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Accelerating Austin’s Social Enterprise Conversation

By Nell Edgington



This is RISE week in Austin.  RISE (Relationship and Information Series for Entrepreneurs) was started by the Sosa crew–Roy and Bertrand Sosa (brothers) and Roy’s wife Suzi.  The brothers immigrated from Mexico in 1986 and started a company called NetSpend, selling prepaid credit cards to recent immigrants.  Netspend went on to be very successful, and they sold the company in 2006 to launch MPOWER Ventures, a double-bottom-line venture capital fund whose mission is to empower the world’s underserved, and MPOWER Labs a research and development incubator and business accelerator.

The Sosa’s are firm believers in entrepreneurship and are a testament to its power to transform people and communities.  They launched RISE in 2007 as a way to ensure that “Austin continues to be a leader in developing top level entrepreneurs who transform their vision into successful businesses that greatly contribute to our local, national and global economy.”  They believe that Austin has been and will continue to be uniquely positioned to foster successful entrepreneurs:

There is no better place on earth than Austin, Texas for an entrepreneur to gather the tools they need for success. As a unique intersection of the academic, public and private sectors, our city has proven itself to be an environment for entrepreneurs to succeed. Austin is home to household names such as Whole Foods Market, GSD&M Idea City, A Glimmer of Hope Foundation, Silicon Labs, The Lance Armstrong Foundation and Sweet Leaf Tea.

RISE differs from most entrepreneurial conferences, though, in that it includes a social entrepreneurship track.  The Sosas believe very strongly in social entrepreneurship, as they themselves are social entrepreneurs.  There are many great sessions on the schedule this week from Philip Berber’s (founder of A Glimmer of Hope) session on his journey from entrepreneur to social entrepreneur, to Kala Philo’s session on Muhammed Yunus’ social business model, to Doug Ulman’s (CEO of the Lance Armstrong Foundation) session on social entrepreneurship, and several others.  These sessions have all been standing room only.  It’s really exciting to see such an interest in this topic in Austin.

My colleague Jessica Shortall and I even got in on the game by presenting Startups with Social Impact, an overview of Social Enterprise, which we define as “An organization (business or nonprofit) that achieves significant social impact as a product of market-based activity.”  And then broke it down into three types, which is our modification of Venturesome‘s 3 Models of Social Enterprise:

  • Subsidized: Business activity operated by a nonprofit–profits are funneled back into nonprofit
  • Trade-off: Business balances between the level of profitability & the creation of social impact. An increase in one decreases the other.
  • Lock-step/Social Business: Direct social impact increases or decreases in parallel with financial returns.

Social Enterprise can be viewed along a spectrum like the one below, where potential for profit starts at the first Trade-Off model:

Then, two great Austin examples of social enterprise spoke to the standing-room-only group.  First, Missy Nathan, co-founder of Blue Avocado discussed how their green grocery bag system has taken off in just 4 short months through Wholefoods and other distribution channels.  Their Lock-Step business model has a triple bottom-line:  profit, environmental and social return.  They even give 1% of sales to Kiva.  Their supply chain is diligently monitored to ensure that they are environmentally sound, and they closely track and report on the number of plastic bags being reduced.  This team of three smart, tenacious women has huge goals and appears prepared to deliver on them.

Our second social enterprise was English at Work, a nonprofit that teaches English at the workplace to Spanish-speaking company employees.  Founder Maile Broccoli-Hickey discussed their unique business model which charges their company clients (large hotels, restaurants and other employers) to provide on-site English language classes to their employees.  Although they are currently charging the companies only 25% of the costs of the class, the goal is to move closer to 50% and beyond.

The session ended with a vigorous discussion of what is holding Austin back from becoming a leading social enterprise city.  Some thoughts included:

  • Lack of capital–investors don’t understand or aren’t familiar with double-bottomline companies, so are unwilling to invest
  • Low media interest in/attention to social enterprise
  • Few events that bring together social entrepreneurs and investors
  • Unclear understanding of the current social enterprise eco-system, and what is lacking compared to other thriving cities like San Francisco, London, Toronto, Pittsburgh

Some suggested the first step may be a wiki that lays out the current social enterprise ecosystem.  Once we understand what we have and where we are, we can determine what it will take to evolve.  Also, many are excited about the possibility of Brewster McCracken becoming our next mayor.  He has expressed a real interest in this area, especially as it pertains to the green economy.

There are many more sessions on tap for today and tomorrow and many more conversations to come.  But the energy and excitement for social enterprise is palpable.  I hope to see it grow.

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.

Wednesday, March 4th, 2009 Social Enterprise

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2 Comments to Accelerating Austin’s Social Enterprise Conversation

[...] RISE finished up late last week.  It was great to see all of the energy and excitement around social entrepreneurship.  Indeed it seems that Austin has caught the tide of interest in social entrepreneurship that is sweeping the nation in the wake of the economic meltdown.  Even the New York Times got on board last week with an article about how social entrepreneurship might be the best business model for some market opportunities. [...]

James Norris
April 8, 2009

I’m so glad Austin has you Nell!

As you discussed in the article, a wiki that outlines the ecosystem here in Austin is a great first step. Here’s our start: http://groups.google.com/group/austinsocialinnovation.

I think you deserve some of the credit for getting this off the ground, so thanks again.

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