Takuya Homma's List: Social Enterprise

• Now a new style of “hybrid” technology organization is emerging that is trying to define a path between the nonprofit world and traditional for-profit ventures.
• The new companies, like thousands of Silicon Valley start-ups before them, typically begin as small groups of intensely motivated people dedicated to the goal of building a product or service.
• self-sustaining projects.
• Computer technology and the Internet are lowering the cost of doing business,

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• They need more time and trial and error to find a profitable as well as socially good way. They are properly motivated, and the society is made to welcome such actions? - Takuya Homma on 2008-04-13

• Many of the problems in the world remain unresolved because we continue to interpret capitalism too narrowly.
• Suppose we postulate a world with two kinds of people, both one-dimensional, but having different objectives. One type is the existing type, i.e. profit maximizing type. Second type is a new type, who are not interested in profit-maximization. They are totally committed to make a difference to the world. They are social-objective driven. They want to give better chance in life to other people. They want to achieve their objective through creating/supporting sustainable business enterprises. Their businesses may or may not earn profit, but like any other businesses they must not incur losses. They create a new class of business which we may describe as "non-loss" business.
• To distinguish him from the first two types of SEs listed above, we'll call him "social business entrepreneur" (SBE).
• With the introduction of SBEs, the market place becomes more interesting and competitive. Interesting because two different kinds of objectives are now at play creating two different sets of frameworks for price determination. Competitive because there are more players now than before. These new players can be equally aggressive and enterprising in achieving their goals as the other entrepreneurs.
• Once we recognise them supportive institutions, policies, regulations, norms, and rules will come into being to help them become mainstream.
• Market is always considered to be an utterly incapable institution to address social problems. To the contrary, market is recognised as an institution significantly contributing to creating social problems (environmental hazards, inequality, health, unemployment, ghettoes, crimes, etc.). Since market has no capacity to solve social problem, this responsibility is handed over to the State. This arrangement was considered as the only solution until command economies were created where State took over everything, abolishing market.
• It is time to move away from the narrow interpretation of capitalism and broaden the concept of market by giving full recognition to SBEs. Once this is done SBEs can flood the market and make the market work for social goals as efficiently as it does for personal goals.

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• Such a system would have a twin mission: making profits and also improving lives for those who don't fully benefit from market forces. To make the system sustainable, we need to use profit incentives whenever we can.
• As such, recognition triggers a market-based reward for good behavior. In markets where profits are not possible, recognition is a proxy; where profits are possible, recognition is an added incentive.
• creative capitalism
• How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing it
• tiered pricing
• some of the highest-leverage work that government can do is to set policy and disburse funds in ways that create market incentives for business activity that improves the lives of the poor.
• What unifies all forms of creative capitalism is that they’re market-driven efforts to bring solutions we take for granted to people who can't get them.
• Klaus Schwab runs a foundation that assists social entrepreneurs around the world, men and women who turn their ideas for improving lives into affordable goods or services.
• Social Capitalism.

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•   He does not view the Grameen bank and related activities as charity.  He truly views them as businesses, albeit a somewhat different kind of business from the classic ones based on maximizing profits.
• He wants to create a new type of entrepreneur, who is not just interested in profit-maximization but who is also totally committed to make a difference in the world and give a better chance in life to other people, not just through charity, but by creating social businesses.
• Dr. Yunus points out that, while there is now widespread acceptance that free markets, rather than the State, are the best mechanisms for the profit-making sector of the economy, somehow markets are considered to be utterly incapable of addressing social problems.  We have handed that responsibility to the State.  He strongly disagrees.  If markets are the best way to bring innovation and competition to the profit-making part of the economy, shouldn't markets be also viewed as potentially excellent mechanisms to bring innovation and competition to help address social problems?
• For those of us who strongly believe in the power of free markets, it is heartening to see that such powers can be applied not just to create profit-making innovators, but also to come up with innovative ways of addressing the social problems in our midst.

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• Among the fixes he plans to call for: Companies should create businesses that focus on building products and services for the poor. "Such a system would have a twin mission: making profits and also improving lives for those who don't fully benefit from market forces," he plans to say.
• Muhammad Yunus, the Bangladeshi economist who won the 2006 Nobel Peace Prize for his work providing small loans to the poor, is traversing the U.S. this month promoting a new book that calls capitalism "half developed" because it focuses only on the profit-oriented side of human nature, not on the satisfaction derived from helping others.
• C.K. Prahalad
• The vested interests in aid are so powerful they resist change and they ignore criticism. It is so good to try to help the poor but there is this feeling that [philanthropists] should be immune from criticism.
• A core belief of Mr. Gates is that technology can erase problems that seem intractable. That belief was deepened, Mr. Gates says, by his study of Julian Simon, a now-deceased business professor who argued that increases in wealth and technology would offset shortages in energy, food and other global resources.

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• his position is right and what's important next is how he tries to achieve this grand plan. many people critisize but what's the point in it? we should praise him for moving in the right direction and coorperate with him after all he is one of the most influential figure on earth - Takuya Homma on 2008-04-14

• -solving health problems that affect only the poor and improving educational systems.

