Entrepreneur

After 3 Cohorts, This Is Why MaGIC No Longer Has A Separate Social Enterprise Track

The Malaysian Global Innovation and Creativity Centre (MaGIC) has played a pivotal role in the lives of some social enterprises in the ecosystem. In the past, they’ve run three cohorts of a Social Enterprise track under their accelerator programme, seeing names like The Picha Project, Foodabox and CoffeeZone grow under their auspices.

However, this year, they no longer ran a separate track for social enterprises, choosing instead to combine everyone under one umbrella in their inaugural Global Accelerator Programme (GAP).

In past interviews and when speaking about GAP, Ashran Dato’ Ghazi the CEO of MaGIC made clear that it was open to social enterprises too. But there were only 6 social enterprises out of the 54 startups in the programme.

We couldn’t help but think that social enterprises seemed to be missing out a little.

Wanting to find out a bit more about what MaGIC now has in store for social enterprises, the reason behind the change and the streamlining into one programme, we had a chat with Ashran, Johnathan Lee, the Vice President of Academy, and Ehon Chan, the Executive Director of Social Entrepreneurship.

This year was a sort of test, to see if they could mesh it in the first place. 

To MaGIC, based on their observations of the past cohorts, they wanted to see if they were able to bring the two separate tracks (Social Enterprise and Startups) into one programme.

“We thought, what if we put the social entrepreneurs and the commercial entrepreneurs together, will we see a shift from the commercial entrepreneurs to be more impactful, and also the social enterprises to be more business-competitive?”
– Ehon Chan

What they found in the past was that separating the tracks created an echo chamber of sorts.

The social enterprises reached a group mentality where all they focused on was impact, and the business side lost out.

For the commercial startups, they were purely focused on their businesses, and did not consider what roles they could play to make the world a better place.

Ashran explained, “The intent was to educate new entrepreneurs. Businesses before, when they started, did not need to think of the need to do good. When we say do good here, we mean in all contexts, whether from an environmental point of view, whether it’s where you engage a labourer from, do you pay fair wage, those things come into play.”

The key hope was that the intermingling would result in a more well-rounded entrepreneur, through the diffusion of ideas and values.

From there, they wanted to increase the eventual impact of the startups under their wing.  

Speaking of social enterprises, Johnathan said, “Depending on the social enterprise themselves, a lot of the time they’re service-based, so the business model can be constrained and they cannot scale.”

“What we’re trying to do is change their mindset a little and look at areas that can be related back to their core activity and this could be multiple revenue streams coming in.”

“We’re trying to open up their eyes to other opportunities. And there will be people who say, ‘No, I don’t want to listen, I want to just do this,’ and that’s fine as well.”
– Johnathan Lee.

Their end goal is to see more sustainable companies; whether serving a beneficiary that needs help or whether it’s a purely commercially driven company, at least they’re thinking about sustainability.

This is also where the Impact Driven Enterprise Accreditation (IDEA) comes in. According to MaGIC, an impact driven enterprise “is an organisation (either for-profit or non-profit) that proactively creates positive social or environmental impact in a way that is financially sustainable”.

Ashran clarified that they weren’t only targeting social enterprises to be accredited. What they wanted was to see more startups look at their own businesses to see what they could change or tweak in order to qualify for the accreditation.

Startups receiving their IDEA / Image Credit: Projek57

It wasn’t pure smooth sailing, and there have been many lessons learnt. 

“It’s not dropping social enterprises, it’s how do we change the mindset of everyone to all businesses should be doing good. We do realise that we were maybe too idealistic, that people may not connect the dots together,” said Ashran.

What they also found was that the term “social enterprise” still needs to be featured more prominently when marketing their accelerator.

“When we started marketing for GAP, the word ‘social enterprise’ was not as prominent, so a lot of people didn’t relate to it,” said Ehon.

Besides that, they’ve also realised that meshing two different groups of people with very different mindsets requires some extra arrangements.

“The other lesson learnt as well is that there might have to be a bit of facilitation, because the social entrepreneurs speak a very different language. For them it’s about changing the world, making the world a better place, B40, beneficiaries. On the commercial entrepreneur side, they’re talking about traction, growth hacking, all the startup speak,” said Ehon.

“To the social enterprises, they feel, ‘You can growth hack, because for you it’s about finding shortcuts. For us social entrepreneurs, we’re working with the poorest of the poor, people who genuinely need help. We can’t just find shortcuts in their lives.’ So there has to be a facilitation of language between the two.”
– Ehon Chan

But despite the challenges, they’re not putting social enterprises to the side.

“When MaGIC started, social enterprises were embedded into our DNA so we will never move away from our responsibility.”
– Johnathan Lee

Johnathan gave the example of MaGIC’s early stage programmes, like Stanford Go2Market and the Ideation Lab, where they do see active participation from social entrepreneurs.

“We think it’s important to have these guys come in at the very early stage and we give them the tools and key learning to help them build a stronger business,” he said.

Ehon echoed his sentiments, saying, “We just had our business planning over the weekend; when we reflect back, social entrepreneurship is one of MaGIC’s most unique value propositions.”

As part of the future, Ehon shared that they’re also looking at investing capital into social enterprises.

“We have an investment fund going, but we’re figuring out the mechanism of how we invest. We don’t want to just invest and say, ‘Here’s money, go grow‘. We want to figure out how we can semi-structure it, so when we do invest, it’s a meaningful investment where we work side by side with you in partnership to grow your social enterprise as well.”
– Ehon Chan.

So based on our conversations, it seems safe to conclude that MaGIC still sees itself as a major player in the field of social entrepreneurship, only that its form as we know it might change.

“What we’re aiming for at the end of the day is social impact, not creating more social enterprises. We want more businesses to think, ‘I want to build a better world’.”
– Johnathan Lee

If more entrepreneurs see themselves as the drivers behind positive impact—be it social, environmental or even systemic—each small contribution will eventually add up to a greater whole.

And if this helps make the world a place at the end of the day, then it really doesn’t matter what we call those companies, only that they exist and continue to thrive.

 

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