Identifying profitable business models that help bring people out of poverty has become an increasingly sexy topic among those working towards social and economic development. There seems to be a generalized realization that traditional grant-based giving needs to evolve and be complemented with market-based approaches.
This trend is not only evident by the work of respected social sector organisations, such as the Rockefeller Foundation, the Omidyar Network or the Bill & Melinda Gates Foundation, but also by an increase in social-enterprise-friendly regulation across the globe (as crisis-struck governments seek cost-effective alternatives to delivering important social services and promoting economic development). [See examples: Social Value Act UK, Social Business Initiative in the European Union].
The fact that the search for successful business models that solve social problems has increased significantly is also demonstrated by the growth in the venture philanthropy or social impact investment industries. The latest JP Morgan report (January 2013) asserts that this year there will be more than 9 Billion available for social impact investing. Also, the European Venture Philanthropy Association research (March 2013) shows a trend towards the use of increasingly complex financing mechanisms and tools to finance social purpose entities (even by traditional grant-giving organisations).
Promoting social entrepreneurship: top of the list
So, it is evident that those who have the money to invest in social impact consider that promoting social enterprise is a great opportunity to effectively address poverty-related issues. Identifying, fostering and scaling social enterprise is moving up on everyone’s agenda. However, one of the huge challenges haunting those who seek to promote social enterprises is the great cost of finding them and then fostering and monitor their growth. Current demands for social impact require much greater efficiency to increase scale and reach. As is the case in many other sectors, technology can help.
Technology can help!
One entity facilitating the identification and scaling of social enterprises is Pullapproach, co-founded by a group of young tech-savy entrepreneurs from around the world. Our own ESADE MBA Alumni Robin Rahe (Class 2012) is leading this efforts as the director of strategic development. Pullaproach was born as a technology company determined to use its technical capabilities to generate significant social impact on a global scale. To achieve this it designed a two-pronged approach to identify and scale social enterprises; First, they offer online business tools needed by social entrepreneurs and those in the support ecosystem such as incubators and universities, to help measure and foster Social Enterprise. Second, they offer open innovation technology to define local challenges, identify social solutions and then assist in the implementation of social enterprises that demonstrate potential for large-scale impact.
One of the aspects that make Pullapproach unique is that it seeks to make data friendlier to those in the social enterprise ecosystem. The inability to efficiently collect and use data is a huge barrier for increasing impact, so one of Pullapproach’s missions is to make data easy to collect, analyze and act upon.
Data collection is currently a great challenge with huge associated costs. They propose improving this through Organic Data Adquisition (ODA), as a substitute to gruesome traditional data acquisition through reporting and pages of questionairs. As outlined by Dr. Nikon Rasumov the CEO and Co-Founder of Pullapproach, in his recent article on Markets for Good, “ODA begins with intelligent process design because any effective data acquisition depends on the willingness of the user to provide data”. Their pioneer design is key, so that their platform captures data on a real-time basis simply from the entrepreneurs’ day to day activities and interactions (good-bye to quarterly reporting, hello to real-time actionable data).
Dr. Rasumov adds: “At Pullapproach we use ODA to lower reporting barriers by creating an online platform where social incubators and universities can foster their social enterprises. Simultaneously, our technology works in the background to generate reports on each enterprise’s financial status, social impact, local challenges, and risk. Pullapproach does this by integrating sophisticated back-end infrastructure with a user-friendly front-end interface. Utilizing these tools, Pullapproach has accumulated a database of more than 10,000 profitable solutions to social problems with an unprecedented detail of information”. A version of their technology is currently used by Wayra, Telefonica’s incubator network operating in more than 13 countries and it supported the launch of the social innovation spin-off from one of Latina America’s largest NGO (Un Techo para mi Pais).
Pull approach’s data obsession also seeks to help promoters of social enterprise learn from the experience of those managing social and environmental programs. No institution can be an island to itself and, instead, needs to pool data in order to detect trends beyond simple benchmarking. Also, by building a vast and dynamic database of social enterprises, regional development organisations will be able to franchise successful business models from other countries instead of trying to reinvent the wheel.
No more stalling
Given the increasing importance that is being given to market-based approaches to poverty alleviation, social entrepreneurship will continue to be in the spotlight. It is important to bring together the entrepreneurs, the experts and the financing organisations with the technology that will make their efforts more effective, efficient and global. Also, we need to think about how we can learn from good ideas that are already out there instead of only wanting to fund new “innovative” ideas; as said recently by Daniel Ben-Horin in the Stanford Social Inovation Review “We need to establish a new consensus that propagation is as important as innovation”, and for this we need tools to help us share information on what has already worked.
Pullapproach is an example of an organisation focusing on just that. The urgency of the needs of people in poverty is so great that it is no longer satisfactory to see entities with great potential that are helping only 5 or 6 social enterprises here and there; the world needs scalable, efficient and much more ambitious initiatives and it is time to start using technology intelligently for this purpose.
By Amy Raisbeck (@Amy23160707), Social Sector Consultant. ESADE MBA Student Class 2012