1. Five Stages of
Social Entrepreneurship
2016.6.30.
Gamechanger Institute
Yutaka Tanabe (Japan)
y.tanabe@gamechanger-inst.org
1
ISTR's 12th International Conference
Stockholm, Sweden
Ersta Skondal University College
F12 Theorizing on Social Enterprise

2. Index
● Introduction 3
● Research Question 4
● Literature Review 5
● Method 6
● Results 18
● Conclusion 20
● References 21
2

3. Introduction
● Economic Inequality is growing globally. (Piketty, 2014)
● Human Security is in peril, i.e. welfare cuts or refugee crisis in Middle East
and Europe.
● Social entrepreneurship (SE) pursues to solve systemic problem by social
innovation.
● However, the stages of SE are not sufficiently researched. This is why
researchers and practitioners are not sure how to build capacity of social
enterprise methodologically.
● Why the gap between successful social enterprises like Teach For America
(TFA) or Grameen Bank and many other unsuccessful social enterprises is
happening? How we researchers and practitioners can fill the gap?
3

4. Research Question
To define five stages of social entrepreneurship, and to research its
effectiveness for social enterprise’s development.
4

5. Literature Review
5
Non-profit
perspective
Dees, Emerson,
and Economy 2002
They argued “Creating value and assessing performance -> Growing and
exploring new directions”
Perrini and Vurro
2006
They defined “Opportunity definition -> Organizational launch and functioning ->
Financial resource collection and leveraging”
Robinson 2006
They addressed “Opportunity identification -> Opportunity Evaluation &
Exploration -> Opportunity pursuit”
Haxeltine,
Wittmayer and
Avelino 2013
They conceptualised TSI (transformative social innovation) theory which defined
the relationship between game changers, social innovation, systemic change
and transformative discourses/paradigms with four dimensions (governance,
social learning, funding and monitoring).
Entrepreneurial
perspective
Eckhardt and
Shane 2003
They clarified the role of opportunities in the entrepreneurial process.
Moroz and Hindle
2012
They tried to discover generic and distinct about entrepreneurship as a process,
but is has not been adequately addressed within entrepreneurship field.
Previous researchers haven’t addressed SE stages starting with “systemic problem.”

6. Why Social Entrepreneurs tackle social issues? Because they discover and define
Systemic Problem. Then, they aim at Systemic Change through capacity building.
Method
6
Individualized
Activity
Systemic
Problem
Socialized
Activity
Organized
Activity
Systemic
Change
Unlike previous researches, “Systemic
Problem” is the beginning for social
entrepreneurs to pursue “Systemic
Change” in this framework, which
reframes previous researches and
practices.

7. Method
Five Stages of Social Entrepreneurship
7
5 Stages
Meaning
1.
Systemic
Problem
2.
Individualized
Activity
3.
Organized
Activity
4.
Socialized
Activity
5.
Systemic
Change
Definition
Systemic Problem
is a problem
derived from
overall social
system;
the root cause of
inequality, human
insecurity, or
crisis of global
sustainability.
Individualized
Activity is an
activity by the
founder (or, co-
founders) of a
social enterprise
solely.
(e.g.weak brand,
small capital,
professional
immaturity)
Organized Activity is
an activity by team
of the social
enterprise utilizing
Theory of Change
(ToC).
(e.g. vision and
mission shared by
ToC, quality
development,
alliancing)
Socialized
Activity is an activity
by stakeholders in
society who strive to
solve systemic
problem collectively.
(e.g. multi-
stakeholder
engagement, shared
estimation, policy
proposal)
Systemic Change
is a fundamental
change at the level
of social system,
which prevents or
alleviates systemic
problem per se.
Success
factor to
move on to
next stage
Opportunity to
create social
enterprise
generated
Strong leadership
of the founder
generated
Strong and
professional
teamwork to tackle
systemic problem
Ecosystem,
Collective Impact,
Impact Investing,
Legislation
Sustainability and
social resource
circulation getting
realized

8. Method
Theory of Change (ToC)
“Theory of Change is essentially a comprehensive
description and illustration of how and why a
desired change is expected to happen in a
particular context.” (Center for Theory of Change,
www.theoryofchange.org )
ToC can be compared as “backbone” of human
body. If we lack “backbone,” we will be “octopus.”
8

9. Method
Theory of Change (ToC)
9
Ultimate
Outcome
Vision / Long-
Term Outcome
Preconditions /
Outcome
Preconditions /
Outcome
Preconditions /
Outcome
Preconditions /
Outcome
Accountability Ceiling
How do you
achieve Ultimate
Outcome?
How do you
achieve Vision /
Long-Term
Outcome?
How do you
achieve
Preconditions /
Outcome?
Assump
-tion A
Assump
-tion B
1 2
3 4
: Intervention
www.theoryofchange.org

