In a rapidly-changing world, there’s no set path to a sustainable future. Social entrepreneurs need to build on lucky chance, or serendipity.
Camilla Leopoldino is a Sustainability Analyst at Vontobel in Switzerland.
Note: This article was written before the coronavirus pandemic. Our hearts go out to those whose health and finances have been affected by coronavirus, and we do not take the situation lightly. We do hope, however, that this article will serve as a serendipitous reminder for social entrepreneurs struggling in this time, that adaptation is key for success, perhaps now more than ever. May this piece inspire you to think creatively about how you can continue growing your business and serving your cause.
Businesses are being asked to reinvent their business models for positive impact. But it’s hard to know exactly what path will lead to a sustainable future.
There are, however, warriors out there already fighting the good battles, and they have lessons to share.
For the past two years, I’ve spoken with entrepreneurs who aren’t waiting for a well-charted path. For my master’s project, I studied 14 sustainable entrepreneurs operating in different countries (Singapore, Netherlands, Italy, Australia, Sri Lanka) and with different missions. From adopting a stewardship role, to encouraging sufficiency, to creating value from waste, they created positive impact for the community and environment.
I tried to understand how they created sustainable business models: building social and environmental value together with financial outcomes. (Background on sustainable business models is in Bocken et al., 2014)
I learned that these entrepreneurs’ recipe for success has an important ingredient that can’t be bought: serendipity. Serendipity is defined as “the occurrence of events by chance in a happy or beneficial way.” It represents the unpredictable and fortunate opportunities that these entrepreneurs used to pursue their dreams.
Two Ways to Create a Business Model
Business development theory says that you can develop a business model in one of two ways. Either the process is formal and predictive — focused on an event or result — or it’s dynamic and adaptive.
Entrepreneurs with a formal approach anticipate the desired outcome and use a clear business plan to make decisions. By contrast, entrepreneurs with a more dynamic approach adapt their actions and desired outcome according to context.
But this is not a binary choice between either A or B. The entrepreneurs I spoke with needed both planning and flexibility to handle the uncertainty and remain focused. Here’s one story:
Sanergy starts with a problem and outcome, and then adapts
Lindsay Stradley co-founded Sanergy to provide sanitation solutions for urban slums. She and her partners began by identifying a concrete problem and goal: relieving the sanitation crisis in developing countries. They went through a long process of research and planning to outline the best solution.
But their model has since evolved. The local culture and community, and their entrepreneurial orientation, led them to take a different approach. They kept focused on the original problem, but adapted their operational strategy for reaching the goal.
Sanergy began with a focus on commercial toilet operators, but moved to selling sanitation services to landlords and groups of residents for use in their residential compounds. “This is a more financially and politically sustainable model,” Stradley explained “and it allows access to the toilets 24/7.”
The art of serendipity: Adaptation trumps planning
The more I talked to entrepreneurs, the more I realized ultimately, adaptation seemed more important than planning. They may have a concrete problem to solve, but their path toward the goal is flexible, and they may embrace new goals on the way due to that flexibility. They rely on their intrinsic values to make decisions and create opportunities.
They encountered serendipity — events developing by chance. But they then turned those circumstances into opportunities. These entrepreneurs are wired to do this transformation; they are great hunters of impact.
Here are some examples:
BebeMoss adapts to context
Izabela Ersahin founded Bebemoss, which provides a flexible income to refugee and underprivileged mothers in Turkey through knitting. Ersahin always wanted to make an impact on this social issue, but took a roundabout route to her current business model.
She wanted to empower refugee mothers, knowing that their economic empowerment would mean better quality of life for their children. But as an expatriate living in Turkey, she didn’t initially realize that local women were often bound to household activities.
“This was the light bulb moment for me,” recalled Ersahin. “I realized that there are many mothers, whatever their degree of education is, who cannot work outside of their house. They need some flexible work opportunity.” Home-based employment was clearly the solution.
Bebemoss has had an impact: “We have been in the market for five years now….But in the last two three years, we made a huge leap, by launching our website, doing wholesales and taking the whole business in a more professional way. We grew little by little and ended up being 80 [women].”
Crické looks for openings
Some say, “If life gives you lemons, make a delicious lemonade.” Crické applies the same thinking to bugs. The company offers eatable insect-based food products in Europe, as an alternative to traditional livestock options.
Its mission to disrupt the livestock industry comes with challenges. Building as much support as possible is crucial for the survival of the business. To that end, they’ve been open to any different opportunities to engage with customers.
Marco Parrinello, co-founder at Crické, explains: “Right now it’s really tough for us to create new customers, to create knowledge for the people. That’s why we try to organize and participate in events and to present our product in as many places as possible. We also have a project with a culinary school because we are sure that we need to start from the base, from the people, the early adopters.”
Make chance your ally
These entrepreneurs have a lesson for us: The future is uncertain, but we can still create business models with positive impact. These entrepreneurs solved operational hurdles by tapping into their knowledge and networks and enhancing their work in a very experimental way. They leveraged unexpected events to create new approaches to achieve positive impact.
These entrepreneurs’ experience reminds me of Tetris, the video game that asks you to fit falling pieces in a puzzle. It’s often not possible to predict what the final piece is going to look like. But, if you are a good player, you will make the most of the pieces falling to make more and more points.
In the game of sustainable development, there isn’t only one pathway, I learned from the entrepreneurs I spoke with. Indeed, there may not even be a clear pathway to start with, but rather small tracks that eventually lead us in the right direction.
About the Research
My focus was on entrepreneurs from around the globe who were developing or had already established small and medium enterprises (SMEs) intended to have a positive impact on society and the environment. To evaluate the businesses, I looked at partnerships, projects, and revenue model, to get a sense of the businesses’ feasibility and impact. The research used interviews as well as videos, documents and articles about the founders to triangulate and strengthen the results.
About the Author
Camilla Leopoldino is a Sustainability Analyst at Vontobel in Switzerland, where her works surrounds integration of environmental, social, and governance (ESG) criteria into portfolio management. She holds a Master’s degree in International Management with focus on sustainable business models by the University of Applied Sciences Northwestern Switzerland (FHNW). Her research and intellectual interests range from entrepreneurship, business model development, and corporate sustainability as driver of company performance.
 Several researchers have developed these concepts over the years. See Wiltbank, R., Dew, N., Read, S., & Sarasvathy, S. 2006. What to do next? The case for non-predictive strategy. Strategic Management Journal, 27(10), 981–998.; Dew, N., Read, S., Sarasvathy, S., & Wiltbank, R. (2009). Effectual versus predictive logics in entrepreneurial decision-making: Differences between experts and novices. Journal of Business Venturing, 24(4), 287–309.; Sarasvathy, S., Dew, N., Read, S., & Wiltbank, R. (2008). Designing organizations that design environments: Lessons from entrepreneurial expertise. Organization Studies, 29(3), 331–350.