Cartography: Germany I

Cartography [n.]: Mapping, review

My trip through Germany in April 2015 gave me the unique opportunity to speak to eight support organizations in all four corners of the country: North, South, East and West. Six of them focus their activities on Germany and selected cities within (Social Impact Labs, Heldenrat, Impact Hub Berlin), two work with social entrepreneurs internationally (Yunus Social Business, The DO School), and Social Entrepreneurship Akadamie in Munich caters to both national and international social startups offering different programs.

Local & national programs

Social Impact Labs are very similar in the services and benefits they provide as part of their support program Social Impact Start. Locally, though, each Lab has strong local partners and runs pretty self-sufficiently. I wonder if any plans are in place to make use of their Lab-network across Germany (not to mention their program-partnerships with Impact Hub Zurich and Vienna!). The Impact Hub network sets a great example for sharing knowledge and experiences among their Hub facilitators and members (though I still don’t exactly know what that looks like behind their closed doors. Did my Honorary Membership invite get lost in the mail?).

Though still young, Impact Hub Berlin is gaining a lot of traction and seems to have found their niche in the German capital. Their new space is great, no question. Let’s see what kind of programs Leon ad his team manage to line up in the months to come and I shall check back in to see how things are going.

Impact Hub Berlin 2

Impact Hub Berlin

When I first started my research into the field of social venture support organizations, I insisted on the category of pro-bono consultants solely because I had heard of Heldenrat. Strictly speaking I am looking at structured support programs for social entrepreneurs and one could argue that they only partly meet this definition. At the same time, they have a process in place of helping out struggling social entrepreneurs and charities. They are able to fill gaps in the support landscape and connect startups in need with relevant support organizations. I have tremendous respect for the team of volunteers around Tom and Birgit for devoting their free time to being volunteer advisers for startups and nonprofits in need.

International Programs

As far as internationally-oriented programs go I spoke to Yunus Social Business, the DO School and Social Entrepreneurship Akademie. Yunus Social Business is headquartered in Frankfurt and manages their core operations from there. There was little opportunity for insights into their programs at work which take place in seven countries around the world. However, their attempt of using their participants’ feedback to inform their program is remarkable even without my field visit. This seems like an easy and obvious mechanism for many of us who I’m sure have at least heard of the Lean Startup Approach, yet Yunus Social Business was the first social venture support organization who was able to make concrete statements about the effectiveness and relevance of their training schedule and services by gathering feedback from their participants.

Starfish-24-1700x945

DO School Fellows of the Green Store Challenge

While working at the DO School over the period of 18 months I was lucky to work closely with several cohorts of social entrepreneurs. Their one-year program goes beyond supporting them in developing a plan for a social venture (during their ten weeks in Hamburg) and implementing it (ten months after) in their home communities. A lot of work within the program is dedicated to ideation, facilitation and developing participants’ personalities. After all, for the ten weeks in Hamburg, they live and work together 24/7. It’s fair to say that the dedication of Romy and her team make the difference in this program.

How many #SocEntSupport programs assess their relevance and effect through participant feedback? Click To Tweet

Social Entrepreneurship Akademie at the opposite (South) end of the country sets a good example of building up strong partnerships to secure the financial sustainability. Speaking to Kristina I realized what energy (and philanthropic capital) mutually-beneficial partnerships can bring to the table. With their active engagement with the European Venture Philanthropy Forum and the Global Social Entrepreneurship Network I think of Social Entrepreneurship Akademie as one of the agenda-setters in the field in Germany, and Europe.

 

Spotlight: Carolin Eissler

Caro Eissler profile

What drives you?

Every day, I am surrounded by people who burn for something and are passionate about their work. I love being a supporter for them, connecting different people and issues. I’m not an entrepreneur myself.

Biggest SocEnt trend you have seen in the last 5 years?

At the Social Impact Lab Frankfurt we recently had a lot of inquiries from universities and high schools who are interested in the field of social startups and social innovation from an academic view. It is good to see, that social innovation is an interesting field of study for higher education.

In Germany, social entrepreneurship is a rather current movement in civil society, so theses little trends are symptoms for the recognition of social entrepreneurship as a concept to overcome challenges and as a way of life. But what is still missing is putting (social) entrepreneurship in the curricula for schools so that kids are empowered from the beginning to create change.

Currently reading

The Internet of Things, by Jeremy Riffkin

Background

Caro has a degree in European Studies and International Cultural and Business Studies. After an internship at Ashoka she joined the Social Impact Lab Frankfurt. “When I worked at AEGEE I did my own projects and could try out a lot of things that focused on intercultural exchange. That was pretty empowering.”

