by Pamela Roussos. Originally featured in The Next Silicon Valley.
The world of social entrepreneurship and impact investing continues to grow and blossom. As a result, social enterprise accelerators must adapt to serve the needs of more diversified and sophisticated social entrepreneurs and impact investors. We are seeing such investors strive to apply 100 percent of their portfolio assets towards social good, while also returning a healthy financial gain.
Accelerators will need to get better at enabling social enterprises to scale effectively, including expanded product or service offerings and growth through the replication of successful enterprises into new geographies. We also expect to see increased interaction and cooperation among social enterprise accelerators, as they work together to help more social entrepreneurs achieve their goals and dreams of positive social and environmental impact.
So what are the factors that enable good social enterprises?
Social enterprises differ from traditional businesses in their goals and priorities: they are committed to effecting social or environmental change—especially among the world’s poor—rather than simply generating as much profit as possible. But even then, social enterprises need rock-solid strategic, financial, operational, and structural business foundations to achieve the positive social impact they desire.
That’s where social enterprise accelerators come in. Accelerators help social entrepreneurs translate their product and service ideas, passion, and drive for impact into funding—most often, by impact investors—and the development of viable, successful businesses.
But not all accelerators are created equal. Which raises an important question: what makes a great social enterprise accelerator?
Miller Center for Social Entrepreneurship’s Global Social Benefit Institute (GSBI)—located on the campus of Santa Clara University—has worked with more than 560 social entrepreneurs since 2003. During those 13 years, we have learned a lot about the characteristics and capabilities that determine social enterprise accelerator excellence.
We have identified three dynamic, interactive attributes important for effective acceleration of social enterprises:
- Actively selecting social entrepreneurs, including assessing their stage of development
- Offering a range of programs suited to different developmental stages
- Providing in-depth, long-term support by executive-level mentors
Let’s look at each of these attributes more closely.
Social entrepreneur selection
Accelerators need a clear idea of the social entrepreneurs they want to work with. In our case, we focus on social enterprises that are ‘social impact first’, meaning that their primary mission is to deliver goods and services to those in need.
Using the Monitor Group’s “Blueprint to Scale” study, we assess prospective social enterprises to determine where they fit along the developmental spectrum of: Blueprint —> Validate —> Prepare —> Scale.
‘Blueprint’ is the seed or ideating stage; ‘validate’ is the start-up stage, usually one to three years in business; and ‘prepare’ is the growth stage where enterprises are beginning to scale. It’s hard to start a business and harder still to scale it.
Accelerators that take a one-size-fits-all approach to their programs will fail to meet the needs of social enterprises that are developmentally behind or ahead of a given accelerator’s ‘center of gravity’.
We have seen enormous advantages in offering programs customized for different social enterprise lifecycle stages. Using GSBI as an example, we offer three programs:
- GSBI Boost straddles the mid-blueprint to early validate stages. It’s a three-day in-person, on-location workshop that uses lectures and examples to help early social enterprises learn business fundamentals and improve their strategic thinking.
- GSBI Online focuses on social enterprises at the validation stage. A six-month virtual training program incorporating one-on-one mentoring, it helps social entrepreneurs improve their business model, enhance their growth strategy, and present their plans in a compelling manner.
- GSBI Accelerator is aimed at the prepare stage, getting social enterprises investment-ready and prepared to scale. This is a 10-month program combining online training with mentoring by two Silicon Valley executives that culminates in a nine-day in-residence program at Santa Clara University. At the end of the in-residence training, entrepreneurs pitch their business plans to an audience of impact investors.
One of the most important attributes of a great social enterprise accelerator is the quality of its mentoring program.
It takes time for a mentor to get to know and understand the intricacies of any social enterprise; to figure out what gaps exist between the enterprise’s goals and its capabilities; and to motivate the social entrepreneur to navigate the challenges of their chosen path. It’s only through in-depth, consistent, and long-term mentoring by knowledgeable, experienced, and caring executives that an accelerator’s program curriculum comes alive.
Choosing and training the right mentors is crucial. GSBI mentors are top-notch Silicon Valley executives. Some bring overall business savvy, while others provide content expertise in areas such as franchising or distribution. All Miller Center mentors go through a training process before being matched with a social enterprise.
Pamela Roussos is senior director, Global Social Benefit Institute, at Santa Clara University’s Miller Center for Social Entrepreneurship in California. She has over 20 years of experience growing teams and delivering products for both large and start-up software companies, including Amdahl, Pure Software, Rational Software, 555-1212.com, Consera, Zend, and AppFirst.