The Rise of Social Entrepreneurship: Are One-to-One Business Models the Way to Go?

Like the name suggests, social entrepreneurs are individuals that have a passion for social enterprise—these individuals want to solve a global humanitarian issue by creating some sort of sustainable resolution to a real-world problem. Traditionally, these “resolutions” come in the form of an innovative tech gadget or a program. But recently there has been a steady increase of “fashion” social entrepreneurs hitting American markets—and profits are booming, especially with the help of fashion-forward young consumers. Perhaps it’s because millennials—those that fall between the ages of 18 and 29—are known as the “humanitarian generation” and care about the sustainability of our planet. Either way, entrepreneurs who are deciding to do the social enterprise route are seeing great success.

Most of what I like to call “charity-chic” retail stores are based on a one-to-one business model: this means that every time a consumer purchases a product, the same product is given away (for free) to someone in need— typically someone  in a developing country. Granted, the original product is inexpensively made, otherwise profits wouldn’t be a possibility. But even though the products aren’t built to last, they’re still flying off the shelves.

The most notable fashion social entrepreneurs are the creators of TOMS Shoes and Warby Parker eye glasses, former small businesses.

Ex Amazing Race contestant Blake Mycoskie founded TOMS shoes in 2006 after he spent some time vacationing in Argentina. He was distraught at the amount of small children he saw who didn’t own a single pair of shoes. So he started selling alpargata-style shoes in America—a traditional Argentinian slip-on canvas shoe that surprisingly was a big hit with American hipsters. Shoes are sold at around $60 a pair, although it costs a fraction of the price to make them. For each pair purchased, a pair of shoes is sent to a needy child in one of the 28 different developing countries Mycoksie’s team sponsors.  TOMS shoes grossed $4.6 million in 2009, according to most recent statistics available.

Warby Parker, on the other hand, is an eye glasses online retail store based in New York. Partners Neil Blumenthal and David Gilboa didn’t understand why stylish-eye glasses had to cost more than an iPhone. So they found a way to create trendy prescription eye wear for only $95. After hearing the tragic story of a Bangladeshi farmer losing his crop to insects because he couldn’t see the critters, Blumnethal and Gilboa decided to “match” purchased eye glasses and give away free pair of eye glasses to improvised people around the globe. Celebrities such as Jessica Alba and Brad Pitt have been spotted rocking a pair of Warby Parkers.

Historically social entrepreneurship has existed long before Bill Drayton, founder of Ashoka: Innovators of the Public, coined the term in the mid-1990s. But now there are MBA business programs that specifically recruit and train aspiring social entrepreneurs—Harvard University, Yale University, Duke University, and University of California are just a few.

If you’re looking to spruce up your entrepreneurial endeavor and would like to see the world prosper, social entrepreneurship might just be for you.

Amanda Watson is a freelancer blogger who writes about online mba programs and other topics pertaining to online higher education, technology and business. You can reach Amanda at [email protected]