Twelve business models for social enterprise & innovation
I just posted this at Quora in response to a question about social innovation business models (note: I have edited a couple issues, but the posts are relatively the same–at the moment this document is more extensive & insightful):
1) Association Model: Collaborative Consumption (think Zip Car & Netflix)–but a similar model is used by mobile entrepreneurs who sell use of their phones. [similar to affordable co-working spaces for new businesses & group buying in principle]
2) Association Model: training, networking, events, etc. (Social Enterprise Alliance & the B-Corporation organization). Encourage best practices. (I don’t know how lucrative Co-ops are or can be, but they are relatively similar in nature–it seems that the association model is slightly better–but I’m sure its different on a case by case basis)
3) Sustainable sourcing: Root capital is a great example with coffee farmers + Starbucks. Somasource is another varient, although applied in the human resources & human capital arena.
4) Training & Job support for the disadvantaged or youth (this has many of the benefits of micro-enterprise without some of the risk–in fact). Its also rather adaptable. In the states I’ve seen it in the areas of cleaning, baked goods, food services and auto repair to target populations (disabled, former criminals, etc…). Delancy Street Foundation in SF is a great example as is REDF.
5) Micro-lending & micro-enterprise
(A couple variants of this micro-franchsing, micro–insurance, micro-savings, etc..). These tend to partner with NGOs & product producers.
6) Bulk/Whole sale buying to meet the price points of the extreme poor. Also miniturization, which enables lower price points.
7) CSR Model (Salesforce, iContact, Ebay, Microsoft/Bill & Melinda Gates Foundation, Pepsi Project, Ford Foundation, etc…)
8] Certification/Labeling/Fair trade (see also Sustainable sourcing
9) Incubator or Accelerator (Tech Stars, YCombinator, Plug & Play, & Unreasonable Institute). Note these are monetized, if they are, by a percentage of the company (6% sometimes) and/or venture investment on the back end. Some are financed via fundraising–like the Unreasonable Institute.
10) Business in a box-often a sales driven model (several examples of this from organizations in Africa & India).
11) Green business consulting, social business consulting, etc… Or training not just for the bottom line–but so your people have meaning & purpose in their lives….or provide EQ/Emotional leadership training or mentoring. (Affordable legal services for nonprofits & social businesses)
12) Decreases fraud, corruption, or waste in business or government or consumers (Terra Cycle is an example of that as is Goodwill & housing works)
Its hard for health care or education companies not to be social businesses (large scale communication platforms–ie Facebook or Skype)–unless they charge fees that are our of control or aren’t ethical.
Also there are businesses which provide amazing value through: 1) scale 2) collaboration 3) design 4) insight 5) productivity. These might be in a gray area of what social businesses are–which is something which will be a constant debate throughout the community.
This free whitepaper has pretty decent coverage of the business in a box & micro-franchising space. Its jam packed with 35 or examples of micro-franchising.
This is certainly just the beginning…..feel free to add your contribution in the comments section.