SOCIAL ENTERPRISE

entrepreneurial venture
and interview

DEVELOPMENT

Social enterprises or social entrepreneurship covers a wide range of societal

trends, organizational forms and structures and individual initiatives (Roper &
Cheney, 2005). A social enterprise can be classed as an organization or company
that applies a commercial business strategy in a way that helps improve
communities, human wellbeing and the environment within the social sector,
rather than maximizing profits for external shareholders. It has been generally
identified as reflecting the two main elements of: overarching social mission and
entrepreneurial creativity (Nicholls, 2006; Peredo & McLean, 2006). An interview
was held with Calum Brash the founder of 80:20 Development, a social enterprise
based around web development. The interview provided insight into the services
that are provided and an innovative business model.

Ventures Products, Services and Operations

Calum started the social enterprise based around web development, called 80:20
Development. Calum wanted a certain part of his life to be dedicated to helping
the community, whilst still being able to support himself comfortably and doing
both to a high standard.

The enterprise has an innovative business model that follows the strategic ratio
80:20. For every eight websites that are produced commercially for paying
corporate companies, two website can then be facilitated for non-profit
organizations. It is recognized that within the non-profit sector there is not a lot of
money available to be spent on advertising and websites. A website in todays
market is very important and it can be a substantial expense. A basic website
is provided to help promote the non-profit organization. The organization are
provided with their own website which promotes what they do, their hours
and resources, sharing specific information provided by the organization. It is a
template that they can then manage and control themselves, so they can be
current within their sector. The website is hosted for free and the domain name is

purchased for them. If anything further is wanted a small fee could be negotiated
but it would be substantially cheaper than a normal fee.

The competitive advantage for this structure is that the interest in the social sector
adds additional motivation for the corporate companies to work with the 80:20
organization as, by association they will be supporting a large number of nonprofit organizations, to no extra cost to their company. The corporates would still
be getting a high quality website at below industry price. The flow on effect is in
the hope to draw more corporate work, which will then allow me to help more
non-for profit organizations. 80:20 currently successfully runs on word of mouth
advertising, there are arrangements in place to put further advertising and a
framework in place.

The business is currently being run under a Sole Trader platform, Calum is the
exclusive owner of the business, therefore he is entitled to keep all profits after
tax has been paid but he remains liable for all losses. There has been interest in
becoming a Limited Liability Company with the potential to be in a Partnership.
This would then mean that it would be a private company whose owners are
legally responsible for its debts only to the extent of the amount of capital they
invested.

Environmental/Social Issues Addressed

80:20 Development addresses a wide range of social issues as the enterprise
can benefit any non-profit organization looking to be further established,
opening them up to the online community. It also takes on another form as 80:20
Development has the hopes of addressing student learning, by utilizing students to
work on the non-profit sector websites.

It was identified that there are not many community-based project that were

related to IT. Before the enterprise was set up a brainstorm session was conducted
to understand why this was. From the discussions it was recognized that within
the IT community there are many people who find it overly social and interactive
to be involved in projects in the sector and they find it can be overwhelming at
times. The type of people that do get involved with computer sciences generally
tend not to be outwardly social, in the way that the social sector requires them to
be (face to face contact, socializing, and networking) they are social in their own
way but usually from behind a computer. Coming from the computer sciences
background Calum can see the numerous benefits that can come from working
in the social sector. He has provided away for students to learn valuable work and
communication skills, with real people.

By offering students the opportunity to grow their skills, both computer based
and in communication it provides a multitude of developers who can benefit
themselves while they benefit the community. Calum is trying to get more people
involved, helping them to grow and giving them the interpersonal skills that will
put them ahead. They would interview better, communicate better, while also
learning the patience that is necessary when working with customers, sharing that
knowledge which is important when working with a real client.

Motivations, Commitment of the Founder

Calum identified what he was good at, with having a Computer Sciences and
Information Sciences Degree, web development was something that he really
enjoyed and found interesting. He enjoyed undertaking work in the social work
sector and decided that the best way for him to help would be for him to look
at what he was good at. He recognized that making websites could be a
constructive way of helping society as well. The idea of 80:20 was formed and he
took the model and put it in to place.

Mission statement, getting enough work to fund my life style but also being able
to help out the non for profit organizations with getting a web presence and
information technology support (Brash 2014)

After being involved with Ignite (a fully non for profit organization) he determined
that each semester has four non for profit organizations that need consulting
advice (which is expensive) some are lacking in expertise in certain areas, for
example applying a business model to what they do. They recruit student to do
the consults for eight weeks and help them come up with strategies to benefit the
organization.

