Lessons from Muhammad Yunus

This Nobel Peace Prize winner, founder of the Grameen Bank and a pioneer of microcredit and microfinance can teach us some valuable lessons on the social entrepreneurship.

Did you know that Yunus started his journey by lending US$27 to 42 women in rural Bangladesh? This can tell us that he was not interested in following traditional rules and markets, but in creating new and different business models. He believed that the poor will repay the money and he was right. This resulted in him being the pioneer of microcredit.

In the beginning, Grameen Bank (or “Village Bank”) completely relied on foreign loans to grow the business. This means that Yunus recognized that collaboration and partnership is not only beneficial but necessary for any kind of business, especially social business.

Grameen Bank started small and slowly but today has over 8 million borrowers, which is about half the population of Bangladesh. It’s important to recognize that growth of any business happens in stages, has its ups and downs, may take a lot of time, but eventually does expand.

After the success of the Grameen Bank, Yunus decided it was time to diversify into other projects, which later grew into separate organizations and entities: Grameen Motsho, Grameen Krishi, Grameen Trust, Grameen Fund, Grameen Software Limited, Grameen CyberNet Limited, Grameen Knitwear Limited and Grameen Telecom. In order for a business to grow, it’s essential to diversify.

In 2011, Yunus co-founded Yunus Social Business, which helps create social businesses around the world and provides post-investment support, while solving different social problems. It serves as a means for Yunus’ vision of humane capitalism. He also helped create the Yunus + You Foundation, which helps young social entrepreneurs to network and develop their social business ideas. In all his great work, he never forgot the bigger picture: helping poor people and giving each human being a fair chance in life.

The Future of Social Entrepreneurship

The future of using business and other entrepreneurial means to solve the problems that society faces is definitely a dynamic one. For one, social entrepreneurship is going to dissolve into an independent field. This is to mean that it is expected that it will develop into a discipline of its own. It currently provides a platform to lobby resources into the social sector by drawing attention to the need to solve social problems through innovative business solutions. This role and scope of social entrepreneurship is however expected to expand in the next few years. This expectation is not only based on the new frameworks that the sector is stimulating but also the new enterprises that are in incubation. Gradual growth will lead the discipline of social entrepreneurship into evolving to an integral lens through which all fields of study and all sectors are understood.

It is however cautious to be prudent in the expectations of social entrepreneurship dynamism. This is to mean getting a balance between enthusiasm in impact investing and practical realities, especially in profit margin estimations. The traditional hardship that comes with breaking even in any business undertaking should not be taken for granted no matter the optimism. This is especially so when entrepreneurial success is linked to a social mission. In a pragmatic point of view, social entrepreneurship is more financially sustainable than it is profitable.

Another anticipated stride in this field is the sophistication of social impact assessment. This expectation is based on the increasingly new tools and models of assessment in development for use in service and product analysis. The reconfiguration of teams and skills in the employment sector is also bound to eventually affect this discipline. This phenomenon is solely based on the trends in the employment sector. In aligning businesses to these expected changes, incremental shifts as opposed to revolutionary ones should be considered.

Who are Social Entrepreneurs

Like the cloud was a concept back in the 90s, social entrepreneurship has also been a concept which has emerged from using resources and reinvesting them to solve issues of a society. One of the ways in which it can be done is by either individuals, or businesses who earn through profits. As per the concept of competitive capitalism which was outlined by Milton Friedman, it is important for a business to ensure that they reinvest the resources they earn through profits, back for the welfare for everyone. It includes the environment, the citizens and the ways in which an individual can improve their quality of life.

Although Freidman had a concept which was involved in the working of a business entity, it can be easily applied to an individual too. Those who use the resources from their surroundings and do not return them the favor are known as parasites, which is something humans do not wish to be associated with. So to ensure that an individual and a business does not get referred to as a parasite, they need to invest their time, knowledge, financial and intelligent resources to help their surroundings and environment grow. One such way is how investment banks work. Although they use pension money to fund their financial products or asking for cash from wealthy individuals to make them more money, not telling them the market risks and risks that may lose their money is what parasites in return do. There needs to be a proper understanding of what makes a shareholder different from a stakeholder.

