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What is a social enterprise and how can we use that in our own innovation journey?

I very much enjoyed this chat to Tom Dawkins. There’s no doubt a lot of opportunities lay in the social space for businesses…

Our consciousness has been awaken, even more with Covid… businesses that focus on the social need and are driven to make our world better, will stand out for the right reasons.

Tom is Co-Founder and CEO of StartSomeGood, a social enterprise which helps people design, launch and grow social impact projects. They run the Good Hustle social enterprise design course, the StartSomeGood.com crowdfunding platform as well as the annual #StartingGood Virtual Summit.

They also power impact accelerators and entrepreneur education programs for partners including Optus, ING, the United Nations Development Program and the City of Sydney.

Tom was previously the founder of youth non-profit Vibewire, first Digital Communications Director for Ashoka in Washington DC and the founding Director of the Australian Changemakers Festival.

Tom has created dance parties and film festivals, conferences and co-working spaces, fundraising platforms and Burning Man theme camps. He has spoken at numerous global events including SXSW, SOCAP, Purpose, Progress and The Social Enterprise World Forum and has worked with nonprofits, social enterprises and major corporates to better refine their purpose, communicate their story and build their community.

You can find out more about Tom ...

Good Hustle social enterprise design course:  Tom has a new course starting August 3rd, well worth checking out if you want to learn more about operating a social enterprise.

StartSomeGood crowdfunding platform

#StartingGood Virtual Summit: 

connect with him on Linkedin:

And follow Tom on twitter

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Listen to the full episode here ...

Check out these episode highlights ...

[00:02:26] Definition of Social Enterprise

Technical definition of a social enterprise. So the exact line between being, you know, a typical business and then being a business, that's doing a few ethical things and then a business that's getting a bit more involved and then becoming a social enterprise is a bit of a blurry line because there isn't this one claim, you know, like you're a profit or a for profit.

[00:03:13] Examples of Social Enterprises

So let's say you're a cafe and you want to be socially minded. So what you might do is kind of do a lot of positive things, but are on the outside. And I'm not saying those are the things to do, but you know, you might buy only fair trade coffee there. Yep.

[00:03:28] You might send your, used coffee grounds to an organic waste recycling facility. You might have a spare making room you make available for free local community groups. If they want to host meetings at your cafe, those are all cool things to do, but none of them will make you a social enterprise on their own because they're all kind of around the entrance.

[00:03:48] Yeah, that's what I mean, what makes you a social enterprise? That's when the business model is at the very core of the business so much so that if you removed that impact model from the business, the business would more or less fall over. It wouldn't function because it's actually a key part. So for instance, the social enterprise cafe might be focused on creating employment opportunities to young people who are at risk of homelessness, like say street in Melbourne.

[00:04:10] So if you took that away, they couldn't run those businesses at all. Cause they wouldn't have staff. Right, but in the case of like, but you could, you know, you could swap out fair trade beans, other beans, you could stop making your meeting room available for free. None of those will actually kind of change the core of their business.

[00:04:24] So that's kind of the distinction I see between business. They've been kind of ethical businesses, which people who are doing the right things, kind of around the edges of their business. I don't mean to say around the edges in a way that dismisses this important stuff, you know, by making sure that you, you buy from, you know …

[00:04:42] Fair trade or, you know, environmentally sustainable sources, can support a community groups with the framing space as a cool thing to do. Maybe give a bit to charity, maybe giving 5% of schools. Those are all wonderful things to do, but they won't make you a social enterprise on their own, in an innovation space.

[00:07:08] Future Opportunities

For instance, in generating huge amounts of low carbon power. There's going to be some massive businesses built from the shift towards sustained, production processes. There'd be some massive businesses built around making our cities, spider. And more efficient and more sustainable. So there's some huge commercial opportunities that are aligned with some huge, huge social, environmental challenges as well.

[00:07:33] It's not something that's produced side, but on the other side of the equation, social enterprises work because customers are also looking to align their values with their individual decisions. So once again, not just being like, I'm just going to buy whatever I want over here. And then I'll also contribute to some community projects over there instead of once again, could I do those?

[00:07:53] Could I do that simultaneously? Can I get what I need? You know, the, the food I enjoyed, I want to wear the experiences I want to have, but could I, could I gain those things in a way that also supports broader. Social benefits. And the answer is yes, I could. I launch from two good co I'm, supporting women, escaping domestic violence.

[00:08:14] If I buy clothes from the social outfit, I'm supporting refugee recently arrived refugees and migrants, um, to, to receive them. If I, go to I think another good example, Columbus social, to eat now they're open again, in Western Sydney, I'm also supporting in that case, you know, kind of refugee causes, overseas aid and this, you know, I mean, lots of more and more great examples of how we can do this.

