In this episode of Both Success and Integrity with Bessi Graham, Bessi dissects a recent Harvard Business Review (HBR) article “Should Your Start-up Be For-Profit or Nonprofit?”, and discusses why the author completely misses the mark on legal structures as well as identifying the actual problems for startups.
The HBR article proposes a framework that founders, board members, investors, and donors can use to make a decision around the legal structure the start-up should use.
Bessi critiques the article’s binary approach and the author’s misnaming of the key problem as a legal structure issue rather than properly addressing how deeply and unconsciously they are wedded to the old paradigm of abstraction and false distinction. She also challenges their claims about the conflicts between social mission and venture capital and argues firmly against their recommendations that entrench dangerous and exploitative power dynamics.
Also in this episode:
- The problem with the old paradigm lies in the unquestioned acceptance that doing good and making money are mutually exclusive.
- The limitations of hybrid organizations.
- Understanding business modeling is key to creating impactful organizations.
- Nonprofits often encounter certain pitfalls when creating a viable and long-lasting business model.
- The dangerous consequences of the entrenched views around not valuing “caring roles” and the parallel between the gendered “othering” of unpaid labor and not paying people properly in the charitable sector.
The Harvard Business Review article: Should Your Start-up Be For-Profit or Nonprofit? A guide for social entrepreneurs by Cait Brumme and Brian Trelstad
Message Bessi the phrase “business model” on social media for details on our Business Model Workshop so you can master how to think about your organization in a more holistic way that allows you to do good and make money.
We also have a workshop for NFPs and Social Enterprises to avoid the 6 common traps hindering business sustainability.
Comment “cheat sheet” and we’ll send you our FREE PDF with some key elements on why we think the business model canvas is such a powerful tool.
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About Bessi Graham:
With over 20 years of experience working with business owners, governments, and large funding bodies to bring “doing good” and “making money” back together, my experience spans from the grassroots of sitting in the dirt working with business owners across the Pacific Islands through to the United Nations in Geneva. This has given me an unparalleled perspective on what makes change happen.
You know you were born to do something significant, so don’t leave it to chance.
Image by: Mark Wagner