In May 2915, Caro was featured on The Changer, see her interview here (google translate will help the non-German speakers).

 

twitter@SocialImpactLab

 

Field study: Germany

Field study [n.]: Preliminary research

First things first: Apologies for the excessive use of footnotes in this post. I want to give credit where it’s due and not get into trouble for plagiarism. I worked through a number of studies – some of which are great to dive deeper into the topic – and have summarized their main points. You will find MY observations at the end of this series in the Cartography post.  

My trip through the Netherlands and Belgium was followed by a month in Germany which gave me some time to freelance and the opportunity to visit support organizations in Frankfurt, Berlin and Hamburg. Having worked in the German social enterprise support sector, I had to challenge myself to step out of my preconceptions and try to see the sector for what it is.

I was astonished to find how much research had already been done on social entrepreneurship in Germany – it was almost daunting to even start diving into the topic for fear of what I would find, and how much. Here are some key insights from the studies I looked at:

Social Entrepreneurship is not new to Germany, some #SocEnt are as old as 30 years. Click To Tweet

… but they often don’t identify as such. The five most relevant social issues in Germany – according to a SEFORÏS report1)Wolf, Myriam (2014). The State of Social Entrepreneurship in Germany SEFORÏS Country Report. (based on another study by the German Ministry for Education and Research2)Müller, Susan, Dominik Rüede, Kathrin Lurtz, Hartmut Kopf, and Peter Russo (2013). Deutschland 2030: Herausforderungen als Chancen für Soziale Innovationen. World Vision Center for Social Innovation, Wiesbaden.) are

  1. Labor market: unemployment and skill shortage
  2. Education: coupling of socio-demographic background and level of education
  3. Income and wealth: increasing division between rich and poor, failure to generate income to secure existence
  4. Environment: Coupling of resource use and economic growth
  5. Health: healthcare provision (aging society) and lifestyle diseases.

Unexpected findings

Apparently, strong welfare organizations make it tricky for social entrepreneurs to find their niche and establish themselves as a unique field. It’s almost like the “market for addressing social issues” is already among organizations like Deutscher Caritasverband (German Caritas Association), Arbeiterwohlfahrt (workers’ welfare association) or Diakonie, making it difficult for new-comers such as social entrepreneurs to position themselves and try out new approaches.3)Wolf, Myriam (2014). The State of Social Entrepreneurship in Germany SEFORÏS Country Report.

Risk-aversion of Germans: “German society tends to be risk averse. Risk averseness is one of the major cultural factors impeding entrepreneurial activities and ultimately also influencing availability of funding for social enterprises.”4)Brixy, Udo, Rolf Sternberg, and Arne Vorderwülbecke (2013). Global Entrepreneurship Monitor (GEM) – Länderbericht Deutschland. Hannover. I will add that in former East Germany – having been born and bred there myself – individual behavior was not necessarily encouraged. Under socialism, the market was heavily (if not exclusively) regulated by the state – going the extra mile didn’t pay off in most cases. During the first 19 years of my life, I didn’t know a single entrepreneur.

Under socialism, entrepreneurship was not encouraged. Does it show in today's #SocEnt sector? Click To Tweet

I believe this mindset is still deeply rooted in East-Germans and hampers their entrepreneurial spirit. I wouldn’t assume this is true for all Germans that lived on the Eastern side of the wall, but it is one influencing cultural factor.

Other Influencing Key-Factors

According to the Global Entrepreneurship Monitor 2013, Germany ranks high in terms of physical infrastructure, government programs and protection of intellectual property – factors which create a nurturing environment for entrepreneurs – while ranking low with respect to entrepreneurial education in primary and secondary schools, labor market conditions, and knowledge and technology transfer – factors that don’t create this kind of favorable environment.5)GEM. Global Entrepreneurship Monitor 2013. Social enterprises can choose from over 20 different legal forms within the German system, none of which is exclusively dedicated to, nor apparently suitable for, social enterprise.6)Wolf, Myriam (2014). The State of Social Entrepreneurship in Germany SEFORÏS Country Report. Instead, social enterprises register as

  • Stiftungen (foundations),
  • Vereine (voluntary associations),
  • GmbHs (limited liability companies) and
  • Genossenschaften (co-operatives)7)Zimmer, Annette & Bräuer, Stephanie (2014). The Development of Social Entrepreneurs in Germany. Westfälische Wilhelms University, Germany.

which makes a head-count very difficult. There also is the legal form of a charitable limited liability company (tax exempt status) which is not mentioned in this study. In 2011, Wissenschaftszentrum Berlin counted

  • 580,000 voluntary associations
  • 18,000 foundations
  • 9,000 limited liability companies with tax exempt status, and
  • 8,000 cooperatives in Germany.8)Priller, E., Alscher, M., Droß, P. J., Paul, F., Poldrack, C. J., Schmeißer, C., & Waitkus, N. (2012): DritteSektor-Organisationen heute: Eigene Ansprüche und ökonomische Herausforderungen. Ergebnisse einer Organisationsbefragung. Wissenschaftszentrum Berlin für Sozialforschung. Berlin.

