On the question of 'Social Entrepreneurship'

Yesterday (11-May-2012) myself and a fellow start up entrepreneur and my good friend Ganesh Shankar checked out "Publics on social entrepreneurship" at the Bangalore campus of Indian institute for Human settlements (IIHS). 

Bangalore campus of the IIHS is situated at RMV extension overlooking the tranquil sankey tank. It is an ideal location for scholarly work and a brainstorm like the publics on social entrepreneurship. 

It was an informal setting and an open house to discuss and debate the whole idea of "Social entrepreneurship". The panelists were people of high repute and achievement who have built successful social ventures. It had A. Suryanarayan; COO of IIHS, Dilip Mehta ; advisor , NSRCEL at IIM Bangalore, Meena Vaidyanathan; Founder and CEO of Niti Consulting and Mr N.K.Ramakrishna; Ashoka fellow and the founder of Rang De. 

The gathering had about 15 people other than the IIHS staff. About half the participants were entrepreneurs (Or founders of NGOs) and the rest were either planning to start an enterprise or were people who had research interests. 

It was a two hour captive session where the discussions were on what exactly is social entrepreneurship, the challenges and opportunities in it, the values around enterprises, the difference between business and social enterprises and related topics. 

The gathering was pretty vocal and participative. A host of success and failure stories were shared and discussed. 

I am not going to go into the details of the discussion. But i will try to put my thoughts on this whole concept of social entrepreneurship or social business. 

Before i proceed, i must make a disclaimer that i am no expert in business or business writing. 

I have recently decided to write down my thoughts, views and experiences on and about business as i set up and grow my own business. So the blogs on entrepreneurship are in that direction. 

The most famous definition of an entrepreneur comes from Professor Peter Ferdinand Drucker who says "An Entrepreneur is one who creates wealth where it is not present". So irrespective of what prefix we use to a "venture", any venture be it a 'business venture' or a 'social venture', the venture must aim to create and sustain wealth at places where it is not present. 

The term "Social entrepreneurship" is a relatively new term. There is no good definition of it available in the mainstream academia. However, one definition largely used with this term is " A social venture is one which seeks to provide solutions to pressing social problems with a profit driven resource sustainable and resource renewable business model" . The aim of social venture is not "profit maximization" but "tangible positive impact" on social problems. 

Classic examples associated with "Social ventures" are 'Micro-finance' and 'rural electrification'. 

I do not like to distinguish between a "Business venture" and a "Social venture". At the end of the day it is a business. Any business has to survive and sustain. 

Having said that, Every business has a "Social impact". Be it a road side tea stall or a multi-billion dollar corporation or a 'so called' social business like a micro-finance institution. The distinction is essentially coming from the academia and the distinction is more 'academic' than 'real'.

I will try and substantiate ;

I will take two classic examples. Let us look at "Dr Reddy's laboratories limited". It is branded as a "Business venture" and is a public company continuously paying out good dividends to the share holders.  Let us then look at "SKS Microfinance" a classic example of a "Social venture" . 

SKS micro-finance was one of the most talked about Social business in the world. It was funded by Mr Vinod Khosla and Catamaran venture fund (Founded by N.R.Narayan Murthy). At one point it had a market capitalization of about 5000 crores. After its disastrous IPO, it came down to about 300 crores or so. In the process, they let down thousands of rural communities in the north eastern Andhra pradesh. Now 'micro-finance' is not a very welcomed term in Andhra pradesh (There are political reasons as well for this). 

Now SKS has shifted out of Hyderabad to Mumbai. 

On the other hand, Dr Reddy's laboratories have been manufacturing and supplying life sustaining drugs. The company must have saved hundreds of thousands of lives. Founded in the Mid 80's with 25 Lakh investment, it is not only paying out to its share holders but also achieving a great social goal. 

(I have met the great gentlemen Dr Reddy a few times. A man with very few words, he means only Business.) 

In my opinion, Dr Reddy's labs is achieving greater social goal and having a far greater positive social impact on the society that SKS. However, the latter is called "social venture" while the former is called a "business venture".

