What’s all the Fuss about Business Models?

Cathy Clark
Founder and Director, Columbia Business School, Research Initiative on Social Entrepreneurship

 

Have you noticed a new wave of attention to business models in the world of social entrepreneurship? We have. We set out two years ago to understand the challenges that social entrepreneurs face in improving their business models.  
 
Why? Because we’ve seen robust business models propel social ventures to scale and success, and weak models handicap even the most intrepid social entrepreneurs.  Because capital markets invest in charismatic entrepreneurs, to be sure, but they also invest in business models. Are they robust? Scalable? Efficient? Impactful?
 
Most of all, we engaged in this work because we see social ventures in all sectors, all places, and at all levels of maturity engaged in a complex dance: how do I gather resources to fund my work, what’s the best way to get bang for the buck in my operations, what products and services are essential, what do I partner on vs. do myself, and how do I best use all the tools of business to create the most impact?
 
In 2009, we conducted a global survey of social entrepreneurs, and the results speak for themselves:
 
  • 100% of the social entrepreneurs surveyed said they had been making changes to their business models over the past 3 years.
  • 91% rated these recent past changes as “significant” or “very significant” and 94% intended to make “significant” or “very significant” changes over the next 3 years.
  • When asked about their resulting financial and social performance, we found the more parts of their model they had changed, the more confident they were about their future performance.
 
We realized were on to something, and decided to dig deeper.
 
CASE Business Model Interviews. 
The result of that digging is what this blog and series of online discussion events is about. In addition to our survey, we have conducted in-depth interview with over 30 social entrepreneurs, covering a range of for-profit and nonprofit organizations around the globe.  Some of these entrepreneurs have made dramatic changes to the core of their business; some are experimenting with new ways of creating social impact. Some are start-ups and are just testing their ideas; some are long-standing organizations who are making big bets on new ways of doing business.
 
Our blog and discussion series will explore stories and themes that have emerged. We’ll be posting short business model profiles here over the next few months, and hosting targeted conversations alongside them. Our hope is that by exploring decisions made by others, social entrepreneurs will see new possibilities for their own business model dance.
 
Key Themes.
So what is to come? We will be releasing the profiles grouped by themes:
 
  • Start-Ups
  • Legal Form Strategies
  • Scaling Strategies
  • Innovative Cost Structures
  • Revenue Model Strategies
 
We look forward to sharing our findings and hope you will add your experiences and examples alongside ours to help us all develop insights into how to build business models that will best drive social impact.