Chapter 5 Result and Discussion
5.1 Discuss of research findings and Managerial Applications
Listed below in table 17 is the cross case report of all the case studies concerned in my thesis. The purpose of this table is to indicate the feasibility of adapting the social enterprise business model canvas to the research companies.
Table 17. Cross case report of case studies
5.1 Discuss of research findings and Managerial Applications
Listed below in table 17 is the cross case report of all the case studies concerned in my thesis. The purpose of this table is to indicate the feasibility of adapting the social enterprise business model canvas to the research companies.
Table 17. Cross case report of case studies
Based on literature review and case studies, I discovered that, although social enterprise and other forms of enterprise share many common points, there are still at least four distinct features unique to social enterprise. The four features I found are explained further below along with the related pictographs 5.1.1 to 5.1.4. These distinct features have confirmed my thesis. For one, that there is a practical need for three additional building blocks for developing and other important considerations related to social enterprise; and, second, that there is a theoretical need to approach social enterprise differently from other types of enterprise.
5.1.1 Turn social cost into key resources.
One feature of social enterprise business model is that one can turn social cost or liability into key resources. In other word one can turns a disadvantageous situation into an advantageous one. In the case study of Puki, for example, Puki has the obstacle of making good use of employments the hearing impairments. Puki is able to overcome this disadvantage rather extraordinarily, realizing the advantage deaf employees possess, being able to stay concentrated for long periods of time without distraction. In other words, the disability of being deaf is commonly regarded as disadvantage and a social cost, giving deaf persons multiple obstacles to finding employment; however, the Puki model turns these this disadvantage or social cost into Puki’s key resource for success by utilize the special abilities deaf employees possess, realizing their potential. Figure 10 shows the business model pattern of turning social cost into key resources. The managerial application of turning any disadvantageous situation or social cost into something advantageous is a special feature of social entrepreneurship. Social entrepreneurs are able to take idle assets or resources in the society and apply them into a business model that is creating revenue.
5.1.1 Turn social cost into key resources.
One feature of social enterprise business model is that one can turn social cost or liability into key resources. In other word one can turns a disadvantageous situation into an advantageous one. In the case study of Puki, for example, Puki has the obstacle of making good use of employments the hearing impairments. Puki is able to overcome this disadvantage rather extraordinarily, realizing the advantage deaf employees possess, being able to stay concentrated for long periods of time without distraction. In other words, the disability of being deaf is commonly regarded as disadvantage and a social cost, giving deaf persons multiple obstacles to finding employment; however, the Puki model turns these this disadvantage or social cost into Puki’s key resource for success by utilize the special abilities deaf employees possess, realizing their potential. Figure 10 shows the business model pattern of turning social cost into key resources. The managerial application of turning any disadvantageous situation or social cost into something advantageous is a special feature of social entrepreneurship. Social entrepreneurs are able to take idle assets or resources in the society and apply them into a business model that is creating revenue.
Figure 10. Turn social cost into key resources
5.1.2 Social Entrepreneur: First Follower
The first follower, person who is the first to support a social entrepreneur, is often the most crucial to the further development and creation of the full social enterprise business model. In the case study of ELIV, the joining with Helene was highly important to ELIV’s further existence and development. Helene was a senior lawyer working in renowned law firm before she met the founder of ELIV, Kevin, on a volunteering tour of India. Kevin was a recent college graduate at that time. Despite much passion and knowledge, Kevin lacked the necessary experience and resources to build on his vision of the social enterprise - ELIV. At the tail of their tour, Kevin expressed his concerns to Helene, explaining that his inability to continue his dream of ELIV. He was exhausted and lacked proper capital and resources. Helene was moved by Kevin’s passion and the vision and dream of ELIV. She quit her current position and joined ELIV, bringing with her various knowledge and experience. With Helene’s help, together they were able to restore the dream Kevin originally conceived.
