Social Capitalism in Entrepreneurship
In recent years I have had many conversations around social entrepreneurship, particularly themes around profit versus impact. A group that is inspiring different ways of thinking about this is Nation Builder. Nation Builder is an initiative of Mergon, a private equity firm which invests in property, natural resources, information and communication technology as well as financial services. Something that has blown me away is their generosity. They have phenomenal HR policies and practices, but more impressive than that, they give away roughly two-thirds of their profits to organizations that are making a great impact on social issues in South Africa and Africa. Being associated with Nation Builder has altered the way we view the startups with which we work as well as their potential. The bottom line is not merely about creating tenfold return for an investor in five years. Adequate returns will come if real problems are being properly addressed.
An exciting facet of working with startups in South Africa is that we have local problems and opportunities requiring high impact solutions to address them. However, in western and more developed economies, millions of dollars are made by building games which create little or no positive social impact. At the Stellenbosch University LaunchLab we have the daily privilege of working with startup founders who are making a huge impact in their specific areas. Here are just a few:
BridgIoT began prior to the Western Cape water crisis but their commercial focus is well timed. They provide internet of things (IoT) solutions for home appliances with usage controls and reporting dashboards. One of their products, Dropula, is a smart geyser and meter which is being installed at schools across the Western Cape. Thousands of liters of water are being saved at each school, while electricity usage is down. Beyond that, BridgIoT is saving schools enough money every month to pay one or two additional teachers at each school where they are installed! That is real impact!
MzansiGO was started after a mediocre experience when moving house in Cape Town. Thinus, the founder, hired a couple of entrepreneurs who had a 1.5 ton truck to help him move. When asked how they attracted business, they said it was mostly through word of mouth or random street pole flyers. Thinus created an online booking form for this team, so giving birth to MzansiGO. Now MzansiGO has 16 trucks and crews on their platform while signing up new crews every month. Amazingly, these crews who only carried out four or five moves per week are now doing three or four times as many, bringing in three to four times the revenue! This is creating new market access opportunities for these teams which they would otherwise not have had.
Fingertips, a website that is not yet live, will empower students to use their student cards as virtual credit cards for purchases both online and in person. For the thousands of students without bank accounts, Fingertips will provide them with the security and convenience of a bank account, but without all the accompanying red-tape and expense. This team from UWC will help the unbanked to access products and services previously unavailable to them.
MyGrow offers emotional intelligence training to the masses. This resource, traditionally reserved for executives and senior management in once-off, expensive, week-long retreats, can now be readily accessed by the masses, at any time, at an affordable price. This method effectively creates real impact by offering manageably short daily engagements. It is interesting that MyGrow was based at the UCT GSB Solution Space as part of their inaugural Venture Incubation Program. This is a great “collabetition” between LaunchLab and Solution Space.
These are just a few of the amazing entrepreneurs with whom we, at LaunchLab, work every day. They are solving real problems for South Africans and Africa. We are increasingly seeing a trend with these startups; profit and social good are inseparable, in similar vein to the more established businesses in the Nation Builder network. We fervently hope this trend continues to permeate the startup ecosystem in South Africa.
Written by Brandon Paschal, Head of Incubation at the Stellenbosch University LaunchLab