The Future of Development? Social Entrepreneurship!

28 September 2017 , , Philia

Nicole has worked as a country director in Namibia. She led a political foundation and gained valuable insights into the working of current practices of development cooperation and how that affects local NGOs. Tanja also has tremendous experience in the development sector. She has worked in the health sector in Kenya, Nigeria and she also worked for a UNICEF project focussed on Somalia.

Their experiences in the sector shaped their views on development deeply, leaving them with the question whether there is another way of facilitating change.

Can we re-think capitalism? Can we re-think development?

Betahaus gave Tanja and Nicole a platform to voice their ideas on their own social business as a solution towards pressing challenges that the current system created for the various actors within.

Why a social business? Quite simply because Philia believes in the ambivalence of sustainability and risk-taking. Philosophically, social entrepreneurship is based on what its founder Muhammed Yunus identifies as the two basic motives of human beings: selfishness and selflessness.

Selfishness is commonly accepted as the underlying assumption in capitalist market models. Economists have traditionally assumed that each market force is constantly trying to maximise its own gain. The classical example of a capitalist organisation is a corporation with profit-seeking shareholders. Capitalism is present both in developed and in developing markets. Whilst it certainly brought great products and services to many, it is undeniable that the bottom of the income pyramid is the loser of the capitalist economy. Capitalism alone can’t be the answer to dilemmas in international development.

There are, however, organisations that seemingly operate in sharp contrast to capitalist companies. Many non-profit organisations (NPOs), non-governmental organisations (NGOs) and similar organisation forms focus on the other end of the spectrum: They try to act selflessly towards end-users by relying on instead of revenues. Especially in the development sector this approach is widespread.

The issue is that for any organisation to be independent and sustainable, it needs a cash flow. If one relies on donor money, the project stands or falls with the goodwill of the donor. So ideally, that cash flow should be generated by taking a risk and breaking the mold. This paradox is part and parcel of a social business as compared to donor funded development projects.

We are not propagating that all social business are without fault – just as not every corporation is only doing focussed on profits. However, social businesses are grass roots movements that are empowered at heart because of exactly having a business mindset paired with a focus on social impact – instead of a dependency mindset. Philia is a prime example for this: Does Philia make money? Yes. Does Phlia have a social impact? Yes!

How do we know that we have a social impact? There are several answers to this.

Needs-Based Product Development

First and foremost, this programme was entirely created out of a need that we experienced ourselves and that we identified in the personal development market at large. Philia started with ourselves as first customers and up until today we are coaching each other every single week.

Catering to Clients – Business Side

Second of all, Philia is clearly a profit orientated business that is fit to endure competition in the market. We charge for our courses, workshops and retreats, which in the long run will allow us to be sustainable without donor support.

As soon as you are charging customers for your programme, you need to put them in the centre of your product development in order to ensure that their needs and wishes are catered for. This is another differentiating factor from donor-based models, where donors oftentimes have a larger say on the product design than end-users.

How did we learn about our customers’ needs? We  conducted two 20-week pilot series with users that are located on four continents with a variety of cultural and ethnic backgrounds. This gives us a very clear view on the usability of our online platform and the suitability of the contents that we have developed.

Free Offering to Beneficiaries – Social Side

Thirdly, we taught Philia free of charge in workshops to female staff members at ehealth Africa, a Nigeria-based health organisation, to female students at the American University of Afghanistan as well as female entrepreneurs at Startup Valley, an incubation centre located in Kabul. These initiatives were undertaken out of our own efforts and free for all participants to attend. We did not make a dime from these programmes and all women were free to join if they found it useful.

What is more, we have adopted a payment structure that was inspired by Tom’s Shoes. For every online course that we sell, we give a free online course licence to a woman with a financially challenged background who would benefit from our teachings.

We do not have the pressure to fill in log frames or other reports that regular donor based organisations have. And we believe that women should be totally free to attend our courses if they deem them useful and be also free in not attending if this is not for them. We do not need to count heads. We count hearts! We want women that are part of Philia with their mind and hearts and subsequently join the Philia community.

Philia is more than just a peer coaching programme for women. Philia aims to create a business model that is self-sustainable by focussing on profit generation as much as on social impact. The best of both worlds.