[00:10:10] I'm fairly bullish that, I think in general, the world is moving, you know, I feel. I care about social enterprise sector and where it's going. I really think we are going to become the dominant form of capitalism over the coming decades. And I think ultimately COVID would be a third of boost in that direction.

[00:11:34] And so the idea that we can solve these profound systemic challenges around, you know, justice and equity and sustainability, climate change and democracy using only kind of one third of the available resources seems to me that that's the naive idea to make the idea that we can kind of rewire our capitalism as sustainability to me is it's not guaranteed or easy.

[00:12:26] I mean, if a lot of the smaller businesses are getting this. And so these are individuals who feel passionate about it, clearly who have gone out and open the business, but we know we need to change. That middle ground a bit in business don't read is, do you have a thought process on how you can change that to a business that's already making money and have shareholders and yeah, I mean, there are some great examples, you know, again, it's not, it's not a trade off, I think.

[00:13:48] Advantages of Social Enterprise as a Business Model

In fact, there are massive advantages in having a social purpose. So you look at someone like Unilever, for instance, And they've, they've really focused over the last …

[00:14:00] while, you know, Unilever are by no means a social enterprise, a huge conglomerate, but they've been building a portfolio of what they call purpose brands of brands that do have a clear social purpose and a clear social mission.

[00:14:14] So one of the most well known of those would be Ben and Jerry's. So to Unilever, they really locked into their constitution into that, into that deal, that they would be allowed to continue to pursue their social purpose and their social mission in a variety of ways. And what Unilever have discovered is that they're purposeful brands and that's Ben and Jerry's, Dove many others, significantly outperforming.

[00:15:02] And so we're actually seeing a significant return on investment in terms of purpose, return on purpose. But I think that's been driven in three main ways where that's actually kind of hitting the bottom line in measurable, profound ways. One is around consumer preference. And I think that particularly links to them, maybe not even so much things, you know, preference, but like the communication ecosystem now is one that's very focused on.

[00:15:25] Benefits in Communication Strategy

Sharing, you know, the kind of medium community environment was all focused on interruption. People would pay to interrupt people while they're doing something else. You know, you're watching the football that someone pays with Rocky with an ad you're reading a magazine and someone pays you're walking into the supermarket and someone pay someone to wear a costume and interrupt you with a, with a solicitation, activation requests, all forms of interruption.

[00:15:50] That interruption is it always favors the status quo. Because you need a big budget, corrupt enough people, interruption is expensive. So a communications will dominate it by interruption is one that is always in that, that systemically favors the status quo because it's those people who already have a big, big marketing budget.

[00:16:11] But today, certainly interruption is still happening. It's still important, but more important today is sharing. Are people choosing to share your message for you? With their peers and we pay more attention to messages that come from our peers, the messages that come from companies or institutions. And so this is now a world where social enterprises have a systemic advantage because social enterprises fundamentally mold worth sharing.

[00:16:38] No, you look at like, who gives a crap toilet paper versus Kleenex, you know, which of them is a more interesting thing to share. Yeah. It gives a crap. They both toilet paper. They couldn't be more, more boring and they couldn't be more similar. Really. Yeah. But when you share a picture sure of your, who gives a crap, whether paper you're sharing more than just the fact that you have toilet paper, you're sharing something that's personal about you.

[00:17:02] You're saying I'm a conscious consumer. I'm someone who cares about more than just my needs. I care about what the world needs and what people less at that, you know, and what disadvantage that we need as well. And so social enterprises, I like adapted. So the communications and kind of the world that has emerged then business as usual.

[00:20:09] What are the decisions I have to make today? Well, I'm going to buy from what I'm going to share, who I'm going to work for and how can I make sure those decisions are aligned? With my purpose and my value. And so purposeful companies are recruiting better people, keeping them for longer and inspiring them to work harder to do better work.

[00:25:18] And so I think we'll, I'm hoping that we'll see more and more kind of social enterprise products just slip into the mainstream. I think an example of that, actually, I think like I'm free range eggs. Is a specific example of where that's happened in a specific product category. If you go to Coles, doesn't sell caged eggs anymore.

[00:27:32] The Future

Obviously, but we have a little way to go yet. So I think this is why it's still such a profound moment. I think the social entrepreneurs to commit to this path, cause you can still really get huge advantages right now. Those advantage will be less because it will be less distinctive to have to have that social mission.

[00:27:50] But right now it's still a key differentiator in the market. It's still a reason why people pick you versus someone else. That's a little reason why they'll be both passionate and be more likely to share. Yeah. So you know, the hard work's been done that the concept's been broken out there in the world, so you're not launching something completely foreign and new, but you still could be new in your space to do that.

[00:28:43] I think you could start by looking at what sort of things I could do that kind of. Align with my existing business activities. So, one of the, I think the best places to start for that, it's a little bit the B Corp assessment. So where we're proud, they call apartments a B Corp is a, is like a third party certification for ethical businesses.