This leads to a total number of 615,000 organizations in the Third sector. Not bad for a country with a population of 80 million. However, the lack of a separate legal form for social enterprise results in them remaining un-differentiated from other third sector organizations such as charities or even parental or neighborhood initiatives. To be honest, this troubles me.

How important is a legal form for #SocEnt in Germany? Click To Tweet

On the one hand, this lack of differentiation makes it difficult to promote the social enterprise concept in an environment that is already heavily influenced by strong welfare organizations. On the other hand, I argue that legal forms don’t make social enterprise. I believe that mission and impact will dictate legal form, not vice versa. Thoughts anyone?

Scheuerle & Bauer give an insight into financing mechanisms of social enterprise in Germany arguing that certain issues lend themselves more to earned income generation ( e.g. related to environment) than others (social services).9)Scheuerle, Thomas, and Albrecht Bauer (2013). Social enterprises as an investment? Frankfurt.

Financing

Financing structure of social enterprises in Germany. Source: Scheuerle, Thomas, and Albrecht Bauer (2013). Social enterprises as an investment? Frankfurt.

 

What social enterprise support?

None of the reports I studied mentioned support organizations. The only reference to our work, my dear readers, is the last sentence of chapter 4.2 in the SEFORÏS study (2014, p. 11): “Entrepreneur support models, however, only recently started to emerge in Germany but are perceived as highly important for the further development of social entrepreneurship.” Amen. Though I wonder how the authors define “recent”. After all, Germany has a number of strong players in the support sector for social entrepreneurs (swing over to The Changer via google translate for a longer list):

Reason enough for me to visit some of them and learn more about their different approaches to supporting social entrepreneurs around Germany and abroad.

References   [ + ]

1, 3, 6. Wolf, Myriam (2014). The State of Social Entrepreneurship in Germany SEFORÏS Country Report.
2. Müller, Susan, Dominik Rüede, Kathrin Lurtz, Hartmut Kopf, and Peter Russo (2013). Deutschland 2030: Herausforderungen als Chancen für Soziale Innovationen. World Vision Center for Social Innovation, Wiesbaden.
4. Brixy, Udo, Rolf Sternberg, and Arne Vorderwülbecke (2013). Global Entrepreneurship Monitor (GEM) – Länderbericht Deutschland. Hannover.
5. GEM. Global Entrepreneurship Monitor 2013.
7. Zimmer, Annette & Bräuer, Stephanie (2014). The Development of Social Entrepreneurs in Germany. Westfälische Wilhelms University, Germany.
8. Priller, E., Alscher, M., Droß, P. J., Paul, F., Poldrack, C. J., Schmeißer, C., & Waitkus, N. (2012): DritteSektor-Organisationen heute: Eigene Ansprüche und ökonomische Herausforderungen. Ergebnisse einer Organisationsbefragung. Wissenschaftszentrum Berlin für Sozialforschung. Berlin.
9. Scheuerle, Thomas, and Albrecht Bauer (2013). Social enterprises as an investment? Frankfurt.

Social Impact Lab Frankfurt

After a week back in Germany, I stopped in Frankfurt to visit the local Social Impact Lab. Social Impact itself is a social enterprise founded by Ashoka Fellow Norbert Kunz. Their first Social Impact Lab was opened in Berlin in 2012, followed by Hamburg in 2013, Frankfurt and Leipzig.

As the third of its kind in Germany, Social Impact Lab Frankfurt opened in January 2014. My morning consisted of an early train and the – once again – futile attempt of finding free wifi. Arriving at the Lab I walked past German and English speaking co-workers, and gratefully dove into this familiar space of do-gooders and changemakers.

At @SocialImpactLab, #SocEnt have a work space, receive training and mentoring for 8 months. Click To Tweet

Caro Eissler – host at the Lab – showed me around and gave me an insight into the different support mechanisms at play. They offer co-working and two programs for aspiring social entrepreneurs: “AndersGruender” and “ChancenNutzer”.

