BEING AN AGENT for social change isn’t easy. Neither is being a business owner. But a growing number of resources are cropping up to assist social entrepreneurs — that is, people who want to tackle society’s problems through innovative business models.
Many social entrepreneurs already have a deep familiarity with the community or population they are trying to serve, but need to beef up business skills. Brothers Brian and Tim McCollum and Brett Beach, for instance, are co-founders of Madécasse , a for-profit importer of specialty foods from Madagascar, where cocoa and vanilla are grown. Tim McCollum and Beach spent years as Peace Corps volunteers in Madagascar, and saw a need to improve the standard of living for the people there. That’s when the idea for Madécasse, launched in 2006, was born.
Madécasse sells products made in Madagascar, like these chocolate bars, in U.S. stores.
The company’s goal: create more jobs in Madagascar by encouraging the crafting, manufacturing and packaging of food products within the country. Currently, Madagascar primarily exports its raw cocoa and vanilla beans at cheap prices — a leftover colonial mentality that effectively impedes the country’s economic development. Making finished products in Madagascar (such as three-ounce fine-chocolate bars wrapped in black paper with gold lettering, shown in photo) that can be exported at higher prices would quadruple revenues for the people who live there, the founders estimate.
After partnering with a manufacturing plant in Madagascar, the three founders next had to raise funding (beyond their personal contributions) and work on getting Madécasse’s products into U.S. retail stores. That’s where special training in running a social enterprise came in handy. Brian McCollum attended New York University’s Stern School of Business, which offers social entrepreneurship classes, and received his MBA in 2007. All three this past year entered NYU’s rigorous eight-month business-plan competition (in the social entrepreneurship track), learning how to tweak their social-enterprise model and pitch their idea to social venture capitalists.
“Through the competition, we met a couple social investors, and they have helped us immensely along the way,” says Brian McCollum. The three were advised by Investors’ Circle, a network of socially-minded angel investors and venture capitalists, to create a “social balance sheet” to monitor job creation and labor practices in Madagascar. Madécasse, which won $25,000 in seed money through the business-plan competition, ultimately hopes to secure at least $1 million in venture capital from a social VC. (For more funding options for social entrepreneurs, read our story .)
In the past year, the Madécasse founders also have asked food purchasers and distributors for tips on getting their company’s products into specialty food shops (currently, Madécasse products are sold in 100 retail stores, mostly in New York). The purchasers and distributors provided valuable feedback, McCollum says. “When you tell people you are doing something good that has a social bent, they want to help,” he says. “We’ve gotten a lot of mileage out of just picking up the phone and calling people.”