Silicon Insider: Social Entrepreneurs

A lot of big tech and business news is going to burst on the scene over the next 12 months — yet I'm pretty confident in predicting that when historians look back on next year, they will see 2004 as the Year of the Social Entrepreneur.

You likely have not yet heard of this term. But try Googling it: you'll be surprised. One of the best ways to detect an emerging phenomenon in modern life is to track the trajectory of the number of its appearances on the Web. "Social entrepreneurship" as a term first appears in a handful of places four years ago — today the number of links is in the tens of thousands … and probably doubling every month.

It is an idea whose idea has come.

To understand social entrepreneurship, you first need to appreciate the momentum behind it. Hidden behind events ranging from Davos to the anti-war marchers in London, from the international AIDS conference in South Africa to Second Harvest Food Bank program in your company's lobby is a revolution in nonprofit organizations.

Driven by technology, legislation, a growing global middle class and a host of other social forces, the number of nonprofits, charities and nongovernmental organizations around the world has grown exponentially over the last decade.

This alone is a stunning development — in vast regions of the world nonprofits are the fast-growing employment sector. But that's only the beginning: Any culture force as great as this one is bound to create equally extraordinary secondary institutions. And, indeed, nonprofit revolution has done just that: created social entrepreneurship.

There are some stunning examples of social entrepreneurship that can already be spotted around the world: Approtech and its low-cost manual water pumps that have already changed the agricultural economy of Kenya, Train Platform Schools and its innovative teaching program for orphans in India, and Rugmark, with its carpet labeling program used to fight child debt bondage.

These are decidedly not your old-time charities.

Tracing an Entrepreneurial Map

OK, then, so what is this "social" entrepreneurship? There is a simple answer, now, but it has taken the leading thinkers in the field a decade to refine their way down to it.

Put simply: A social entrepreneur is an individual who brings the techniques, tools, and most of all, the spirit, of commercial entrepreneurship to the nonprofit world. Social entrepreneurship is as old as Florence Nightingale and Jane Addams, but only in the last decade has it been recognized as a distinct discipline with its own processes and standards.

It's a simple definition, but it raises as many questions as it answers. In particular, the world of commercial entrepreneuring, as we know well here in Silicon Valley, has become quite systematized.

It begins with a startup, a business plan, and usually a prototype product. Then, as the startup company grows, it goes through several rounds of investment, ending (with luck) in a "liquidation event", i.e., going public with an initial public offering. The private startup company is now a publicly owned corporation.

The question that has vexed the best thinkers in the social enterpreneurship world is this: How much of the commercial entrepreneurship experience maps over into social entrepreneurship? That is, how many of the experiences of a Santa Clara semiconductor be used in the creation and growth of an Indian micro-loan bank or an Angolan sunflower oil consortium?

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