Mistakes of a Social Entrepreneur

Hosted by Jeremy Hockenstein (February 2012)

This month marks our 10^th anniversary as a social enterprise. On February 4, we celebrated our achievements and successes with staff, clients and donors at a big party in Phnom Penh, as well asonline. And we invite you to download our e-book “The Confidence to Dream”, in which several of our graduates tell their stories in their own words. Here on Social Edge, we will also share some of the things we would do differently, if only…

Digital Divide Data (DDD) creates jobs for talented youth inCambodia, Laos and Kenya by delivering business process outsourcing services to clients. Working in this enterprise, while attending university, empowers our staff with the skills and experience they need to lift themselves out of poverty. We are now employing nearly 1,000 staff.

When I reflect on the past decade, I often joke that our current board of directors would have never approved the plans we used to start-up ten years ago! Since then, we have taken countless missteps. Over the next few weeks, I would like to share some of those mistakes—and what we’ve learned. It’s a bit easier after ten years to talk about failure, but I hope some of you will be inspired to share what’s not working in your organizations. In my experience,acknowledging what we’re doing wrong has been the first step towards improvement. I’ll start with a few—and then let’s engage in a dialogue about these and others.

Dream Big, but Think Realistically

When we started in Phnom Penh, DDD employed 20 youth. When people asked me about the difference we were making, I told them it was huge—that our impact on those young people’s lives was infinite. But we were ambitious. In 2003, we made a plan to open new offices every year. Once we realized the complexity of managing operations across offices in Phnom Penh and Battambang, Cambodia and Vientiane, Laos, it took seven years to launch our next office in Nairobi, Kenya!

Focus on Whom You Can Help

Initially, DDD was ready to give a job to nearly anyone who walked in the door and could type. We took support from a donor to work with a group of young women who were vulnerable from their experience being trafficked, without knowing much about this population. While we worked tirelessly to provide support to help them stabilize their lives, their level of education didn’t prepare them for the type of jobs we had at DDD. We helped them find jobs that fit their skills—and established criteria of high school graduation for new recruits.

Hire Ahead of the Curve

For the first three years, my colleague and co-founder, Jaeson Rosenfeld and I, sold all the client work we did at DDD. In our early years, we found great volunteers and made a few hires of bright, passionate people—but with no direct experience in our business. Our early team did amazing things. And, now, as I see the value that experienced staff brings, I wish we had found a way to hire talent like this earlier.

Food for thought:

• As social enterprises, we are often resource challenged; how can we collectively benefit from sharing our experiences about what works and what doesn’t?
• What have been your challenges in expanding operations, hiring experienced staff and defining your target audience?
• If you could turn back time in your social enterprise, what would you do differently?
• What’s the “best” mistake your organization made; the one that you learned the most from?

Join Jeremy Hockenstein, co-founder and CEO of Digital Divide Data, in the conversation. And share your mistakes and your victories!

Source: http://www.socialedge.org/discussions/social-entrepreneurship/mistakes-of-a-social-entrepreneur

Design Thinking for Social Innovation

Designers have traditionally focused on enhancing the look and functionality of products. Recently, they have begun using design techniques to tackle more complex problems, such as finding ways to provide low-cost healthcare throughout the world. Businesses were the first to embrace this new approach—called design thinking—and nonprofits are beginning to adopt it too.


By Tim Brown & Jocelyn Wyatt | 25 | Winter 2010

In an area outside Hyderabad, India, between the suburbs and the countryside, a young woman—we’ll call her Shanti—fetches water daily from the always-open local borehole that is about 300 feet from her home. She uses a 3-gallon plastic container that she can easily carry on her head. Shanti and her husband rely on the free water for their drinking and washing, and though they’ve heard that it’s not as safe as water from the Naandi Foundation-run community treatment plant, they still use it. Shanti’s family has been drinking the local water for generations, and although it periodically makes her and her family sick, she has no plans to stop using it.I

Shanti has many reasons not to use the water from the Naandi treatment center, but they’re not the reasons one might think. The center is within easy walking distance of her home—roughly a third of a mile. It is also well known and affordable (roughly 10 rupees, or 20 cents, for 5 gallons). Being able to pay the small fee has even become a status symbol for some villagers. Habit isn’t a factor, either. Shanti is forgoing the safer water because of a series of flaws in the overall design of the system.

