Entrepreneurship has been booming in the MENA region in the last few years, so it was natural that a growth in social enterprises would follow, particularly in a region that suffers plenty of social, environmental, and economic problems. While there are many definitions of “social enterprise” the best may be “every enterprise that offers, at the heart of its strategy or action plan, solutions for a social or environmental problem.”
Medea Nocentini, founder and CEO of C3 – a venture that offers consultancy and coaching for social enterprises in Dubai – has a different, more quantitative view of what a social enterprise is. As she explains, “any company which at least 50% of proceedings don't come from grants and donations and which invests not less than 50% of its profits in developing and expanding itself or in its social project is a social enterprise.”
C3 focuses on social entrepreneurship in the UAE, particularly on emerging startups. “We receive entrepreneurs from all nationalities and 10% of them (200 to 250 entrepreneurs) end up developing their projects successfully,” she says, adding that recent studies show that 24 to 30% of startups that participate in competitions are social enterprises. Moreover, most of these enterprises focus on solving problems related to unemployment, healthcare, and education. This reflects “the increasing interest of young entrepreneurs in their society and their keenness on solving its social issues.”
Medea first entered the realm of social enterprises from her home by organizing meetings to coach young entrepreneurs. After her work grew, she established C3, a platform that mobilizes business experts and professionals to support social entrepreneurs on a voluntary basis by providing them with coaching and consultancy in the first stages of launching a social enterprise. Medea considers the support to be critical for the launch of any project.
C3 offers a variety of programs that have supported several social enterprises that later turned into success stories. Palestyle, Eshraq, and a number of others in various fields have successfully tackled problems related to education, environment, health, human rights, and reduction of poverty. Medea drew on her broad experience to give the following tips to social entrepreneurs:
1. Choose a cause that is dear to your heart: Medea tells us that she often notices a lack of passion and credibility among entrepreneurs when they choose a cause that doesn’t mean much to them. “Before you choose a social cause or an environmental problem, you should do some investigation and make sure that the cause means something to you, because the last thing you want is to feel weak when your sincere will is being questioned and your credibility is put under the spotlight.”
2. Develop a commercially viable product or service: Your service or product must be good and beneficial, because good will alone is not sufficient. Entrepreneurs often think that people will buy their product just because it supports a cause, even if it’s not the best out there. “You cannot overlook the quality of your product or service if you want to ensure sustainability,” says Medea. She believes that the solution is “to align between the social cause and the financial performance” of an enterprise. She cites Palestyle as an example, saying that the more this Palestinian startup sells its products, which include embroideries made by the refugee camps’ women, the more it is able to help and to pay more to its providers in the camps. Moreover, the better the quality the more its sales increase. Another example she gives is the one-for-one movement, most fully embodied by Toms, a shoe company that offers a pair of shoes for the poor each time a client buys a pair for themselves.
3. Adopt the lean startup methodology: Don’t wait for your product to become perfect to launch it. “Make a lot of iterations and get feedback at the lowest cost and effort possible to test your idea’s viability,” she says. Only customers know what they want, and no matter how hard you try to put yourself in their shoes you won’t figure out exactly what they want and what they are willing to pay for it until you begin to collect their feedback.
4. Measure your social impact in the early stages: Save all the interviews, testimonials, data, and figures you collect to be ready to present them to stakeholders and potential investors and partners. Don’t assume that what is obvious to you is obvious to everyone else.
5. Test your product before choosing a legal framework for your company: Entrepreneurs often wonder whether they should choose to found a for-profit or non-profit enterprise and many might even hesitate for a whole year before testing their product. Medea recommends starting with “a few test products under other registered companies or companies of friends without however doing anything illegal, so that you do not to find yourself stuck with a license that does not serve your project… However, reality is that you might choose one option or the other before discovering which successful strategy you should focus on.”
6. Only seek funding when necessary: Medea advises entrepreneurs to rely on personal funding as much as possible because it helps create more lucrative products or services and motivates them to be more creative and innovative. “If you get cash since the beginning to launch PR campaigns and an e-commerce platform without investing your own money, you will become spoiled and face many challenges once you run out of money,” she says. She cites C3 as a good example; the company relies solely on Medea's personal savings.
7. Know your investors: We find many investors, especially large corporations, pumping money into social enterprises just to diversify their investments. However, it is important for a social entrepreneur to understand which investor to go to. If you are negotiating with a conventional investor who is just after return on investment, you must emphasize the importance of the project from a profitability perspective instead of focusing on its social impact. However, if it is a venture investor who wants to do some charity work, you can focus on the social impact and on the need to make money to guarantee the project’s sustainability.
8. Be ready for negative feedback, especially if it’s constructive: “It is often difficult for us to hear negative feedback. However, it is good to find people who are honest. Ignore insignificant criticism and don’t let it get to you.”
9. Ask for help: You will be surprised at the number of people ready to help, especially when it comes to social enterprises. “Many don’t ask for anything in return, especially in Dubai, the UAE, the Gulf, and the whole region in general. More volunteers come to us than entrepreneurs. We don’t even need to go look for them,” says Medea. When she launched C3 she thought that she would be short on volunteers and that she will gather many entrepreneurs. However, what happened was exactly the opposite.
10. Have fun and don’t take yourself too seriously: We do our best. Sometimes we do the right thing, and sometimes we encounter challenges. However, it’s important not to take yourself too seriously, even when confronted by failure. According to Medea, “many entrepreneurs have launched products and failed, and then made some iteration and things went fine. Sometimes, we get too excited and take ourselves too seriously, especially in social projects when we’re dealing with difficult and serious causes. However, every entrepreneur should have fun with what he does every single day.”