importantly, most philanthropic funds have investment cycles; once they come to an end, social enterprises are expected to be able to succeed in the market place on their own. Those which cannot achieve this will tend to drift into a nonprofit state of mind.
be interesting to study tensions between activism, self-help, and phil- anthropy. The result would be a more fine-grained understanding of how the different sources of opportunity interact with each other.
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11
Ownership, Mission and Environment:
An Exploratory Analysis into the Evolution of a Technology Social Venture
Geoffrey Desa and Suresh Kotha
Introduction
Despite the recognition that technology is not a panacea for social ills (UNDP, 2001), some of the largest and most active philanthropic organizations in the US (for example, The Bill and Melinda Gates Foundation, The Open Society Institute, and The MacArthur Founda- tion) are committed to technology-based solutions to social problems.
Similarly, like-minded entrepreneurs are beginning to address social problems through technology.
The literature on technology and innovation however, is yet to discuss this growing phenomenon. In general, one of the main thrusts of the technology and innovation literature deals with how established companies: (a) use technology to gain a competitive advantage (Bettis and Hitt, 1995); (b) have difficulty adapting to technological change (Henderson and Clark, 1990; Utterback, 1994; Christensen and Bower, 1996; Rindova and Kotha, 2001); and (c) seek ways to stay techno- logically innovative (Nelson and Winter, 1982; Dosi, 1988; Cohen and Levinthal, 1990; Leonard-Barton, 1992; Ahuja and Katila, 2001).
Similarly, the literature on entrepreneurship deals almost exclusively with commercial ventures (Moore, 1991; Ahuja and Lampert, 2001;
Shane and Stuart, 2002; Agarawal, Echambadi, Franco and Sarkar, 2004) and, only occasionally, addresses how technology-based startups satisfy social welfare needs. Finally, the literature on social entrepre- neurship (SE) addresses issues pertaining to how social ventures differ
155
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.