Raising money and donating to charity is admirable, and it’s an element of what makes a business socially responsible. However, this type of giving back is different from what makes a business a social enterprise.
A social enterprise has a thread of ‘social’ woven throughout the entire ‘enterprise.’ The business is designed and operated in such a way that the two are intertwined.
We recently connected with two local businesses and their founders in a virtual interview about the four Ps—people, profit, planet and purpose, and balancing the ‘social’ with ‘enterprise.’ We asked them a few questions all about social enterprise and how it fits into their journey of entrepreneurship.
Carrie Gour and Beth Thompson or PwrSwitch and Alina Turner and Travis Turner of HelpSeeker, shared some meaningful and noteworthy thoughts on the subject. Their depth of knowledge and passion for what they’ve built will inspire you.
1. How has balancing the ‘social’ with ‘enterprise’ changed or guided your business into what it is today?
Initially thinking PwrSwitch was mainly a B2C play, we focused efforts on validating the problem—and the deep desire for a solution—with women’s and family support agencies like the YWCA and Discovery House. We presented to the 75 agencies that comprise the Calgary Domestic Violence collective and found nearly 100% of all clients are challenged with problems around collecting and consolidating electronic communications evidence to prove harassment, bullying, threats, etc.
Agency staff spend a lot of energy coaching clients around the need to document and how, then helping them to apply for court orders or file charges. The issue for us, was that we’d validated the need for PwrSwitch (the “social”) but learned that given the position these folks are presently in, for the most part, they don’t have the means to pay for the service (the “enterprise”).
To be sustainable, we need to find our “early adopter tribe:” Those who not only have the problem, but who have the ability to pay to solve it. To this end, we’ve turned our focus to people in the throes of a high conflict separation or divorce and the legal counsel who support them.
Like the individuals we’d validated with through agencies, these people are struggling to document and consolidate hundreds of electronic communications for use as evidence. Unlike agency clients, however, they have the financial means to make this pain go away. From the perspective of legal counsel, we offer a software collection and management system for e-communications discovery, so they’re motivated referers. It’s win-win.
We set out to develop HelpSeeker as a social enterprise from the get-go; the business is inherently for social purpose—it aims to transform the way people access help services to improve their lives and society as a whole. This means that everything from our KPIs, to hiring practices, and our marketing approach leads with the social.
Now, where things get interesting is when we have to ensure this is a profitable business as well. We are quite insistent that a social enterprise needs to stand on its own two feet through its value add in the marketplace, rather than grants or donations.
We actually debated a lot about whether the right legal status and business model should be charity or non-profit, and came back to a very strong guiding philosophy that if this model depended on charity, then it was a charity and not a social enterprise. We know that our interpretation might differ from others, and that’s ok too.
What being clear about our guiding values and philosophy did is ensure we built a profitable social purpose business without any government grants or donations; we built it lean, and expanded on pace with revenues.
2. How has the decision to give back to your community affected your bottom line?
We’re still working out what our “give back” will look like, exactly, but we’ll bake it right into our business model. SaaS (software as a service) products generally don’t have a social aspect, so we’re lucky that we can be creative with this in our company. We could take a TOMS Shoes approach, for instance, where for every subscription someone buys, we give a subscription to a client at an agency for whom the service would make a difference, but who couldn’t otherwise afford it.
Giving back is an important value for us generally, but also because helping people through a level of crisis was our inspiration for PwrSwitch in the first place.
There’s a financial bottom line, but there’s a social bottom line as well. We’re firm believers that you can make money and do good at the same time; they aren’t mutually exclusive. In fact, we’d argue financial sustainability is what makes it possible to do that much more good.
When profit reins supreme, there is a certain simplicity that comes from this clarity that we at times envy. For us, every decision filters through the social/sustainable lens: for instance, we provide the front-end of the HelpSeeker platform to those seeking help with life circumstances at no cost.
Charging for the service was never on the table for us; we feel this is essential to our social purpose. In turn, we had to monetize other aspects to ensure we had the enterprise side of the business covered. In turn, when we think through licencing costs on the systems mapping part of the platform, we consider the best methods to ensure maximum success for the buyer—because the buyer being successful actually means better impact for end users.
It’s all a virtuous cycle where all the parts have to be infused with this approach—the social purpose is never an add-on; it’s intrinsic to the business model.
So to say that it doesn’t impact the bottom line would be ridiculous,yet, you’d have to assume that you could provide the same product/service in a profit-only model, and I think for this niche, you actually can’t effectively do it without the social enterprise approach.
3. The social cause has to be meaningful for the customer and make sense for the business. How did you approach this in the beginning stages of your business when you were dreaming up the idea?
In our case, the social good for customers and the business alike was baked together. We solve a social problem: supporting victims of cyber-harassment and cyber-bullying by automating the collection of multiple channels of e-communications to create an evidentiary document for use in a legal setting.
