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10th International Conference
       of the International Society for
       Third-Sector Research (ISTR)
           at Siena University, Italy




Five Stages of Social Entrepreneurship


                     2012.7.13.
                   Yutaka Tanabe
      NPM (Non Profit Management) Course,
                 Social Engineering,
     Tokyo Institute of Technology, Tokyo Japan
            yutaka.t.aa@m.titech.ac.jp
                                                  1
Index

•   Introduction and Research Question

•   Literature Review

•   The comparison between For-profit Entrepreneur and Social
    Entrepreneur

•   Methodology

•   Findings

•   Limitations & Conclusions

•   Discussions

•   References

                                                               2
Introduction and Research Question

•   Social Entrepreneurship (SE) as a field of research is a relatively
    recent phenomenon (Mair, Robinson, and Hockerts 2006).

•   Although SE is spreading among practitioners and researchers
    around the world continuously, the stages of SE don’t seem to be
    defined yet.

•   Some successful social entrepreneurs like Muhammad Yunus
    create a fundamental change in society (Bangladesh), but others
    stay with little result and financial difficulty on a self-employed
    scale.

•   Concept of stages of SE would indicate success factors for
    practitioners and researchers to find opportunity to tackle social
    issue, to develop social enterprise from individual-scale to
    society-scale, and to realize a sustainable society.
•   The research question would be to define five stages of social
    entrepreneurship, and to research its effect to SE development.
                                                                         3
Literature Review
1. Non-profit perspective
  •   Creating value and assessing performance -> Growing and
      exploring new directions (Dees, Emerson, and Economy 2002).
  •   Mission Statement & Opportunity -> Innovation -> Product/
      Services & Relations -> Business Model Definition -> Social
      Outcomes -> Social Transformation (Perrini and Vurro 2006).
  •   Opportunity identification -> Opportunity Evaluation &
      Exploration -> Opportunity pursuit (Robinson 2006).
2. Entrepreneurial perspective
  •   Eckhardt and Shane clarified the role of opportunities in the
      entrepreneurial process (2003).
  •   Moroz and Hindle demonstrated that there is an urgent need
      to synthesize what can be taken from the extant body of
      entrepreneurial process models as one component of a
      concerted attempt to derive and test what might be called a
      “harmonizing” model of entrepreneurial process rather than a
      “unifying” model (2011).
Overall, we can assume social entrepreneurial processes
defined by these authors can be improved more to explore
key success factors by mission-driven approach.                      4
The comparison between For-profit
Entrepreneur and Social Entrepreneur
               Source of      Top priority of
               Motivation     the enterprise


  For-profit
                            Maximizing Profit
Entrepreneur
                Profit       (If it can pay tax, then
                            it is good for society.)



    Social      Social            Solving
Entrepreneur    Issue           Social Issue

                                                       5
Methodology
  - 5 Stages of Social Entrepreneurship Model -


•   Social mission creates opportunity to solve social
    issue and economic value.
•   Size of Social Entrepreneurship (SE) activity
    (opportunity) grows according to stages.



                                                        Contribute
                                                             to
              Individualized   Organized   Socialized
Opportunity                                             Sustainability
                 Activity       Activity    Activity
                                                             of
                                                          Society




                                                                         6
Case Study from Ashoka DataBase
       - NPO Teach for America -
•   Social Entrepreneur: Ms. Wendy Kopp
•   Field of work: Education
•   Social Issue: Education gap
•   Mission: “One day, all children in the U.S. have the
    opportunity to attain an excellent education.”
•   Business Model: TFA gathers donation from donors/
    foundation, then, sends TFA teachers to public schools in
    poverty area in US. They teach at least 2 years. Budget:
    $143M in 2009 (Source: Ashoka Fellows Database).
•   Operation: “Best of the best” recruiting, fundraising, IT
    investment, training, and reporting, etc.
•   Ranked #1 of “America’s Ideal Employers” in 2010 (#3 in
    2012), surpassing Google, Apple, and Microsoft. (Source:
    UNIVERSUM, http://www.universumglobal.com/US-
    Undergraduate-Rankings)
                                                                7
Methods for Data Collection




• Checking Ashoka Fellows Database
• Interviews in 2 TFA schools and HQ
• On-site observations

