INSIGHTS FOR IMPACT

Social enterprise articles

Westaway Review leads the discourse on best practices for social entrepreneurship. Find the insights you need to change the world.

The all-American ‘rags to riches’ story is one that many can identify with or find inspiration from — going from sleeping in your car to owning more than you hate to admit, or coming from humble beginnings only to reach fame and fortune. Entrepreneurship is the vehicle of this story, where we have the power to make something from nothing.

As a startup, one way to progress is to raise capital. In an ideal scenario, with this money, you’d grow faster and stronger than the competition, and you and your investors emerge on the “riches” end of the equation as quickly as possible.

Of course, there’s always the other option — the Cinderella side of the story, where a couple of ambitious people aim to build their empire one customer at a time in bootstrap mode.

When you build your startup without other people’s money, you make the decision to take control. First, you don’t dilute yourself right out of the gate; we’re capitalists after all. We’re here to make a buck. Second, by not taking someone else’s money, you’re able to prove your business model and paid channels before really putting gas on the fire. Third, when you’ve decided to embrace the little cash you initially have, it forces you to make better decisions and to stay disciplined. And finally, without investors, you can craft your company culture the way you intended (something that was important to us).

With a 10 percent startup success rate, the decision to bootstrap means that your plan of execution needs to be as tight as possible. Some points to consider:
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Treating diseases, addressing climate change, expanding access to healthy food or creating new methods of learning. These are just a few of the major social challenges that companies—yes, companies—are working to solve. Of course, the public and nonprofit sectors continue to play a critical role in tackling these challenges, but we’ve also witnessed an increasing number of entrepreneurs building companies whose products and services offer scalable solutions to improve our communities, while at the same time generating financial returns.

Because of their unique goals, companies that have a mission to turn a profit and do good have a different set of questions to ask than traditional enterprises when they’re getting started. What are the critical questions you should ask if you want to be a for-profit social enterprise? Here are six things to think about:

1. WHAT IS THE PROBLEM YOU’RE TRYING TO SOLVE?
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When you set out to build a great company, it’s hard to know how you are doing along the way. There does come a time when you know you’ve done it. Apple, Google, Facebook, Amazon, Salesforce, Tesla, etc got there. We know that. And the founders of those companies know that too.

But two years in, three years in, four years in, it’s hard to know how you are doing. The market moves quickly. Customers are fickle. Competition emerges. Trusted team members leave. Your investors flake out on you. And so on and so forth.

So entrepreneurs want something they can hang on to. They wants a scorecard. A number. Validation that they are getting there.

And that thing is often valuation. If the “market” says you are now worth $1bn versus $500mm a year ago and $200mm two years ago and $50mm three years ago, then you are making good progress. The numbers tell you so. And it feels good.
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We see the world as it could be. We resolve to make change happen. Not content to wait for better times, we strive to lay foundations now. We know that a brighter future is built by the adventurers, people like you and me, who are on the ground charting new territory, motivated by passion and obsessed with execution.

We believe in the power of the marketplace to create positive social and environmental change. We believe the world’s most complex challenges have financially sustainable solutions. We believe the people who design these solutions are driven by long-term prosperity, not only financial but also social and environmental.

We are in this together.