In many ways, the first supporter, or follower, is as important to the development and prosperity of a social entrepreneurship as is its founder. Helene’s joining ELIV is an excellent example. Helene helps transform Kevin into someone to be considered a leader of a movement. She supported his vision with the necessary business knowledge and experience. For the success and prosperity of a social enterprise, the founder of a social entrepreneurship needs the necessary support and knowledge that a first follower provides. Moreover, the skill and resources of the first follower also play an important role in early stage social enterprise. Figure 11 shows the business model pattern of first follower. The managerial implication of the first follower theory is that it is important for the entrepreneur to seek out and encourage the first follower to support his or her entrepreneurial goals, as first followers are crucial equal participants in building the social enterprise.
5.1.2 Social Entrepreneur: First Follower
The first follower, person who is the first to support a social entrepreneur, is often the most crucial to the further development and creation of the full social enterprise business model. In the case study of ELIV, the joining with Helene was highly important to ELIV’s further existence and development. Helene was a senior lawyer working in renowned law firm before she met the founder of ELIV, Kevin, on a volunteering tour of India. Kevin was a recent college graduate at that time. Despite much passion and knowledge, Kevin lacked the necessary experience and resources to build on his vision of the social enterprise - ELIV. At the tail of their tour, Kevin expressed his concerns to Helene, explaining that his inability to continue his dream of ELIV. He was exhausted and lacked proper capital and resources. Helene was moved by Kevin’s passion and the vision and dream of ELIV. She quit her current position and joined ELIV, bringing with her various knowledge and experience. With Helene’s help, together they were able to restore the dream Kevin originally conceived.
In many ways, the first supporter, or follower, is as important to the development and prosperity of a social entrepreneurship as is its founder. Helene’s joining ELIV is an excellent example. Helene helps transform Kevin into someone to be considered a leader of a movement. She supported his vision with the necessary business knowledge and experience. For the success and prosperity of a social enterprise, the founder of a social entrepreneurship needs the necessary support and knowledge that a first follower provides. Moreover, the skill and resources of the first follower also play an important role in early stage social enterprise. Figure 11 shows the business model pattern of first follower. The managerial implication of the first follower theory is that it is important for the entrepreneur to seek out and encourage the first follower to support his or her entrepreneurial goals, as first followers are crucial equal participants in building the social enterprise.
Figure 11. Social entrepreneur: first follower
5.1.3 Customer relationship: value co-creation
Many social enterprises seek or leverage co-creation to provide the services. In the case of ELIV, for example, the value creation process is not exclusive to staff members themselves but also includes their customers----those tourists volunteering on various trips connected with ELIV. Although many web-based service providers also use co-creation for service and content out-put, social enterprise is especially suited for leveraging co-creation; specifically, social enterprise with a social value or purpose can motivate volunteers to co-create services. The managerial application of co-creation is that social enterprises can apply the concept of volunteer management to leverage co-creation with volunteers.
Moreover, the definition of value of social enterprises is different from that of for-profit enterprises: only regard the financial value. Incorporated the concept of triple bottom line, social enterprises also consider ecological and social value. Figure 12 shows the business model pattern of value co-creation. The managerial applications of value co-creation is that social enterprises should well-communicate with their customer and, most important of all, co-define value with their customers.
5.1.3 Customer relationship: value co-creation
Many social enterprises seek or leverage co-creation to provide the services. In the case of ELIV, for example, the value creation process is not exclusive to staff members themselves but also includes their customers----those tourists volunteering on various trips connected with ELIV. Although many web-based service providers also use co-creation for service and content out-put, social enterprise is especially suited for leveraging co-creation; specifically, social enterprise with a social value or purpose can motivate volunteers to co-create services. The managerial application of co-creation is that social enterprises can apply the concept of volunteer management to leverage co-creation with volunteers.
Moreover, the definition of value of social enterprises is different from that of for-profit enterprises: only regard the financial value. Incorporated the concept of triple bottom line, social enterprises also consider ecological and social value. Figure 12 shows the business model pattern of value co-creation. The managerial applications of value co-creation is that social enterprises should well-communicate with their customer and, most important of all, co-define value with their customers.