                                       8
(1) Opportunity

•   Opportunity is to recognize social issue and to start
    social entrepreneurship. Mission creates opportunity.
•   TFA Case: “The moment that opened her eyes, she
    says, was when she witnessed her undergraduate
    roommate from the Bronx struggling with the
    academic pace of the college despite being “brilliant,”
    while their next door neighbors who had attended
    prep schools were calling Princeton a “cakewalk.””
    (Ashoka, http://www.ashoka.org/fellow/wendy-kopp )
    Success Factors: She/he will start volunteering or
    small business to make it happen with strong will.
                                                              9
Mission expansion for Social Change
            (TFA case)
                              Society
                        (Culture, Industry,
                           Policy Sector)

               Citizens / Corporations
              which collaborates with TFA


             Supporters / Alumni of
                     TFA
                 NPO (TFA)
                 Social
                Mission
               by Wendy
                 Kopp
                                              10
(2) Individualized Activity


•     Social entrepreneurship activity by a person. Because it is
      a small personalized activity, it is difficult to spread
      rapidly. Social business opportunity is also for an
      individual; the wage, eventually sustainability, is low.

•     TFA case: “She developed the concept as her thesis, and
      despite little reaction from others, felt that the idea was
      so important that she kept pursuing it.” (Ashoka)


    Success Factors: Pursuing team-building / alliance, Utilizing
    management resources (money, person, etc.) by strategy
    and leadership.
                                                                    11
(3) Organized Activity


•   Social entrepreneurship activity is organized because of team
    building / alliance. It starts to spread rapidly with right staffs.
    Social Business Opportunity gets bigger; right people hired,
    trained, and Human Resource / Fundraising Strategy executed.

•   TFA Case: “Teach For America teachers go through a rigorous
    recruiting process, and if selected, participate in a summer-long
    training program after which they are placed in some of
    America’s poorest schools and perform two years of teaching
    service.” (Ashoka)
    Success Factors: Hiring right people, Sharing mission among
    organization through training, Strategy execution by
    teamwork, Evaluation.
                                                                          12
(3) Organized Activity
- The Elevator hall for TFA staffs at TFA HQ -




TFA mission is always shared among staffs
                                                 13
(3) Organized Activity
        - Students in a TFA Charter School -




  “2023 is the year when
these students will graduate
   college. “ (a TFA staff)
                                               14
(3) Organized Activity
                                            - Evaluation -




  TFA “What the Research Says”                                 TFA Annual Report (2010)
https://www.teachforamerica.org/sites/default/files/      http://www.teachforamerica.org/assets/documents/
  Research_on_Teach_For_America_2012_1.pdf                            2010-annual-report.pdf
                                                                                                            15
(4) Socialized Activity

•   Social entrepreneurship activity to solve social issue with
    society scale. Misson-shared people will play a key role in
    society to realize the SE mission. Culture, Industry, Policy
    Sector will change (Social Change).

•   TFA Case: “Approximately 65 percent of Teach For America’s
    participants decide to remain teachers or move on to become
    principals, school board members, or education sector planners
    and public policymakers... the majority of alumni, such as
    Michelle Rhee, the Chancellor of Washington D.C. schools, are
    staying in education, many of them taking dramatic steps to
    transform the education system.” (Ashoka)
    Success Factor: Social Impact (culture / industry / policy
    change), Evaluation
                                                                     16
(4) Socialized Activity
                      - Mission Expansion among Society -

              •     Alumni of SE have a crucial role as those of
                    McKinsey do.
              •     Alumni who hold and cherish the SE’s mission,
                    then she/he will expand it among society.




 “The 100 Most
Influential People
     in the
 World” (TIME)


                                        Mr. Kevin Huffman                                      Mr. Bill Draiton
             Ms. Cami Anderson                                     Ms. Kanoko Ohishi
                                    (Tennessee State Education                            (Founder & CEO, Ashoka)
            (Social Entrepreneur)                                (CEO of MEDIVA, Japan)
                                         Commissioner)
                                                                                                                    17
(5) Sustainability


•   Contribute to Sustainability of Society (Industry, Culture,
    Policy-making): Socialized Activity creates outcome to solve
    the social issue and contribute to fix our society.

