Aurelia Adriana de Melo (UNISINOS University), Yeda Swirski de Souza (UNISINOS University)
Entrepreneurs’ dilemmas and challenges with social enterprise scaling up
This paper aims to discuss scalability in social business settings. We intend to highlight dilemmas and challenges that social entrepreneurs face when scaling up their start-ups. As proposed in the GEM Social Entrepreneurship Activity Report (2015- 2016), social entrepreneurship can be defined as any kind of activity, organization or initiative that has a particularly social, environmental or communitarian objective. This may include providing services or training to socially deprived or disabled persons, activities aimed at reducing pollution or food waste, organizing self-help groups for community action, etc. Scalability is an important feature in social impact ventures. It allows startups to achieve their social mission providing more efficient solutions for low-income populations. Furthermore, it also promotes scale economies that could facilitate the guarantee of attractive returns for investors and entrepreneurs. A social business can be scaled up by expanding the business itself or through the replication of its technological solution by others entrepreneurs in other regions. However, scaling up often presents personal dilemmas for the founding social entrepreneurs in addition to requiring improvement of technical and managerial capabilities. Our study addresses these issues and proposes an avenue of inquiry balancing the scalability challenge with that of the social entrepreneurs´ motivations and capabilities. To investigate these issues, we adopted a case study strategy. Based on in- depth interviews, we studied an award winning Brazilian startup, known as “Green Solution”. Green Solution was created to solve the grain storage problem on small farms. The entrepreneur, whose parents are small farmers, has been aware of the need for efficient and cheap solutions for grain storage since his early childhood. Additionally, as a business administration student at a Jesuit University (UNISINOS - a Brazilian university located in Rio Grande do Sul, southern Brazil), he was stimulated by studies on sustainability. As soon as he met an opportunity to create a new venture, Green Solution’s founder proposed a prototype of a silo adapted to small farms, totally built with recycled materials, using PET bottles as the main material input. The Green Solution’s silo solution combines affordability for small farmers and sustainability, and its mission was framed connecting the improvement of agricultural productivity on small farms with social, financial, and environmental sustainability. In 2014, this project won an entrepreneurship competition promoted at the UNISINOS’s incubator. Since the business’ inception, the entrepreneur has been facing important decisions regarding venture development, mainly related with how to scale up while assuring mission continuation and sustainability. This case study sheds some light on this issue and contributes to ongoing studies about social enterprise scaling and impact challenges.