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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."
I've always liked the idea of starting a company with an added clause to the mission statement that goes along the lines of "...to help and move forward all of humanity..." That would allow the company to invest significantly into science with their R&D but still attempt to make large profits. Then again, I feel I've probably yet to learn a lot about businesses.
Geeks will not inherit the world anymore than any other group will.
The world has to have different types, asshole types included. Without them and the other groups, the would does not and will never work. You need forward thinkers and you need short sighted thinkers. Without short sighted thinkers, you go bankrupt in the short term and there is no long term and visa versa.
No one group or type of person can do it all.
Gone!
all corporations would have a social mission, and we wouldn't buy from, or invest in, corporations that did not.
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.
Gee... perhaps thats the problem? Check this out: We need a new path to liquidity
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
and that the majority of the money that comes from shareholders to buy shares is not from people, but corporations whose charter includes only profit aims.
Such as banks.
Sure there is a lot of corporate ownership by corporations, in a big incestuous pile, but the ultimate source of capital is from individual investors -- primarily retirement investments. If individual investors chose social good companies over pure-profit companies, and chose to invest in banks and mutual funds that chose social good, then the market would follow suit.
When it comes to their retirement, though, most individuals prefer to maximize profit.
Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
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.
That's what the assholes want you to think.
You think Enron was the only company that fudged numbers so their top brass made their bonuses? This behavior doesn't create wealth, it only redirects it from productive uses. These people are parasites on wealth building processes. The system functions despite these people.
The essence of being an asshole is being a person who habitually lies to get ahead. Many highly successful people are assholes, but for ever such there are a thousand whose lies caught up with them. It isn't that assholes aren't forward thinkers, it's that they don't look any farther into the future than is necessary to keep their deceptions from collapsing. It's not about rational self interest, it's about the inability to control the impulse to grasp and manipulate.
This doesn't mean nice guys finish first. The world isn't divided into assholes and nice guys. Ben Franklin was a bit of a conceited jerk, but he was never an asshole, and he pretty much accomplished anything he ever set his hand to. He was incredibly disciplined; it was always a penny saved with old Ben. He know the line between jerk and asshole, and didn't step over. He wasn't the type to cheat a customer because a repeat customer, after all, is the most profitable in the long term. He might deceive his way into a lady's boudoir, but his aims in those matters were exclusively short term.
And sometimes assholes smarten up. Young George Washington was a nasty piece of work, but the transparent ugliness of his social climbing ruined any prospects he had of advancement, and this changed his thinking.
Thomas Jefferson never stopped being an asshole, and suffered his entire life as a result. No question he was very bright, of course, but what he accomplished was because of his intelligence and despite his unwillingness to face his personal problems squarely.
The world needs many kinds of people: kindly people and stern people, benevolent people and ambitious ones. But saying it needs assholes is just another way of saying that it needs more fools. Saying that many assholes are successful is like saying that many people successfully pursue the lottery to riches. It's only "many" if you don't compare it to the failures.
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Well, if you are a small business, your choices are different. You are running the business to benefit yourselves, and you have more choice of the coin in which you will be paid than if you were a publicly traded company.
Growth, cash flow and profits are all things that you trade off, at least in the short term. Growth is easy to achieve; you just shovel cash into getting new business. I've known businesses that lost money (profit) for years because they did this; they paid last year's debt out of this year's growth -- until they hit the wall. It might have been a brilliant strategy if they had had a plan to get off the merry go round.
I know that rapid growth has almost been a religion in business, but the truth is most small businesses thrive best on slow growth, staying profitable and in healthy cash flow by being careful with cash and consistent with customers.
But the things that small businesses can potentially do better is attention to detail in the customer relationship, and when your labor and know-how is a big part of what makes you profitable, it isn't easy to scale quickly. If you are in a business for the long run, and you only require a good living out of it, you can probably get all kinds of other things out of it. Like anything else in economics, it's about marginal costs; the marginal cost of producing a dollar more of profit may be greater than a dollar, whereas producing a marginal dollar's worth of fun or of community prestige, might be a lot less.
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