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The Effect of Social Missions On Tech Innovation
The New York Times is running a piece on how some emerging companies in the tech industry are focusing on social missions rather than profits despite having successful business methods. The startups are modeling themselves after organizations like Mozilla and TechSoup, who have both grown to significantly affect their respective markets. The article also discusses some of the non-profit support groups, such as the EFF, who contribute specific services to the field. Quoting:
"'There is a lot of discussion taking place right now about a whole new organization form around social enterprise,' said James Fruchterman, president of Benetech, a social enterprise incubator based in Palo Alto. 'Many of these efforts can make money; they will just never make enough to provide venture capital rates of return.' The new stream of technology-centric and successful nonprofits, however, appears to be driven in part by a set of microelectronics technology trends that have sent shock waves through many industries, from publishing to music and movies. 'Computer technology and the Internet are lowering the cost of doing business,' said John Lilly, the chief executive of Mozilla."
This is the reason that geeks will inherit the world .
Money grabbing corporations have had there day, I man making money is one thing but doing it through actions which will improve sociality will make us all stringer in the long run. I am glad to to see people taking a bigger picture view for the long term and not for just the here and now
My business partner and I have been talking about stuff exactly like this, but I never knew companies were actually doing this. It always seemed a major problem that companies must be devoted to profit... and that leads to issues, like Microsoft changing their billing practices, etc. When a company is the undisputed leader in their niche, they had to do something to increase their profits. Usually thats when companies do stupid things like use the RIAA, put spyware on CDs, etc. So its actually bad for a company to focus on profits. Oh well, still too many greedy people.
Profit. That's a pretty broad subject, isn't it?
In the solely monetary sense, profits are a byproduct.
In the sense that a tech profits humans directly, it is a direct correlation of its aims.
all corporations would have a social mission, and we wouldn't buy from, or invest in, corporations that did not.
The last time I checked, a company (versus an OSS software project) needs, to pay someone to answer the phone. (Pay the phone bill too.)
Yes, there are exceptions when it's a *really* small business, but we're talking about company sizes that include paying an accountant and have many talented employees.
It's a marketing angle to create some differentiation. Whole Foods Markets is a very well-known example. Guess what? Investors were mad as hell when their profits did not come in as targeted.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
I wonder if he's theorizing or just making a veiled reference, because it seems to me that there's a very good chance that the next major operating systems company is Canonical Ltd., producer of the Ubuntu Linux distribution. While Canonical is technically a for-profit company, it is not a profit-motivated company. Mark Shuttleworth has said from the beginning that he was willing to continue funding the company in order to make sure that it met its social goals -- distributing a high-quality, user-friendly operating system completely free of charge.
With low costs from its decentralized "virtual company" model, and moderate revenues, I believe Canonical has achieved profitability even sooner than Shuttleworth expected. But profit is and has been a side benefit, something that makes running the company easier rather than a primary goal.
I'm surprised the article didn't mention Canonical by name.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
The main goal of every company is to make as much profit as possible. You can't survive without this goal.
The article is mainly about companies that try to do business with non-profit organizations. I don't see how this can be labeled "social enterprises". Integrating some "social" goals in your business' mission statement is nice and pretty common, but it doesn't change the fact that your main goal should be making profit.
The article doesn't seem to state anything that would convince me otherwise. Nothing to see here. Move along.
you all know that many of the people working in those social enterprises are people (all are generally tech people anyway, just like you) who could make money by getting any job.
but there is a fact as old as human civilization itself - WILL to do something is the biggest thing that can drive people.
these people, are setting up social companies, setting up social goals, because they believe in them and really want to achieve them, unlike some obscure company quarterly profit goals in a big buck corporation. and they achieve those goals, mainly due to sheer power of will that fuels their soul. in the end they end up more than achieving their social goals - they change society.
this is how this human civilization was made. anything that changed the nature of society on the face of this planet has come through such willing breakthrough.
wake up people. this is the way society is going. modern big buck corp understanding, which is just a bastardized heir of 19th century's samuel hezekiel hapgood & sons & co understanding is dying.
a new understanding and approach to solving things and making things happen has been brewing for the last 10 years, first it was in silicon valley and software business, and now its spreading around to other sectors.
jump in that bandwagon. start living in the next century instead of living in the last. make something change for good.
