Anika Horn On Advice And Insights For Social Enterprise Startups

From ideation to established companies Anika Horn supports purpose-driven founders and their teams in successfully establishing, managing and growing socially responsible companies.

Anika currently calls Richmond, Virginia, home but travels frequently between the United States, Canada, Europe and Australia.

Through her work with Thrive (a local mentoring program), Unreasonable Lab VA (Virginia’s first mini-accelerator for social entrepreneurs), Venture Creation University at Virginia Commonwealth University, CO.STARTERS VA (a pre-accelerator for socially responsible business) and Lighthouse Labs (a nonprofit accelerator for high-growth companies) Anika helps local founders validate their business models through one-on-one mentoring and acceleration programs. As B Keeper for local IT consultancy Impact Makers Anika helps build and grow the community of Certified B Corps and Benefit Corporations through networking, speaking engagements and presentations, events, online communication and thought leadership. Anika also heads Communications and Outreach for the Startup Champions Network representing the Virginia startup ecosystem.

Before moving to Richmond, Anika worked in the nonprofit sector, consulting, international development, higher education, and startup acceleration in Germany, France, and Australia. Anika’s research on international social enterprise support can be found on www.socialventurers.com

Anika shares her experience working with social entrepreneurs and changemakers, providing great tips and ideas, as well as insights into the global purpose-driven startup sector.

Highlights from the interview (listen to the podcast for full details)

[Tom Allen] - To start things off could you please share a bit about your background and what led you down the path of social enterprise and startups? [2:55]

[Anika Horn] - I was born and raised in East Germany. After having lived in such a small village in the East German countryside I knew I wanted to go and explore the world. So among other things, I found myself in Thailand teaching English. I decided that I wanted to devote my career to make a difference helping people less fortunate than me. What do you do when you want to make a difference for other people? You go and work for a charity or development aid. But I soon realised that the money we were pouring into those programs wasn't really making a lasting impact.

It felt like we were putting a band-aid on things rather than addressing the root cause.

I was a little disillusioned and found that that wasn't going to be my way of making a difference in the world.

After those experiences I found myself working in a Corporate Social Responsibility consultancy and for the first time realised how powerful the combination of business and social/environmental objectives can be if you really bring those together. You can show a business that they're going to fair much better if they keep in mind the impact that they are making on their environment physically and socially. That's a very powerful driver to make a difference.

I started getting some experience talking to social entrepreneurs, reading up and doing research and at that point I went back to university, got a Masters in Science and Sustainability and crafted that around using business as a force for good from very different angles.

I especially fell in love with social entrepreneurship because it wasn't just an add-on, but the whole reason for those businesses was to make a difference to other people and I found that very powerful.

I found that I'm very good at helping social entrepreneurs get off the ground and test their ideas, so I moved more into the startup phase of social entrepreneurship and have been there ever since.

You’re involved in a range of interesting startup initiatives. Could you please tell us more about those which are delivering positive social impact? [5:27]

I moved to Richmond, Virginia in July 2015 and I had just finished up a research trip for Social Venturers where I had travelled around the world to find out what the best practices were in supporting social entrepreneurs around the world. I knew very well what was working in social enterprise support in London, Berlin, Amsterdam, New York, Melbourne, but I didn't know what the best approach would be for a mid-sized city like Richmond. So putting on my lean startup hat, I knew that we'd just have to try a few different formats and that's what we did. [Anika talks about the Unreasonable Lab and the support work they do, along with the learnings from running that initial program. She talks about the various iterations of different programs in Richmond that she is involved with and the learnings she has got along the way.]

What are some of the biggest challenges you’ve seen purpose-driven startups face and how did they navigate around them? [8:05]

Three things come to mind:

1. They still battle with the fact that they are often mistaken for charity. Because as soon as you use the term 'social', people think of charity and non-profit work.

Making clear that they are first and foremost a business that also has a social and/or environmental impact is an issue.

2. The social entrepreneurs (especially those in their early stages) still struggle with their storytelling, because they know they want to lead with their value proposition but still need to tie in that story in an authentic way and communicate the impact they are trying to create.

3. And thirdly...

It's hard for social entrepreneurs to raise investment.

Especially in Richmond which is a very traditional city. There are two ideas about investment; either you invest financially into a startup, or you use your philanthropic money to a give to a charity or foundation. What we've been trying to create is a better understanding that they are not mutually exclusive and that by making a smart investment with a ROI, you can also create a social impact by investing in a company that does not just maximise profit, but has some love for creating a social and/or environmental impact in the community.

What advice would you give an aspiring social entrepreneur who has an idea but is unsure of what steps to take to move it forward? [9:38]

I think the best way [to start a social enterprise] is to go and talk to your customers.

