Social entrepreneurship is not only a fascinating idea, but also the future. Everyone, on both a macro and micro level, relies heavily on the 'tech startup' bubble. As did the dot-com bubble in 2000, the startup bubble will burst, and when it does, it will pave way to social entrepreneurship. It is like the Titanic; the ship for tech startups has hit the iceberg and the bigger players have started scaling back, lowering expectations, and reducing costs upfront, with up to 15% (on average) reduction of staff. And the present is comparable to the 'final two hours' before the ship submerges completely. The looming question persists - what now?
Mutual funds and venture capitalists, which have in the recent past fueled the rocketing value of startups and the technology boom, are now reducing their investments at an alarming pace. According to the Wall Street Journal (WSJ), "The markdowns have stunned many venture-capital investors and blindsided some executives at startups" (Mutual Funds Sour on Startup Investments). It is hard for already existing startups to spend on expansion while mutual funds cut down their investments and backing; they have come to a standstill. The economy currently is dependent, and has risen in the past, due to the investments in startup companies.
According to the WSJ, no U.S. based venture-backed technology companies have gone public so far, and the shares of the companies that did offer an IPO over the last two years have fallen at an alarming rate of 30% on average. Moreover, investors funded fewer U.S. startups in the fourth quarter than any period in more than four years, claimed the WSJ (Mutual Funds Sour on Startup Investments).
There is, however, a new trend that is emerging. It is a change in attitude wherein one may be able to help another, and still make money - social entrepreneurship, which is essentially drawing on business techniques to find social solutions. It is not an organization that one sets up; it is not purely on humanitarian basis that one engages; social entrepreneurship provides one of the highest profit margins compared to any other industry. As Ahmad Ashkar, CEO of the Hult Prize Foundation, puts it, "If you can't make money, then you're not a business; you're just another charity."
Rampant inequalities exist in the modern world, with the wealthy class getting smaller and its share of wealth getting larger. On the other hand, the situation of the poor is seemingly not improving. However, that does not mean that those people in the world must suffer. They deserve betterment, and it is our responsibility to give them an opportunity. President Clinton's challenge for the Hult Prize Competition this year not just gives students a chance to improve the conditions of millions of people who live in poverty stricken conditions, but to in fact double their incomes over the next five years. What government in the world would reject or challenge a genuine social enterprise seeking to make real impact? "If you can create a real business, the beginning of a prototype, you can change the world," said Professor Muhammad Yunus, Nobel Peace Prize Winner.
The opportunity exists right now to create companies with potential to have legitimate positive impact on the world's problems. Platforms like the Hult Prize and others, tremendous resources at our disposal, mentors and funding and expertise are all out there to be had. The next step is for us to take the leap and embrace the future.