Discover the 3 secret blind spots of social entrepreneurs across the Middle East and North Africa: money talks, know your audience & have innovative business models
By: Wamda
Suzan Elsayed is a Google Policy Fellow at Wamda and an independent researcher focusing on the Fourth Industrial Revolution and future of jobs in Middle East and North Africa (Mena). She previously worked as a strategy consultant in the GCC and London.
Social entrepreneurship is often misunderstood as "non-profit" or simply an extension of corporate social responsibility programmes, but while it remains a theoretical concept without a solid definition, they tend to be companies that tackle various societal or infrastructural issues.
Plenty of social enterprises have emerged across the Middle East and North Africa (Mena) region. There are now startups that tackle issues in the healthcare and education sector, enabling better efficiency and accessibility and companies that focus on environmental issues due to the misuse of resources and the arid lands that surround the region.
But social entrepreneurs face a host of challenges, particularly when it comes to maintaining focus or understanding the business lingo.
The lack of communication and gaps in understanding the necessity and the needs of social enterprises results in governments, investors, and startups to be ‘lost in translation’. For a starter pack, it would be recommended to focus on those three ‘blind spots’ for social entrepreneurs:
Money Speaks
In a recent panel discussion, one of the investors made a poignant statement. Given the political situations of the region, many of us cannot voice our opinions or vote on challenges facing our societies, so, “private finance can provide a democratic vote”. With investments being the key driver for change, social entrepreneurs need to speak the lingo. Given the limited number of venture capitalists who are open to social enterprises in the region, there needs to be a strategic and quantifiable language with potential investors.
On the other hand, it is crucial to highlight that the social entrepreneurship ecosystem struggles with a lack of pre-seed and Series B funding. However, this gap is substituted with grants and funding from international donors and charities which is considered unsustainable. Donors usually provide their funding as part of a one-off investment and do not drive a business-mindset in social entrepreneurs as they are not expected to showcase return on investment or profits.
Innovative Business Models
Social entrepreneurs are mission-driven individuals who are keen to make a visible impact in their societies. Yet, this can sometimes be difficult to translate into quantifiable and measurable results. Thus, the key is to make the business models ambitious but be humble about your social impact. For instance, if you are adding two to three UN Sustainable Development Goals (SDG), this will draw some scepticism towards the achievability of the business – especially if it is not backed by solid financial figures.
Source: wamda.com