Why do Social Enterprises think they are different than private enterprises? I want to shake people silly or run outside and scream every time I
hear…
"..and we will run a cafe, bookstore, creche, catering service, consultancy service, training, lettings, bakery, car repair, disco, and flower shop in our building."
You and what government? How do we get social enterprises to do one or two things well and grow sensibly. It’s no wonder so many social enterprises never get off the ground or are spinning out of control. You cannot do everything and do it well (or even ok).
This irrational exuberance is followed by the classic…
"…and we only need 0.005% of the £1,000,000,000,000 market to succeed."
*Please refer to Guy Kawasaki’s blog (no. 11) for why this is insanity.
The irony of all of this: the people saying these things and planning these multi-national corporations have enough energy to power a small town for a week. I find the best way to work yourself out of this trap is to write down all the people, things, and time you will need to accomplish your expansive goals. This usually gets most people to reconsider. However, because they will be surrounded by others who see luster in the (il)logic of their comments, the second comment is not far beyond–buoying the small team to believe they can do anything. Second irony: doing everything is considered conservative and safe! eeek!
But, Todd, we know a social enterprise doing lots of different (non-complimentary) services who is surviving. Surviving or thriving? And, are they providing as much value as they could be?
Let me illustrate through personal example—and embarrassingly enough, I should know better. When I first got here I tried to start 6 different businesses at the same time! I told myself they were related and complementary. They were, only because they were classified as businesses. Finally, I got a break in one of the businesses and we were off and running. (How much energy AND money did I waste on the other 5!). But, wait, it does not stop there…we then fell prey to the illusion that if we were working in social enterprise–anything was ok for us. Perhaps some of this is ok given the tenuous nature of cashflow in a start-up business, but I would argue that you are destroying value (burning cash) if you are not devoting your efforts to 1 or 2 strands of business. Luckily, we lasted long enough to break through on a strand or two and we were off and running again. Ironically, the strand of business that we broke to in the end was the same strand that, if forced to choose, would have been the one strand we would have picked in the beginning | our passion.
The entrepreneur wants to cast the net wide because a small specialised net is scary. But it’s scarier to think about running out of cash because you are bogged down by the admin tasks of several unrelated business propositions. Or because you are spreading your resource, you don’t really make a mark in any.
Learn from entrepreneurs like us; do your research, pick a path, and blaze away. Remember you are not going after .005% of a market, but 100% of YOUR market and to get them to buy your service/product you have to be great.
Related posts:
The changetheworldmobile
There’s a good entry on the Social Catalyst blog which has also been picked up by the SSE blog, about the tendency for some social enterprises to diversify into 100 different arenas. Todd says: Why do Social Enterprises think they
I work for Guy Kawasaki. Thanks for the link!
Mary-Louise
http://blog.guykawasaki.com/
I call what you describe the baited hook strategy. Each business that you start is like a baited hook – testing the market to see what its feeding on at the moment. The more, different, baits you have in the water the more chance you have of a bite. And when the bites start to come you know which bait works. As long as you can afford the bait, and can genuinely provide value when the customer bites I think it is a sound way of working.
On the point of social enterprises often becoming all things to all people – I think this has more to do with an addiction to property than it does anything else. Once we have taken on this white elephant that was sold to us cheaply (I wonder why) how can we pay the overheads? Well we can rent out some space (call it an incubator to get some subsidies) run a cafe, consultancy etc. Once you are in the property game you become a hostage to the overheads and do whatever can be done. Now this not a baited hook strategy – this is desperation.