• Bill - Takuya Homma on 2008-04-14

• Grameen, crazy as it may sound, “assumes that every borrower is honest.” But it does have ways to help ensure repayment. Each borrower joins a group of people from similar social and economic conditions, and the group approves the loan request of each member. In this way, the group assumes “moral responsibility” for the loan.
• They said we are destroying their religion because we are giving money to women.
• He argues that in today’s world, people whose main ambition is to help those in need tend to be pushed into philanthropy, which isn’t always the most efficient way to bring about change. In philanthropy, he says, the “dollar has only one life, you can use it once . . . social business dollar has endless life, it recycles. And you build institutions.” He continues, “when it’s an institution you bring creativity into it. You bring innovations into it. You bring continuity into it.”
• the moment you bring in a business model, immediately you become concerned about the cost, about the revenue, the sustainability, the surplus generation, how to bring more efficiency, how to bring new technology, how to redesign, each year you review the whole thing . . . charity doesn’t have that package.
• Mr. Yunus argues that it’s extremely difficult to bring efficiency to charity

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• Social business is not profit-driven but cause-driven. The founders have to retract the money they used but shouldn't get revenue. It should be self-sustained, not just a charitable movement which collects money from well-hearted people. It should be business and cost-aware, competition-aware. - Takuya Homma on 2008-04-14

• A social business is not a charity. It is a nonloss, nondividend company with a social objectiv
• Traditional philanthropy and nonprofits generate a social gain, but they do not design their programs as self-sustaining business models. A charitable dollar can be used only once. A dollar invested in a self-sustaining social business is recycled endlessly.
• he bottom line for a social business is how much impact it makes on society,not how much money it returns to the investors.

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• For a profit maximising company, the bottom line is how much money you make. But when you run a social business, it’s about impact.
• In the charity world, I go to the donor, spend the money and then go back to the donor. In social business, the money is recycled. There are thousands of people that need help. Why should microcredit compete if we are not interested in profit?
• Innovation is driven by making money. Do you think the good heart of a chief executive of the social business is enough to drive innovation and create good products and services?
• As long as you are a profit maximising business, your thinking process is about how to make money. Imagine you came to a business where you don’t have to make money, you just do good. Your thinking changes completely. A lot of things become relevant and irrelevant.
• To have social business recognised as a businesses entity and define what are the norms and standards. A

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• ummm, it sounds like he's talking dreams which don't match the society requirement . - Takuya Homma on 2008-04-14

• Several companies, including Intel, Motorola and Microsoft, employ trained anthropologists to study potential customers,

• it's a great job to be able to just travel around the world and experience things foreign - Takuya Homma on 2008-04-14

• But most of Grameen’s businesses have something to do with tech: Bangladesh’s largest cell phone company (which is also its largest private employer), an Internet service provider, an electronics manufacturer, a business IT consultant and a developer of high-tech office buildings.
• InternetSpeech
• Yet when Yunus explains how he wants to get from here to there, he rejects conventional capitalism. His book is primarily devoted to promoting something he calls “social business,” in which investors seek no monetary profit, but rather get only their initial financial capital returned. They would thus “profit” more by getting the satisfaction of helping others.
• Grameen Intel, which aims to bring broadband and educational computing to Bangladesh schools (in competition with OLPC). “Silicon Valley people are used to making crazy money, so non-crazy areas are left out,” he opines. “Some things nobody will lift a finger for.”

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• Yunus' site - Takuya Homma on 2008-04-14

• Social Businesses seek to profit from acts that generate social improvements and serve a broader human development purpose. A key attribute of social businesses is that an increase in revenue corresponds to an incremental social enhancement. The social mission will permeate the culture and structure of the organization and the dual bottom lines - social and economic will be in equal standing with the firm pursuing long term maximization of both.1

• It boils down to the following requirements:

   

  1. it needs to have social objectives: e.g. health, education, poverty, environment or climate urgency
   2. it needs to be owned by the poor or disadvantaged, e.g. women, young people or long-term unemployed
   3. investors may not, after having had their investments paid back, take profits out of the enterprise.

• i wanna read this - Takuya Homma on 2008-04-14

• a movement to harness the power of business and the market to the goals of social change, what Matthew Bishop calls "philanthrocapitalism".
• My worry is that the hype surrounding philanthrocapitalism will divert attention from the deeper changes that are required to transform society, reduce decisions to an inappropriate bottom line, and lead us to ignore the costs and trade-offs involved in extending business principles into the world of civil society and social change.
• systemic change involves social movements, politics and the state, which these experiments generally ignore.
• a survey of twenty-five joint ventures in the United States showed that twenty-two "had significant conflicts between mission and the demands of corporate stakeholders"
• What separates good and bad performers is not whether they come from business or civil society, but whether they have a clear focus to their work, strong learning and accountability mechanisms that keep them heading in the right direction, and the ability to motivate their staff or volunteers to reach the highest collective levels of performance.
• The answer is that the logics of business and social transformation are not just different - they pull in opposite directions in many important ways, and there is long experience of the risks involved in mixing them together. Take attitudes to redistribution and social justice, which rarely appear on the radar screen of the philanthrocapitalists but are central to any transformative agenda. "Wealth is like an orchard", says the Mexican philanthrocapitalist Carlos Slim, "you have to distribute the fruit, not the branch", presumably because the branch, tree and forest all belong to him.

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• it's difficult so I'm gonna read this later. - Takuya Homma on 2008-04-14

• a new breed of non-profits have successfully merged being a vibrant business with doing good to society.
• TechSoup
• Internet Archive

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• seems like it's a great blog - Takuya Homma on 2008-04-14

• You start thinking damn my suspicions were right UK has some top talent, give them the opportunity and things will happen.
• Lack of high risk taking, seed funding investors in the UK means that entrepreneurs can’t resist the move.
• Stanford Student Enterprise Venture

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