One goal is to fully develop the model to adopt some of the Ignite ideas, seemly
with the Otago University design school, using students in that department
to come and do free design work for non for profit websites. There is also
consideration being given to the idea of adopting an internship for the computer
sciences department to come and work on the non-profit sites for free, while
gaining experiences, a portfolio and a reference from Calum himself. After
establishing their level of work and level of experiences they could be offered
paid work as well.

Business Model of the Venture and Impression of the sustainability

This venture proves innovate and sustainable, the business model was analyzed
using the triple bottom line framework to evaluate the sustainability of the
emerging social enterprise.

Sustainability has been related to the goals of businesses, non-profits and

governments in that last few years, but calculating the amount in which a business
is being sustainable or wanting sustainable development can be challenging
(Slaper &Hall 2010)

This framework developed by John Elkington, called the triple bottom line (TBL),
goes outside the conventional channels of profits, return on investment, and
shareholder value to include environmental and social dimensions.
Elkingtons argument was that companies should be preparing three different and
relatively unconnected bottom lines.

One is the customary quantity of corporate profitthe bottom line of the

profit and loss account.

The second is the bottom line of a companys people accounta

measure in some shape or form of how socially responsible an organisation has

been throughout its operations.

The third is the bottom line of the companys planet accounta measure

of how environmentally responsible it has been.

It aims to measure the financial, social and environmental performance of the
corporation over a period of time.

Only a company that produces a TBL is taking account of the full

cost involved in doing business (Triple Bottomed Line 2009)

Profit

The main motivation for many emerging business are profit and loss. 80:20 isnt
trying to hide the fact that one of the main business aspects is to support a
certain life style. With the growing awareness of corporate malpractice in these
areas, it has forced several companies, including Nike and Tesco, to re-examine
their sourcing policies and to keep a closer eye on the ethical standards of their
suppliers in distant places. This is an honest financial choice as the intentions are
clear and obvious for the customers involved, at no point would 80:20 want to
come across as facetious when communicating with customers.

People
80:20 Developments aims to benefit all the people involved, financially and

socially. The fact that the business model uses the money from corporate business
who have paid for high quality services to facilitating non-profit organisation,
while teaching and helping students to better their skill provides an very socially
responsible structure. The model also provide an option to encourage corporate
companies to become more socially responsibly, by providing the framework to
employ a company that by association can benefit a wider number of people.

Planet
Perceptibly the online based enterprise doesnt have many factors to consider
when it come to the planet bottom line, but to be fastidious 80:20 could be
environmentally responsible when considering computer choices, consumers
and businesses alike can opt for models certified by their federal governments as
energy efficient with the Energy Star label. If all computers sold met Energy Star
requirements, somewhere like the US could pocket $1.8 billion annually in saved
energy costs and reduce greenhouse gas emissions by an amount equivalent to
taking some two million cars off the road. As this is still an emerging business these
problems arent going to be necessarily huge until they are a global corporation.
The main environmentally associated impact that could be considered is energy
usage, which in turn affects the amount of greenhouse gases we pump into our
atmosphere. Limiting computer time is a large ask for an online company, but
shutting computers/ laptops down or putting them into sleep mode when they
arent using them could be one pedantic aspect that the enterprise could use to
implement environmental responsibility. Being an online company it has already
taken a massive step forward in the plant section making the sustainability of the
enterprise vastly higher than many others.

In the position of long and short term sustainability 80:20 Development has a strong
framework for establishing itself in a number of markets. It could be said that this
venture interlinks with The Base of the Pyramid theory. The Base of the Pyramid (BoP)
theory suggests that new business opportunities lie in designing and distributing

goods and services for poor communities. This is supported by SustainAbility, and
the views on business model behavior.

The idea of business model innovation that a company could

launch a new business model never conceived of before, or transform
an existing business model has long captivated business leaders.
Yet, executives are often held back by vested interests in their
current approach: If it aint broke, dont fix it. But as global trends
environmental, social, political, technological continue to shift the
foundations of our current business models, incremental innovation
will become less effective in enabling companies, industries and
whole economies to adapt and succeed. There is an urgent need for
fundamentally different approaches to value creation. (Clinton &
Whisnant 2014).

The quote is explained in an info graphic that describes the different possible
business models in relation the Base of the Pyramid.

FREE

BASIC

Subscription Model:
Customers pay a recurring fee, usually
monthly or annually, to gain ongoing
access to a product or service; model
has been used to lower barriers to entry
to the purchase of green innovations.

