October 30, 2014

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Seven Principles: Developing New Social Enterprises with Benetech

In the fifth post in the series Creating Good Work, Jim Fruchterman explains Benetech’s model for matching social needs with profitable efforts.

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By Jim Fruchterman

I was delighted when Ron Schultz invited me to collaborate with him on his latest book Creating Good Work – The World’s Leading Social Entrepreneurs Show How to Build a Healthy Economy. What I liked most was the idea of creating a body of knowledge that’s truly helpful to prospective and emerging social entrepreneurs. I’m honored to join my fellow contributors in sharing practical lessons we’ve learned throughout our journeys towards actualizing positive social change. I look forward to continuing the conversation the book has opened.

A Critical Time For Social Entrepreneurship

Creating Good Work arrives at a critical time for the social entrepreneurial movement. We see tremendous innovations in social enterprise, but these are merely part of larger, global changes in the ways in which society organizes itself to create public goods.

Digital and mobile communications are changing the rules about social networks, intellectual property, and the availability of big data, with an overall blurring of the boundaries between state, for-profits, and nonprofits. We’re learning new ways to create and sustain social value. As philanthropy wonk Lucy Bernholz writes, together, these changes add up to a new social economy:

“[A] dynamic and diverse set of enterprises that deploy private resources to the creation and sustenance of public goods.”

Benetech: Software for Social Enterprises

As I was thinking about this, it became clear that now is the time to look beyond the tools for social change that we’ve built and consider the frameworks that guide us in moving them forward. In Chapter 15 of Creating Good Work, I discuss the framework that guides us at Benetech, the technology nonprofit I lead. I hope this discussion helps other social enterprises examine and develop their own frameworks.

When I first started pursuing the idea of using technology to solve challenging social problems, it was a pretty radical idea.

Now, more than two decades later, social entrepreneurship is a hot global movement and Benetech has become the “go to” nonprofit software company in the heart of Silicon Valley. During that time, we’ve grown from offering one product to offering many products and services, in four program areas:

  • Education
  • Human rights
  • Environment
  • Tech volunteerism

Frameworks For Innovation And Goal Setting

We are always exploring new projects with the hope of launching a new product each year. And as Creating Good Work: Ron Schultzwe’ve grown, we’ve learned what works for us and what doesn’t, which has led us to codify two frameworks to guide our team. Benetech’s New Project Framework helps us identify the next projects to work on. The Benetech Truths define our culture and focus our efforts on how we operate. I want to focus here on our New Project Framework.

Bookshare: Matching Social Sector Needs With Profitable Goals

At Benetech, we look to fill the gap between what’s possible and what’s profitable with technology. We address the market failure that occurs when the needs of the social sector don’t match the goals that for-profit companies consider worth pursuing. We use our New Project Framework to identify one project each year that offers the greatest chance of making a difference.

To explain our approach, let’s look at Bookshare, our accessible online library for people with print disabilities.

When Bookshare was first created, most people with print disabilities read printed material via books on tape or hardcopy braille books. Converting and delivering these accessible books was expensive and time consuming. Only a tiny fraction of print materials were made available in accessible formats. As a result, people with disabilities were left behind, facing insurmountable barriers to opportunities in education, employment, and social inclusion.

With support from our stakeholders, Benetech changed that reality. The Bookshare breakthrough put our users in charge of the collection with a crowd-sourced library built by—and for—the people it serves. Instead of deciding what people with disabilities should read, we let our users decide which books to scan and share with each other.

Our lower cost model allowed us to invert the power structure.

As a result, we quickly became the world’s largest online library for people with print disabilities. We developed strong relationships with publishers who share our values and voluntarily submit high quality digital files directly to Bookshare. Now, when a person who is blind needs a specific book, s/he is likely to find that title in Bookshare—in the format they need—with Benetech delivering it for less than one-fifteenth of the cost of previous approaches.

Bookshare: Books without Barriers

The New Project Framework Model

Here’s how Bookshare maps to the top seven considerations in our New Project Framework:

1. Chance for Revolutionary Change

Lowering the cost of delivering a social good by a factor of 10 or bringing a technological capability to a community that didn’t have a technology solution at all: now that’s worth doing! In the case of Bookshare, we’ve gone from solving a sliver of the problem to most of it, while hitting more than an order of magnitude reduction in cost.

2. User Needs and Product

We must understand our users’ needs and how the new product will thrill them and affect the social outcomes we (and they) desire. Prior to Bookshare we built affordable reading machine for the blind, so we understood our users’ needs well. Then, with Bookshare, our users decided (and still do) what books they want in the collection.

3. Distribution and Go-to-Market Plan

Our product will only matter if we can get it to the people who need it. With Bookshare, we knew that a web-based platform would enable us to get the product to scale and into the hands of hundreds of thousands of users today.

4. Partnership Plan

We engage cross-sector stakeholders who help us ensure that our product truly creates social change. scaling social enterpriseBookshare is a global asset we built in partnership with our user community, and then the publishing industry jumped on board to help.

5. Sustainability Plan

Every product needs to sustain itself on revenues after the initial donor investment in building and bringing it to market ends. We planned for Bookshare to be viable on individual subscription fees, but eventually found that focusing on serving students with disabilities is the key to the library’s sustainability.

6. Exit Options

Each of our new ventures needs at least three exit options. For Bookshare, it could sell out to publishers, merge with one of the traditional libraries, or even convince the publishers to solve the problem and reduce the need for us to do it.

7. Low Technical Risk

We focus on applying existing technologies to bear on social needs. To develop Bookshare, we hired Silicon Valley engineers who had built something similar more than once for one of the major early commercial ebook companies.

Each year, we look at the pipeline of dozens of good, new project ideas and measure them on this framework. We choose a few ideas to further research and develop and then zero in on the one we think is the top contender to create maximum social return on investment.

But our measure of success goes beyond what any one of our initiatives alone can achieve.

At Benetech we want to help catalyze the creation of many new products and many new organizations that do great things with technology. Our aim is to be part of a larger movement—one that harnesses the power of technology to improve the lives of all people across the world. Check out Creating Good Work, our new book. We hope you’ll join us in this movement!

Previously:

Creating Good Work: Identifying Commonwealth-Building Healthy Economies

Shifting The Unshifting – The Course Of Social Innovation

Creating Good Work: Bringing Good Capital Home with a Living Economy Fund

Creating Good Work: A New Series on Social Innovation by Social Innovators

About the Author

Jim Fruchterman is CEO of Benetech, a nonprofit technology company based in Palo Alto, California. He is a former rocket scientist who creates technology social enterprises targeting underserved communities.

Fruchterman has received a MacArthur Fellowship and the Skoll Award for Social Entrepreneurship. He is also a contributor to Creating Creating Good Work – The World’s Leading Social Entrepreneurs Show How to Build a Healthy Economy, Palgrave Macmillan, 2013, available February 19, 2013.

The opinions, beliefs and viewpoints expressed by CSRwire contributors do not necessarily reflect the opinions, beliefs and viewpoints of CSRwire.

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