Getting Beyond Better

1. Social entrepreneurship targets equilibrium change, not just incremental improvement

Social entrepreneurs seek to go beyond better, to bring about a transformed, stable new system that is fundamentally different than the world that preceded it.

Transformative change. Social entrepreneurs aim to shift entire systems, not just improve existing conditions. They target unhappy equilibriums - stable but unjust situations that marginalize or exclude segments of society. Unlike social service providers who ameliorate problems or social advocates who lobby for change, social entrepreneurs take direct action to create new, more optimal equilibriums.

Characteristics of social entrepreneurship:

• Identifies a stable but inherently unjust equilibrium
• Develops an equilibrium-shifting solution with social value
• Creates a new, sustainable equilibrium that releases trapped potential

Examples like Muhammad Yunus's Grameen Bank demonstrate how social entrepreneurs can fundamentally transform systems, in this case providing access to credit and financial services for millions of poor people previously excluded from the banking system.

2. Understanding the current system is crucial before attempting transformation

The paradox of social transformation is that one has to truly understand the system as it is before any serious attempt can be made to change it.

Deep system knowledge. Successful social entrepreneurs invest significant time and effort in understanding the current equilibrium before attempting to change it. This involves navigating three key tensions:

• Abhorrence vs. appreciation: Balancing outrage at injustice with curiosity about why the system persists
• Expertise vs. apprenticeship: Leveraging existing knowledge while humbly learning from those in the system
• Experimentation vs. commitment: Testing ideas while maintaining focus on the ultimate goal

Molly Melching's work with Tostan in Senegal illustrates this approach. By deeply immersing herself in Senegalese culture and communities for years, she gained the insights needed to effectively address issues like female genital cutting in a culturally sensitive way.

3. Envisioning a new future requires specificity and adaptability

Social entrepreneurs envision a stable and sustainably transformed world that exists on a new, substantially healthier plane for that targeted population and, often, for society at large.

Clear, compelling vision. Effective social entrepreneurs articulate a specific vision of a transformed future equilibrium. This vision should:

• Target a defined beneficiary group while considering the broader system
• Describe a compelling, superior future state
• Remain adaptable as conditions change

The vision serves as a north star, guiding all subsequent efforts. For example, Riders for Health envisioned a future where reliable transportation systems enable consistent healthcare delivery across Africa. This specific yet systemic vision drove their development of innovative fleet management solutions.

4. Building a model for change involves reengineering the value equation

Successful social entrepreneurs must build their models for change with both cost and value in mind, challenging assumptions and finding mechanisms that turn a losing value equation into a winning one.

Value equation transformation. Social entrepreneurs create models that fundamentally alter the economics of the system they seek to change. They can:

• Enhance value: e.g., creating transparency standards or measurement rubrics
• Reduce costs: e.g., lowering capital or operating expenses

Key mechanisms include:

1. Adding customer value through transparency (e.g., GoodWeave's rug certification)
2. Adding government value via measurement (e.g., Pratham's ASER education survey)
3. Enhancing value of existing assets (e.g., One Acre Fund's farmer training)
4. Reducing capital costs by borrowing assets (e.g., Imazon using NASA satellites)
5. Investing in platforms to lower operating costs (e.g., Kiva's microlending platform)
6. Substituting lower-cost labor (e.g., APOPO's landmine-detecting rats)
7. Creating low-cost products/services (e.g., Proximity Designs' affordable irrigation tools)

5. Scaling solutions demands intentional design and systemic approaches

Scale, even when defined explicitly as scale of impact rather than scale of organization, is hard to achieve. It is the stage that marks the true equilibrium shift, and is the stage at which many would-be social entrepreneurs fail.

Deliberate scaling strategies. To achieve widespread impact, social entrepreneurs must:

1. Design for economies of scale
2. Take a systemic approach, leveraging other ecosystem actors
3. Use open-source models that encourage replication

Successful scaling often involves:

• Documenting the model to enable replication
• Refining the approach over time based on feedback and results

Partners In Health exemplifies effective scaling through its community-based care model. By partnering with local organizations and governments, PIH has expanded its impact far beyond what it could achieve alone, transforming health systems across multiple countries.

6. Successful social entrepreneurs navigate key tensions in their work

Social entrepreneurs must navigate three powerful tensions in understanding the world they wish to change: abhorrence and appreciation; expertise and apprenticeship; and experimentation and commitment.

Balancing act. Effective social entrepreneurs skillfully manage opposing forces:

1. Abhorrence vs. Appreciation: Maintaining outrage at injustice while deeply understanding the current system
2. Expertise vs. Apprenticeship: Leveraging existing knowledge while humbly learning from those in the system
3. Experimentation vs. Commitment: Testing new approaches while staying focused on the ultimate goal

These tensions arise throughout the social entrepreneurship process, from understanding the world to scaling solutions. Navigating them requires self-awareness, adaptability, and a willingness to embrace paradox.

7. Social entrepreneurship fills the gap between government and business innovation

Social entrepreneurship negotiates these constraints.

Bridging sectors. Social entrepreneurship offers a distinctive approach to driving change, filling the space between government-led and business-led transformation.

Key differences:

• Government: Mandatory, ubiquitous, driven by social benefit
• Business: Voluntary, limited, driven by profit
• Social Entrepreneurship: Combines elements of both to address challenges ill-suited to either sector alone

Social entrepreneurs like Nandan Nilekani (Aadhaar unique ID program in India) demonstrate how principles from both government and business can be creatively combined to tackle complex social challenges. By operating in this hybrid space, social entrepreneurs can drive innovations that neither government nor business alone could achieve.

Last updated: October 4, 2024