Social Entrepreneurship 2.0 and Blended Value Organizations

Laurie Lane-Zucker
Laurie Lane-Zucker

Laurie Lane-Zucker, founder and CEO of Impact Entrepreneur, on the evolution of social entrepreneurship and impact investing.

Tell us about your journey as a social entrepreneur:

The vast majority of my career has been focused on environmental sustainability and the social issues that inevitably relate to sustainability.

I was the executive director of Orion, an organization and magazine in the environmental space, for over 13 years. More recently, over the last 10 years, I have been increasingly immersed in social enterprise and impact investing.

Hotfrog, a company I founded in 2007, and which was the precursor to my current company, was one of the first “Founding” B Corporations.

There are two different kinds of benefit corporations. [B Corps] certification, overseen by BLab in Philadelphia, involves a voluntary, thorough analysis of a company’s environmental, social, and governance activities, which include things like sourcing, partnerships, and the ratio between the lowest and highest pay employees.

BLab is also involved in creating state-by-state legislation so a company founder can designate an organization a benefit corporation.

[According to Benefitcorp.net, “benefit corporations expand the obligations of boards, requiring them to consider environmental and social factors, as well as the financial interests of shareholders.”]

I decided I wanted to create an international network of entrepreneurs, investors, scholars, and students of social and environmental innovation who were systems-minded.

Beyond the essential, holistic nature of systems thinking, in impact entrepreneurship, systems thinking is also related to what I and others call “global sustainability context.” The United Nations’ Sustainable Development Goals (SDGs), for example, aim to articulate context for both social as well as environmental challenges globally.

Put other ways, systems thinking is an “ecological” rather than simply a “biological” approach. It involves a metaphorical mindset —where one seeks to identify and be guided by relationships between things—rather than simply a literal or linear one.

How do you define impact entrepreneurship?

Impact has a couple of definitions. One is “the rigorous application of blended value.” So, an impact entrepreneur (or an impact investor) is one who practices an active blending of environmental, social, financial values to create a new living gestalt for business culture and activity. In a metaphorical or spiritual context, impact is defined as “transformation.”

Impact entrepreneurs understand not only the importance of building social enterprises, but that we have to be very systems-minded about it and collaborate with a whole range of others.

I created the term impact entrepreneur, [which I] also refer to as “social entrepreneurship 2.0,” because there was a hole in the story for me. Based on my experience as a social entrepreneur, I felt like I was butting my head against a dominant business paradigm that was largely antithetical to what I was trying to do [as a social entrepreneur].

The dominant paradigm then [and now] was a single bottom line, profit-minded focus, and what I was trying to create is what we call “triple bottom line” or “blended value.”

I started the impact entrepreneurship group on LinkedIn six years ago and it now has over 14,600 members. We grow by about 100 people per week and it’s truly global. There are obvious concentrations in places like San Francisco, Boston, New York, London, and Switzerland, but there are also a lot of people from India, Africa, South America, and Asia.

As the network grew, early stage companies with different kinds of business development needs surfaced. I created Impact Entrepreneur LLC, a consulting company, in 2015.

Who are you consulting with currently?

Tom Chappell, the founder of Tom’s of Maine and a legendary social entrepreneur, started a sustainable clothing company in 2009 called Ramblers Way [located in Kennebunk, Maine]. Initially, the clothing was distributed through independent retailers. The margins weren’t big enough, so [the founders thought]: What if we try a direct to consumer model with company owned stores and a website where we can really educate the customers about the values of this company?

Ramblers Way opened a pilot company-owned store in late 2015 and found the intimacy with their customers was incredibly valuable. They are in the midst of a pivot toward an entirely direct to consumer model and just opened the second and third stores in Hanover and Portsmouth, New Hampshire. The early numbers are very, very positive.

I’m also working with PowerGrow, a seed stage Arizona-based company that uses renewable energy to make commercial greenhouses more efficient, and Himalayan Wild Fibers, an Oregon-based company that has developed the most beautiful clothing fabric from a wild-growing nettle that grows profusely in the high Himalayan mountains of Nepal.

What is your vision for the Impact Entrepreneur Center for Social and Environmental Innovation?

I’ve been working with a small team together to launch the Impact Entrepreneur Center for Social and Environmental Innovation, which is still in the pre-brick and mortar phase.

The center has three parts to its mission:

  • To be a remote learning home for our vast expanding global network.
  • To be a year round gathering place for impact investors and social entrepreneurs in the Northeast Corridor, including Boston and New York City.
  • To test and develop what we’re calling a “regional impact economy” model that is replicable.

We’re proposing to Western Massachusetts that we create an economy with an abundance of triple bottom line businesses fueled by a wide range of impact investments. [The towns and cities that make up the Berkshires] are having tremendous difficulty keeping young professionals around. Population is dropping overall, and there is also a weak infrastructure to support entrepreneurship. At the same time, there is deep seeded social and environmental awareness in the region, that provides fertile soil for building an impact economy.

Our first phase involves doing a lot of economic mapping, data crunching and looking at the existing trends in the Berkshires, as well as launching a conference series, starting with an upcoming event focused on sustainable food and innovation.

A big part of what we’re working on with the Impact Entrepreneur Center is, rather than trying to be the new Silicon Valley or the new Route 128 corridor, to build a vibrant 21st century economy that grows from the Berkshires’ historical contributions to social and environmental thought and action.

For example, we have the first community supported agriculture farm in the country. We have the most advanced local currency experiment at the Schumacher Center in Great Barrington, Massachusetts. There’s a history of social and environmental innovation [in the Berkshires] that runs pretty deep.

Did you have an “a-ha” moment when you realized you wanted to focus on social and impact entrepreneurship?

The evidence is out there in abundance—we have to change capitalism. Capitalism’s emphasis on the single bottom line and unrestrained consumption in a very unconscious way is destroying the planet. And yes, you can make reasonable arguments that capitalism has brought many people out of poverty and plenty of other good things. But from a sustainability context, we’ve got big problems, and government and the nonprofit sectors do not have the resources to grapple with these challenges by themselves. Business and capital markets need to play a central role.

I got hooked on impact investing when I became exposed to the systems-oriented thinking within the think tanks that were developing the B Corporation structure and impact investing in 2006 and 2007.

What motivates you?

I have three kids, and I want them to live in a world that is rich with not only   human interactions and economic stability—but rich in terms of life and diversity.

How do you think impact investing will evolve moving forward?

There are a lot of positive things happening in the world. The variety of investors getting involved in the [impact investing] space is growing. There are a number of colleges and universities, like the Isenberg School of Management at UMass Amherst, that are developing serious social entrepreneurship and impact investing programs.

There are also global developments that are extremely promising such the release of the United Nation’s Sustainable Development (SDG) Goals  in 2015.

Both social entrepreneurs as well as impact investors are increasingly using the 17 SDG goals as a guide for their enterprises and investment activities. I think that’s incredibly helpful.