Last month co-trainer Thijs (BemBem) and I spent the day at the Impact Startup Fest in The Hague, the Netherlands. We soaked up inspiration and best practices in social innovation and entrepreneurship. The giant hall was packed with a unique mix of investors, start-ups, and representatives from NGOs en local government, bringing together new initiatives on important themes such as climate action, humanitarian innovation, and how to feed the world. Aspiring entrepreneurs were dripping sweat as they utilised the opportunity to pitch to critical impact investors. In parallel, amidst loud music and the smoke of free cricket (!) burgers on the grill, non-profits were presenting their innovations carried out under the umbrella of the Dutch Coalition for Humanitarian Innovation.
Listening to the many interesting and innovative initiatives that are being carried out by the numerous non-profits present, I was not only calculating in my head the amounts of subsidy that would be involved to get them started and keep them going, but also wondering what would happen if we’d start to ask the question: What would you do if you had to pay back the subsidy you received when you’re done implementing your project? What if it was just a loan?
It prompted me to think about a sunny day in Kenya, where I spent the summer of 2014 working with 6 young entrepreneurs to advise them on scaling their small businesses. It was there, in the town of Kericho, where I realised for myself the necessity and potential of entrepreneurship and innovation to create social impact.
I had asked the impatient yet ambitious entrepreneurs in Kenya these questions as well when they shared their initial business plan and crossed their fingers for free money. Simply putting that question out there pushed them to think critically about the investments that were needed right then and there. “Never mind about investing in an expensive oven now, I can borrow the equipment of my friendly neighbour until I have made enough profit to purchase my own oven” or something along those lines is what followed. It encouraged them to test whether their business model worked without having to do major investments early-on.
Not an option not to think about finance
Inspired by the positive energy and wealth of experience at the event, I was struck by the limited reflection on the financial aspects of doing good. To me, it is not an option not to think about finance, even if you have endless amounts. Someone is always paying – directly or indirectly – for that free lunch. The question is: can it be done differently? What if you would not be subsidised to innovate, who would be willing to pay for your innovation? And what would you need to change to make people ready to pay?
Maybe it’s not in your realm to have a business model that seeks for profit, yet you’ve experienced a cut in your funding. Maybe you work in a context where people cannot afford your innovation, or maybe it’s a hard sell because the system isn’t ready for you yet. Even so: let’s continue to ask ourselves the critical questions and source inspiration from those who are paving the road for others on the way.
Are you ready to switch gear? MDF and BemBem are organising a 3-day course on Enterprising Project Design from 3 to 5 December, aimed at supporting you to acquire hands-on tools to boost the financial sustainability of your projects.