If there’s one thing that all startups know, is how difficult it is to have a sustainable business model by regenerating sustainable profit.
This week, social entrepreneurs of YCSEA by @america had the opportunity to hear from Irwan Liem from Gunung Sewu Ventures about his experience in investing in various startups, especially in the scope of social impact entrepreneurship.
Irwan noted to the participants that as social entrepreneurs, they face an additional challenge namely the difficulty to scale up the impact of their enterprises. This may be complicated due to several factors, such as the investor selection bias, costs related to the social mission on top of operational costs, or even government policies. So what can social enterprises do? Luckily, Irwan has many pieces of advice for us all!
Follow social enterprises principle guidelines
Lead with the product or service first, and mission comes next
Mission should be authentic and believable
Simple format and easy-to-understand mission
Measurable social impact (such as improved livelihood, jobs creation, economic benefits, etc)
Check and reflect on what you need to know
Are you addressing important needs of the market?
Do you have the best solution to fulfil the need? Make sure you have done research.
Are you the right person to do this? Do you have the best team to pursue this opportunity? The best idea may be nothing without the best execution by your team.
Will there be a large enough gross margin to make the business sustainable?
How hard will it be to acquire customers?
It’s OK if you don’t have all the answers yet, he said. Because you can always make assumptions and evaluate as you go on.
Make the uncertainties become opportunities
Faced with COVID-19, many social enterprises struggle with uncertainties and many do not want to pivot their business. But according to Irwan, in this kind of circumstances, pivoting is the wisest thing to do. Learn as you go, adapt quickly to changing landscapes. Afterall, this is what successful startups are best at!
Turn customers into sources of opportunity
Customers can be a very great source of ideas for any companies. Just like many companies that have made platforms to accommodate their customers’ ideas, social enterprises can also adopt this method. Even a company as giant as Starbucks has a platform called “My Starbucks Idea” to push their innovation further. The platform has generated 200.000 ideas, including drink recipes that became actual drinks that Starbucks launched! Never underestimate indirect customer feedback, Irwan said.
After hearing Irwan’s point of view as a venture capitalist, are you now more confident and face challenges in the social enterprise world? We bet you are!
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