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Social Entrepreneurs: Startups set to change the world

Published: Thursday, July 31 2014 6:45 a.m. MDT

Social entrepreneurs even have their own Silicon Valley techie-style accelerators, including Unreasonable Institute and Ashoka, which match would-be do-gooder CEOs with mentors and money. Unreasonable Institute offers a five-week boot camp to carefully vetted ventures with luminary philanthropic mentors such as John Mackey, Chairman of Whole Foods, and major Silicon Valley investors. So far, Unreasonable Institute has launched 82 socially-minded companies in 37 countries, which have raised $42.6 million collectively in venture funding.

Unreasonable venture Eco-Fuel Africa, a Uganda company that converts agricultural waste into clean fuel and combats deforestation, has grown from serving 1,250 people to 30,000 people; Solidarium, an online marketplace for impoverished artisans based in Brazil, has improved the incomes of 8,500 by 80 percent using Unreasonable connections.

Social entrepreneurs are not going to replace NGOs, Gore said, but they do tend to be faster and more flexible, and NGOs will look to partner with them.

Ku sells her filters through NGOs, but starting a business over a nonprofit was a natural fit for her because she wanted the project to be local and sustainable and to “disrupt” the long-standing cycle of foreign aid in Uganda. Besides, being an entrepreneur gave her street cred.

"When you say you're a college grad doing good, people laugh at you, but if you tell people you are running a business and getting returns, it's different," Ku said. "It feels good to say, 'I'm a businesswoman.'"

Staying sustainable

NGOs rely on donor money, and if funders don't like results or see them fast enough, they pull out. This leaves little room for the experimenting and "fast fails" that allow startups to learn and thrive, and that's where social entrepreneurs have an edge, Gore said.

"They're going after something a little faster and they have more flexibility," she said. They have the luxury to "learn, evolve and iterate."

Social entrepreneur Chris Ategeka is CEO of Ride for Lives, a company that makes bicycle and motorcycle ambulances outfitted with a small trailer to carry a patient. They are made extra-tough so they don't fall apart in the rough terrain of rural Uganda, where cars are scarce and thousands of people die every year trying to get to a hospital. Ategeka uses a hybrid nonprofit and for-profit model, with the business part making and selling the bikes to locals, and the nonprofit arm distributing them.

Ategeka grew up an orphan in Uganda. Both of his parents died in an HIV epidemic by the time he was eight, and he was left to fend for himself and his younger siblings. Ride for Lives was inspired in part by the death of his younger brother, who fell ill as a child and died while Ategeka tried to get him to a hospital on foot.

"We were about eight miles away," Ategeka said. "The pain and horror and blame of what I could have done different stuck with me for a long time."

At age 15, Ategeka was taken into an orphanage, where he excelled in school, and a sponsor family in California offered to take him in and send him to college in the United States. He earned BS and MS degrees in mechanical engineering from Berkeley, and now he helps run Biotech, a company that builds medical diagnostic devices for early detection of HIV.

As an entrepreneur he knows how startups work, but there's a different standard for nonprofits, he said. Most companies don’t make money until three, four, or five years into the business, he said, and if a person has $10,000 in funding and spends $5,000 on overhead, that's understood. "But if you do that with a nonprofit, people say, 'Those people are evil; they used half their donations for overhead!' They expect everyone to work for free—and it’s tough."

Fashion for profit

Saba Gul was raised in Pakistan and attended MIT for undergraduate and graduate degrees. She returned to her native country in 2011 on a mission to empower other women in Pakistan, and like other idealistic young people, the 31-year old started a nonprofit. Inspired by the beautiful embroidery of local artisan women, her organization sold luxurious handbags featuring colorful, hand-embroidered details and paid the women artisans a living wage.

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