This post is by Jeff Carter from Points and Figures
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Entrepreneurship is really hard. It’s a massive challenge to start a company off an idea and execute on it. In recent years, there has been an emphasis on “social entrepreneurship”. I think it’s gone too far.
There is nothing wrong with making a lot of money if you build or work for a blowout company that solves real problems for people.
I am seeing a lot of deal flow designed to get people to donate money to causes. This has been done. GoFundMe is the dominant player. I am invested in Public Good and still love the team. They have found an interesting pivot and they are building a business but it’s been an arduous struggle. Without their CEO Dan Ratner, it would have been impossible. Ask him to tell you about it if you are lucky enough to meet him, but give yourself enough time to hear the . If you think you can beat the existing players simply by adding features you will lose. Why can’t they add the same features if you get any traction at all? Look at what Instagram did to Snapchat.
I clicked on a link the other day and read a story about a college kid who found himself in the Social Entrepreneurship department of his school. I think that is awesome, except it could have just been the “entrepreneurship” part of his school as easily as anything else. By designating “social”, it’s as if all of a sudden just simply solving a business problem and delighting customers is grubby.
Entrepreneurship is at the heart of being a capitalist. It is the essence of capitalism. Being a capitalist and making money isn’t grubby and there isn’t anything wrong or backhanded about it.
My good friend the late Professor Paul Magelli used to quip, “If you aren’t making money it’s a hobby.” A lot of social entrepreneurship strikes me as being a hobby. Was Marc Andreessen a bad guy because he developed an internet browser and made a lot of money? How about Max Levchin and his development of PayPal which gave everyone a secure way to pay online?
It’s not that I don’t have empathy. I do. But, I think that social entrepreneurship is too focused on the “charity” part and not enough on the “business making money” part. A lot of people that are involved in social entrepreneurship don’t believe in unbridled capitalism.
We are investors in two companies that clearly have a “social” mission; Holberg Financial and PipIT. You can see what they are doing at their websites. Joe Holberg has carried it even further by integrating things like diversity as a part of his corporate culture. It is a topic in some board meetings. For example, his engineering team is equally male as it is female.
However, both businesses are solving a problem and driving top line revenue is their number one goal. Their solutions are sticky and compelling enough that customers gladly pay for them. Top line revenue makes a business sustainable and without it you cannot solve the problem you are attacking. They both are eager for more customers so if you can become one give them a call.
I know that pendulum swings too far when it gets momentum. I think when it comes to social, it has swung too far.
Bill Gates lifted billions of people up by inventing Microsoft. He lifted more people up by doing that than he ever will via the Gates Foundation. As a matter of fact, he could donate every dollar he has to his name, sell off all his assets and donate the proceeds and what he did with Microsoft will still have lifted more people up.
If you want to be an entrepreneur, find a tough problem to solve. Build a scalable business around solving that problem. You will lift people up by delighting your customers. You make them more productive. You will employ people in your company. The sum of all the parts is greater than anything else you might do individually to lift people up.
You can feel just as good about yourself if you build a business and solve problems for people even if it’s not “social”. Frankly, some social problems are just too tough to solve and you need a radical change in government policy to give you the tailwind to solve them.