Jackley and Matt Flannery founded Kiva in October Social entrepreneurs engaged in for-profit ventures are concerned with creating shared value—for their companies and also for society.
What services do Entrepreneurship Facilitators provide?
Creating both private and societal value aligns well with the interests of the large percentage of consumers. And many thought leaders on entrepreneurship have recognized the potential of social enterprises. The concept of building a profitable business model in which doing good and contributing to social change is an intrinsic part of the business and not just a sideline has been gaining ground in recent years. Social entrepreneurs total more than thirty thousand and are growing in number, according to B Lab, a nonprofit organization that certifies these purpose-driven companies.
Certified B Benefit Corporations are a new type of corporation that use the power of business to solve social and environmental problems. The idea of blending a social mission with business is not new.
6 Timeless Strategies That Drive Successful Entrepreneurship
Case chapters in the textbook document sustainable businesses and how they addressed consumer concerns about ecological and social matters in new ways across different industries. An entrepreneur was the key driver in four of these cases. Simply Green, Green Mountain Coffee, Seventh Generation, and Stonyfield Yogurt have provided fuel, coffee, household products, and yogurt to customers, respectively, with product options that have lower carbon and environmental footprints and higher attention to social justice.
We summarize one of the case examples and its founder entrepreneurs here.
- Entrepreneurship Facilitators.
- Success is All in the Attitude?
- There Is No Magic Marketing Strategy?
- How Entrepreneurs Can Beat The Odds: 7 Strategies For Business Success.
- Decisions, Decisions, Decisions: How To Prune Your Decision Tree And Get What You Really Want (The This or Prozac series).
- Entrepreneurship, Innovation, and Sustainable Business?
- Latest on Entrepreneur.
Bob Stiller opened his first coffee shop in in Waterbury, Vermont, selling high-quality coffee. His concept was simple: sell only high-quality coffee to ordinary people every day. When demand for his coffee outstripped his small store, he started bagging his coffee and sold it to wholesalers, supermarkets, and through mail order. Then recognizing and experiencing the challenges brought on by fierce competition in the specialty coffee segment of the industry, Stiller became an early advocate that his business—and all businesses for that matter—could help make the world a better place by committing to sustainable business practices.
Stiller was passionate about this commitment and was convinced that this would lead to financial success.
By adopting innovative sustainable business practices, GMCR met customer demand while having a positive impact on the environment and society. GMCR implemented a fair trade procurement model that improved the quality of life for the farmers in the coffee bean supply chain and their families. At the same time, fair trade helped GMCR monitor quality and lower costs. By lowering dependency on traders and other supply chain intermediates in procuring its coffee, the company lowered supply chain costs and was able to respond more quickly to customer preferences.
Innovation in business involves a change in a product offering, service, business model, or operations that meaningfully improves the experience of a large number of stakeholders. Consistently since , Fortune surveys have ranked Apple number one in innovation and the company is also frequently mentioned as the most admired company in the United States. One innovation in particular, the iPod was the start of a trend of products with broad consumer market appeal. The iPod combined technical knowledge with a new online music concept to become the most influential new product in decades.
All these products combine technological innovation with attention to design, usability, and content delivery in new and innovate ways to transform the way billions of consumers use music, use their phones, use their computers, and access the Internet. But does it meaningfully reduce the materials and energy use of consuming or using the product?
This aspect of the definition raises the bar to avoid classifying meaningless changes as innovations. What is meaningful is contextual on a per innovation basis. The term stakeholders acknowledges that the beneficiaries of an innovation can vary widely—consumers, shareholders, employees, and any subset thereof. All of these stakeholders can potentially benefit from different types of innovations meant to address sustainability. Responding to an opportunity often requires innovation; for example, finding a new way to solve a problem or address a concern that is cheaper, faster, or better than the old way of doing things.
The innovation can range from a relatively simple process way of doing things change to a highly complex new technology, such as those introduced by General Electric GE in their ecomagination program discussed in the previous sidebar titled "Jack Welch at GE: An Industry Leader as an Intrapreneur". The process by which a new product or service is introduced into the general market is called commercialization. Commercialization is broken into phases, from the initial introduction of the product to its mass production and its adoption.
It takes into account the production, distribution, marketing, sales, and customer support required to achieve commercial success. As a strategy, commercialization requires that a business develop a marketing plan, determine how the product will be supplied to the market, and anticipate barriers to success. To help illustrate the concept of innovation, two companies will be discussed. Both companies are innovators in two entirely different areas at two entirely different price points. However, both companies are connected to sustainability in that they are providing a product to help reduce the consumption of fossil fuels for energy.
The smart sensors allow fuel distributors to electronically monitor the amount of oil in a tank. The sensors send information to a software-as-a-service interface that integrates into fuel dealers delivery scheduling systems. This allows business owners to make their delivery methods more efficient while reducing greenhouse emissions by 30 percent or more. The same sensors can also monitor other energy and natural resource use, including water, and can help with regulating use and conservation efforts.