Figure 12. Customer relationship: value co-creation
5.1.4 Customer Relationships: customer-driven design
In the 1 kg case study, the common conception known as push strategy that one must first design a product before selling on the market was reversed commonly, having proved ineffective and wasteful. 1kg enquires of customer wants before designing any products -- a process known as pull strategy. For many NPOs and foundations, the production of products are more or lest related to the amount of funding they acquire from various donators and government services. As a result, their product production and services offered are often arbitrary to the wants or needs of their customer base; they provide their products or services in a push strategy. Social enterprises, on the other hand, run on limited recourses and as a necessary result must allocate their resources prudently and wisely in a pull strategy format in order to the necessary generate revenue crucial to their continued existence and development.
In addition, most NPOs or foundations that receive government funding are strictly mentored by those government bodies from which services were provided. Under these circumstances, however, the government oversight is usually cumbersome and fails to serve the need of such disadvantage groups; in this regard, NPOs and foundations lack the flexibility to make a change. The flexible services constructed specifically to customers that social enterprises are able to provide are due to their financial independence from donors and government bodies. Figure 13 shows the business model pattern of customer-driven design.
The managerial application of customer-driven design is that social entrepreneurs should best follow Rie's lean startup approach towards solving e limited resource problem most social entrepreneurships face. That is, specifically, to eliminate wasteful practices and increase value producing practices during the product development phase. The major basis of this principle is so that startups can have a more attainable success rate without requiring a large number of outside funding, elaborate business plans, or the perfect product. Another important lesson for social entrepreneurs is that customer feedback during product development is integral to the lean startup process and further ensures that the producer will not vainly invest time designing features or services that consumers do not necessarily want or need.
5.1.4 Customer Relationships: customer-driven design
In the 1 kg case study, the common conception known as push strategy that one must first design a product before selling on the market was reversed commonly, having proved ineffective and wasteful. 1kg enquires of customer wants before designing any products -- a process known as pull strategy. For many NPOs and foundations, the production of products are more or lest related to the amount of funding they acquire from various donators and government services. As a result, their product production and services offered are often arbitrary to the wants or needs of their customer base; they provide their products or services in a push strategy. Social enterprises, on the other hand, run on limited recourses and as a necessary result must allocate their resources prudently and wisely in a pull strategy format in order to the necessary generate revenue crucial to their continued existence and development.
In addition, most NPOs or foundations that receive government funding are strictly mentored by those government bodies from which services were provided. Under these circumstances, however, the government oversight is usually cumbersome and fails to serve the need of such disadvantage groups; in this regard, NPOs and foundations lack the flexibility to make a change. The flexible services constructed specifically to customers that social enterprises are able to provide are due to their financial independence from donors and government bodies. Figure 13 shows the business model pattern of customer-driven design.
The managerial application of customer-driven design is that social entrepreneurs should best follow Rie's lean startup approach towards solving e limited resource problem most social entrepreneurships face. That is, specifically, to eliminate wasteful practices and increase value producing practices during the product development phase. The major basis of this principle is so that startups can have a more attainable success rate without requiring a large number of outside funding, elaborate business plans, or the perfect product. Another important lesson for social entrepreneurs is that customer feedback during product development is integral to the lean startup process and further ensures that the producer will not vainly invest time designing features or services that consumers do not necessarily want or need.
Figure 13. Customer Segment: customer-driven design
5.2 Limitations and future research
The case studies selected are representative of early stage social enterprises located in the greater China region. Due to time and resource constraints, my research only covers three social enterprises. In the future, as researchers utilize even more case studies to gather information and data on more social enterprises in even more locations, this business model framework will be more conclusive and comprehensive.
While gathering data on the case studies I oversaw, the social entrepreneurs mentioned some issues in my social enterprise business model framework. These various issues with my current framework are listed in sections 5.2.1 to 5.2.2. I hope that these issues can inspire future researchers to make the business model of social enterprise more comprehensive.