•   TFA Case: “(Teach for All) works to support the
    development of Teach For America’s model around the world
    by increasing and accelerating the impact of independent
    social enterprises that enlist their nation’s most promising
    future leaders in addressing educational need.” (Ashoka)

•   Success Factor: Mission-driven operation with leadership,
    Hiring right people, Policy-making, Evaluation

                                                                   18
Findings

(a) Mission make it possible to grow SE from
   individualized activity to well-organized, and
   socialized activity.
(b) Alliance with (local) government or policy
   proposal facilitates SE to be a socialized activity.
(c) The domain of public sector, private sector, and
    citizen sector will be integrated in the future.
    Social Entrepreneurs are nothing special then. All
    jobs will pursue common good.

                                                          19
Limitations & Conclusions



• Top priority is the key to define Social
  Entrepreneurship as our research.
• We need to research other cases than TFA
  to check the feasibility of the model of 5
  stages of social entrepreneurship.



                                               20
Discussions


•   What do you think about the comparison
    between for-profit entrepreneur and social
    entrepreneur?

•   What do you think about the 5 stages of social
    entrepreneurship for future improvement?

•   What do you think about the success factors in
    the stages of social entrepreneurship?



                                                     21
References

•   Dees, G. (1998). The meaning of “Social Entrepreneurship”

•   Dees, G. & Anderson, B. B. (2006). Framing a theory of social entrepreneurship: building on two
    schools of practice and thought

•   Dees, G. Emerson, J. Economy, P.(2002). Strategic tools for social entrepreneurs. Wiley.

•   Mair, J. Robinson, J. Hockerts, K. (2006). Social Entrepreneurship. Palgrave Macmillan

•   Moroz, P. & Hindle, K. (2011). Entrepreneurship as a Process: Toward Harmonizing Multiple
    Perspectives. Entrepreneurship Theory and Practice.

•   Rose, S. Ackerman. (2005). Competition between non-profits and for-profits: entry and growth.
    Voluntas Volume 1, Number 1, 13-25

•   Kerlin, J. A. (2006). Social Enterprise in the United States and Europe: Understanding and Learning from
    the Differences.Voluntas Volume 17, Number 3, 246-262

•   Churchill, N. & Lewis,V. (1983). The Five Stages of Small Business Growth. Harvard Business Review.

•   Bloom, P. & Dees, G. (2008). Cultivate your Ecosystem. Social Innovation Review. Stanford University.

•   Sherman, D. (2005). Social Entrepreneurship: Pattern-Changing Entrepreneurs and the Scaling of Social
    Impact

•   Eckhardt, J. & Shane, S. (2003). Opportunities and Entrepreneurship. Journal of Management.

                                                                                                               22

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Five Stages of Social Entrepreneurship