Social entrepreneurs are more inclined towards stakeholders, which just not include those who invested through funds, but those who would be getting the returns from those funds. Social entrepreneurs provide a change by being actors of social change. They accept missions, bring ideas back to reality and engage in a process that is constantly innovating. They are a distant form of leaders, teachers and innovators. They provide electricity and education to Africa, help farmers in Central America, give clean water to Asians and provide education to the underprivileged in war-torn countries. Social entrepreneurs are amazing, they have a vision, which makes them unique. Everyone amongst us can be one, it’s our society and we need to strive for its betterment.

Lessons for creating Social impact

Social Impact fosters positive social and economic changes. Want to create social impact that Iasts? Here are some lessons from my experience that can help social impact:

1. Assess your Ideas: However brilliant your ideas may seem you, but there is every possibility that they won’t work in the same manner you expected. Always remember, you are not the only creative one. You may need to fearlessly struggle to keep up the momentum.
2. Don’t Seek Perfection: To create social Impact, it is very important to remain close to the ground. Keep yourself closer to the realities on ground and test your ideas in their natural state.
3. Accessibility: A social Impact that is has wider accessibility lasts over a longer period of time.
4. Design: Creation of social impact is all about design and implementation of vision through this design. It could be a new product, service, business, policy or procedures, etc.
5. 5.Perception: The design process is informed and inspired by the research but a viable perception develops with time. You do not perceive things uniquely in the first place.
6. Learn from Experience: Yes, there are several professional instances that experience can help you engage with social issues and create a social impact on a large scale. However unique your idea may seem to you, there is always something that you can learn from other’s experiences.
7. The Internet is not enough: Although the latest communication technologies, like internet and mobile, are vital to leverage, personal involvement has always been the best tool to make a social impact.
8. Be Consistent: No impact lasts for long, if you do not stick to your ideas for a long time. Be determined to be consistent with your ideas.
9. Watch Your Celebration: Do not celebrate your social impact success too early. There might be ideas that have captured the imagination of a wider audience but they might have major challenges in the field.

Social Entrepreneurs as Agents of Social Change

Social entrepreneurs are people who come up with innovative ideas meant to solve the most pressing social problems in the society. These individuals are ambitious and their innovative ideas help in tackling the major social problems while still offering novel ideas of bringing wider change.

Social entrepreneurs look for what is not working well in the society and tackle the issue by changing the system, sharing the solution and then convincing the entire society to adopt different ways of doing things. They do this instead of doing what many people usually do-waiting for the government or the business sector to come up with solutions.

Social entrepreneurs are not only visionaries but also realists who are concerned more with the practical implementation of their ideas. They go to the extent of committing their lives to bringing change in the society.

They come up with ideas which are user-friendly, ethical and easily understandable. This is to maximize the number of individual citizens who will support, adopt and help in implementing the idea. These social entrepreneurs are role models in the society and the leading ones are mass recruiters of local change makers..

Today’s social entrepreneurs include Jim Fruchterman of Benetech who brought the idea of using technology to address social problems like reporting human rights infringements. Another is Muhammad Yunnus of Bangladesh who started offering microloans to the lower income earners. His micro credit model has been replicated across the world.

While mentioning historical social entrepreneurs in the world, we cannot fail to mention the following:

i) John Muir from the US- He is a conservationist and naturalist who established the National Park System. He also helped in the founding of the Sierra Club.

ii) Jean Monnet of France who played a key role in the reconstruction of the French economy after the World War II. He is also responsible for the establishment of the European Coal and Steel Community (ECSC). This community together with the European Common Market are the precursors of the European Union.

iii) Susan Anthony –She fought for Women’s Rights in the US. She also played a crucial role in spearheading the adoption of the 19th Amendment.

iv) VinobaBhave – He is the founder and the leader of the Land Gift Movement. Vinoba caused the redistribution of more than seven million acres of land in India to settle the landless.

