Align your mission with your business model

Social entrepreneurship is not just a growing sector – in 2015 it generated €3.5 billion of collective revenue in the Netherlands alone – but also a very trendy buzzword. You may be tempted to call your venture a ‘social enterprise’ to reach a growing class of impact investors, but you should first consider what the term truly implies: a drive to make a positive impact.

As Fast Company explains: “social enterprises are created to solve a social challenge using the power of the market. And it’s important to consider that mission when developing your business plan, planning to raise capital, and implementing your strategy.”

Ronald Beuk, co-founder of Amsterdam-based social enterprise Generous Minds, couldn’t agree more: “A social enterprise is not about you, it’s about the other. It’s about purpose. Are you willing to build a better world together with other entrepreneurs? If the answer is ‘no’, then don’t start an impact business.”

Find out more how Ronald’s collective of nearly 60 co-vestors helps social enterprises grow in this video series, made by Impact Hub Amsterdam and Amsterdam Impact.

But don’t forget to focus on the business part

Making the world a better place is an admirable goal, but to increase your chances of success, and ultimately have a more positive impact, you need to find a real market for your product or service. Or as this Harvard Business Review piece puts it, entrepreneurs should “design business models that align financial and social goals as closely as possible to minimize tradeoffs and reduce friction.”

But can this really work? Take tea; though it’s the world’s second most consumed beverage, surpassed only by good ol’ water, it’s market value is much lower than coffee’s. FRANK about tea, a young Amsterdam-based company co-founded by David Kellerman and Valerie Hirschhauser, wants to match tea’s business value to its popularity, while making the tea production and distribution process fairer and more transparent.

And FRANK does so by directly sourcing tea from East African farmers who – in the absence of multiple middlemen – can receive bigger chunks of the revenue. Meanwhile, consumers who signed up to receive FRANK’s tea blends will get fresh tea mailed to their doorstep each month.

Find out how David’s impact startup simultaneously brews commercial and social value in a perfect cuppa.

Trust your instinct and go for it

75 percent of all startups fail. So launching your own impact startup without doing your market research, and writing up a business plan, may sound downright silly. But in recent years, experimentation – formalised in the increasingly popular Lean Startup methodology – has been gaining ground as a legitimate mindset for budding entrepreneurs.

And as this Harvard Business Review article points out, successful startups “go quickly from failure to failure, all the while adapting, iterating on, and improving their initial ideas”. Which is something homegrown startup The Dutch Weed Burger knows a thing or two about.

“We didn’t even write a business plan”, says founder Mark Kulsdom of his five-year-old company, which makes tasty vegan fast-food from roasted soy bits and protein-rich kombu seaweed, all responsibly farmed in the Dutch province of Zeeland. This experimental approach to their business paid off: The Dutch Weed Burger even won an award from MVO Nederland for their marketing strategy. And, you guessed it, they didn’t have one yet.

Find out from Mark how they managed to grow into a brand available across the Netherlands.