There’s a new breed of MBA in town–one willing to grapple with multiple bottom lines that can’t always be crunched in Excel. Rather than simply homing in on proﬁt margins, B-school graduates are increasingly connecting business interests to social value.
The umbrella term attached to the trend–social enterprise–is a slippery concept. Most entrepreneurs would contend that their businesses, social enterprise or otherwise, offer necessary services, create jobs, and improve others’ lives. However, most of them obviously put proﬁt far ahead of social good and may sometimes leave the world a little worse off than they found it.
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Today, an increasing number of MBAs are becoming social entrepreneurs, actively engaged in projects that serve a real social need–even when they aim to make a proﬁt. Take, for instance, University of Virginia Darden School MBA Manoj Sinha, who grew up in Bihar, India. Sinha wanted to give back to his community, so he started Husk Power Systems, a nonprofit that uses rice husks to bring energy to large swaths of rural India. But he quickly discovered that he needed a new model: “After we did the first power plant and we actually had paying customers, we realized that this can actually be replicated hundreds of thousands of times across India, especially because India has about 350-plus million people without access to reliable power,” he says. “It doesn’t have to generate 80% margins, it just has to generate sufficient margins to run as a financially sustainable business.”
But he wasn’t entirely sure how to classify his idea. “I think we were the trailblazers in 2008. Social enterprise was not really defined as a sector at the time,” he says. “So it’s kind of funny that I had to explain what we did because a lot of questions that would come to us were like, ‘Are you a nonprofit? Are you a for-profit? What the heck are you guys?’”
In 2007, Bill Drayton, who funds and supports social entrepreneurs through his nonproﬁt Ashoka: Innovators for the Public, offered his take on the term: “Whenever society is stuck or has an opportunity to seize a new opportunity, it needs an entrepreneur to see the opportunity and then to turn that vision into a realistic idea and then a reality and then, indeed, the new pattern all across society. We need such entrepreneurial leadership at least as much in education and human rights as we do in communications and hotels. This is the work of social entrepreneurs.”
Using this ideal, Poets&Quants scoured the Internet, school submissions, and nominations for some of the best MBA-founded social enterprises with the potential to bring about real change. The ﬁve proﬁles in our sidebar represent some of the most innovative companies in the space. From Husk Power Systems to Sanergy, which operates a network of safe, clean toilets in Kenya’s slums, socially minded MBA startups are applying business solutions to some of the world’s most intractable problems with promising results. Their profiles offer an instructive example for MBAs looking to pair market solutions with a positive social impact.
For those who prefer a more clear-cut guide, we’ve also included an exclusive interview with serial social entrepreneur Paul Pollack. His latest book, The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers, co-authored with impact investor Mal Warwick, defines a new breed of multinational and gives MBAs the scoop on how to scale up a social enterprise. These startup savants agree with our MBA founders: Society, B-schools, consumers, and even investors are ready for business models that deliver both social and financial returns.