Social entrepreneurship could change society even more in the future. Clever ideas abound. But the social startups are rarely tall. Why?
Whether bittersweet or whole milk, whether 43 or 70 percent cocoa – the flavor “good conscience” should always be present at the chocolate bars of the Munich startup Fairafric. Since 2016, the young company has been selling chocolate, which to a large extent is produced in the country of origin in Ghana, thereby creating jobs in agriculture and in production plants. The aim is to build a bridge between consumers who find the job good and the producers, says Fairafric founder Hendrik Reimers.
From just under three euros for a chocolate bar, the plan is to arrive at least 80 cents in the producer country. Usual is about a tenth of it. In the first year, a Kickstarter campaign generated sales of € 30,000. Reimers plans to spend around 350,000 euros this year. In 2022, according to the business plan, it could be five million euros. His approach: “We tackle the social problem of poverty, but still want to earn money with it”.
Social entrepreneurship is recognized in the breadth of society
At parties, Reimers, who has previously made a career in large IT corporations, no longer has to justify his job and perspective change: “The reactions are very, very positive,” he says. Social entrepreneurship is recognized in the breadth of society. However, it has not arrived in the breadth of the economy yet. Many of the founders make generous use of the agile development tools or the lean startup methodology to quickly get their first services or products and do a great deal with little resources.
Nevertheless, social startups face some special challenges when it comes to leaping from good thoughts to global problem solvers: “We still do not manage to scale social enterprises across the board,” says Matthias Scheffelmeier. He is one of the German partners of Ashoka. The globally active organization for the promotion of social entrepreneurs is supported in this country by a number of foundations and corporations.
Big and small for the good
There are plenty of reasons to start a business with a clear conscience: In many countries, populists are pushing for power, and in some places, hard-won fundamental rights are being recovered. There is still a huge imbalance in the distribution of social wealth globally, and even within many countries. In addition, scientists increasingly urge a more considerate use of the resources of the earth.
This is why more and more established and young companies are also repositioning themselves in Germany, bringing at least one social component into focus. Three drivers come together. First, the honest will to engage in society and the environment. Secondly, a clientele that is increasingly critical of how companies are doing business. And thirdly, the entrepreneurial commitment to the environment and society also attracts much sought-after new employees, who want to see not only a decent paycheck but also the meaning of their daily work.
Although the examples are often isolated cases, they are becoming increasingly visible and increasingly prominent. At this year’s Dmexco, Telekom CEO Tim Höttges called on other companies to take on more social responsibility. The German management of the consulting firm Ey called their staff before the Bavarian election, “to strengthen democratic and constitutional forces in our country”. Siemens CEO Joe Kaeser shared such views on Twitter and attacked there in May, for example, the AfD chairman Alice Weidel directly. And Deutsche Post already has over 10,000 electric vehicles in use today, of which the street scooters are even being developed on their own. In the medium term, the Group wants to replace the entire fleet with e-vehicles, “in the interest of the environment and the customer”.
Startups also position themselves as ambitious
The ambitions are big, maybe even too big: in a Bitkom survey of 302 startups, 36 percent said they want to improve the world with their company. So many digital insurance or some innovative vacuum cleaner adapter suggests that the product should optimize the account balance of the founders in the first place.
But of course there are also many dedicated examples: in the food sector, startups attract ecological and fair supply chains. There are clever ideas around controlling renewable energy. Startups are also found in the intergenerational networking of young and old. Initiatives like “Ankommer” from Potsdam build up entrepreneurial perspectives for refugees. “We are at a point where there is an ecosystem of actors,” says Scheffelmeier. “But what’s missing are more in-depth and broader collaborations among the actors.”
How much good is good enough?
The definition of “good” can be arguably argued – and that is also done zealously. In more generous interpretations, it is enough if shares of sales or profit go to the good cause. Share, for example, started in the spring of 2018 with big ambitions in traditional trade, but with a new concept: every bottle of water or soap sold here means a donated meal or a hygiene article for people living in poverty. Share works with organizations such as the World Food Program of the United Nations or the Berliner Tafel. The products include tracking codes to track where the benefit arrives. The intention was to show how successful entrepreneurship and social responsibility are not only compatible but even mutually reinforcing one another, said initiator Sebastian Stricker as his motto in March 2018.
Fairfric founder Reimers also sees social business as a for-profit company that wants to solve social problems. “Where the fine line runs is often very difficult to determine” he admits. And in very narrow definitions, social impact precedes any economic outcome. Ashoka cites examples such as the reformist Montessori movement or Florence Nightingale as the founder of modern day nursing.