Although Shanti can walk to the facility, she can’t carry the 5-gallon jerrican that the facility requires her to use. When filled with water, the plastic rectangular container is simply too heavy. The container isn’t designed to be held on the hip or the head, where she likes to carry heavy objects. Shanti’s husband can’t help carry it, either. He works in the city and doesn’t return home until after the water treatment center is closed. The treatment center also requires them to buy a monthly punch card for 5 gallons a day, far more than they need. “Why would I buy more than I need and waste money?” asks Shanti, adding she’d be more likely to purchase the Naandi water if the center allowed her to buy less.

The community treatment center was designed to produce clean and potable water, and it succeeded very well at doing just that. In fact, it works well for many people living in the community, particularly families with husbands or older sons who own bikes and can visit the treatment plant during working hours. The designers of the center, however, missed the opportunity to design an even better system because they failed to consider the culture and needs of all of the people living in the community.

This missed opportunity, although an obvious omission in hindsight, is all too common. Time and again, initiatives falter because they are not based on the client’s or customer’s needs and have never been prototyped to solicit feedback. Even when people do go into the field, they may enter with preconceived notions of what the needs and solutions are. This flawed approach remains the norm in both the business and social sectors.

As Shanti’s situation shows, social challenges require systemic solutions that are grounded in the client’s or customer’s needs. This is where many approaches founder, but it is where design thinking—a new approach to creating solutions—excels.

Traditionally, designers focused their attention on improving the look and functionality of products. Classic examples of this type of design work are Apple Computer’s iPod and Herman Miller’s Aeron chair. In recent years designers have broadened their approach, creating entire systems to deliver products and services.

Design thinking incorporates constituent or consumer insights in depth and rapid prototyping, all aimed at getting beyond the assumptions that block effective solutions. Design thinking—inherently optimistic, constructive, and experiential—addresses the needs of the people who will consume a product or service and the infrastructure that enables it.

Businesses are embracing design thinking because it helps them be more innovative, better differentiate their brands, and bring their products and services to market faster. Nonprofits are beginning to use design thinking as well to develop better solutions to social problems. Design thinking crosses the traditional boundaries between public, for-profit, and nonprofit sectors. By working closely with the clients and consumers, design thinking allows high-impact solutions to bubble up from below rather than being imposed from the top.

Design Thinking at Work

Impact Investing and Social Entrepreneurship

New innovations to generate social and environmental impact, with the potential for financial returns

Zurich/Davos,  January 26, 2012

Today at the World Economic Forum in Davos, the Credit Suisse Research Institute, in collaboration with the Schwab Foundation for Social Entrepreneurship, releases the key findings of its report entitled “Investing for Impact: How social entrepreneurship is redefining the meaning of return.” The report provides insight into the major trends shaping Impact Investing today and its ability to tackle some of the world’s most intractable societal problems.

Today, more than ever before, investors and entrepreneurs are proactively investing capital in solutions designed to generate a positive social or environmental impact, as well as the potential for financial returns. In practice, these solutions are emerging in most parts of the world, across nearly all asset classes, and at many different levels of risk and return. And although this field is still at a relatively early stage in its development, recent activities suggest that Impact Investing may be reaching a tipping point, with the potential to channel large-scale private capital for social and environmental benefit.

In this report, the Credit Suisse Research Institute explores the opportunities and complexities of Impact Investing. Primary focus is placed on Social Entrepreneurship. Here, direct investments are made into social enterprises that provide scalable, self-sustaining solutions to address global problems. Examples include access to clean water, improved health care or the provision of clean energy. Such investments create a direct and measurable impact, as well as offer the potential for financial returns. Beyond direct investments into social enterprises, other newly emerging financing innovations available to social entrepreneurs are also discussed.

The report further covers the latest trends shaping the field of Impact Investing, including the promise and risks of scaling growth for social enterprises, the importance of the right mix of financing structures to achieve scale, the development of standardized metrics, and the lessons learned by pioneering Impact Investors. Contributors to the publication include some of the most prominent leaders in the field today - Mark Kramer, the founder of FSG Social Impact Consultants, Rupert Scofield, the founder of FINCA International, and Sir Richard Branson, founder of the Virgin Group.

Giles Keating, Head of Research for Private Banking and Asset Management at Credit Suisse, states: “Increasingly, clients are looking for innovative ways to generate financial return alongside social and environmental impact. Today, many philanthropists and investors view Impact Investing as a viable alternative and perhaps a more effective vehicle to create social change than pure charity.”

Mirjam Schöning, Senior Director of the Schwab Foundation for Social Entrepreneurship, adds: “This report clearly highlights how Impact Investing provides great promise in addressing some of the world’s most pressing social and environmental issues.”

Source: https://www.credit-suisse.com/news/en/media_release.jsp?ns=41934