5.2.1 Revenue stream: dividend distributed/ dividend not distributed
During the interview with ELIV, Helene and I discussed whether social enterprise should distribute dividends. According to the British council’s definition, social enterprise should not distribute dividends but rather choose to reinvest instead. Many social entrepreneurs in the field, however, such as Helene from ELIV and Ben from Transist believe that social enterprises should be allowed to distribute dividends to make incentives for talented youth to join their organization. This issue will not be further discussed in this thesis. I await future studies to investigate further an even more comprehensive analysis as well as a possible solution to this problem.
5.2.2 Social entrepreneur: Sustainability issue when founder left
During my interview with Puki, Founder Xiao Liang mentioned his concern for the issues of sustainability and manpower. He said that Puki might be closed if he decides to leave his position in the case he decides to further his studies abroad. Social enterprise often relies heavily on the founder’s passion to keep working. It is more than often the case that once the founder leaves, the social enterprise faces serious problems, with no one interested in becoming the successor. The solution to this problem perhaps may be of interest for future researchers to address.
5.3 Conclusion
During the process of building the business model framework for early stage social enterprise in the greater China region, I encountered many social entrepreneurs and other players in the social enterprise field. Of whom, there were impact investors and social enterprise incubators. I was glad to learn that the development of social enterprise in greater China region is continuously growing and prospering. Twelve building blocks forms the business model proposed in this thesis. Three early stage social enterprises: ELIV (Taipei), 1 kg (Beijing) and Puki (Shanghai) are chosen as case studies used to build this business model framework. Four distinctive features of social enterprise model are found based on the case studies. Last, two issues were mentioned for future researchers to consider and analyze.
5.2 Limitations and future research
The case studies selected are representative of early stage social enterprises located in the greater China region. Due to time and resource constraints, my research only covers three social enterprises. In the future, as researchers utilize even more case studies to gather information and data on more social enterprises in even more locations, this business model framework will be more conclusive and comprehensive.
While gathering data on the case studies I oversaw, the social entrepreneurs mentioned some issues in my social enterprise business model framework. These various issues with my current framework are listed in sections 5.2.1 to 5.2.2. I hope that these issues can inspire future researchers to make the business model of social enterprise more comprehensive.
5.2.1 Revenue stream: dividend distributed/ dividend not distributed
During the interview with ELIV, Helene and I discussed whether social enterprise should distribute dividends. According to the British council’s definition, social enterprise should not distribute dividends but rather choose to reinvest instead. Many social entrepreneurs in the field, however, such as Helene from ELIV and Ben from Transist believe that social enterprises should be allowed to distribute dividends to make incentives for talented youth to join their organization. This issue will not be further discussed in this thesis. I await future studies to investigate further an even more comprehensive analysis as well as a possible solution to this problem.
5.2.2 Social entrepreneur: Sustainability issue when founder left
During my interview with Puki, Founder Xiao Liang mentioned his concern for the issues of sustainability and manpower. He said that Puki might be closed if he decides to leave his position in the case he decides to further his studies abroad. Social enterprise often relies heavily on the founder’s passion to keep working. It is more than often the case that once the founder leaves, the social enterprise faces serious problems, with no one interested in becoming the successor. The solution to this problem perhaps may be of interest for future researchers to address.
5.3 Conclusion
During the process of building the business model framework for early stage social enterprise in the greater China region, I encountered many social entrepreneurs and other players in the social enterprise field. Of whom, there were impact investors and social enterprise incubators. I was glad to learn that the development of social enterprise in greater China region is continuously growing and prospering. Twelve building blocks forms the business model proposed in this thesis. Three early stage social enterprises: ELIV (Taipei), 1 kg (Beijing) and Puki (Shanghai) are chosen as case studies used to build this business model framework. Four distinctive features of social enterprise model are found based on the case studies. Last, two issues were mentioned for future researchers to consider and analyze.