Read radical news here
Wrong. Your ignorance here is shining through. Just because you don't see how it's possible doesn't mean that it doesn't exist, doesn't mean that there are people and businesses out there who are doing just such a thing and succeeding. There are businesses that do not solely have a profit goal and they do just fine, thank you very much. I just happen to work for one of them.
You see there are people out there where the job and the social mission are more important than earning as much money as possible. I could go on here and wax poetic about how money can't get you everything and such, but let me stick to the point at hand of companies who do good as well as financially paying the bills and keeping the lights on. I work with non-profit organizations all day, people dedicated to making things better for other people. They often don't understand technology and need help because their focus is somewhere else. That's where people like me come it, help them out and help them do their mission. And we do this at under-market rates because tech budgets for non-profits are usually pretty tiny. And it is possible to run a company on thin margins to provide this service to these people. It's difficult, not for everyone, but very possible.
We've gotten some strange idea in our heads that making money is the most important thing in our lives and without gobs of money, there's no way that you can survive. Horseshit. You just have to have a good plan and be fortunate to have people who have the same desire to do good work for less money. The upside to this is you get people who are dedicated to their work, who do this work because it's what they want to do, not some nebulous monetary goal. Any profits into a venture like this gets reinvested to provide the future of the company and to grow the company steadily and slowly. Careful reinvestment is the key here.
If I were working corporate (which I did at one point), I'd be getting paid probably twice what I'm getting now for less work. But I'd be under the thumb of some accounting knob who decides that my training is a risk of me leaving. If I strictly went consulting, I could earn up to three times as much. But then I'd be doing zombie work, not really caring about making someone else rich. Neither of those jobs give any type of appreciation from your employers. None of that matters to me. I have a great job, my clients are great people who really appreciate what I do, I work with brilliant people who are passionate about their jobs and life and I get paid a living wage, which allows me to live modestly and within my means.
Oh and you may ask or wonder about our company owner/president. You might think he drives a fancy car and socks all the money away. Actually, he often bikes to work, volunteers a lot of his time and is a fantastic guy to boot.
The point I'm trying to make is that one way people involved in technology can help is by doing things like this for people who need this help. There are all sorts of motivations for businesses, not all of them are monetary. The good ones are those who are doing what they love to do for people who are doing good work and who appreciate the work you do.
I have nothing against enterprises that have social goals as their mission statements.
That said: I also like to invest in profit-making companies. It seems to me that when a company divides its attention between multiple mission statements, it never really succeeds at any one of them. Perhaps it would be better to structure the social enterprises as non-profits and let the for profit companies maximize their returns. Then I, as an investor, can allocate my resources between the two.
Have gnu, will travel.
'Computer technology and the Internet are lowering the cost of doing business,' said John Lilly,
Yep right up till they figure out how to ream you via bandwidth or some other required medium.
"If any question why we died, Tell them because our fathers lied."
I can't believe no one got the joke.
Profits are not bad per se. On the contrary, then natural state of profit is that it's a good thing. It means that a lot of people thought your product was good enough for them to invest their money.
Wealth has to be produced before it is redistributed. So don't judge wealth by those that expropriate it (like the enron blokes). It is not the thief that creates the value that is traded with money - it is the producer. Most companies are honest and produce more than they consume - otherwise the civilization would collapse.
Take a look around the room you are currently in. How many of the items there would you be able to produce? Not that many right? All those things were created by the profit motive. Or just take a look at the monitor in front of you. You have bought it (if it's your monitor of course) with the value your work has to those that pay your wages or buy your products. Now tell me if you seriously think that your work is as complex and difficult as would be building a monitor from scratch.
My point is that business is not a zero sum game. In actual value every individual gets far more than he invests. What makes this possible is industrialization and mass production which are a direct consequence of the profit motive.
When you hear that company X has had a Y profit, you should be happy. Even if you do not get the direct primary benefits, you do get the secondary which are significant.
whose new book, "Creating a world without poverty: how social business can transform our lives" is #1234 on Amazon right now in the hardcover edition, explains quite simply that a social business is one that differs from a profit-making business in that it repays the investors their capital, continues to provide ownership to investors and to the disadvantaged, has a social mission, and does not pay dividends but returns the profits to the organization or to the community that it serves. Social businesses can indeed have paid employees, and would probably have an intermediate tax status between a profit-making business and a non-profit. As almost everyone on the planet probably knows, Yunus won the Nobel prize, together with the Grameen Bank that he founded, for their work on microfinance.