The term ‘social entrepreneurship’ has become popular in the small business world. It’s a buzzword that is defined as utilizing entrepreneurial techniques to find solutions to social issues. A ‘social entrepreneur’ is a business owner who connects their company with some philanthropic cause. For example, Jordan Kasselow runs the company VisionSpring, which sells inexpensive reading glasses in developing countries.
So far, this makes sense. Social entrepreneurship is about solving social problems, which equates to making philanthropy part of a company’s mission. However, Ray Hennessey, a writer for Entrepreneur Magazine, does not agree. In a recent article, Hennessey postulates that all entrepreneurship is social entrepreneurship, and separating the definitions of the two is harming the entire startup industry.
In his opinion, all business brings good to society, whether or not the business is philanthropic in nature. He is not wrong. Entrepreneurs start companies based on a problem they want to solve. Whether it is a problem that affects an entire country, or perhaps just an individual, a company can only succeed if it has a product that people want to buy. Namely, a product that solves some sort of problem.
Does it matter if social entrepreneurship is defined as being separate, and somehow bigger, than regular entrepreneurship? Hennessey thinks so. He writes that CEOs of companies, big or small, are thought of as being greedy money-hoarders. This is why stories of companies doing any good, whether it be donating to charity or treating employees well, go viral. People are surprised when CEOs care, but are not surprised when a company hurts the environment or cheats employees out of money and benefits.
The term ‘social entrepreneur’ has become a loophole to this stereotype. Rather than being an actual entity, it has become a marketing tactic for starting a business. Social entrepreneurs are looked upon more kindly, and therefore are able to raise more money, but the nature of a marketing tactic is that it is only that. Social entrepreneurs are no different from regular entrepreneurs, save in how they define themselves.
Hennessey makes a good point in his assertion that companies known for bad deeds have contributed to social good, and conversely companies known for their philanthropy have, at some point, harmed society. There is no black and white between ‘good’ companies and ‘evil’ companies, as CEOs are faced with having to make a profit while solving social problems.
Entrepreneurs that want to be successful in the long run are focused on solving a problem in society, and on treating their employees and customers well. That sounds like doing social good to me.