I've met a lot of social entrepreneurs who are more 'hero-preneurs', who know they want to be a social entrepreneur, and they are going to figure out what issue in the world they want to solve along the way, but I don't think that's a healthy approach to really making an impact.

Figuring out whether that problem that you are seeing is a problem that only applies to you or to a bigger target audience is the first step.

Then really try to understand the problem in depth. By that I mean, 'how does it affect the beneficiaries or target audience in their daily life? How does it make them feel? What are their pain points? What are they hoping to gain from a solution that you are creating for them?'

I think it's crucial for any social entrepreneur to create a solution with their target audience and not for them.

What are the biggest changes you’ve seen in the social enterprise sector in the last 5 years and where do you see social enterprise heading into the future? [10:48]

I wouldn't want to try and compare the social enterprise sector in Australia with the one in Sweden or New York City, so it's a hard question. One thing that I'm finding myself a little careful or suspicious of is the over organisation in the sector that I think is stifling the progress.

I'm not a big fan of institutions that want to serve social entrepreneurs but are static and bureaucratic.

Because social entrepreneurs are entrepreneurial; they constantly change and adapt and need to be very lean in what they do.

Having big organisations and big networks that are trying to regulate, even though that's really important, is dangerous for the sector.

Because it means we're going to be less able to respond quickly and I think this bureaucracy is just a mindset that doesn't really fit very well with what social entrepreneurship and especially social innovation is all about.

What advice would you give to someone who is looking to get sustainable funding for their initiative? [12:07]

I think this is almost true for any kind of startup.

Have metrics in place and be able to prove that you have traction and some success.

So even if all you have a landing page, if you can show that you have had traffic on your page and people are willing to give you their email address, that is traction and you are proving to an investor that what you do is something that other people care about and want to engage in.

Picking success metrics early on and starting to track them rigorously is absolutely important.

Otherwise I wouldn't give anyone any money if I can't see that there is a real interest in the community.

Lead with how you are going to be sustainable.

There are so many heart warming stories out there and that's great, but if you're a social entrepreneur who wants to run a social venture be it for-profit or non-profit, I think every investor wants to see how their money is going to do good in the long run and not just be used up.

There needs to be a model for financial sustainability and I think that's what a lot of entrepreneurs are still trying to figure out.

Which countries do you believe are really leading the charge when it comes to social enterprise? What are they doing that you think other nations could adopt? [13:33]

The UK immediately comes to mind. They're several decades ahead of us, not least thanks to the government's early understanding of what social entrepreneurship can do on a large scale. The government as much as 20-30 years ago started giving out some grants that allowed for experimentation and the best support models for social entrepreneurship. If you have 20-30 years of experience in what works or doesn't work in your society in terms of empowering, enabling and training social entrepreneurs, you're way ahead of the curve.

They've really figured out how they can use social entrepreneurship not just as a grassroots movement, but as a tool to tackle the bigger societal problems that citizens usually expect governments to solve.

But tying in social entrepreneurs is a really smart way and I wish that more governments were following that example.

I have to say that Australia and the support organisations that I have met in Brisbane and Melbourne really surprised me. The one thing that really stood out to me was the very self-critical approach that was forward thinking about financial sustainability, teaching social entrepreneurship, innovation and design thinking in high school is a conversation we had, but that I hadn't come across in other countries and that was incredibly inspiring.

What actions have you seen governments take to help create a community of innovative social entrepreneurs? [15:40]

I think in general the role of government is to help set a framework that allows social innovators to experiment and fail quickly without doing too much damage on the way.

So set the framework and regulation, but then get out of the way because I don't think that government has a big role to play in getting deeply engaged in social innovation processes.

I think there is a step for them to help prepare the ground and reap the fruit, but in between I think that social entrepreneurs, innovators and changemakers are best left alone to figure out what works and what doesn't and then tie it back into the system once we know what works.

Are there any particular tools you use which have proven to be invaluable in the development and daily running of your different projects? [16:48]

I have a business model canvas hanging in my house which helps me keep track of what I'm trying to do and the different initiatives I'm engaged in. It helps me stay accountable and keep my eye on the big picture, because when you work day to day and you've got your head down in the nitty-gritty, it's sometimes hard to remind yourself why you're doing it and what success looks like.

I think that everyone who starts to understand the business model canvas and the value that's in it, finds that it's something that you can repeat in your everyday life and apply to everything you do. It has become a way of thinking that has really helped me to move quickly, try things out and adapt along the way.

What other inspiring projects or initiatives have you come across recently which are creating positive social change? [17:57]

I've really found myself enjoying pop-up events. Things like Creative Mornings or Mindful Mornings. Across the US we have 1 Million Cups where entrepreneurs come together. [Anika discusses these events further.]

To finish off, what are the top 3 books you’d recommend to our listeners? [19:06]

[Anika discusses the books listed below and why they are inspiring.]