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Social Entrepreneurship is Dying (and That’s a Good Thing)

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The exact definition of social entrepreneurship is widely debated, but there is one thing everyone agrees on: it involves a business addressing a social issue. One that extends beyond consumer desires into a greater community impact. But that has an implicit assumption: the business is forgoing some level of profit to address that problem.

Why is that the case? Because the market is profit-seeking, and the market as it stands isn’t solving the problem. If a social problem could be solved by purely profit-seeking behaviour, GE would have already solved it. There’s a reason homeless people in Vancouver can’t find a roof but can get a burger for $1.39.Although this makes social entrepreneurship a noble cause, it also makes it grossly unappealing to me. By not seeking profit, social ventures are inherently at odds with capitalism and at greater risk of being overtaken by competitors with a more singular focus. I have no intention of arm-wrestling with the invisible hand.

But what if social entrepreneurship is becoming an outdated term?

Listening to the market

When I started developing Smoothie Veggies, I had no ambitions of being a social entrepreneur. I wanted to fulfill the need I saw(veggies for smoothies), and I hoped to eschew traditional industry business models. But there was no magnanimous social mission. I wanted, and still want, to make a shit-ton of money.

But something began to happen when I interviewed prospective customers. First, they insisted that if they were going to buy an product in individual servings, the packaging had to be compostable. Otherwise they would feel wasteful. Then, they told us that they would pay more if we sourced our veggies from local, sustainable farms like UBC Farms. After that, we learned that it has become more profitable to sell directly to consumers than to insert ourselves in big-box grocery’s complex supply chains.

So we sourced locally and operated sustainably – to make more money.

After that, the banks told us they are much more open to providing startup loans to sustainable businesses, and the government told us they have lots of grants available for the local food economy. UBC even told us they would give us a host of free resources as part of their social accelerator.

So we embraced our position as a social business – to get more money.

The death of social entrepreneurship(and the birth of the Social Singularity)

Ten, or even five years ago, it wouldn’t have happened this way. Organic was the luxury of the rich, and local/sustainable was the purview of the tree-huggers. If I had sought out a way to solve my consumer problem (veggies for smoothies), I likely would’ve sourced veggies from Mexico, packaged them in a cheap plastic film, and sold them at Costco. And it only would’ve happened if I had a deep-pocket financier behind me.

That’s not to say I don’t care about Smoothie Veggies’ sustainable practices. I now love my local farmers and have gone to great financial lengths to ensure our packaging remains compostable. But I only felt that once our prospective customers exposed me to the issues.

I believe North American market conditions are reaching an inflection point. If enough consumers and institutions continue to open their wallets for sustainable businesses, then “social entrepreneurship” will be like “colour TV” – redundant. They will be one and the same.

When that happens, the economy’s invisible hand will propel forward at an even greater rate, to the point where it can do so even without the help of outside institutions or legislation. At that point, its growth will feed into itself: a Social Singularity. Profit would become a force for positive change, and the noble but doomed “social entrepreneur” would be replaced by good old-fashioned money-hungry entrepreneurs like me. Local/sustainable food is the low-hanging fruit here because everyone likes it, but this could apply to any social issue.

But this all relies on buyers’ preferences – every purchase is a vote. So, Vancouver, good job. Keep buying local. I don’t care whether you’re doing it for your health, your ethics, or just to impress your friends. It’s changing the way the economy works – and I’m betting my business on it.

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