Sally Osberg & Roger Martin: Social Entrepreneurship: The Case for

Definition

Social entrepreneurs are entrepreneurs (perception of pattern & opportunities,

attitude, & behavior) –The word social simply modifies entrepreneurship.

Entrepreneurial Context (starting point of entrepreneurship)

1. Steve Jobs and Steve Wozniak (Apple)

Problem: users were dependent on mainframe computers controlled by a
central IT staff who guarded the mainframe like a shrine. If users wanted a
software program to do something out of the ordinary, they were told to wait six
months for the programming to be done.

Solution: they invented a personal computer that allowed users to free

themselves from the mainframe.

2. Pierre Omidyar and Jeff Skoll (Ebay)

Problem: inability of geographically based markets to optimize the interests of
both buyers and sellers. Sellers typically didn’t know who the best buyer was and
buyers typically didn’t know who the best (or any) seller was.
Solution: the creation of eBay provided a superior way for buyers and sellers to
connect, creating a higher equilibrium.
3. Ann and Mike Moore (Snugli)
Problem: parents’ limited options for toting their infants.
Solution: she developed the Snugli, a frameless front- or backpack that enables
parents to carry their babies and still have both hands free
4. Fred Smith (FedEx)
Problem: long-distance courier service
Solution: had to convince himself and the world that it made sense to acquire a
fleet of jets and build a gigantic airport and sorting center in Memphis, in order
to provide next-day delivery without the package ever leaving FedEx’s
possession.

Entrepreneurial Characteristics

Entrepreneurs are attracted to suboptimal equilibrium, seeing it an opportunity to

provide new solution(improvement/enhancement), product, service, or process.
Characteristics:

a. INSPIRATION
- Entrepreneur is inspired to alter unpleasant equilibrium.
- MOTIVATED because they may be frustrated users/they empathize frustrated
users
b. CREATIVITY
- Thinks CREATIVELY & develops new solution that breaks existing one.
- Finds WHOLLY NEW WAY approaching the problem, rather than minor
adjustments.
c. DIRECT ACTION
- Entrepreneurs take DIRECT ACTION by creating new products & venture to
advance it.
- Does not wait for someone else to intervene.
d. COURAGE
- Bearing the burden of risk & staring failure squarely if not repeatedly in the face
- Take BIG RISKS

e. FORTITUDE
- To drive their creative solutions thru fruition & market adoption
- Entrepreneurs need to be able to find creative ways around the barriers &
challengers that arise.

ENTREPRENEUR VS SOCIAL ENTREPRENEUR

Entrepreneur
- The value proposition anticipates and is organized to serve markets that can
comfortably afford the new product or service, and is thus designed to create
financial profit.
- Profit = sine qua non

Social Entrepreneur

- Aims for value in the form of large-scale, transformational benefit that accrues
either to a significant segment of society or to society at large
- “mission related impact”
- individuals who take financial resources and convert them into changing the
world
- Social Impact comes first and Financial Stability comes second.
3 Components:

 Identifying a stable but inherently unjust equilibrium that causes the exclusion,
marginalization, or suffering of a segment of humanity that lacks the financial
means/financial clout to achieve any transformative benefit on its own;
 Identifying an OPPORTUNITY in this unjust equilibrium, by developing a SOCIAL
VALUE PROPOSITION, & bringing to bear inspiration, creativity, direct action,
courage, & fortitude, thereby challenging the stable state’s hegemony; and
 FORGING A NEW STABLE EQUILIBRIUM, that releases trapped
potential/alleviates the suffering of the targeted group & thru imitation & the
creation of stable ecosystem around the new equilibrium ensuring a better
future for the targeted group & even society @ large.

Muhammad Yunus
- Founder of Grameen Bank
- Father of Microcredit
Yunus confront the system and lend $27 from his pocket to 42 women in the village of
Jobra. Women repaid the loan. Yunus found that with even tiny amounts of capital,
women invested in their own capacity for generating income.

Robert Redford (well known actor, director, and producer)

- Identified an oppressive but stable equilibrium in way Hollywood works, with its
business model increasingly driven by financial interests.
- Created Sundance Institute to “take money out of the picture”
- Created Sundance Film Festival to showcase independent filmmaker’s work.

Victoria Hale (pharmaceutical scientist)

- The populations most in need of drugs were unable to afford them.

- Hale became determined to challenge this stable equilibrium, which she saw as
unjust and intolerable.
- Created the Institute for OneWorld Health (first nonprofit pharmaceutical
company whose mission is to ensure that drugs targeting infectious diseases in
the developing world get to the people who need them, regardless of their
ability to pay for the drugs.)
- Paromomycin (provides a cost-effective cure for visceral leishmaniasis, a disease
that kills more than 200,000 people each year.)
Social Service Provision

- A courageous and committed individual identifies an unfortunate stable

equilibrium – AIDS orphans in Africa, for example – and sets up a program to
address it.

Social Activism

Instead of taking direct action, the social activist attempts to create change through
indirect action, by influencing others – governments, NGOs, consumers, workers, etc. –
to take action.

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J. Gregory Dees, Meaning of Social Entrepreneurship

- Social Entrepreneurs play the role of change agents in the social sector by:
 Adopting a MISSION to create & sustain social value (not just private value)
[Social Mission]
 Recognizing & relentlessly pursuing new opportunities to serve that mission.
[Perceive non-traditional opportunities]
 Engaging in a process of continuous innovation. Adaptation, & learning
 Acting boldly w/o being limited by resources currently in hand [resourceful]
 Exhibiting heightened accountability to the constituencies served & for the
outcomes created [ethical].
Origins of the word: Entrepreneur

KEY THINKERS:

17th and 18th centuries “entrepreneur” (French Economics)

1. Jean Baptiste Say (French economist)

“the entrepreneur shifts economic resources out of an area of lower &
into an area of higher productivity & greater yield.” – 19th century
- “the one who undertakes”
- create VALUE

2. Joseph A. Schumpeter – 20th century

“Innovation is the market introduction of a technical/organizational
novelty, not just its invention.”
- Innovators who drive the “creative destructive” process of capitalism
- Change agents in the economy
- By serving new markets/creating new ways of doing things; they move the
economy forward.
- Unternehmer (identifies a command opportunity an dorganizes a venture to
implement it.