10. Method
Seven cases were chosen to meet following criteria.
● They are widely regarded as successful examples of social entrepreneurship.
● They are from multiple regions including US, Bangladesh, Japan, Cambodia, India, etc.
● They have been described in available literature sufficiently to answer our key questions. On-site
interview was available with Teach For America (2011, 2012, 2013, 2014, 2015, 2016), B Lab
(2011, 2012), Kamonohashi Project(2013, 2016), UTEC(2015), and Figure Skating in Harlem
(2011, 2013).
● They have exhibited at least some potential for systemic change within which they have been
implemented.
10

11. Method
Teach For America (TFA)
11
5 Stages
Case
1.
Systemic
Problem
2.
Individualized
Activity
3.
Organized
Activity
4.
Socialized
Activity
5.
Systemic
Change
TFA status
Founder
Ms. Wendy
Kopp
defined
education
gap.
She founded
TFA in 1989.
She survived
budget crisis
and constant
criticism from
outside.
She and TFA
team created
and shared
ToC. TFA’s
goal and its
impact
understood
among team.
TFA alumni
(former TFA
teachers)
increased
exponentially and
work collectively
to pursue TFA
mission.
Students in
marginalized
community can
access to excellent
TFA teachers in
schools and
explore their future.
Success
factor to
move on to
next stage
Opportunity
and mission
of TFA
defined
Strong
leadership of
Ms. Kopp
was
generated
Strong and
professional
teamwork to
tackle
education gap
Ecosystem to
tackle education
gap generated
and spread
among sectors
For example,
Tennessee
implemented
systemic change in
education.

12. Method
B Lab
12
5 Stages
Meaning
1.
Systemic
Problem
2.
Individualized
Activity
3.
Organized
Activity
4.
Socialized
Activity
5.
Systemic
Change
B Lab status
Jay Coen
Gilbert, Bart
Houlahan,
and Andrew
Kassoy dis-
covered need
for B corp.
They found B
Lab and
developed B
impact
assessment
in 2006.
B Lab utilized
ToC.
GIIRS, IRIS
and benefit
corporation
legislation
were realized.
B corporation
movement
spread globally.
1,752 B
Corporations,
50 Countries,
130 Industries.
Definition of
good company
is being
changed from
“best in the
world” to “best
for the world.”
Success
factor to
move on to
next stage
Opportunity
to create B
Lab
generated
Strong
leadership of
the founders
generated
Strong and
professional
teamwork to
develop B
Lab
Ecosystem to
harness B corp
spread in US,
Canada, Europe,
Australia, etc.
B corps all over
the world aim at
sustainable
society by
declaring and
certification.

13. Method
Grameen Bank
13
5 Stages
Meaning
1.
Systemic
Problem
2.
Individualized
Activity
3.
Organized
Activity
4.
Socialized
Activity
5.
Systemic Change
Grameen
Bank status
Prof.
Muhammad
Yunus
discovered
gender
economic
gap.
He started
research
project to rural
area and
launched
Grameen
Bank.
Grameen bank
is authorized
by Bangladesh
government
and developed
microfinance.
However, its
ToC is implicit.
By 2006,
Grameen Bank
branches
numbered over
2,100.
Microfinance
methodology
diffused globally.
Grameen Bank
explored new
option for
disadvantaged
people, aiming at
ending poverty.
Success
factor to
move on to
next stage
Opportunity
to create
microfinanc
e institution
generated
Strong
leadership of
the founder
generated
Strong and
professional
teamwork to
tackle gender
economic gap
Ecosystem for
marginalized
people
generated by
Grameen bank.
Multiple
microfinance
institutions gather
money from small
investors in
developed countries.

14. Method
Kamonohashi Project
14
5 Stages
Meaning
1.
Systemic
Problem
2.
Individualized
Activity
3.
Organized
Activity
4.
Socialized
Activity
5.
Systemic
Change
KP status
Ms. Sayaka
Murata
knew child
prostitution
issue in
Cambodia.
She and Mr.
Kenta Aoki,
Mr. Keisuke
Motoki co-
founded KP.
They created
ToC to impact
supply side
and demand
side of child
prostitution.
They established
rural factory to
create employment
(reduce supply)
and trained police
(reduce demand)
effectively.
Child prostitution
issue in
Cambodia is
almost solved;
KP started to
move on to
India.
Success
factor to
move on to
next stage
Opportunity
to create
social
enterprise
generated
Strong
leadership of
the founder
generated
Strong and
professional
teamwork to
tackle child
prostitution
Ecosystem,
Collective
Impact, Impact
Investing, &/or
Legislation
KP’s social
enterprise in
Cambodia will
be independent
from KP HQ.

