Traditional Business Models and Social Innovation

Divisive Visions and Social Entrepreneurship

          In any entrepreneurial endeavor there is the eventual risk that founders will come to a disagreement over the execution of their creative vision. Regardless of the nature of the organization there will inevitably be disagreements over any number of elements of the organization. This is true of both non profits and and social enterprises. In the case of social enterprise, however, there is a unique challenge over disagreements. In a for profit enterprise, in spite of any number of other complications that may arise, the principal concern is making money. If the company isn't making money, it is failing. In social enterprise the primary goal at hand is achieving a mission that transcends money making and addresses a social need. What happens, then, when a social venture teeters on the verge of the two worlds and the two founders find their highly different approaches to operating the company are in line with the mission of the organization?
          Two friends of mine are the founders of an apparel screen printing company. Roughly $50,000 have been put into the twenty-somethings' business between the two of them. The concept is that local artists sign with their company to have their work incorporated into apparel. The artist has no discretion in what specifically the work is screen printed onto (t-shirt, v-neck, long sleeve, etc.) not how the work is screen printed (colors, orientation, size). Different prints cost the company different amounts to create depending on the materials used and labor involved. This issue at hand is about what their ultimate goal is: to make the most amount of money or to create a product that best represents the artists work even if the margin of profit is smaller. In other words, if a piece can be printed onto the least expensive clothing item, making very few alterations to the equipment involved, and using basic colors it costs the company much less money. Making alterations to the printing equipment, using more expensive apparel, and using more elaborate color combinations cost the company significantly more. The problem is, the apparel all sells for the same flat rate.
          One of them sees pursuing profits as perfectly ethical and in line with the mission. If the company doesn't make money it goes under and they lose their investment. The artists don't explicitly demand (contractually) their work is portrayed a certain way or on a certain material. It's up to the company to make those choices. The other principal sees it as the company's intrinsic duty to bring up and coming and otherwise unheard of artists' work to the fashion world at whatever cost it takes. They cannot be motivated by profit margins because if artists feel alienated or let down by lackluster translations of their work they will stop signing with the company. Ultimately, a balance must be struck between financial viability and the artistic mission. However, I find it interesting that an organization can be so intwined in the balance between social and for profit motives.