[00:29:03] A little bit like, you know, fair trade, but instead of looking at fair trade on aspect, how well do you pay farmers and producers? This looks at kind of everything will 200 different data points about your company ranging from, you know, how many of your suppliers are that already (…)? What kind of power are we?

[00:29:20] Are you using sustainable or unsustainable? So what's the gap between your highest and lowest paid staff members. So what's the representation of women and the minorities on your board or your leadership. Tame to you providing, are you giving the nation's doing philanthropy, allowing your staff to have volunteer time, all of that sort of stuff.

[00:29:56] How To Get Started - BCorp

We're a B Corp and a social enterprise, but there are many big clubs who we wouldn't consider to be social enterprises. They don't have an impact model at the very heart of their business, but they're doing everything they can around that, which I think is really awesome. And so I think what's great about big, well, because it's this huge list of things that you can improve and that you might not have even thought about.

[00:30:14] Like, have you really spent any time thinking about who, you know, who you buy your stationery from, or your power from, and whether they, whether you could align those with social enterprises or ethical. And so it's a really easy. I'm trying to cheat sheet for how to be an ethical business.

[00:30:32] And then I think once you've got those pieces, you can start off bigger, more profound questions as to what would it look like to put impact at the heart of our business. And that may involve, you know, significant changes to your core business model, or it may involve developing new products built from the ground up with that real social framework.

[00:32:38] The Innovation Paradox – Good Ideas vs Great Ideas

I read your great article on LinkedIn, the innovation paradox and this particular statement. And I wanted to get a further take on this is you say. Good ideas look like good ideas, but great ideas look like bad ideas.

[00:33:03] I think that's exactly right, because great ideas, somewhat on a spit. You know, that's innovation. Innovation is not just an incremental improvement. Normally it's an evolutionary improvement, generational improvement on something, and those kinds of ideas often look impractical or unlikely to work.

[00:33:23] Well, I mean, they don't just look unlikely where they are unlikely to work. So, you know what I mean by good idea is something that, you know, you've got some pitches, you, their idea what a good idea. But I think those that I think that happens more commonly in great ideas. And that's why we have that reaction to good ideas.

[00:33:41] Good ideas make sense. They feel status quo. You hear it? I'll tell you. I think the best idea I've heard recently in this kind of good idea, good versus great to disparaged all week. Lots of good ideas. I'm all men kind of how easily easy to grasp and how well it fits with existing kind of parameters.

[00:36:42] Yeah. And so the kind of big picture though, commercial startup investment world, you could kind of put it into two broad buckets, angel investors who invest their own money very early, normally before Austin, before there's been any revenue, any launch, maybe no business model yet. and so, because they're missing their own money, they can do so on

[00:42:53] Crowd Funding

Crowd funding kind of does address that challenge? It basically diffuses risk across a wider group of people. And therefore it breaks it down to each, each of that kind of acceptable level of risk. You know, I wouldn't, if you have a cool new idea for a session, I couldn't give you 50,000 and I couldn't give you 5,000.

[00:43:15] I probably couldn't use $500, but if I think it's super cool, I can give you 50. Yeah. If you could find another.

[00:43:26] Yep. And if it turns out not to work, yeah. That was $50. It was worth a try. You'll learn something from it, then we'll do better next time. And so companies playing a really important role in helping people. Try new things and essentially funded experiments. It's not in and of itself. It hasn't kind of replaced the other sources of capital.

[00:43:49] If you added up like all the successful crowd funding, it sounds impressive, but it's a fraction of all the funds impact investments of mainstream investments. It's a tiny, tiny fraction of that. I think the best way to give back crowdfunding to some extent, as much as an alternative source of capital, but an alternative source of validation.

[00:47:03] Good Hustle – Social Enterprise Design Course

Good hustle is our social enterprise design course. So it's a 10 week cohort based online program. To design a launch or growth ready. We launched about a year ago. So we're currently enrolling Africa seventh cohort into the program and the results so far have been really amazing.

[00:47:21] Everything we hoped for.And a big part of that. And cause our motivation was that we see a lot of people at our company. You know, we talked before you mentioned a great place to start. Uh, I wouldn't say it's a bad place to be like, it's, it's a great next step for a lot of people, but it's not very first step, you know, cause you've really got, because to succeed at crowd funding, you need to do a lot of work before refining your idea, figuring out who it's for nailing your value proposition, your theory of change, et cetera.

[00:47:47] So we work really hard at our company platform to not just give people the tools, but to teach them how to use them effectively as well. But there's only so much you can do when you, when you, when people cause people don't intend to come to the platform, you know, I'll wake up before they walk and watch their campaigns with a week or two to go.

[00:48:02] There's only so much, you can reimagine your impact, your theory of change or your business model will help them refine how they express those things, hopefully, and then who they want them to. But you can't go too much deeper than that in that timeframe. And so what we realized we really want to do, you know, we just see so many people who are.


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