15. Method
UTEC (United Teen Equality Center)
15
5 Stages
Meaning
1.
Systemic
Problem
2.
Individualized
Activity
3.
Organized
Activity
4.
Socialized
Activity
5.
Systemic
Change
UTEC status
Youth at
risk issue is
severe in
lowell; teen
rescue
program
was crucial.
Steve
Pearlswig
found UTEC
and started to
rescue
teenagers
involved in
gangs.
UTEC created
ToC and
organized its
programs to
increase its
impact, and get
support from
society,
UTEC is pursuing
to improve
recidivism,
employment and
education by ToC-
backed high
performing
program and
community support
Although UTEC
programs
generate
splendid
outcomes, the
challenge
continues.
Success
factor to
move on to
next stage
Opportunity
to create
social
enterprise
generated
Strong
leadership of
the founder
generated
Strong and
professional
teamwork to
tackle youth at
risk problem
Ecosystem of
UTEC and
supporting
community is
generated.
-

16. Method
Figure Skating in Harlem
16
5 Stages
Meaning
1.
Systemic
Problem
2.
Individualized
Activity
3.
Organized
Activity
4.
Socialized
Activity
5.
Systemic
Change
FSH status
Sharon Cohen
was asked to
teach figure
skating in
Harlem and
found systemic
problem with
girls there.
She found
FSH, and
developed its
program
through
teaching
skating.
(Teamwork is
confirmed.
However, ToC
is not defined
on FSH’s HP.)
(Collective
impact or
ecosystem of
FSH is not
confirmed.)
(We can’t
confirm
Systemic
Change derived
from FSH
because of lack
of ToC.)
Success
factor to
move on to
next stage
Opportunity
to create
social
enterprise
generated
Strong
leadership of
the founder
generated
- - -

17. Method
Giving Pledge
17
5 Stages
Meaning
1.
Systemic
Problem
2.
Individualized
Activity
3.
Organized
Activity
4.
Socialized
Activity
5.
Systemic
Change
GP status
(Systemic
Problem is
not defined
on GP’s HP
currently.)
Bill Gates
and Warren
Buffett
created GP,
but they ask
other donors
to join
individually.
(ToC is not
defined on GP’s
HP. Teamwork
by GP members
as a whole is not
confirmed
currently.)
(GP’s impact is
spreading
globally, but
direction of
donation is not
disclosed.
Not collective
currently.)
(We can’t
confirm
Systemic
Change derived
from GP
currently.)
Success
factor to
move on to
next stage
-
Strong
leadership of
the founders
generated
- - -

18. Results
18
Teach For America
B Lab
Giving Pledge
: Satisfied the definition
: Not satisfied the definition
stages
cases
Grameen Bank
Figure Skating in Harlem
UTEC
Kamonohashi Prj.
Systemic
Problem
Individualized
Activity
Organized
Activity
Socialized
Activity
Systemic
Change
US*
HQ in US **
Country
Bangladesh
US
learning/
education
Economic
Development
Field of work
Human Rights
Economic
Development
***
US
Economic
Development
Japan,
Cambodia, India
Human Rights
US Human Rights
****
* “Teach For All” is the global network to share its methodology globally..
** B Lab has partners in Canada, South America, Australia & NZ, Europe, UK.
*** ToC of microfinance institute including Grameen Bank is assumed to be
implicit. (Datar, S. Epstein, M. & Yuthas, K. 2008)
**** Regarding Cambodia, the child prostitution will be ending thanks to KP.

19. Results
(a) Mission and “Theory of Change” make it possible to grow SE from
individualized activity to socialized activity.
(b) Creating Ecosystem including alliance with (local) government, corporations
and/or citizens facilitates SE to be a socialized activity.
(c) SE contributes to build Peace Economy by providing Human Security.
19

20. Conclusion
● Comprehensiveness of the framework needs to be more researched.
● Practitioners can find progress or management issues of a social
enterprise by the framework easily: the framework will be effective.
● Many new areas for future research
○ Quantitative research
○ Comparison by region, countries, field of work, etc.
○ What kind of intervention works for social enterprise to move on to the next stage? (e.g.
support from intermediary like Ashoka, foundation, pro-bono, company, government, etc.)
20

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