"Social entrepreneurship" is more an academic construct . Every business must be profit driven and produce dividends on the factors of production. Else it cannot survive. 'Social' or 'non-social', every venture must be run professionally by sound principles of entrepreneurship. 

There can be again little differences. For example an old age home run 'for profit' can be called a social business since it is addressing a social issue directly. 

One can take the example of a small organization educating slum children.  They may choose to charge a very low fees just enough for running the organization. That is a direct customer centric 'social venture'. 

As i said before, every business has a social impact. Take for example retail. Retail business has provided plenty of opportunity to the less educated folks. Plenty of employment is created in logistics and sales area. 

In my opinion, the most critical distinction if at all between a business venture and a social venture is that the latter focuses directly on the issues concerning the less privileged and try to solve the pressing problems of the society directly  by making less privileged as a the consumers as well as beneficiaries (Directly). 

At the end of the day, there is no point "romanticizing" the idea of 'social entrepreneurship'. It is just another business model where the cash flows are diffidently structured and the customers are direct beneficiaries.  Having said that achieving 'scales' become critical for a real measurable social impact.  

If it is an entrepreneurial venture, it has to be grounded on the "reality" that it is profit driven and profitable and sustainable to the investor. 

The question of "Identity"

This blog is an extension of a small essay i wrote when i was asked to contribute for an article in the Deccan Herald . 

"Who am I?" Well , "Who am I?". Many generations of greats scholars have passed trying to answer this question. Many great men have devoted their lifetime in trying to know "Who they are" .

Mere mortals like me, though interested in knowing who we are in the overall scheme of things, do not have the ability or courage or the wisdom to dwell into the philosophical journey in trying to decipher the "True I". We more or less restrict ourselves to academic discussions or at best end the discussion with the famous dialogue of Dr Rajkumar in "Bhaktha Kumbara" which goes "ಬರುವಾಗ  ಬೆತ್ತಲೆ, ಹೋಗುವಾಗ ಬೆತ್ತಲೆ , ಬಂದು ಹೋಗುವ ನಡುವೆ ಬರೀ ಕತ್ತಲೆ", meaning, we come naked, we go naked, life is all darkness in the gap between birth and death. 

However, i am not going to write about the "philosophical I". 

One has different identities. We can identify ourselves by our nationality, our state, our religion, our caste, our sub caste, our sub sub caste etc etc. Each of these identities are used at different places depending upon the context of one's presence. Though each of these identities are used in isolation, many times they come into conflict with each other. 

Today's urban middle class young professionals like me do like to be identified outside the sphere of religion, community and caste. Though we respect these identities, we like to be more associated with our passions and our professions. 

Let me substantiate. Before i generalize,let me put myself in perspective ;

Earliest memory of me being identified with something worthwhile dates back to 2000-2001 when i was known as “E-mail Sunil”. Those were the years when i first became acquainted with internet, E-mail and the "copy-paste" digital world. There was no internet at home and the 20 rupees per hour browsing centre was frequented regularly.  I used to send E-mails to the then chief minister. S.M.Krishna . So in response to my e-mails, the BBMP authorities used to show up near my house and look for “E-mail sunil”. So this was the first real identity outside being “Brahmin", “Madhwa” etc etc.

Activist Me

Enthused by the e-mail and replies from the then chief minister, i started taking more interest in writing to civic authorities. It slowly took shape into little “activism”. So by about 2003-04, i was identified as being a “rebel” and sometimes “crazy”. 

These activism did bear fruition. Though not only by my effort, a little fishy government land worth about 50 crores which was just wasted ,undeveloped and "Up for grabs" for the real estate mafia, is today on records as a  "civic amenity" site. The files which had proposals to make the site into a park carried my name on it. Every contractor who came to work there could quickly connect to my name.  

When a part of the park had to be sacrificed temporarily to accommodate temporary housing for the nearby slum dwellers, the authorities did consult me, though they were not obliged to. However, i could not prevent the sacrifice of the part of the park. 

I have carried on my "Outspokenness". Throughout my academic life, this outspokenness earned me rich dividends. In college, i was known to be a rebel and a continuous questioner. So even there, i was identified as “Rebel”. 

