Q&A with Alberto Masetti-Zannini: Development Director, Impact Hub King’s Cross.
1. Impact Hub provides a physical space for entrepreneurs to work and make connections. What do you see as the key benefits to entrepreneurs, offered by the Hub?
Impact Hubs are more than just physical spaces. We are a global network of centers for social innovation and social entrepreneurship. The first Impact Hub was started in London in 2005; we now count 70+ Impact Hubs in world cities across six continents, with a significant presence in Europe. As of December 2014, the Impact Hub Network has over 8000 members, and its membership is growing at a 40% annual rate. Impact Hub members are typically start-up social entrepreneurs and innovators, some in early stages of development, others growing and scaling up. Each Impact Hub’s local network is enriched by a number of professionals, consultants, corporate employees, academics, public sector representatives, students and many other individuals passionate about creating social impact.
Impact Hubs thus create and nurture networks of individuals working at the cutting edge of social innovation, social entrepreneurship and the impact economy. By building a network of spaces and communities – collaborative, inspiring, mixed-use, resource-rich and diverse – we have established a dual global and local ecosystem ideal for the growth of social innovation and start-up businesses that tackle pressing social and environmental issues.
The support we offer to our members ranges from access to physical spaces where they can work, meet and hold events, to access to these local and global networks of talented individuals who can become partners, clients, collaborators, co-founders and providers for anyone starting a project or a social enterprise. We run a number of incubation and acceleration programs specifically tailored to start-up social entrepreneurs, such as the Impact Hub Fellowship, which has been replicated 19 times across the world, and has supported early-stage social entrepreneurs and helped them turn their idea into impact.
2. At Impact Hub you see both social and fully commercial enterprises. In your view, what are the different challenges faced by social enterprises when compared to traditional commercial enterprises?
Starting a business poses huge challenges, regardless of whether its aims are purely social, purely commercial or a combination of both. There are a lot of questions that start-ups need to answer in order to succeed: how realistic is their business model? Is their founding team sufficiently skilled and motivated? Where is the initial investment/funding going to come from? Have competitors been assessed well enough? What is their market entry strategy? It is really hard, especially at an early stage, to be able to answer all these competing questions, and especially hard to do it in an environment that is resource-scarce and relies on founding team’s ability to support themselves through second jobs, supportive families or a little cash saved up from an inheritance!
Socially-focused start-ups have a further layer of important questions to answer: what pressing social problem are they trying to solve? How are they going to blend social and financial returns into one credible business model? How are they going to enter an even more competitive financing market that isn’t as well structured as the conventional one is?
Therefore, social start-ups have much more early homework to do to become a viable social business. They have to make sure their model is sustainable, and at the same time they have to ensure and measure their social impact in order to be considered truthful social enterprises. Sometimes this dual objective – maximising financial returns and social impact – can be too ambitious a goal for some, but when it works it’s like magic. It can have a transformative impact on people and planet.
3. Have you witnessed any change in attitudes to social impact and do you see a swing towards social impact as a key measure of success for a business enterprise?
HBO recently launched a TV series called “Silicon Valley”, a sitcom focusing on the volatile world of startups. In it, the CEO of a Google-inspired tech giant called Hooli proclaims that his first and foremost intention is to make the world a better place, and that making millions is less of a priority for him. Like in the sitcom, we hear a lot of these proclaimed intentions to improve the lives of people and planet from every corner of business these days. In truth, I fear a lot of this posturing is still close to window-dressing.
But I do think things are changing. I don’t expect large corporations to switch to a triple-bottom line approach overnight, but many are taking their social impact more seriously than ever. What excites me most, however, is the world of start-up social entrepreneurs, because they are building businesses that have social impact enshrined into their DNA. The global economy needs to be rebuilt on entirely new foundations, and these are what these new social enterprises are building. Just like many of the giant businesses that dominated the 20th Century are being overtaken by technology-driven businesses that are reconfiguring the world’s economy, and many have in fact already disappeared. This is a typical regenerative trait of the economy, and the same trait that will allow the emergence of new forms of economic exchange based on a new set of values that are emerging today.
If the economy is a social science, therefore, and if we are to understand the deep changes of the economy not just in the last 20 years (since the advent of the Internet) but also in the next 20 years, we need to combine a better understanding of how technological progress is going to reshape consumer’s behaviour (and therefore the market), with a deeper understanding of how social change is making people value things differently. In 2006, for example, UK expenditure in Fairtrade goods overtook spending in cigarettes and alcohol. We can expect more shifts of this sort to happen in the economy as ethical values become more central to the economy.
4. Why do you think social enterprise has been so successfully acknowledged and embraced in the UK?
There is a long tradition of social economy in the UK, like in many other EU countries, but unlike places like Italy or France, where the social economy has remained anchored to older models (for example cooperative forms), the UK has stimulated a conscious rethinking of the role the social economy plays within the bigger picture of the national economy. It has been less fixed about “what is right and what is wrong”, and more keen to test “what works and what doesn't work”. This attitude has trickled through to where it matters – at the heart of how the government (including local municipalities) – and it has influenced the way funds have been spent to reshape the social economy. If we look at the role played for example by Nesta and UnLtd in stimulating the growth of the sector, we quickly realise that creating intermediary organizations that are able to support and fund social entrepreneurs is a crucial step in kick-starting a new economic approach to social change. This is precisely what the UK government did when it backed the creation of both organizations through publicly-funded endowments. There are of course many more aspects to this UK story, and some have raised concerns about a progressive “privatization” of the social enterprise sector, but from where I stand – from the point of view of social entrepreneurs who really want to blend purpose and profit – the UK remains one of the most exciting and supportive countries where to launch and scale a social-purpose organization.