The Quiet Revolution in Social Impact

By Nathaniel Whittemore , written on February 3, 2012

From The News Desk

There are currently 30 million African migrants who have left their home countries to find work elsewhere. They support more than 300 million people in their home countries, remitting essential food and goods, and in aggregate represent more than $10b in annual economic activity. This is an economy without an infrastructure, however, relying on informal channels and bribes to function.

South African entrepreneur Suzana Moreira is working to change that. Her startup moWoza uses SMS to help African migrants order, pay for, and select a place for parcel pickup. Instead of having to actually ship a bag of maize, for example, they can simply order one near the person they're buying it for.

Suzana and moWoza are part of a quiet revolution in social impact. While in Silicon Valley, the last half decade has been all about the rise of technologies where "social" refers to a reorganization of product design around shared experiences with friends, around the world, the same time period has seen a massive shift in the nature of "social impact" - companies and nonprofits dedicated to solving problems ranging from poverty to health to sanitation with market forces.

Like in Silicon Valley, innovation in the impact sector has been driven by an acceleration in the growth of new startups, and a significant uptick in the infrastructure of resources to support them. New funds have emerged to provide seed and growth capital for businesses with both financial and social metrics of success, and media both new and old has gotten ever more interested in the stories of social entrepreneurs. Importantly, working towards social impact has become embedded in the Millennial zeitgeist and is being inescapably woven into this generation's definition of success.

In this landscape, one of the most important institutions to emerge is the Unreasonable Institute. Like a Y Combinator or TechStars for social innovators, the Unreasonable Institute runs a 6-week summer program in which entrepreneurs from around the world come to Boulder, CO to learn from mentors (disclosure: I was previously a mentor for the program) who are experts in both subject domain areas and business process and strategy. These mentors not only run sessions for the participants, but actually live with them in converted University of Colorado student housing.

The program was founded with a simple belief: that solving the world's biggest problems was going to take the full resources and efforts of great entrepreneurs, and that the scale of the challenge was matched only by the scale of the opportunity - for both financial and social return.

One of the more fascinating aspects of the program is the way they figured out to give entrepreneurs from even the poorest places an equal shot at participation. Unlike YC-style programs where companies give up equity to participate, the Institute is structured as a nonprofit. To generate the revenue they need to operate and to increase company's sense of buy-in to the program, they charge participants $10,000 each. But they don't allow them to actually pay that money directly.

Instead, UI selects 50 finalists and puts them into a Battle Royale to test their entrepreneurial mettle. They have 50 days to raise the $10,000 from their communities and the public at large. In order to defeat the "rich uncle" problem and ensure that even developing world entrepreneurs have a shot, the amount that any one donor can give each week is capped, starting at $10 the first week and progressing slowly before finally becoming open in the last week to unlimited donations.

Over the past three years, this strategy has produced classes of entrepreneurs that represent literally dozens of countries and income backgrounds. Importantly, the organization is not focused on charity - all of the participants are required to be for profit organizations.

The Finalist Marketplace is open for the next 33 days, and includes entrepreneurial projects ranging from the African migrant economy products above to technology that converts human waste sludge into carbon-neutral fuel to a leasing system that allows Ugandan motorcycle taxi drivers to buy their bikes and build business franchises.

Like their participants, the Unreasonable Institute has ambition to see that the revolution in social impact doesn't remain quiet for long. Their vision is to build the Virgin of the 21st century - a set of affiliated "Unreasonable" brands from impact funders to media companies to locally-owned adventure travel and beyond.

The Unreasonables are one more indication that what makes Silicon Valley so exciting - the passion of entrepreneurs designing a different future - is a force not constrained by place or industry, but the provence of anyone who dares to go big.

[Photo: kiwanja]