  • 1. 10th International Conference of the International Society for Third-Sector Research (ISTR) at Siena University, Italy Five Stages of Social Entrepreneurship 2012.7.13. Yutaka Tanabe NPM (Non Profit Management) Course, Social Engineering, Tokyo Institute of Technology, Tokyo Japan yutaka.t.aa@m.titech.ac.jp 1
  • 2. Index • Introduction and Research Question • Literature Review • The comparison between For-profit Entrepreneur and Social Entrepreneur • Methodology • Findings • Limitations & Conclusions • Discussions • References 2
  • 3. Introduction and Research Question • Social Entrepreneurship (SE) as a field of research is a relatively recent phenomenon (Mair, Robinson, and Hockerts 2006). • Although SE is spreading among practitioners and researchers around the world continuously, the stages of SE don’t seem to be defined yet. • Some successful social entrepreneurs like Muhammad Yunus create a fundamental change in society (Bangladesh), but others stay with little result and financial difficulty on a self-employed scale. • Concept of stages of SE would indicate success factors for practitioners and researchers to find opportunity to tackle social issue, to develop social enterprise from individual-scale to society-scale, and to realize a sustainable society. • The research question would be to define five stages of social entrepreneurship, and to research its effect to SE development. 3
  • 4. Literature Review 1. Non-profit perspective • Creating value and assessing performance -> Growing and exploring new directions (Dees, Emerson, and Economy 2002). • Mission Statement & Opportunity -> Innovation -> Product/ Services & Relations -> Business Model Definition -> Social Outcomes -> Social Transformation (Perrini and Vurro 2006). • Opportunity identification -> Opportunity Evaluation & Exploration -> Opportunity pursuit (Robinson 2006). 2. Entrepreneurial perspective • Eckhardt and Shane clarified the role of opportunities in the entrepreneurial process (2003). • Moroz and Hindle demonstrated that there is an urgent need to synthesize what can be taken from the extant body of entrepreneurial process models as one component of a concerted attempt to derive and test what might be called a “harmonizing” model of entrepreneurial process rather than a “unifying” model (2011). Overall, we can assume social entrepreneurial processes defined by these authors can be improved more to explore key success factors by mission-driven approach. 4
  • 5. The comparison between For-profit Entrepreneur and Social Entrepreneur Source of Top priority of Motivation the enterprise For-profit Maximizing Profit Entrepreneur Profit (If it can pay tax, then it is good for society.) Social Social Solving Entrepreneur Issue Social Issue 5
  • 6. Methodology - 5 Stages of Social Entrepreneurship Model - • Social mission creates opportunity to solve social issue and economic value. • Size of Social Entrepreneurship (SE) activity (opportunity) grows according to stages. Contribute to Individualized Organized Socialized Opportunity Sustainability Activity Activity Activity of Society 6
  • 7. Case Study from Ashoka DataBase - NPO Teach for America - • Social Entrepreneur: Ms. Wendy Kopp • Field of work: Education • Social Issue: Education gap • Mission: “One day, all children in the U.S. have the opportunity to attain an excellent education.” • Business Model: TFA gathers donation from donors/ foundation, then, sends TFA teachers to public schools in poverty area in US. They teach at least 2 years. Budget: $143M in 2009 (Source: Ashoka Fellows Database). • Operation: “Best of the best” recruiting, fundraising, IT investment, training, and reporting, etc. • Ranked #1 of “America’s Ideal Employers” in 2010 (#3 in 2012), surpassing Google, Apple, and Microsoft. (Source: UNIVERSUM, http://www.universumglobal.com/US- Undergraduate-Rankings) 7
  • 8. Methods for Data Collection • Checking Ashoka Fellows Database • Interviews in 2 TFA schools and HQ • On-site observations 8
  • 9. (1) Opportunity • Opportunity is to recognize social issue and to start social entrepreneurship. Mission creates opportunity. • TFA Case: “The moment that opened her eyes, she says, was when she witnessed her undergraduate roommate from the Bronx struggling with the academic pace of the college despite being “brilliant,” while their next door neighbors who had attended prep schools were calling Princeton a “cakewalk.”” (Ashoka, http://www.ashoka.org/fellow/wendy-kopp ) Success Factors: She/he will start volunteering or small business to make it happen with strong will. 9
  • 10. Mission expansion for Social Change (TFA case) Society (Culture, Industry, Policy Sector) Citizens / Corporations which collaborates with TFA Supporters / Alumni of TFA NPO (TFA) Social Mission by Wendy Kopp 10
  • 11. (2) Individualized Activity • Social entrepreneurship activity by a person. Because it is a small personalized activity, it is difficult to spread rapidly. Social business opportunity is also for an individual; the wage, eventually sustainability, is low. • TFA case: “She developed the concept as her thesis, and despite little reaction from others, felt that the idea was so important that she kept pursuing it.” (Ashoka) Success Factors: Pursuing team-building / alliance, Utilizing management resources (money, person, etc.) by strategy and leadership. 11
