Entrepreneurs in Education

A smart man once told me, “The education community has it backwards. Neither the student nor their parents are the customers. The customer is business. Students are the product.” Little Suzy or Johnny aren’t really widgets fresh off the assembly line. The real purpose of school is to prepare kids for career.

How are our schools doing? Although there are many excellent schools, the answer in general is not great. The Organization of Economic Development tests 15 year-olds across the globe. The U.S. results out of 65 countries are remarkably unimpressive: 24th Reading, 36th for both Mathematics and Science. OK. Maybe you don’t believe the validity of international tests. However, only 28% of employers in a 2009 Association of American Colleges and University survey said that 4-year colleges were doing a good job preparing students for the challenges in today’s global economy.

The Business of Non-Profits

Think of all the great works that non-profit organizations give to our communities. They embody a lot of the characteristics of startups – passion for an idea, deeply held beliefs by the founders and impact on the region (market.) Although the term social entrepreneurship is relatively new, the process has been around for centuries. Instead of making a return on investment measured in terms of profit, social entrepreneurs measure their positive returns to society.

However, for-profit and non-profit organizations probably have more in common than differences. The distinction between the two really lies in how the Internal Revenue Service treats the taxability of each group. The 501(c)3 non-profits are exempt from income tax, sales tax and property taxes. In return for this benefit, they must meet stringent requirements so that society and not an individual is personally benefitting from this tax exemption.

In just about every other way, the non-profits look, smell and act like a for-profit business. Non-profits must take in more money than they spend. They must market their services and goods to their constituents (customers.) While often associated with volunteers, many non-profits have payroll for workers who make their living doing these good works. In order for non-profits to succeed, they must run like a for-profit business.

One of our first customers to test our service was Homestretch Hounds, a dog rescue shelter in Hillsboro, Ohio that provides a second chance for dogs whose time has run out at other facilities. This started as a small home operation and grew to accommodate the demand of the marketplace by providing a great environment for the dogs or by a great adoption network they have built. Like any other business, they have to buy supplies and services and as a donation-centric entity, they like to spend their money effectively. To maximize the impact of donations, they negotiated a great deal with a dog food manufacturer. Just like other small businesses, getting a great deal on the product doesn’t necessarily mean you will get a great deal on the shipping. In fact, the market charges premiums for small loads versus using an entire trailer. Keeping an eye on the budget, the founder caught wind of our service in Soapbox and Homestretch Hounds stretched their budget to save 33% on shipping. The lesson is that non-profits need to run their organizations like a business.

Many non-profits get started by non-business people. So how do you acquire the skills and knowledge to become a sustainable business in the non-profit world? Follow the paths of many non-profits by forming a board of advisors or directors that have different backgrounds: financial, marketing, governmental and more. Don’t appoint your people who all have the same background — build diversity on your board in multiple ways. Seek out the advice of other successful non-profits – they all had to start somewhere and like entrepreneurs, most are glad to help others along the way. If you are just getting started, ArtWorks offers an 8-week boot camp called Springboard, which provides you with the basics of starting your organization (for-profit or non-profit.)

Seek out these resources and you will increase your chances of success.

Find out more about Homestretch Hounds at https://www.facebook.com/HomestretchHounds

Find out more about Springboard at http://www.artworkscincinnati.org/springboard/

Bill Cunningham is the CEO of OneMorePallet.com and shop foreman at the Greater Cincinnati Venture Association.

Accelerating Entrepreneurship to Change the World in Afghanistan

While the Brandery’s Demo Day served as an important launching pad for organizations from around the US, many players of the Cincinnati entrepreneurial ecosystem helped to accelerate entrepreneurship on the other side of the world in a region where entrepreneurship is not so common – Afghanistan. Over a five day period ending earlier this month, Miami University’s Institute for Entrepreneurship hosted over 60 post-graduate Fulbright students for a seminar on social entrepreneurship informally called Startup Afghanistan. The goal was to provide the best and the brightest from Afghanistan with the tools, experiences and knowledge to develop entrepreneurial solutions to some of the most pressing problems when they return back to their home country. The program was sponsored by the US Department of State’s Bureau of Educational and Cultural Affairs (ECA) and administered in cooperation with the Institute of International Education.

Startup Weekend Methodology

While the Fulbright Program – the flagship international educational exchange program of the US government – offers enrichment seminars for the visiting scholars, it generally does so through traditional workshops and experiences. However, given the focus on gaining entrepreneurial knowledge, Miami convinced the US Department of State to experiment with this seminar through the use of the Startup Weekend methodology. As such, 60 Fulbright students from Afghanistan engaged in a 54-hour immersion experience of moving from idea to prototype. The Startup methodology was directed primarily through Mark Lacker and Tony Alexander. Lacker is the Altman Clinical Professor of Entrepreneurship at Miami, who has become a national expert in Startup Weekends and recently ran one for the national kick-off of Venture for America.  Alexander is co-founder of three start-ups including Travelers Joy, Simple Registry and Smarty Tags and a mentor at the Brandery.

