Why things are harder for social entrepreneurs
Starting a successful company is challenging. Social entrepreneurs face even greater difficulties due to their commitment to social impact. Incorporating socially responsible features into business models can lead to non-traditional risk-return profiles, slower paths to profit, and increased costs.
As Enviu, we adopt the lean startup methodology. This approach prioritizes ideation, testing, and validation before fixating on immediate profitability.
Lean? What’s that?
The essence of lean thinking, initially developed by Toyota, involves cutting unnecessary waste, focusing on learning and striving for continual improvement. This approach has been successfully applied in various fields and was adapted for business startups by Eric Reis in his book The Lean Startup. Here are the key reasons why the lean approach particularly benefits social entrepreneurs.
Benefits for social entrepreneurs
1: Low cost, low waste
Social entrepreneurs often struggle to secure funding due to non-traditional risk-reward profiles and longer paths to profitability. The lean startup methodology helps address this challenge by providing a framework to work within limited sources. Validating interests from consumers and suppliers with minimal budgets and making impact-driven ventures is an appeal for investors.
2: Learning fast
Socially responsible business models can introduce additional costs for users. Learning quickly is essential When designing ventures requiring consumers to change their habits. The lean approach emphasizes collecting data, delivering a viable product, and continuously iterating based on feedback. This process allows social entrepreneurs to pivot their business model quickly to meet market demands.
3: Getting started now
Social entrepreneurs are responsible for designing ventures that promote a sustainable future and convince stakeholders of their financial viability. In order to comprehend the situation broadly, you have to get out of the office. The best way to do this is by taking business models to the field, testing them, and collecting data demonstrating practical effectiveness.
Working lean can help tackle our most urgent challenges
The urgency of our planet’s challenges requires social entrepreneurs to bring solutions to market as quickly as possible. The lean approach can assist entrepreneurs in overcoming capital constraints and connecting with funders.
In conclusion, we encourage more social entrepreneurs to embrace the lean approach in building their solutions and operations. By doing so, they can demonstrate the benefits of a funding approach that emphasizes ideation, testing, and validation. This approach enables them to focus on building the solutions our world urgently needs while staying true to their mission of creating a positive impact.