Conflict of Interest:

Vying for Capital as  Social Entrepreneur

          Social entrepreneurs face inherent challenges in assessing and pursuing their ventures in an environment which promotes private, for-profit ventures. Such ventures typically produce more substantial returns for investors and are thus generally more palatable to all but those particularly interested in social innovation or philanthropy. As I have begun the process of evaluating the feasibility of my own project, World Reader, I can't help but feel I would be met with a cool reception when it came time to face my hypothetical investors. 

         In one respect, a social venture could relatively easily achieve the principle pillar of success:  adding significant value to a customer or end-user. Additionally, social ventures solve significant problems and address dire needs. The venture could also be dynamically different and enjoy competitive advantage over other goods or services available. The issue is that the individuals who benefit are not willing (or able, frankly) to pay a premium price for the goods and services rendered. This makes the good or service unlikely to provide a margin or posses moneymaking characteristics even if the market for the product is robust. These shortfalls make it improbable that the good or service would be viewed as an investment with a good balance between risk and reward. 

          The overall positioning of a product like my proposed World Reader feels uncertain due to its inherent social nature. There is obviously a market for a product (the 785 million illiterate individuals highly concentrated in several countries). It offers a competitive advantage over other means of literacy promotion because it doesn't require a human and financial capital intensive physical teacher. The value creation could be immense; as I go about performing research on costs of illiteracy (social and economic) even marginal reductions could prove beneficial for these largely undeveloped, under-served nations. The reward is philosophically palatable, and now is as good a time as any to combat illiteracy particularly as we increasingly become a global economy motivated by technological innovations that will leave illiterate  populations even more disenfranchised. However, the risks of both the mission of the product (illiterate don't care to learn to read, self guided methods are ineffective, etc.) mount on the inherent risks to investors (losing their money) to make the bottom line even less certain. How does one engineer a devoted social venture that is desirable to more than merely philanthropic investors?