Authored by Mr Varun Chawla, Founder of build3
Global businesses are in a state of divergence, separating from the school of thought that limited the scope of work to profit margins and market capitalisation. This transformation has led to the rise of social entrepreneurship, representing a fresh approach to aligning business success to prioritising profit and purpose simultaneously. The objective of this transformation remains simple — as entrepreneurs increasingly believe that businesses can thrive not only by increasing profit but also by establishing a positive and measurable impact on society. This new-age social entrepreneurship is driven by innovative business models that address social and environmental concerns by embracing an extensive understanding; and comes in all shapes and sizes including nonprofit social enterprises, for-profit social businesses, cooperatives, B Corps, and L3Cs.
The rise of social entrepreneurship has largely been owed to venture builders, categorically and foundationally different from conventional VC firms. Widely known as startup studios or company builders, these entities initiate and develop distinct business models from -1 to 1, extending critical support in ideation, development, PMF, and other aspects, apart from infusing capital. This comprehensive approach by the venture builders enhances the innovation potential, while uniquely positioning them as critical contributors to establishing a new economic outlook.
Core Principles
Social entrepreneurs have a distinguishing foundational principle that becomes crucial in scaling businesses. To begin with, their dedication to addressing social and environmental challenges while simultaneously prioritising profit generation leads to measurable and meaningful impact. Furthermore, versatility and innovation make up the core part of their principles — helping to address complex challenges through new-age solutions. This directly translates to measuring their growth in not only quantitative but also qualitative measures, ensuring social value creation.
Furthermore, venture builders emphasise generating social ROI, environmental impact, achieving community development, garnering meaningful beneficiary feedback, and employee retention — aspects that are deemed crucial to empower social innovation in purpose-led entrepreneurship. This growing emphasis on prioritising mission-driven focus on social and environmental goals through innovative and sustainable solutions acts as a catalyst for long-term financial viability and impact. Coupled with this, the combination of venture building and social entrepreneurship focuses on creating several impact-focused startups with added emphasis on scalability, risk mitigation, and cross-pollinating ideation among businesses.
Impact and Role in the New Economy
One of the foundational roles of venture builders to support and empower social innovators is through innovation — a critical aspect driving the scalability of sustainable business ventures. This is achieved through a balanced outlook of investment capital, strategic guidance along operational support that becomes invaluable in ideation, research & development (R&D), product-market fit (PMF), and holistic growth. This expertise also safeguards impact startups in the nascent stage, navigating unforeseen challenges, reducing expenditure, enhancing the scope of work, and establishing a loyal customer & community base. This helps startups from going under, as prominent surveys reveal that over 10% of Indian startups fail to make it past their first year of existence, while a staggering 45% fail to remain functional after 5 years. The proactive role of venture builders helps social entrepreneurs with additional expertise in nurturing the entrepreneurial spirit and establishing a culture of innovation and originality. This directly translates to faster and more efficient innovation and an optimised way to establish and scale companies.
Technological infusion
Innovation is increasingly becoming synonymous with technology, a fact that has been identified and is being addressed by venture builders. As part of their comprehensive support to empower social innovators, venture builders are helping impact entrepreneurs to integrate relevant, state-of-the-art technology to address social or environmental problems. This multidimensional focus is leading to a meaningful convergence of technology and social impact, aligning with the shifting preferences of customers, employees, and other stakeholders. Accessibility & inclusion, environmental focus, healthcare & educational advancements, and community building are aspects that are gathering steam through this technology infusion, with several impact-driven startups working in the space in India itself. Digital technologies like Artificial Intelligence (AI) and machine Learning (ML) to physical technological inventions like 3D printing are particularly becoming the subject of emphasis — with an extensive scope of work in emerging impact startups.
Future Outlook
As the venture-building models mature, the importance of flexible and purpose-driven social entrepreneurship is becoming imperative. With a predetermined goal of addressing challenges in society and the broader environment, these businesses are offering comprehensive solutions to accumulate measurable impact through collaboration, innovation and originality. As profit and purpose become equally important, the global emphasis on sustainability, leveraging new-age technologies, and extending global footprints to achieve visible impact is highlighting the space. This cyclical effort is once again putting the limelight on venture builders, and their role in supplementing purpose-led entrepreneurship and social innovators where the potential is fully realised. This is driving the creation and growth of impact startups that are addressing critical social and environmental challenges, while also empowering innovation by methodically realising mere ideas into growing businesses.
