Tom Tobia

General thoughts and ideas:

The Social Enterprise Trap

An article posted today on Guardian Social Enterprise Network picks up on a point I’ve been thinking about over the last year, that the very baggy term ‘Social Enterprise’ is in danger of not meaning anything any more.

The article quotes the Annual Small Business Survey as suggesting a social enterprise can be defined as businesses that:

Think of themselves as a “social enterprise”.

Not pay more than 50% of profits to owners/shareholders.

Generate more than 25% of income from traded goods/services.

Think that they are a very good fit with the DTI (Dept of Trade and Industry) definition.

This means absolutely nothing.

I like to ‘think of myself’ as a Premiership-quality footballer and virile lothario. I’m not sure if the DTI has a position on the matter but if it did I’m certain I’d be a ‘very good fit with it’s definition’. Sadly, as my lack of interest from The Big Four and/or my wife would attest, I am most likely misguided in my beliefs.

In the same vein, the ambiguity in the above definition does create an opportunity for a lot of people to use the term (consciously or otherwise) as a misguided ‘mask of worthiness’ for their enterprise that’s either a) a shit idea and/or b) just a business. This is obviously not always the case by the way. A lot of people do a lot of great things that would rightfully be termed a social enterprise. But like cyclists in London, the good ones are in danger of being tarred with a bad brush by a significant contingent of bozos. Yes, I did write bozos. So, I’ve had a little stab at 3 reasons why Social Enterprise isn’t a thing. (remember, it’s just for fun).

1) An equation for properly understanding what constitutes a social enterprise. Fill in the gaps as appropriate for your case in point.

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Founder of Social Enterprise: “I have founded a Social Enterprise that helps people who [insert founders personal and defining negative life experience] by [insert solution based on founders direct experience of tackling the problem. This will have been either a) A positive experience & will therefore be the core of the enterprise or b) a negative experience and therefore the antithesis of the enterprise].”

“I can see a need for [enterprise name] because [insert a number between 1 and 3] people I know have been affected by [insert founders personal and defining negative life experience].”

“I just need £ [insert a number between 20 and 100] thousand pounds funding to get it off the ground”

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2) An example of this equation being applied [this is purely a fictitious example and not representative of lots of great social enterprise]

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““I have founded a Social Enterprise that helps people who ‘find getting out of beanbags difficult’ by ‘creating an [insert tech solution eg. App] that means they can send a signal to neighbours when they are stuck in a beanbag to come and help me, erm I mean them get out of it.’

“I can see a need for ‘BagOut’ because ‘2’ people I know have been affected by ‘finding getting out of beanbags difficult.”

“I just need £‘46’ thousand pounds funding to get it off the ground”

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3) A translation of what this really means

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“I have founded a Social Enterprise that helps me potentially turn a profit and feel better about my problems by pretending to monetise an ill thought out solution, creating a logo, a blog and networking furiously.

“I can see a need for my social enterprise because I need to make a living, and It’s great to do this by helping people just like myself whilst also making money.

“I just need £46 thousand pounds funding to get it off the ground”

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Want to do something amazing and give something back? Great, set up a charity or a foundation. Want to do something amazing and give something back whilst also potentially making a wedge? Great, set up a business but perhaps just call it a business. Both are fine. If it really is a viable business, and you really are helping people, it will be inherently social and this will be obvious in time. Still want more? Maybe you could even write a mission statement or something.

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High Streets – How can we get out of this pickle?

With the death of three (well two and a half) large high street chains in a week and no immediate policy level ideas in motion about how we stop the rot, I have been getting more and more confused and subsequently angry about why we’re in this predicament. Even St. Mary Portas doesn’t seem to be able to save our beloved high street (apparently). I know there’s a lot of good stuff happening out there (including Assemble & Join I hope you’ll agree!), but it does feel like a drop in the ocean. I think I’m angry because I’m confused and I’m confused for two reasons. One is I think I can see obvious ways we could do something better, and two is that I’m probably ill-informed / ignorant / naïve (delete as you see appropriate. So I thought I’d scribble some thoughts down mainly to help me reflect and digest what’s currently keeping my synapses occupied, but also to see if anyone agrees / wants to set me straight on the following:

Retail space is more valuable than civic space.

The idea of prime high street real estate being a place driven by the consumption of products is deep seated. Over a long time period the continuous cycle of increased consumption and provision of more and more space in which to consume has taken firm hold of the British psyche, high street and planning laws.