Local Knowledge to the Develop Local Solutions

Guided by Lacker and Alexander, the Fulbright students, ranging in age from 25 to 60, were encouraged to offer opening pitches to solve real problems in Afghanistan. As the US Department of State held their breath for fear that no one would pitch an idea, the students displayed incredible enthusiasm and courage by pitching 39 different ideas that were organized into nine different teams. Cutting across the sectors of healthcare, education, business and energy, the students worked tirelessly – guided by Lacker, Alexander, 2^nd year mentors from Afghanistan, and peer mentors in Miami’s entrepreneurship program – to develop nine business models grounded in the day to day reality of Afghanistan. After two days, the nine teams made presentations to a panel of judges including a nonprofit university, a business research center, a manufacturing business producing saffron, a low-cost marriage business, a solar energy business, a community development bank, a plastic bottle recycling business, an Afghan consulting business, and a diabetes management business. In the end, the community development bank for farmers emerged as the winning business model.

Partnering with the Cincinnati Ecosystem

While the Institute for Entrepreneurship at the Farmer School of Business of Miami University was selected to host the Fulbright Program because of the international reputation of its work in social entrepreneurship, the success of the program was greatly enhanced because of several key players in the entrepreneurial ecosystem. In addition to Alexander, Mike Bott (General Manager, Brandery), Johnmark Oudersluys (Executive Director, CityLink), Joe Hansbauer (Executive Director, UGive) and Richard Palmer (President, Nehemiah Manufacturing Company) shared their time and experiences with the Fulbright students to greatly advance their ideas. The goals of the seminar were to advance mutual understanding of people from different countries / cultures, to build sustainable human networks, and to gain actionable knowledge of the entrepreneurial process. Given the startup weekend methodology, the local knowledge of students and the support of the Cincinnati entrepreneurial ecosystem, the Fulbright students have accelerated the rebuilding of their country and the changing of the world in Afghanistan through entrepreneurship.

Starting a Non-Profit

“The great aim of education is not knowledge, but action.”

— Herbert Spencer, British Philosopher

Thinking about starting a not-for-profit venture?   Perhaps you are thinking of starting an education or education-related start-up?  It is a very timely topic given the focus on the role that entrepreneurs can play on the social entrepreneurship front as well as the on-going debate on how to fix problems with education.  For example, the business of education is one of the most challenging and perplexing endeavors on the planet.  It involves multiple stakeholders, volatile emotions, and no easy answers.  The keepers of big data tell us that spending per pupil has gone steadily up while student performance overall continues to erode.

As if that weren’t enough of a challenge, when it comes to starting a venture in the education related field, the debate also extends to the public policy arena and politics, where politicians and business leaders are often at odds on how to define and address the problems.  Of course, education is more than just another business model (no matter how many times we call parents, students, and potential employers customers, they are not), but even a non-profit needs to have a monetization model to sustain its ability to offers its services beyond the here and now.  Let’s take a look at what it takes to start a not-for-profit in the education field.

Multiple Stakeholders, Multiple Styles

Social Entrepreneurship: Value Creation through Different Models

Contrary to popular belief social entrepreneurship does not equal nonprofit organizations. While social entrepreneurship may occur within and through 501(c) 3 organizations, the legal entity is not the primary criterion for social entrepreneurial activity.  In social entrepreneurship, it is the explicit social mission that distinguishes social entrepreneurship from other start-ups. In this way, social entrepreneurship can occur along a continuum of for-profit to non-profit organizations where the social mission is central and explicit.  Following are a few of the many examples in the Cincinnati area that use different models to deliver social value.

Nonprofit focused on social value creation: GCEA

Greater Cincinnati Energy Alliance (GCEA) www.greatercea.org is a nonprofit organization whose explicit social mission is to lower consumer, business and nonprofit use of energy. The Department of Energy provided early stage funding with goals of reducing energy / environmental costs and of creating jobs for Greater Cincinnati and Northern Kentucky. A recent study indicates that energy efficiency could save residents and nonprofits more than $60 million and create more than 300 jobs, adding another $13 million in economic benefit to the area. In this way, the founding of GCEA by Andy Holzhauser created a nonprofit organization focused on creating social value by reducing unnecessary energy consumption.

When Fishing Isn’t Enough: Solving Social Problems through Entrepreneurship

“If you give a man a fish, you feed him for a day. If you teach a man to fish you feed him for a lifetime.” However, teaching a man to fish may not be enough. Bill Drayton, founder of Ashoka, suggests, “Social entrepreneurs are not content until they revolutionize the fishing industry.” This statement raises at least three questions. What is a social entrepreneur? What does it mean to revolutionize the fishing industry? And finally, how is social entrepreneurship expanding in Cincinnati?

Defining Social Entrepreneurship

Social entrepreneurship can be defined broadly as developing innovative solutions to persistent social problems. In this way, social entrepreneurship borrows the creativity and imagination from entrepreneurship, but applies it to address social problems such as hunger or poverty. According to Greg Dees at Duke University, “a social entrepreneur is of the genus entrepreneur and the species social.” In this way, an entrepreneurial mindset identifies opportunities, marshals resources and creates value, but the primarily focuses on the creation of social value – value often for the marginalized of society – rather than private economic value.