Social Impact Lab FFM

All Social Impact Labs hold a pitch event every three months in their locations across Germany to select the four to six most promising social business concepts. Successful candidates move into an eight-months incubation program that comes with a desk in one of the Labs, group sessions on various business skills run by start-up coaches, and individual mentoring by experts. Unlike Berlin and Hamburg, Frankfurt is not necessarily known for its start-up vibe, I was curious how things were going. “We were some of the first ones in this region to provide this kind of support to aspiring social entrepreneurs. Naturally, there was a lot of interest from potential participants right from the start. We are beginning to look into more strategic approaches to advertising our programs to find candidates that meet our criteria.” says Caro. What criteria you ask? Social Impact Labs generally look for social start-ups that

  • Address a societal issue,
  • Show potential for social innovation, and
  • Have a viable business model.

Relatively new in the sector, Caro hadn’t been sure she was an interesting interview partner, but when I asked her what she thinks makes a good support program, I knew she was. “An effective support program needs integrity and lead by example. How can you enable social innovation and sustainability if you are not living it? We work on eye-level with all founders and strive for a balance between structural input and freedom to let things happen, spur innovation. Further, I think granting aspiring social entrepreneurs access to networks is key to a good support program. It allows them to gain new perspectives, meet potential customers, mentors, collaborators, business partners.”

An effective #SocEnt support program needs integrity and lead by example. Click To Tweet

After a little tour around their humongous space, we get a chance to talk about challenges that a support organization in frankfurt faces. Caro: “Three things I am currently working on are

  1. Identifying follow-up funding opportunities for our start-ups,
  2. Finding a good balance between renting the lab for external events, organizing own networking events and keeping a good co-working atmosphere.
  3. Planning workshops that meet the needs and expectations of our entrepreneurs. People seem to think that workshops are the solution to everything while I am convinced that it’s all about assessing participants’ needs, and finding the right expert.”

In terms of programs, the Social Impact Lab in Frankfurt is not much different from the ones I would meet in Hamburg and Berlin in the weeks to come. I can’t help but wonder how such a structure can be used to exchange Lab-related learnings and experiences. Could they build up a knowledge base similar to that of the Hub network, become a micro-network within Germany’s larger support sector? I would address these topics during my field visits at the Lab Berlin a few weeks later.

twitter@SocialImpactLab

socialimpact.eu

Yunus Social Business

The interview with Yunus Social Business (YSB) was one of the first I ever held. It was in January 2015 during the Big Social in London. I remember meeting Daniel – executive and program director at Yunus Social Business – for the first time and being positively surprised by his genuine honesty about the opportunities and shortcomings of social entrepreneurship and the support sector (check out his spotlight!). A few months later, I was lucky to also speak to Bastian Mueller, head of partnerships, and get a detailed understanding of their program and objectives.

Program Insights

Yunus Social Business operates in seven different countries (Albania, Brazil, Colombia, Haiti, India, Tunisia, Uganda) and is headquartered in Frankfurt, Germany. They support social entrepreneurs that have a prototype of  a startup and need help in growing their business, look for partners and financial support. Participants are selected based on their written applications and face-to-face interviews. “We are trialing a bootcamp-style assessment center that resembles a two-day version of our accelerator. As part of our selection process, this allows us to see participants interact in a group and perform under stress.” says Daniel. Successful candidates benefit from a program consisting of training in business skills and social impact by external experts, mentoring, infrastructure support, access to third party support (e.g. legal local assistance), to markets and networks. The local staff of YSB acts as a program facilitator and supports on a process level rather through content and expertise. On average, eight to twelve out of 150 applicants make it into the accelerator. While programs are run locally, the team around Daniel and Bastian works from the German headquarters in Frankfurt.

At @Yunus_SB #SocEnt receive training, mentoring, infrastructure & network access. Click To Tweet

The program is facilitated during evening courses and – where location allows – in-person. Participants from remote areas participate online and via skype. “In general, our social entrepreneurs receive two days of training, one day of coaching and one day of mentoring per week.” explains Daniel. “In total, they go through six intense program weeks followed by two months of working in the field and testing their products during which they are mainly support by mentors and coaches. After the end of that phase, they receive two weeks of additional training that leads up to pitch day at the end.” Yunus Social Business invests in four to eight accelerator enterprises. On a non-dividend basis they invest between EUR 50.000 and EUR 200.000 through equity and debt-financing.

Making Impacts Comparable

One of the central topics Daniel and I got to chat about was impact assessment. “Everybody has a different idea how to assess impact and talk about it. It creates a lot of effort and extra work. If we agreed on a more standardized method with common reference points, we could speak the same language with investors, public agencies and corporates. We are trying to re-define business, not to make profit but to re-think society. By making our impact measures comparable, there is so much we can do to evaluate business on a whole new level and re-define capitalism.”  

