The world is seeing what many from marginalized communities have known too long, American capitalism does not work for all of us. In the wake of the COVID-19 pandemic, we are seeing how fragile this system is and shuddering the economy.
Those affected and at a disadvantage are disproportionately people of color — black, brown, Latinx, immigrant, rural — working-class people.
We are learning that the same corporations that called us “family” are letting us go leading to 6 million filings for unemployment, leaving many without healthcare, and vulnerable to food, health, and financial insecurity.
Yet, We hear people worrying more about the economy than the people themselves. Ironically the country that has been calling to deport millions of people, keep immigrants out, is now calling the same people “essential workers” asking them to risk their lives to keep us all fed, safe, and caring for our health in this time.
I could go on about the issues we see in detention centers, prisons, and education coming to light. Overall, we are seeing so many problems come full center into the mainstream that many of us have been aiming to tackle for years now.
But every problem is an opportunity for a new solution, disruptive solutions that may have not been attempted otherwise.
In college, I took a sustainable business course as part of my globalization concentration where my professor urged us to ask people in a community what they needed instead of imposing our views. It is here, I was introduced to the concept of microfinance, Muhammad Yunus, and that overwhelmingly people need access to capital more than anything.
Muhammad Yunus is an economist, Nobel prize winner, and has a mission to eradicate poverty. Yes, a lofty mission which he started with $27 that he lent to women to break them free of payday loans and focus on their microbusiness. This gave birth to Grameen Bank and social business movement which has expanded worldwide from Bangladesh. As an idealistic twenty-something, I was hooked to this concept and in 2013 I took my first job with Grameen America to help implement the model across the US and Puerto Rico.
Growing up as a child of the diaspora in an entrepreneurial Guatemalan family that worked in both traditional businesses and nonprofits, there was something that wasn’t connecting between our values and American values. Since, I’ve realized our values lay in impact and community, which I believe is the aim of many of us first-gen Americans and why a social business might be the answer we’ve been looking for.
So during this isolation time, I decided to re-read the initial book that inspired me to take a different path than most into technology today. As I thought of how I will continue to do my work and build my company in the midst of a move I found my old copy Muhammad Yunus’ book “Building Social Business: A New Kind of Capitalism that serves the world’s most pressing needs” and isn’t that exactly what we need at this moment?
As Yunus says, “In a social business, the aim is not to maximize profit, crus rivals, or grow for the sake of growth. The aim is to deliver a social benefit with smart financial and managerial policies as a means to that end” (Yunus, Business Social Business).
What no maximizing ROI? Well, in short, The premise of social business is to create a new form of capitalism that serves our community and builds a better world. Many businesses aim to create a better world through their services following the traditional concepts of business and profit. However, social Business differs in that it measures impact rather than profit.
Well isn’t that just a non-profit?
Well no, many nonprofits rely on grants and charity to function and stay afloat and provide charity to the people they serve. The goal of a social business is to be self-sustaining and empower the poor and marginalized to receive accessible services. Like a traditional business, there needs to be a profit and this is used to scale the business not to increase dividends to the investors or owners. There is no increasing revenue for any investors, those that fund the business get only what they invested back. However, Yunus believes that this is more rewarding knowing that you are part of actually making improvements.
This isn’t bound to any one industry and the goal is to think of a problem you want to change then start small and local. Think of the most cost-efficient and low investment way that you want to start a project whose ultimate goal is to improve the lives of those who need it most. Then grow from this.
It’s a simple concept, which many bootstrapped startups are all too familiar with finding a minimum viable product, being lean with low overhead expenses, and reinvesting the profits generated back into the business to scale.
I think many people building today are forced to think like this more, many of us that do not have family and friends who can invest or provide seen money have had to follow this model regardless. But shouldn’t all businesses have a social good component to it? Shouldn’t all businesses strive to leave this world better than how we left it?
Even more so, what if we focused less on maximizing profits for investors, shareholders, and the owners and instead focused on reaching self-sustainability while maximizing the impact on who we are serving and their communities.
Right now, with all the talk of the economy needing to stabilize, the markets crashing, the ultimate truth is there is no market without people. We need to focus first on what people need. This global pandemic has shown us that no one is immune and that we are only as strong as our society’s most vulnerable.
So how do we create businesses that allow for innovation in healthcare, education, and technology that take care of people’s basic needs? As Yunus says “you can start by listing to the problems of the world? You could easily fill up a whole notebook. Pick any one of these and ask yourself “can I design a social business to solve this problem. That’s the beginning”. Maybe your experience, talents, and skills hold the answer we’ve been needing.
I think many people more than ever are focusing on this and life will be a lot different than we knew — maybe now is the time that we can adopt a new business model that will bridge the gaps in inequality. I believe the answer in any approach to business is fulfilling people’s needs first, with healthy empowered people we can thrive together.
You can find the book here :