Innovative Product Financing:

Consumers lease or rent an item
that they cant afford or dont want
to buy outright.

BUY

$$$

PRO

Crowdfunding:
Enabling an entrepreneur to tap
the resources of his/her network to
raise money in increments from a
group of people.

BUY

$$

PREMIUM

Diverse Impact

Ownership:
Companies owned and managed by members,
often taking broader stakeholder concerns
into account, including those of employees,
customers, suppliers, the local community and
in some cases, the environment.

Buy One, Give One:

Selling a specific good/service
and using a portion of the profits
to donate a similar good/service
to those in need.

$$$

Download the full report at:

This infographic is an extract from the report,

Model Behavior: 20 Business Model Innovations
for Sustainability

Shared Resource:
Enabling customers to access a
product, rather than own it, and use
it only as needed; often dependent
on the participation and generosity
of community members to share
their goods with others.

Inclusive Sourcing:
Retooling the supply chain to make
a company more inclusive, focusing
on supporting the farmer or producer
providing the product, not just the
volume of the product sourced.

ooperative Ownership:Cooperative

Differential Pricing:
Realizing customers may benefit
from the same product but have
different payment thresholds,
companies charge more to those
who can afford it in order to
subsidize those who cannot.

$$

Base of the Pyramid

Micro-Franchise:
Leveraging the basic concepts of
traditional franchising, but specifically
focusing on creating opportunities for
the poor to own and manage their own
businesses.

Social Innovation

Alternative Marketplace:
When a company circumvents
a traditional method of
transaction or invents a new
type of transaction to unleash
untapped value.

Microfinance:
Providing small loansand in
some cases access to financial
servicesto low-income
borrowers who do not have
access to a traditional bank
account.

Building a Marketplace:
Delivering social programs,
adapting to local markets, and
bundling with other services
like microfinance and technical
assistance enable companies
to build new markets for their
products.

Product as a Service:
Consumers pay for the service
a product provides without
the responsibility of repairing,
replacing or disposing of it.

Behavior Change:
Using a business model to
stimulate behavior change to
reduce consumption, change
purchasing patterns or modify
daily habits.

Pay for Success:

Employing performancebased contracting, typically
between providers of some
form of social service and
the government.

Rematerialization:
Developing innovative ways to
source materials from recovered
waste, creating entirely new
1.4. Rematerialization:
products.

Produce on Demand:
Producing a product only
when consumer demand
has been quantified and
confirmed.

Environmental Impact

Financing Innovation

Freemium:
Offering aproprietary product
or service free of charge,
butcharging a premium for
advanced features, functionality
orvirtual goods.

1.1. Closed Loop Production:

Closed-Loop Production:
The material used to create
a product is continually
recycled through the
production system.

Y
BU

Physical to Virtual:
Replacing brick and mortar
infrastructure with virtual
services.

20 Business Model Innovations

for Sustainability

Model Behavior
Image: Model
Behavior
Report 2014

80:20 is a development of both financing innovation and social innovation. This could be
referred to as the Ration Model: Using a specific ratio of profits to facilitate charities or
non-profit organisations.
Base of the Pyramid

* While educating students and developing their skills.

Social Innovation

Ratio Model:
Using a specific ratio of profits
to facilitate charities or
non-profit organisations.

After investigating the role of the venture and the motivations and inner workings of
80:20 Development it is currently on the right path to creating a potentially successful
social enterprise. Having anaysied the business using the bottom line frame work and
briefly touching on the Base of the Pyramid theory the venture proved innovative and
has a long term sustainable framework in place.

Reference:

Brash, C. (2014). 80:20 Development Entr420. R. Elmslie.

Clinton, L. W, Whisnant. (2014). Model Behavior B. M. I. f. Sustainability, SuatainAbility
Elkington,J.(1997) .Cannibals with Forks: the Triple Bottom Line of 21st Century Business.
Capstone.
Nicholls, A. (2006). Introduction. In A.Nicholls (Ed.), Social Entrepreneurship (pp. 1-35).

Oxford:Oxford University Press.

Peredo, A. & McLean, M. (2006). Social Entrepreneurship: A critical review of the

concept. Journal of World Business, 41, 56-65.

Roper,J. & Cheney, G. (2005). The meanings of social entrepreneurship today. Corporate

Governance, 5(3), 95 -104.

Slaper, T. Hall, J. (2010) The Triple Bottom Line: What Is It and How Does It Work?