Business Models Beyond Profit - Social Entrepreneurship Lecture

Last Monday I gave a three hour lecture on Business Models Beyond Profit at Jacobs University, Bremen, Germany. It was in the context of impACT, a pan-European student competition in social entrepreneurship. Find the slides of my presentation below.

It's a really exciting topic and I am a firm believer in the combination of "doing good" and "doing well". In my opinion the traditional frontiers between nonprofits focusing on social and environmental impact, and corporations solely focusing on profits will disappear - because of new and innovative business models. So many young professionals want to make a difference, but are not willing to forgo decent salaries. Personally, I think that's not a contradiction. The challenge is to come up with the business models that combine both impact & profit.

Michael Shuman, author of Going Local, nicely summarizes why I think nonprofits must be replaced with different business models (and I'm speaking with the experience of somebody who worked in the HIV/AIDS and malaria field):

There’s a very good argument that many of the attributes of typical nonprofits – heavy reporting requirements, self-reappointing boards, poor access to capital, awful labor standards (in the name of the public interest) – make them lousy vehicles for social change…I think we need to rethink the structure of do-good enterprises.

In my presentation I mainly focused on showing how the Business Model Canvas can be used to describe and design "new" models like Grameenphone, MyC4, Grameen Bank, Kiva and more. Have a look and tell me what you think:

By the way, we are looking for funding to write a social entrepreneurship version of our book Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers. We know that this would be of immense value and that it would have a huge audience. Organizations like the Skoll Foundation, Ashoka and others are likely to be interested, but we don't have the contacts there...

Business Models with an Impact beyond $

We are living in exciting times. Some entrepreneurs involved in business model innovation are not only seeking for financial returns, but are also aiming at achieving social, development and environmental returns. In other words, money and fame are not their only motivators. They want to have an impact. What is interesting is that they are aiming at combining financial AND social success. These entrepreneurs try to prove that these two are not necessarily contradictory.

There are are a couple of interesting business models out there that I follow with quite some fascination. Grameen Phone is a telecom company founded by Iqbal Quadir, that has brought connectivity to rural areas in Bangladesh. What is interesting about their business model is that they partnered with the world famous micro finance institution Grameen Bank to exploit synergies.

I also very much like the business model of MyC4, which allows you and me to make loans to small businesses in developing countries. This means that I can diversify my investments away from the unstable global equity markets towards uncorrelated small businesses in developing economies. I make a return on my investment, while helping boost development. Really exciting.

I am very much a believer in the fact that you can do good while doing well. This is not about "giving back", but about creating value while making a difference. Since this is an area that I'm interested in I decided to help run a workshop on the topic in London this coming Thursday. Check out "Disruptive models: The art and science of VISUAL BUSINESS MODEL DESIGN for breakthrough social innovation" if you are curious (or sign-up if you are in London).

See you there!