We also knew the pain of how people document today—basically hundreds of screenshots, with no way to time sequence, consolidate or search—was sharp enough that people would pay to solve it. At the same time, we figured out that we solve a significant problem for family lawyers especially, which helped add heft to the business side of the proposition.
We have to admit that coming from the non-profit and public sectors, we were building the plane as we flew it. We always had the same vision for the social enterprise model, but we had to really work through the various aspects of our ICPs (Ideal Customer Profiles) given we had a 3-sided platform.
The social impact was also different for a government department buying data to make better decisions, versus someone experiencing homelessness looking for housing. The value proposition and differentiator were similarly different for these segments as well.
We approached figuring all this out with hardcore research; with one of us being a PhD in social sciences, it wasn’t hard to lean on this skillset and apply to develop our go to market plan. We knew who our buyers were and we had direct access to them through our networks coming from the non-profit and public sectors.
We had to get a lot savvier to develop the marketing and business development side, and we had great mentors where our experience fell short. That was essential to our success.
4. Do you find added purpose in the social element of your business?
Absolutely. Even the process of user-testing, which is where we’re at right now, is energizing and motivating. These are people carrying the psychological burden of being full-time evidence collectors.
They spend up to 5 hours every week documenting and consolidating their communications for themselves or their lawyer, and the process is disruptive to almost every aspect of their lives—work, personal, social.
That we can remove all that grief, give them back their time and mental space and give them better evidence in the end on top of all that, is amazing. The users to date have been overwhelmed with gratitude for PwrSwitch, even in this pre-market phase.
Of course; we are both building this on longstanding careers in social justice work—and we see this as a natural extension of our passion for systems transformation and human-centred design. What motivates us is the ability to challenge systems as well: you may be surprised to know that there are a lot of challenges in the social sector that make the impact of services less than they could be despite being a significant industry in its own right.
Take for instance charitable revenues—they amount to $32 Billion per year just in Alberta. That’s not accounting for nonprofits that aren’t charities or for anything governments operates or provides in the form of benefits. There are about 20,000 different services out there for people looking for addiction, mental health, housing, etc. help. Yet, we all hear about the lack of access to services and those looking for help being met with constant obstacles in finding and accessing what they need. Clearly something is amiss in the way we design these systems to begin with.
We have gone ‘through the system’ so we know the challenges first hand: Alina was homeless as a young person and a refugee when she came to Canada. And some aspects of the charitable sector and government were helpful, but others less so. We aim to be part of challenging this industry to be innovative and do better.
Our work through HelpSeeker was intentionally disruptive for this sector—and that’s a good thing—because we want services and systems to be more responsive to people’s needs. Why wouldn’t we want to challenge the status quo for better impact?
That’s the premise of social enterprises as well; they represent a shift in consciousness, not only for the private sector, but for the public and non-profit as well to do business differently. And we see that as a key part of our business model: how are we challenging systems to transform for the better? Not on a B2C/B2B level only, but on a B2S (business to systems) level as well.
5. Do you think that social enterprise is the new normal for business?
I think business owners are thinking about it more for sure. Is social enterprise the “new normal” though? I’m not sure that’s the case, at least not yet. I suspect it’s a struggle for many businesses to attach themselves to a social cause that makes sense with the business.
It absolutely can and we would argue, should be the new normal. The trick is that to be authentically social enterprise, the social purpose can’t be an appendage on top of an existing model that isn’t actually aligned with the social good mandate. It’s dishonest to the consumer, staff, and the business model. You have to bake it in from the foundation out.
We are in the midst of a Fourth Industrial Revolution that is poised to fundamentally transform our economic and social structures—how we revision the role of business in and through this shift will be foundational to our future. Social enterprises provide us with hints of what society might look like post-automation or when AI is status quo.
6. Do you think that to attract a ‘millennial’ audience (who have higher expectations than ever) you need to be conscious of the four Ps—people, profit, planet and purpose?
I think millennial customers are more savvy and selective than they’re often given credit for. I see evidence that given the choice between a business or product that has a social conscience versus one that doesn’t, they’ll choose the former every time.
That said, I’d argue customers of all ages are leaning more in this direction. My own mother who’s nearing 70 will seek out and choose businesses with social good or give-back as part of their mandate.
Speaking for PwrSwitch, both my co-founder Beth and I have children; as business owners we feel obligated to help make the world a better place if we can. And I think we all can.
We do see the generational shift as an opportunity rather than a threat for sure; and that’s because the millennial expectations align with our ethos as well. We are both in our mid-30s, so we straddle the generation of Boomers and millennials coming into the workforce and as buyers.
Because we have a technology focus as well, it goes without saying that we are more appealing to the 20-year-old than the 60-year-old; at the same time, being a social enterprise is something that we feel all generations can agree on too. The Boomers were essential to the social movements of the 60s and 70s that provided the impetus for today’s social impact sector to begin with. And they are preceded by generations that prompted the Social Credit party in response to the Depression era.
If we think about it, despite our generational differences, the social enterprise model is something that binds Albertans of all stripes and ages: we want to do good, while doing good.