is slated for infrastructure improvements, so that the country will be better able to keep up with the economic pace required in joining the €uro. (This is equivalent to about half of the annual government budget here, so even spread over six years its still a significant surge in government funding.) However, in anticipation of European Union funding, the Czech government actually cut much of the funding to local NGO’s. This led many to scramble to find a new approach, and many turned to the social enterprise model. Although a handful successfully pitched business plans to the EU’s social enterprise startup fund, most lacked the entrepreneurial education to put together a feasible and well-designed business model.
Petr’s educated guess is that there are about 100 social enterprises in all of the Czech Republic, and unlike in the UK, there is no legal structure for social-mission businesses here to receive tax incentives for the social value they create. (A legal status that is lacking in almost all of the United States as well!)
Although there is also a need for more education to support the growth of the social enterprise movement in central and eastern Europe, there are some pioneering investments coming into the space. Inspired by Nobel Laureate Mohammad Yunus’ Social Business Tour, the Austrian Erste Bank has created a US $10 million venture fund for social businesses in the region. Erste bank is the major player around here, and was started in the late nineteenth century as a bank for local small businesses, so this move honors its roots. This is great news for the Hubs in both Prague and Vienna, as recipients would be ideal Hub members. Although this is just a drop in the bucket in terms of overall access to capital for social startups in central Europe, its the first major and clearly visible investment into the scene here.
I look forward to visiting the Hub in Vienna tomorrow to get the Austrian perspective on the social enterprise movement in this part of Europe.