Existing Conditions

Early social entrepreneurs came from European countries or perhaps the U.S. They brought their expertise to their countries. Nobel Laureate Muhammad Yunus, was one of the pioneers when he launched the notion of microcredit to Bangladesh in the 1970s with the foundation of the Grameen bank. Early social entrepreneurship was basically humanitarian models in which charitable organizations and also not-for-profits were continuously attempting to earn money from donations and grants. Sir Ronald, whose involvement in interpersonal business capabilities elsewhere in this version of INSEAD, makes the purpose that lots of charities or and also humanitarian social enterprises rely on temporary financing and grants. He believes that the new era of social entrepreneurship institutions is becoming self-sustaining in the long-term rather than having to proceed to cover with you to donors each couple of years.

 

Under the proposed ‘social entrepreneurship’ project, the farmers get paid ahead of time, so that they are incentivized to purchase more effective plants. The government commits to spending a competitive product that is linked to upgrades in KPIs – profitable change of maize land to higher margin crops and improvements in farmers produces. The institutional traders get a secure low-risk gives back, a familiar looking product with IR risk to handle, as well as in giving back significant liquidity. Impact investors control their social entrepreneurship by obtaining three to four times the number of poor college students into university, handle substantially more risk, but still get paid in a structure that will withstand defaults of 20 percent. More bright business college graduates grab hold of social entrepreneurship and customers still need ‘ethical products’, they are able to expect to notice more and more companies in the future being run on ‘social entrepreneurship’ principles as well as more charities rather than for profits being run on a lot more industrial lines which provide them with, along with the people they help, a long-term environmentally friendly long term.

Social entrepreneurship has developed a lot with the course of time. It is not merely profit gaining organization rather gaining profit through social changes and development. People come to social entrepreneurship because they think they can contribute social development and serve his or her particular community. This also gives them the chance to do business as a matter of consequences the rates of unemployed people are decreasing rapidly. Social entrepreneurship will be expanding day by day due to the commitments of vast people’s commitment towards social development.

 

The Hope of Women in Social Entrepreneurship

In this day and age, the participation of women in social entrepreneurship is quite optimistic. Women fight a range of discriminations before launching social entrepreneurship; such as, they have to fight race, class, ethnicity, age, capability, gender identification, and sexual orientation. Females are determined to do well in entrepreneurship; in addition to, they often take it as a challenge. Since they engage their passion in entrepreneurship, they will certainly gain success sooner or later, it is a matter of time. They have come to entrepreneurship in the early 19th century. Since then, they are moving ahead day by day and becoming an inspiration to a lot of women who are still haven’t decided whether they ought to launch social entrepreneurship or not. As soon as they discover their potential in entrepreneurship, they will start social entrepreneurship.

However, recent studies have shown that women are certainly doing great competition and taking high risk to flourish their entrepreneurship. About threat in particular, stereotypes that associate risk-taking with masculinity as well as with cautiousness. According to the survey, 750 women directors found that when those analyzed were less likely to have exactly money challenges, over 80% reported obtaining pursued defective professional opportunities, many of which needed risking individual capital. They’re all round investigations advised that women were just like risk-taking as males but were caught in an increase twofold bind, conventional notions concerning women’s dangerous adversity cause their skill to possibly move unnoticed or be noticed negatively because cockiness instead of lower aptitudes for entrepreneurship.

Another consideration that may as an alternative be holding females back from achieving the same amounts of success as men are access to the startup budget needed to establish a brand new company. Not just start brand new companies with fewer finances, but additionally expertise additional barriers to getting additional sources of capital as compared to their male counterparts. Female-owned firms rely largely on inside types of start-up capital, while male-owned business enjoys greater access to external options.

Despite all these obstacles, women entrepreneurship is doing extremely great and in near future they will lead to social entrepreneurship as they have an immense passion, devotion, sincerity towards works. They do not get support both socially and financially and soon this attitude of society will be eliminated and as soon as they will enjoy all sorts of supports. They will be started enjoying social entrepreneurship like their male counterpart.

 

Developing Social Entrepreneurship

When you will start up a social entrepreneurship, you will face a lot of challenges, money is one of the important facts no doubt. You will see how funding is among your most effective challenges. It is not really enough that you become to be a creative genius who has work on a sensible way to eliminate a public situation, that you will be rushing up your current sleeves together with finding the job done when sacrificing everything else in everyday life, knowing that you are able to show that your current idea both answers the problem together with includes enough of an earnings to proceed. Still you should perform an extra 40-hour week on the side figuring out how to lure investors so that your enterprise can improve.