For an equally long time, all this shouting about buying stuff was a self-fulfilling prophecy, and in many ways it still is. People still buy a lot of stuff. But two things have changed since 2008. Firstly, we aren’t able to buy as much, or at least the rate of growth in purchasing has slowed. Secondly, the way in which we buy stuff is changing very fast, something I’ll come to in a minute. Taken in isolation both these points needn’t be a problem, but when viewed in context of wider economic policy they undoubtedly are…

We live in a world where everything can be solved through growth. If the economy is broken, we need to generate growth, and one thing we do to encourage that is cut interest rates to dissuade saving and encourage spending i.e. consumption of more stuff. This generates more tax revenue and taxable income for businesses.

There are many reasons that this idea of our saviour growth’ grates with me personally, but sticking to task, let’s get back to why (as I understand it) needing it affects the high street: Increased tax from sales and rates on the high street in theory goes back into the public purse through corporation tax, income tax and business rates right?

Only now more than ever we’re being hit by a triple whammy:

1)   The Internet. Shopping online is ballooning and companies such as Amazon are able to legally circumnavigate their moral tax duties in the UK in a variety of ways. This means increased spending does not equate to increased corporation tax revenue. Tax collection systems and legislation is seemingly unable to cope with a globalised marketplace that is developing so fast it’s almost impossible to pin down.

2)   High street businesses, big and small, are struggling in the face of lowering disposable income and increased competition from online retailers who have the double advantage of not paying premium rent and business rates and often paying nominal tax in the UK. This in turn means as the HMVs and Jessops this world go out of business leaving conspicuous shells on the high street that, being empty, generate no business rates.

3)   For some reason, the current government have reduced the tax burden on the highest earners, meaning any increase in taxable income (a desirable by-product of increased growth/consumption) does not convert into an increase in tax revenue. The reason given for this is that a 50% tax band wasn’t generating any more revenue than a 45% would, so therefore what is the point? This is an impossible concept if government (and HMRC) are performing their duties fully, and a strangely defeatist attitude from a government telling us we need to fight for our lives and that we’re all in it together. Yes and before you scream at your monitor I know the theoretical reason given is that we will drive away the best bods in business, particularly in financial services if we don’t compete on tax, and I just don’t buy it, a) because I think it’s nonsense, London will always be an attractive place to be and b) because income tax revenues from financial services in the last ten years are less than the taxpayer cost of bailing out our failing financial institutions, so who cares if we lose a few, it actually makes economic sense in a way. However that’s a rant for another time.

So the problem (again as I understand it) now is that we’re seeing revenues decrease across the board, and the burgeoning areas of growth in the market (Amazon for example) are contributing proportionally less and less tax back into the system. It seems we’re chasing an economic dream that is becoming inexorably further out of reach.

So with reduced tax income, less people and businesses in on the high street and more space becoming available in centres of population, it’s easy to say we’re seeing the ‘death of the high street’. A traditional approach might see us leave it to ‘market forces’ to rectify themselves. Only market forces don’t legislate for human behaviour, at least not properly (IMO). They operate on a principle of siloes of prosperity; they don’t measure good will or wellbeing very well. They are also slow to adapt to change. Too slow, as we’re seeing with the financial services industry. Not only are they slow to change but reticent. Take M-Pesa for example. A wonderful innovation in the financial industry in Kenya that makes moving money form one person to another simply a matter of a text message. M-Pesa is now used by 80% of Kenyan adults, but it’s not managed to make an indent on any other country. Why? Because most financial institutions are scared. Crucially, they are also big and well organised enough (unlike in Kenya five years ago when M-Pesa kicked off) to snuff out competition. It would be possible to suggest the same mind-set is prevalent in many large high street chains (not to mention government in general). Aggressively overpowering small business, and buying up (and then sitting on) large swathes of retail space (yes you Mr Tesco) may have the big boys winning for now, but will it really last if there is nothing left but homogenous wastelands punctuated by chain stores? The internet sounds way more appealing than that; I can do my weekly shop in the bath. 

The obvious way around this is a collective and conscious deviation from pure market-based policy to think about what people like, how we interact as groups, what we want from what we buy, how we buy it, and what we want from our public spaces.  There is a very interesting film recently put out by Microsoft (& others) about how interaction design has shifted into a holistic and joined-up way of thinking based on human behaviour and interactions in recent years. The talking heads repeatedly discuss how exciting the future is as a result. It seems we need to do the same when considering public spaces, and in particular the high street.