From early to early , Enertrac went from monitors installed to 25, monitors in place with , units on order. SustainX has invented a new technology to cost-effectively and efficiently store energy from renewable and other sources. The technology being pioneered by SustainX compresses and expands gas resulting in seven times the reduction in storage cost as compared to traditional methods. This could profoundly change the economics of energy generation from both renewables and conventional sources. Fundamental to many sustainable businesses, including Enertrac and SustainX, are so-called clean energy technologies or sometimes called clean tech.
These include technologies that generate energy from renewable sources, store energy, conserve energy, monitor and regulate energy usage and the pollution it generates, and efficiently manage water and other natural resources. Technological advancement relies on investment in research and development. This can range from relatively small investments for Enertrac and other sustainable businesses pursuing low-cost technology solutions to millions of dollars for companies like SustainX, which are pursuing more radical so-called game-changing inventions.
Public policy can play a role in encouraging the development and adoption of new technology, which serves to jump-start market development and demand and reduce start-up risks for sustainability entrepreneurs. Research and development tax credits can reduce the costs of innovation and new products and services, offering development for entrepreneurs. Any company that designs, develops, or improves products, processes, techniques, formulas, inventions, or software may be eligible. In fact, if a company has simply invested time, money, and resources toward the advancement and improvement of its products and processes, it may qualify.
Entrepreneurship, Innovation, and Sustainable Business
The company receives a credit that can be used against taxes owed for their investment in qualifying research and development. Also important in the development of new technologies are the industry standards the government defines and regulates. Examples of public policy initiatives that have pushed forward technological innovations are energy efficiency standards for appliances and for buildings. Innovation in turn can lower the barriers and costs of public policy standards on emissions and efficiency, and this can also be true for some policies to address social injustices e.
So from a systems perspective, there is feedback going in both directions between innovation and public policy. Regulations are issued by executive branch agencies to carry out federal laws, such as the standards laws, and are available in the Code of Federal Regulations. The end users of clean energy technology are diverse.
They include private households, businesses, public agencies, and utilities. End users can take advantage of public incentives and they can also influence the public discourse and policies concerning investment, standards, mandates, and incentives. Most importantly, the choices end users make influence decisions by green producers and sustainability entrepreneurs regarding new products and services. And this provides an entrepreneurial opportunity.
To compete in the sustainability arena, entrepreneurs must frequently go beyond what has worked in the past and seek new and different perspectives and connections. One important area of innovation is new associations, networks, and partners that can provide new resources and information and foster new ways of doing things.
Facebook is an example of a social network that has been innovative in creating new connections and relationships on a global scale that otherwise would not have existed through applying existing technology. People from the same circles tend to share the same pools of information and contacts. Research indicates that the longer the duration of these direct connections, the more similar the perspectives and resources. Under normal circumstances, this is fine.
- Weston Veterans, 1: World War II!
- J. Masterson Construction Corporation; 00-2000 11/29/01?
- Key Management Factors.
- How Entrepreneurs Can Beat The Odds: 7 Strategies For Business Success.
However, when entrepreneurs want to take action in an arena outside the familiar terrain—such as launching a new sustainable enterprise—it is likely that information from existing relationships will not be enough. Instead they must search outside of their traditional network of relationships. For new entrepreneurs, it will be beneficial to seek information and resources from new relationships and contacts. These new relationships can be formed with a range of individuals and organizations—including academics, consultants, nonprofit research institutes, government research organizations, and nongovernmental organizations NGOs.
It is for this reason that businesses are increasingly forming relationships to these groups to engage them in thinking strategically about solutions and new venture opportunities. The most innovative ideas may well come from those quarters most critical of how business has traditionally been done. Ronald Burt Ronald S. The GLP works with aspiring entrepreneurs and connects the entrepreneurs with qualified marketing and management professionals and potential funders. The program works with entrepreneurs to accelerate the development of new sustainable businesses that will directly reduce energy use and carbon emissions while creating new jobs and economic opportunities in the state of New Hampshire.
In a short time period, just more than one year from May to June , the GLP helped to launch eleven companies, including Enertrac and SustainX. The GLP helped Enertrac gain the support of state and federal government officials and helped the company to expand the markets they target and reach. The GLP is helping SustainX, which is dominated by highly skilled engineers, connect with market development expertise. Without GLP, both these companies would not have been able to establish these connections to new resources and to develop their businesses as fast and as effectively.
To be successful in sustainable business practices often requires entrepreneurship and innovation. This chapter provides an overview of entrepreneurship and innovation as it relates to sustainable business. The discussion is most relevant to sustainable businesses focused on offering new products and services in response to societal concerns.
The importance of entrepreneurship and innovation also applies to companies that change how they produce products and services. The latter companies can use innovative practices and entrepreneurship to establish their brand name and to be market leaders in doing things that create shared value for society and their companies and also, over time, contribute to changes in practices in their industry. Previous Chapter. Table of Contents. Next Chapter. Learning Objectives Discuss what is meant by entrepreneurship and why it is important to sustainable enterprise.
Discuss the relationship between innovation and sustainable business. Understand the key factors affecting entrepreneurial viability.