3. Peter Drucker (Austrian Economist)

- Entrepreneurs focus on OPPORTUNITY, specifically EXPLOITING
OPPORTUNITIES.
- Canny and committed exploiters of change
- “the entrepreneur always searches for change, responds to it and exploits it
as an opportunity”
- not all business are entrepreneurial

4. Israel Kirzner (British Economist)

- ALERTNESS is entrepreneur’s critical ability
- Recognize competitive imperfections in markets

5. Howard Stevenson (American Educator)

- Resourcefulness to opportunity
- “Pursuit of opportunity w/o regard to resources currently controlled”
- Entrepreneurs mobilize the resources of others to achieve their
entrepreneurial objectives.
SOCIAL ENTREPRENEURS PRESENTED IN CLASS:

Winchester Lemen (Envirotech Waste Recycling Inc.)

 Davao Recycled Plastic King
 Envirotech: a company that recycles plastic waste into different products like
school desks, chairs, benches and even building components.
 With this, he can easily reduce the volume of waste clogging drainage canals&
filling the landfills of major towns/cities.
 Would lessen the problem of pollution because plastic mats he would recycle
would no longer got o landfill sites.
 They’re not only cleaning & protecting the environment, but also PROVIDING
LIVELIHOOD to the poor, to the workers in the factory, processing the wastes.
Muhammad Yunus
 Yunus confront the system and lend $27 from his pocket to 42 women in the
village of Jobra. Women repaid the loan. Yunus found that with even tiny
amounts of capital, women invested in their own capacity for generating income.

Anya Lim (Anthill Fabric Gallery)

 a social and cultural enterprise that works to preserve and promote our Philippine
weaving traditions by applying them in contemporary design for everyday
essentials to attract younger generation of weavers and weave wearers and
provide sustainable livelihood to partner communities.

Michael Harris Conlin (The Giving Cafe)

 to use part of its proceeds to sustain barangays of coffee farmers in La Trinidad,
Benguet, in an effort to promote sustainable coffee farming and reignite local
coffee production.
 a social enterprise and coffee shop created by Henry & Sons in order to sustain
the FSCE, whose beneficiaries include the coffee farmers in La Trinidad, Benguet.
 promotes sustainable coffee farming, and second, will propel the Philippines
again as one of the top coffee producers in the world, albeit one barangay at a
time.

Jaime Jim Ayala (Hybrid Network)

 founded the Hybrid Network, a cluster of social businesses that pioneered the
"hybrid value chain" concept.
 seeks to provide Filipinos in need with access to high-quality and affordable
products and training services necessary for development.
 distributes a large selection of durable, warranty-protected solar-powered lights
with cell phone charging capabilities, in order to provide a source of light and
communication to off-grid communities.
Marie Cavosora (Calaboo)

 committed to paying farmers above-market price for their milk
 carabao outshines it in terms of its milk’s nutritional value: almost double the
calcium and phosphorus,
 Starting with farm fresh milk from grass-fed carabaos, nature’s goodness is just a
serving away. And when you purchase our products, we’re able to pass the
benefits directly to farmers. So while you gain wellness for yourself, you also gain
well-being to others.
 Provides auxiliary support such as GK values formation, leadership and
practical training, and access to health coverage and education so our dairy
farmers are enabled to improve their quality of lives.

Maria Angela Villalba (Unlad Kabayan)

Jourdan Sebastian (Taclob)

 a social enterprise dedicated to providing jobs for the victims of typhoon Yolanda
in one of its worst-hit areas, Tacloban.
 to provide livelihoods for families through sustainable, disaster-ready bags that,
most importantly, are made entirely by survivors putting their lives back
together.

Tony Meloto (Gawad Kalinga)
2003

 To eliminate poverty, Gawad Kalinga focuses on sustainable community building
through the creation of “GK villages” to address housing, education,
environment and health issues.
 A global movement for building sustainable communities within slum areas.

Liza Morales Crespo & Mariella de Leon-Lazaro (Tali Handmade)

 builds the lives of marginalized women in the country and gives them a sense of
empowerment through social enterprise.

Kristina Reyes-Lopez (Messy Bessy)

 a non-toxic and all-natural household and personal care line
 50 to 60 percent of its workforce are “learners” or out-of-school youth selected
from different non-profit organizations and depressed areas, given a new lease
in life through a special scholarship program.


Bryan McClelland (Bambike)

 Bambike is a socio-ecological enterprise based in the Philippines that hand-
makes bamboo bicycles with fair-trade labor and sustainable building practices
 have programs that include scholarships, sponsoring a preschool teacher, and a
weekly feeding program for children, as well as a bamboo nursery for
reforestation.
  Bambike is a company that is interested in helping out people and the planet,
dedicated to social and environmental stewardship.
 Our goal is to do better business and to make the greenest bikes on the planet

Therese Fernandez-Ruiz (Rags to Riches)

 To help poor women earn a decent living through turning waste such as scrap
fabric into high-value products.
 The social enterprise “was created to provide these artisans with fair access to
the market and the formal economy, as well as with additional skills-based,
financial and health training so that they can maximize their career potential and
take steps towards long-term financial and personal well-being