But instead, we seem to be hovering in a state of denial; online retail giants such as Amazon seem to be held responsible for the death of high street shopping. People talk nostalgically about the days of Woolworths and in time they will about Blockbuster Video, but can you really be sad to see them disappear from your local town centre? Only when they’re not replaced by something more appropriate and relevant you can. This isn’t happening at the moment for reasons I’ll talk about in a bit, but in short all this needn’t be a problem. In fact, we can now buy everything from sofas to plane tickets online, and have them delivered to our door or phone. This means cheaper products for us, and the potential for high streets to lose some or even most of the clutter and ugliness these retail empires bring. So if high street retail is dead, what could there be in its stead?

Well in short and rather excitingly, lots. It seems painfully ironic to me that just as the competition for high street space is waning (i.e. shops are shutting and not being replaced), we’re also seeing the biggest contraction in civic spaces in living memory. Apparently we can’t afford to keep libraries because there isn’t the money available. Retail is the only viable option when filling town-centre space as it generates tax through revenue and rates – it ‘pays it’s way’. But what happens when the music stops, and there is no revenue generation because everything shuts? Well, two things could happen, and there is precedent for both.

1)   Retail that offers an added value beyond simply the product sold reclaims the high street. People still like going to their local butchers (apparently), and traditionally any self-respecting village would have had a bakers, a forge, a carpenter etc. In the 21^st Century what’s really exciting is is we now have the tools through emerging tech and digital manufacturing to compete with production-line quality but with the attraction of being bespoke to individual consumer needs. Over the last generation we have seen an ever-increasing movement towards passive consumption of products. This is in part because products have become more and more advanced thus we have the luxury of being lazier in this sense than ever before. The reality is though, as places such as Habitat have found, the mass production of many products results in the creation of a ‘one size fits all’ option, or in essence, the least worst version of something for everyone. For the moment there are still many things (cars, stereos, washing machines etc.) that make total sense to purchase in this way, but technology now allows us to challenge mass-production for an ever increasing range of consumables. So there is the possibility in my mind that sometime in the future we might see a return to thriving independent high streets serving a secondary layer of consumer products, and even potentially sitting in harmony with the big boys. Sugru recently worked with a fencing (sport not boundary divider) equipment manufacturuer to produce what they think is the world’s first deliberately unfinished product – a fencing lance without a grip on the handle. Instead purchasers can mould one to suit their needs using Sugru. This seems to me to be a great example of the value of large-scale retail / production, and emerging technology providing bespoke solutions, and this is where you local high street could again become so valuable. (You could even argue that Nike ID offers a similar experience, and you know what, good for them. They’re at least challenging the notion of passive consumption.

2)   Civic initiatives are afforded the necessary breathing space financially to be able to operate on little more than good will and desire to address a need. The problem with this is civic spaces don’t usually generate income.  However, if we’re not generating cash from rates on vacant properties anyway, why not open them up? This does happen now at a small scale, but is a long way from becoming standard policy. Additionally, importantly and depending on how tangential you’re willing to go, a celebratory approach to civic spaces could save a fortune. For example, an elderly person who has a regular meeting space near their home might find they build a support network around them in a way that at least partly compensates for the break-up of most family groups living in close proximity we’ve seen in the last few generations. This added resilience makes people less of a burden on expensive centralised services. Equally, a group of young people who have somewhere to go on a Friday evening may have their boredom sufficiently alleviated to not feel the need to get up to mischief, thus saving the myriad costs associated with antisocial behaviour or worse.  This is not easy to track, and even harder to unequivocally prove, but also undoubtedly possible.

Examples of both civic and retail experiments such as these can be found in places such as Brixton Market and Deptford High Street where civic activity and small, differentiated enterprise have flourished in a space that was previously largely devoid of financial or social value. This is an exciting and tantalising time and space, and one that I hope will soon be populated with designers, farmers, bakers, hackers, 3D printers, coffee mornings, youth clubs and the rest. The question is do we really have to get to this level of desperate dystopia (for those of you that remember Brixton Market before it was renamed Brixton Village) before decision makers start to act, and equally, those of us complaining about it start to rethink the value of civic space, question passive consumption and explore the potential of technology in providing a more personal product than could ever be purchased through a behemoth such as Amazon. And can we finally just get over this growth thing once and for all.

Please tell me if this is all bollocks: tom@tomtobia.com

Entrepreneurship & Living without money.

I recently attended an workshop at a well respected international body, exploring the barriers to entrepreneurship faced by young people of the ‘Millennial Generation’, or in normal speak, anyone who can’t remember life before home computers (or maybe can, just)…. work in progress!