By staying smart, speaking with customers and scaling within a strict budget you probably will not want a primary investment to account your current social enterprise. Here are a few common misconceptions and how you can tackle them are important. You have got a notion for a B2B product, but you still need to construct it before going to buyers to try to get rid of it with these people. Talk to your customers; you will see these people mockup. They may help your development at least offer you criticisms together with telling you how to enhance your current thought.

You are building a new product, and you should spend money on advertising/marketing. Scaling can be done without spending massive amounts of money. If you still think you require money for promoting, the situation might be the concept. You need to shell out someone to develop your current website/product when you don’t have the techie skills. Ideas are cheap, and if you don’t get the skills to construct even the principles then you certainly are merely an element of your current funding team. You will need to talk with folks and construct your own tribe: get traffic to work with you, not for you. There is numerous prevalence of money for sociable enterprises. It’s in no way been easier to come across furnishing for a sociable organization.

If you’re ruthless with yourself, it really is hugely helpful. Write down almost every assertion, reflection and idea in your market, and then validate or remove everyone subsequently. The person who you ask, you should demonstrate the same several points about their opinion. Instead of focusing on the impact, social entrepreneurs should be realistic and focus on precisely how they are going to pay the money back and on displaying they possess sorted out their integrity, preparing and improvement.

You Can Be a Social Entrepreneur Wherever You Are

The very phrase “social entrepreneurship” conjures up images of startups and non-profit organizations. Of course, not all social entrepreneurships are startups, and not all are non-profits, but still. That is a very common mental image people have. The truth is, being a social entrepreneur is much more about who you are than it is about where you work. Not all social entrepreneurs start their own companies; some carry out their social work in the companies they already work for.

 

One of the most notable examples of this is Graham Simpson of huge pharmaceutical corporation GlaxoSmithKine (GSK). Simpson took a trip to Africa, where he saw many of the most common health problems that are ravaging the villagers there. He watched sadly as the child of one of his African colleagues died of anemia, which is a relatively easy-to-treat illness in the United States. The medical clinics in the child’s village had the resources to treat the disease, but the child’s family was unable to travel to the clinic in order to receive a diagnosis.

 

That experience touched Simpson enough to talk with one of the research and development heads at his company, and they immediately got to work. They developed a simple, inexpensive, transportable diagnostic kit that even an untrained worker could use for testing purposes.

 

The project has only expanded. Now they’re looking at making kits to target specific at-risk populations (like pregnant women for example) and kits to target diseases in addition to anemia. It’s a revolutionary development, and it was all made possible because one person at a huge company spoke up and encouraged his company to use their resources for good.

 

So don’t despair if you aren’t sure what kind of company you would start. You might be able to make a difference right from where you’re sitting now.

LuminAID

If you watch the ABC show Shark Tank, then you may remember Andrea Sreshta and Anna Stork from LuminAID. They came up with the idea for their business after the 2010 earthquake in Haiti. They realized that one of the major problems in the disaster relief and rebuilding efforts was the fact that there was no reliable electricity. All work had to stop as soon as it got dark outside, and the darkness created dangerous conditions in tent cities that were popping up in the rubble.

 

Their idea was to create a solar-powered light that could pack flat. They figured it would be useful to have something that could fold up and be easily stored while not in use, but that could pop up and become a reliable source of bright light for use in disaster situations like in Haiti, but also on camping trips, in homes, and in search and rescue operations.

 

Their product is an inflatable light. When fully inflated, it creates a bright, but diffused light source that is capable of lighting an entire room. It’s much brighter than you would expect, but not so bright that it’s dangerous to the eyes. The product has been adopted by individuals and organizations alike. It was used by disaster relief teams after Typhoon Hiyan, Hurricane Sandy, and the recent earthquake in Nepal. It is also a staple item in rescue kits for national park workers and ski patrol.

 

The LuminAID founders have worked very hard to get where they are. They initially funded their efforts through IndieGoGo, but because of their enormous success, they were offered the opportunity to pitch their product on Shark Tank. Mark Cuban became their first investor, and they are now able to expand rapidly. The LuminAID light will surely become a standard item in any hiker’s backpack and any home’s emergency kit.