from ‘traditional’ entrepreneurship and is yet to address issues specific to technology-based ventures (Mair and Martí, 2004).
The purpose of this study is to better understand technology social ventures (TSVs), an area that falls at the nexus of two fields: SE, and technology innovation. We base our study on the following premises:
(a) social enterprises increasingly develop and use technology to solve critical social problems; (b) technological-innovation frameworks developed for ‘for-profit’ ventures may not be readily applicable to the SE context; and (c) management research can benefit from studying innovation in the SE area (Drucker, 1989; Kanter, 1999).
We explore the following research question: How do technology social ventures originate, develop and grow in a resource-limited context?
We address this question by studying Benetech, a Silicon Valley- based, TSV incorporated in 2000. The goal is to understand this firm’s evolution and discuss how it uses technology to benefit social inno- vation, and how it continues to expand through technology-based projects into multiple arenas. Benetech has multiple projects in various stages of venture formation from idea/opportunity generation to venture growth. The firm’s founder, Jim Fruchterman, is a strong advocate for technology in social ventures and has addressed leaders and policy makers at venues such as the World Economic Forum, which meets annually in Davos, Switzerland. The firm is widely regarded as an exemplar, and thus is a ‘revelatory’ case (Yin, 1994) that warrants academic study.
Below we discuss the emerging literature on SE to provide a context for our detailed study of Benetech’s approach to technology SE. We then discuss Benetech’s evolution and growth, and highlight the pro- positions that emerge from our study of this firm. We conclude with a few observations for research on TSVs.
profit’ sector or inadequately addressed by the government sector. In contrast, the mission statements of ‘for-profit’ ventures typically mention the market segment addressed or financial returns to be ex- pected from the venture’s pursuit to providers of capital. Thus, it is addressing a ‘social’ need that forms the defining characteristic of a social venture. Social ventures can take on a complex array of forms (for-profit, nonprofit and intermediate hybrids) (Mair and Martí, 2004) and since they operate at the nexus of public, economic, and social authorities they serve multiple masters (Leadbeater, 1997; Mair and Noboa, 2003a; Shaw and Carter, 2004).1
Drawing from opportunity recognition literature in entrepreneurship research (Shane and Venkataraman, 2000), a second stream focuses on highlighting how social entrepreneurs recognize opportunities worthy of pursuit (Hockerts, 2004). As they attempt to discover and exploit venture opportunities, social entrepreneurs invariably straddle the boundaries between the ‘for-profit’ business world and the social mission-driven ‘nonprofit’ organization. Hockerts (2004), for example, conceptualizes social entrepreneurial opportunity recognition as emerging from one of three sources: philanthropy, self-help, and activism. Activist groups use a distinct set of resources (for example, legitimacy, awareness of social forces, distinct networks, and technical expertise) to influence politicians and managers through confronta- tional or cooperative campaigns, and thus involve them in addressing social needs. Self-help sources or volunteers, often beneficiaries of the social enterprise themselves, provide the venture with valuable resources through volunteering time, effort, or cheap and patient capital. Finally, philanthropic venture capitalists form a third source of opportunities by providing subsidized capital and know-how on social ventures.
Since entrepreneurship research involves the study of two phenom- ena, the presence of enterprising individuals and the presence of lucrative opportunities (Shane and Venkataraman, 2000), it is not surprising that a third research stream focuses on one or both these phenomena. For example, Mair and Noboa (2003b) attempt to ex- plain why entrepreneurs start social ventures using four factors:
empathy, moral-judgment, self-efficacy, and social support. They pro- pose that behavioral intentions to create a social venture are influenced by constructs of perceived social venture desirability, and social venture feasibility.2Their framework provides a useful starting point for studying how entrepreneurial intentions results in social venture formation.
Geoffrey Desa and Suresh Kotha 157
The emerging literature, however, is yet to address the phenome- non of TSV (that is, ventures that develop and deploy technology- driven solutions to address social needs in a financially sustainable manner) dotting the SE landscape. Not unlike other social ventures, TSV’s address the twin cornerstones of SE – ownership (financial return) and mission (social impact) using advanced technology.
From a technology venture perspective, Shane and Stuart (2002) focused on the situational and background characteristics of entrepre- neurs to predict the probability of venture formation. They looked at the resource endowments (such as social relations, prior industry, startup experience and technological assets) of technology entrepre- neurs and found that these resource endowments significantly pre- dicted who secured external funding. This external funding then allowed founders to pursue the discovered opportunities.
In another study, Shane (2000) demonstrated that people can dis- cover entrepreneurship opportunities without actively searching for them as portrayed in the traditional entrepreneurship literature.
Using case studies of eight potential entrepreneurs seeking to exploit a single MIT innovation, he shows that, despite all potential entre- preneurs having access to the same information, each discovered and pursued only those market segments which were related to his or her prior background knowledge.
Recently, a few academics have highlighted the transformative and innovative power of TSVs. Prahalad (2005), for example, through case studies of social venture organizations, advocates for technologically empowered social ventures that treat the poor as consumers and sources of innovation rather than as a problem or as recipients of aid. One of the examples Prahalad and his coauthors chronicle is Voxiva (Casas, Lajoie and Prahalad, 2003), a startup social venture that provides practical technology solutions that let distributed organizations exchange information and communicate more effectively. However, beyond this and a few other cases (for example, Project Impact, OneWorld Health, and eChoupal), we know little about this emerging form of technology-based SE, and how it fits within the larger domain of entrepreneurship (Schumpeter, 1934; Venkataraman, 1997) and SE (Dees, 1998;
Drayton, 2002; Skloot, 2002; Mair and Martí, 2004). Thus, the current study is an exploratory attempt to address this important nexus between technology and SE, an area that deserves academic attention.
158 Social Entrepreneurship
159 Table 11.1 Technology social venture projects within Benetech (circa. mid-2004)
Project Description
Bookshare.org An Internet library where members of the blind, visually-impaired and reading-disabled community can legally store and share scanned publications.
Martus Provides for the creation, encryption and secure storage of reports of human rights abuses. The system improves the accessibility of human rights information to help assure that violations will be recorded and those responsible held accountable.
Human Rights Data Analysis Group Applies information technology solutions and statistical techniques to help human rights advocates build evidence-based arguments.
All-Link Internet service providing best-practice reading and writing instruction to students with significant disabilities.
Bookaccess An initiative delivering digital books to improve access to information for poor and illiterate populations in the developing world.
Landmine Detector Project Adapts cutting-edge technologies to the needs of humanitarian landmine removal.
Project Libre Seeks to bring truly affordable and usable open source software to users in the developing world and schools, nonprofits and government agencies in the industrialized world.
ReadingCam Project Developing a prototype device for people with visual disabilities that can locate, recognize, and speak text found in the general environment.
Source: Adapted from http://www.benetech.org.