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Blake Mycoskie visited Argentina in 2006 and saw children walking in the streets outside Buenos Aires without shoes. He was inspired to take action after learning how shoes are an effective way to combat disease. Nearly one-quarter of the world’s population has soil-transmitted infections, according to the World Health Organization, and they affect the poorest and most deprived communities.
Mycoskie founded TOMS the same year and established a “buy one, give one” model. For every pair of shoes sold, TOMS would provide a new pair of shoes to children in Argentina and other developing countries. TOMS’ dedication to giving has expanded to several items in more than 70 countries.
- More than 60 million people have received pairs of shoes
- More than 400,000 people have received prescription glasses, sight-saving surgery or medical treatment to restore their sight
- More than 335,000 people have received a week of safe water
- More than 25,000 mothers have received safe birth services
TOMS is a well-known example of social entrepreneurship companies, which have recently grown in popularity. Many business leaders are dedicated to changing the world through the idea of social entrepreneurship.
What is social entrepreneurship?
“Social entrepreneurship is about applying practical, innovative and sustainable approaches to benefit society in general, with an emphasis on those who are marginalized and poor,” according to the Schwab Foundation for Social Entrepreneurship.
Certain values and characteristics set “the social entrepreneur apart from the rest of the crowd of well-meaning people and organizations who dedicate their lives to social improvement.” Those characteristics include:
- Achieving large-scale, systemic and sustainable social change
- Focusing first and foremost on the social and/or ecological value creation and trying to optimize the financial value creation
- Innovation through a new product, a new service or a new approach to a social problem
- Continuously refining and adapting approaches in response to feedback
These standards and differences are illustrated in the way that an organization is founded. Fast Company asks six questions that entrepreneurs should answer before starting a social enterprise.
- What is the problem you’re trying to solve? Social enterprises solve a social challenge by using the power of the market. This mission should be considered when developing a business plan, planning to raise capital and implementing a strategy.
- What is your business model? Generally, investors focus on growth, profits and valuation. Social enterprises need a business model that demonstrates value while remaining true to a social mission.
- How will you measure your impact? Investors ask companies not only for their financial projections, but also for how the business model contributes to solving a social problem.
- What is your plan for capital and growth? Investors often expect a successful “exit” within five or so years. Some companies choose an IPO path, acquisition offers or a “recap” to bring in new investors to buy out earlier investors.
- How will you tell your story? Stories can appeal to investors and consumers. This is not an “elevator pitch,” but more of a “passion pitch.” Greyston Bakery employs people to help them out of poverty. Its slogan reads: “We don’t hire people to bake brownies. We bake brownies to hire people.”
- What corporate form should you take? Social enterprises can register as a C corporation, and other forms — B corporation, low-profit limited liability corporation or 501(c)(3) nonprofit with a for-profit subsidiary — may provide more flexibility.
Grace College’s fully online Master of Business Administration provides students with a strong foundation in marketing, accounting, finance and human resources as well as coursework in entrepreneurship.
Content sponsored by Grace College