Good Business

By Schectman, Joel | Newsweek, October 11, 2010 | Go to article overview
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Good Business


Schectman, Joel, Newsweek


Byline: Joel Schectman

Is it possible to do good and do well? Businesspeople with a goal to better society--known as social entrepreneurs--think so. Unlike traditional nonprofits, these do-gooder companies turn a buck while pushing for environmental and social goals, like helping people out of poverty or reducing the use of harmful pesticides. And the idea seems to have caught on; the sector is currently pumping out millions of dollars in revenue each year. So how can aspiring social entrepreneurs get in on the success? Newsweek spoke to Blake Mycoskie, founder of TOMS Shoes, a company that gives away a pair for every pair it sells, and to George Siemon, a founding farmer of Organic Valley, a dairy co-op, to find out. Their advice:

TOMS

BUILD AROUND THE PROBLEM

You don't need a perfect solution to offer long-term help. Mycoskie was in Argentina when he first noticed rural children running around barefoot. Volunteers donated shoes, but kids didn't always get the right size. To provide the correct sizes, over time, he created a constant revenue stream, making sure each donated pair was backed with a purchase.

START SMALL

"People get scared [about starting a business] because they think they need a giant loan, but you can start on a very small scale," Mycoskie says. He began with 250 pairs of shoes. A small leap lets you test the product so you can work out kinks. You can also be creative about marketing, which TOMS still does largely through word of mouth.

HELP YOUR CUSTOMER HELP YOU

Customers like to get behind a product they love. That's why Mycoskie kept the focus of his company simple--so customers knew what they were doing with every purchase. "Because we incorporated giving [into our mission], customers helped spread the word, [that] got media attention, and retailers even helped market us," he says.

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