Entrepreneur Me

These identities have stayed on. And i have started to enjoy these as identities. 

Further, because of  my profession, i am variously identified as “environmental  entrepreneur” , “social entrepreneur” etc. Though personally i think its too premature to put me in this league, these brandings are very inspiring and i am looking forward to being identified in this league.

Personally, i like to be identified as an Entrepreneur more than anything else. It is an identity that i have carved out for myself. This is an identity that i have earned with least influence of family and friends. It is kind of my unique identity.  

By hobby, i am a photographer. So the identity of a “photographer” strikes chord with your passion just like the identity of “Entrepreneur”. “A photographer” comes second in the priority.

“Unconventional” . Thanks to my little different ways of life ranging from running an unconventional business to making the management of malls play kannada songs,to writings to PM and CM , i am sometimes branded “Unconventional” or “Different”. In my opinion its an honour to be called “Unconventinal” and i completely relish it.

Though i have not achieved anything in the above mentioned identities, Identities and the tags associated with identities like "Entrepreneur", "Photographer", "Cyclist" etc gives one a sense of accomplishment. They are earned identities and one naturally takes more pride in that. 

Brahmin Me

Having said that, it does not mean that i do not acknowledge identities associated with my origin and caste. But these are "Received" identities and one does not have a direct role in acquisition of this identity. 

I cannot forget the Royal city of Mysore. Though “by accident”, “Mysore” as a surname gives me a royal feeling. A city associated with Heritage, art, music and good food. It is the city i am proud to be associated with.

“A Brahmin”. Why not?. Nothing wrong to be identified with your caste as long as you do not disrespect other castes. Being born and raised in a little orthodox family, The Brahmanical systems and practices have been a part of day to day living. I may not approve of some of the brahmanical dogmatic believes and practices but that does not mean that i do not want to be identified as a “Brahmin” . It gives me certain happiness to be associated with the cult of Vedas, Upanishads and host of literature dealing with wisdom.

Identity is a function of “reach”. We have various identities and different sets of people look at us through a different lens. Of course in the midst of best photographers, you like to be identified as one. Among the writers, you like to be identified as one of them.

Photographer Me

In my case, i am identified as a Brahmin, more preciously a Madhwa Brahmin (A sub caste of Brahmin). By profession, i am an entrepreneur. By hobby i am a cyclist and a photographer and sometimes a blogger. Evolution of social media has buttressed these identities. There is no clear distinction between these identities and there cannot be one as well. It is with the target group that you identify yourself.

Moving to the question of caste and community, two threads are observed in general. Particularly with the evolution if Social media, one set of people want to highlight their identity vis-a-vis their community and other set of people want to cover their identity vis-a-vis their community.

Cyclist Me

For example we have a Brahmin group, A madhwa Brahmin group, A madhwa Brahmin group belonging to uttaradhi matha (A sub group of Madhwa Brahmins) on Facebook. This is the level of distinction to which people want to associate themselves. There are hundreds of such groups of various sub sub sets of Brahmins on facebook. Many many people want to be identified precisely where they think/know they belong. There are two strong reasons for this. Most importantly, the pride they associate with being “Just there”. Second, with globalization and dwindling barriers on just about everything, one wants to be unique and have a very clear community identity.  There is a perceived “insecurity” among people. “Being in an In-group” gives an individual that extra comfort and security.  This is precisely why we see a lot of people take pride in being in a “certain group” on facebook.  At no time in history, so much updates and information about rituals, mathas, the swamijis reached so many people so easily.

The second set of people do not care much about their identity vis-a-vis their community. These people see community as a barrier for free flow of ideas and people.  They want to be identified as “more progressive among the progressive” though taking pride in identifying yourself with a certain community does not necessarily make you “non-progressive”.

In the overall scheme of things, in the context of community, nothing greatly has changed. Endogamy is still pretty much practiced everywhere in India. We have community matrimonial websites. There are only sporadic dilutions but we pretty much still live in a closed society. 


(PS: Views are purely personal)