Last week I had the honor of guest lecturing in John Greathouse’s Entrepreneurship class in the Technology Management Program at UC Santa Barbara. The topic of the day was where to draw entrepreneurial ideas from. I proposed that new ideas might come from using a social benefit lens.
What is a social benefit lens? To think about social benefit is to think about a product or service that would benefit an underserved population and to provide it commercially.
Let’s start with underserved populations. A good example is the underbanked. In the US alone, 60 million adults have minimal or non-existent relationships with traditional financial institutions leaving them vulnerable to over-priced services that essentially create a financial vacuum for the customer that’s tough to get on top of. Mango was founded in 2009 as a for-profit financial institution that empowers underbanked adults by providing customized, affordable, and high-quality financial services to help them better manage and get ahead in their financial status. With a presence in 6 global markets, Mango offers low-cost, sustainable solutions that provide convenience, service, and a positive customer experience.
Mango focuses on a specific marginalized customer but there are other opportunities to use social benefit as a lens for a for-profit business benefiting society.
Ultra Testing is a for-profit software testing business that looks to leverage the unique skill sets of the underemployed 1.5 million adults on the autism spectrum. Reasoning that software testing requires an incredible amount of focus for repetitive pattern recognition and problem solving, and with 80% of these adults unemployed, Ultra Network launched a business that meets the special social employment needs of these adults while creating a business that has a 20% higher bug detection ratio than standard testing services. It’s this efficiency that Ultra sells its clientele on, not the dual benefit that it’s solving a social issue at the same time.
By looking at social benefit businesses, there is a new more sustainable way to think about invigorating economies and the people who participate in them. Products and services with transactional prices force organizations to build businesses that must compete on product performance but will also create social value. Instead of creating charitable services to address inequities, innovating around social impact could create entirely new industries that will change the way we look at product value.
Entrepreneurs using a social benefit lens will not only stand out from the pack from a financing perspective but could create revolutionary new business models with historical significance.