  • 12. (3) Organized Activity • Social entrepreneurship activity is organized because of team building / alliance. It starts to spread rapidly with right staffs. Social Business Opportunity gets bigger; right people hired, trained, and Human Resource / Fundraising Strategy executed. • TFA Case: “Teach For America teachers go through a rigorous recruiting process, and if selected, participate in a summer-long training program after which they are placed in some of America’s poorest schools and perform two years of teaching service.” (Ashoka) Success Factors: Hiring right people, Sharing mission among organization through training, Strategy execution by teamwork, Evaluation. 12
  • 13. (3) Organized Activity - The Elevator hall for TFA staffs at TFA HQ - TFA mission is always shared among staffs 13
  • 14. (3) Organized Activity - Students in a TFA Charter School - “2023 is the year when these students will graduate college. “ (a TFA staff) 14
  • 15. (3) Organized Activity - Evaluation - TFA “What the Research Says” TFA Annual Report (2010) https://www.teachforamerica.org/sites/default/files/ http://www.teachforamerica.org/assets/documents/ Research_on_Teach_For_America_2012_1.pdf 2010-annual-report.pdf 15
  • 16. (4) Socialized Activity • Social entrepreneurship activity to solve social issue with society scale. Misson-shared people will play a key role in society to realize the SE mission. Culture, Industry, Policy Sector will change (Social Change). • TFA Case: “Approximately 65 percent of Teach For America’s participants decide to remain teachers or move on to become principals, school board members, or education sector planners and public policymakers... the majority of alumni, such as Michelle Rhee, the Chancellor of Washington D.C. schools, are staying in education, many of them taking dramatic steps to transform the education system.” (Ashoka) Success Factor: Social Impact (culture / industry / policy change), Evaluation 16
  • 17. (4) Socialized Activity - Mission Expansion among Society - • Alumni of SE have a crucial role as those of McKinsey do. • Alumni who hold and cherish the SE’s mission, then she/he will expand it among society. “The 100 Most Influential People in the World” (TIME) Mr. Kevin Huffman Mr. Bill Draiton Ms. Cami Anderson Ms. Kanoko Ohishi (Tennessee State Education (Founder & CEO, Ashoka) (Social Entrepreneur) (CEO of MEDIVA, Japan) Commissioner) 17
  • 18. (5) Sustainability • Contribute to Sustainability of Society (Industry, Culture, Policy-making): Socialized Activity creates outcome to solve the social issue and contribute to fix our society. • TFA Case: “(Teach for All) works to support the development of Teach For America’s model around the world by increasing and accelerating the impact of independent social enterprises that enlist their nation’s most promising future leaders in addressing educational need.” (Ashoka) • Success Factor: Mission-driven operation with leadership, Hiring right people, Policy-making, Evaluation 18
  • 19. Findings (a) Mission make it possible to grow SE from individualized activity to well-organized, and socialized activity. (b) Alliance with (local) government or policy proposal facilitates SE to be a socialized activity. (c) The domain of public sector, private sector, and citizen sector will be integrated in the future. Social Entrepreneurs are nothing special then. All jobs will pursue common good. 19
  • 20. Limitations & Conclusions • Top priority is the key to define Social Entrepreneurship as our research. • We need to research other cases than TFA to check the feasibility of the model of 5 stages of social entrepreneurship. 20
  • 21. Discussions • What do you think about the comparison between for-profit entrepreneur and social entrepreneur? • What do you think about the 5 stages of social entrepreneurship for future improvement? • What do you think about the success factors in the stages of social entrepreneurship? 21
  • 22. References • Dees, G. (1998). The meaning of “Social Entrepreneurship” • Dees, G. & Anderson, B. B. (2006). Framing a theory of social entrepreneurship: building on two schools of practice and thought • Dees, G. Emerson, J. Economy, P.(2002). Strategic tools for social entrepreneurs. Wiley. • Mair, J. Robinson, J. Hockerts, K. (2006). Social Entrepreneurship. Palgrave Macmillan • Moroz, P. & Hindle, K. (2011). Entrepreneurship as a Process: Toward Harmonizing Multiple Perspectives. Entrepreneurship Theory and Practice. • Rose, S. Ackerman. (2005). Competition between non-profits and for-profits: entry and growth. Voluntas Volume 1, Number 1, 13-25 • Kerlin, J. A. (2006). Social Enterprise in the United States and Europe: Understanding and Learning from the Differences.Voluntas Volume 17, Number 3, 246-262 • Churchill, N. & Lewis,V. (1983). The Five Stages of Small Business Growth. Harvard Business Review. • Bloom, P. & Dees, G. (2008). Cultivate your Ecosystem. Social Innovation Review. Stanford University. • Sherman, D. (2005). Social Entrepreneurship: Pattern-Changing Entrepreneurs and the Scaling of Social Impact • Eckhardt, J. & Shane, S. (2003). Opportunities and Entrepreneurship. Journal of Management. 22