Markets & NEETs

Following the post from serial near-collaborator @joesmithdesign last week I thought I’d scribble down my sixpence-worth regarding my personal experience of the growing issue of long-term NEETs, and how Joe and I intend to finally come together to look at it:

Working with @wemakegood on the Thames View Estate in Barking this year has been a real eye-opener for many reasons. One of the most striking elements of our exploration and engagement with the resident population has been how many young people are not connected with society on any level. This is not a shock in most senses (a lack of regular schooling, links with the state, or community groups etc) but we’ve been surprised at just how many people we’ve met in the 16-25 age group who aren’t connected with eachother either. Facebook is used by some, and most have a mobile phone in various states of disrepair, but BBM, IM and even texting are not common forms of communication, and as many young people are not in employment, education or training, they appear to have little structure in their lives on even a social level let alone as part of society as a place in which to work and learn.

This has been problematic when trying to regularly meet with local people (who are often more than willing) as we just don’t have a reliable format for communication. We’ve had to adapt to the most prevalent way of arranging meets amongst young people on the estate - a promise to meet by ‘big shop’ the following week. Anecdotal this is, but it points to a potential a continuing lack of connectivity by means most would consider near-ubiquitous amongst those born in the nineties and noughties.

This, coupled with a lack of social mobility, appears to create a ‘bird in the hand’ mentality towards income. It is an assumption, but I would say most 16-25 year old’s we’ve met would rather earn £20 doing a few hours labouring than have someone invest £200 in a course or training that will improve their skills base, but may or may not lead to employment and thus financial remuneration within the immediate future. A lack of connectivity helps to isolate young people and cloud decision-making in such circumstances - they don’t hear about opportunities available to them (and their associated benefits) through the internet or their peers and it’s therefore hard to communicate the potential benefits of further education or training. Additionally, fear of potential failure and commitment to relatively long-term training or employment seems to halt a desire to find a way into economic activity. Even if there is an interest in further training, most young people I’ve met wouldn’t know where to look or who to speak to.

This circumstance however, does engender a sense of latent opportunism. If there is £20 on offer, you’ll find suddenly certain people coincidentally are ‘experts’ at just the area you happened to be looking for. Communicating this is a valuable skill in itself, and opportunism is a key ingredient of any entrepreneur. However this interaction has only taken place in my experience when face-to-face and with someone familiar. It is less scary to chance your arm in these circumstances and comes with a lower risk of failure so often an issue for the fragile confidence lurking beneath teenage bravado.

It is clear that the academic slant of school and higher education is not appropriate for everyone, and ‘training’ likewise. Employment is also near-impossible to attain without the former in some capacity. Interestingly, the term NEET (not in employment, education or training) makes no reference to entrepreneurship as an option available to young people who are currently off the education/economic treadmill. This might seem like a big leap, but with the right support and at least nominal financial input, is not impossible, even if it is on a very small scale. It may even be a way around one of the perceived (and in our experience real) issues with getting some young people into work - reliability. If a young person not only has no experience of work, but additionally little understanding of responsibility in a family or social context, it can understandably be hard to empathise with and respect would-be employers as well as the impact their behaviour has beyond the immediate. Entrepreneurship by its very nature means one suffers directly for a lack of reliability - and this is a lesson quickly learned.

There are few places that microbusiness is more prevalent than on a market. Just this month Mary Portas has released the findings of her government-commissioned report into regenerating Britain’s high streets in which she champions the market as an environment that allows you to “try your hand” at something, and learn as you go. They are inherently low-tech, familiar and accessible - what you see is what you get. They are a place where low-key entrepreneurship can flourish, and allow for experimentation and importantly ‘mistakes’ and ‘failures’. In this sense they have potential to be a breeding ground for NEETs to build on what they know - talking to people face to face, informal relationships - and learn valuable transferable skills about competition, finances, dealing with ‘clients’ and perhaps most importantly structure and responsibility.

The next stage is to consider how a framework and/or platform around this might provide the support and opportunity to make this a viable concern. This will take some thought but there are some great models out there, not least our good friends The Amazings.

So, lots to think about but I guess at this stage our standpoint is that entrepreneurship doesn’t always have to be about making something completely financially viable (in the short term at least) but could well be a great way for those who are not well served by current provision to learn and prepare for an economically and socially active future. We’re interested in how, with the right support, markets could be a potential forum for this to happen.

More to follow…