YSB

Yunus Social Business locations outside Germany

Being critical with yourself

During my conversation with Bastian, I ask what he thinks makes a good support program for social entrepreneurs. “First of all, it needs to be customer-oriented. When offering support, always ask yourself what participants  really need at the stage they are in at the time of joining, and along the life cycle. Beyond that, I think it takes a) good mentoring, b) access to an international network and markets, and c) local supporters in the local scene.”

And they take that part seriously. Yunus Social Business recently ran a survey with their participants to understand how their fledgling entrepreneurs rated their program. The outcome included issues that participants feel they need most support with:

  • Deal negotiation
  • Access to Alumni and other Social Entrepreneurs
  • Access to other investors
  • Financing

As well as skills needed as an aspiring social entrepreneur:

  • Branding & communication
  • Accounting
  • Legal services
  • Talent sourcing/recruiting
  • Web design
  • Co-working

While I think ANY support organization should have these assessments in place, YSB is in fact the first one I have come across to actually do it. As soon as the white paper is published, check back here to learn more! 

The charming aspect about YSB – I find – is their ability to invest in start-ups they have worked with very closely. It allows for more informed investment decisions that factor in the entrepreneurs’ personality and business context which can be crucial in volatile environments such as Tunisia or Haiti. In the pipeline of social enterprise support, YSB works with more mature entrepreneurs guiding them on their way to investment readiness. But how do you find these mature entrepreneurs in countries with historically weaker support systems such as Albania or Uganda? I see great potential in formalizing pipeline partnerships in recruiting participants especially when working in several countries.

Mark your calendars!

Yunus Social Business is organizing this years’ Global Social Business Summit on 5 & 6 November 2015 in Berlin:

The Global Social Business Summit is the worldwide leading forum for social business. This event globally accelerates the awareness of social business, fosters discussion and collaboration between practitioners and stakeholders, as well as presents and develops best practices.

 

twitter@Yunus_SB

yunussb.com

Spotlight: Bastian Mueller

Bastian Mueller profile

What drives you?

Being able to enjoy the work I do is the most important thing for me. I am lucky to work with great people in the sector who inspire me and from whom I can learn. I love the change in perspective when addressing social issues from an entrepreneurial angle.

Biggest SocEnt trend you have seen in the last 5 years?

There has been a strong trend that social business is the next big thing and it’s so much better than charity. This brought a lot of high expectations about it being a world-saver. Let’s be honest, social business can only do so much, not everything has a business model (e.g. education, refugee work). I also think that the support industry works too much in a silo: You see the same people at the same conferences. I think we need to start looking for connections outside the industry, such as in the corporate sector, charities, and so on.

Currently reading

The Power of Social Business, by Prof. Muhammad Yunus

Background

“I have always been interested in management with a social purpose. I spent some time working in international development and classical industry before becoming a part-time entrepreneur. I set up a pro-bono matching platform for experts and non-profits called re:frame. After almost two years, re:frame merged with BMW Foundation and continued operation under Proboneo. While I managed this transition I realized that it was time for me to do something else, and I joined Yunus Social Business.”

Want to hear more? Visit The Changer for an interview with Bastian!

twitter@Yunus_SB

 

Spotlight: Daniel Nowack

Daniel Nowack profile

What drives you?

I am driven by a fascination about the creative potential of entrepreneurship to solve the problems that really matter. With a great team on top of that, it’s just fun to go to work and build something that ideally leaves behind a somewhat better world than we inherited.

Biggest SocEnt trend you have seen in the last 5 years?

The maturity that the concept has achieved, not just recognizing but sorting it out and getting more serious about it. People are starting to wrap their heads around how to evaluate impact and consolidate as an industry. It has become less of a jungle.

At the same time, we have seen a lot of premature “celebrationists” who praised the success of social entrepreneurship before any results were assessed and created. When YSB/Grameen started we had to find a selling point in order to get the interest of corporates and the public with little substance. Now we are in a position to focus more on the things that really work. I think we should stay critical with ourselves and manage expectations. Social entrepreneurship is not a silver-bullet, it’s a great idea for now, let’s see what we can do. Undersell, over-deliver.

Currently reading

Reinventing Organisations, by Frederic Laloux (website)

Background

Daniel spent seven years in online marketing before he founded his own web development and online consultancy for SMEs. After a five-year stint as Financial Analyst, he joined Grameen Creative Lab and eventually Yunus Social Business in 2013. “During my time in Berlin I worked with an incubator where I experienced a lot of trial and error in business incubation. I designed a program, got a good sense for the reality of a startup entrepreneur and what kind of people you should try to attract (mentors and advisers, investors).”

twitter@Yunus_SB