Should all entrepreneurs be social entrepreneurs?

Empty grocery store shelves while people wait in line to check out in the beginning of the COVID-19 pandemic.

Social entrepreneurship has been defined as a startup created to serve society in some way. One of the first businesses that comes to mind is TOMS, a started founded using a one for one model - one pair of shoes was donated to children in need for every pair of shoes that was purchased. Another business model lauded as social entrepreneurship is that of micro-finance, businesses founded to provide small loans to people in developing economies where a formal banking structure is lacking.

Here’s the thing - all businesses should be founded to serve society. Society = customers. If a business is not bringing something good into a customer’s life, why does it even exist?

During the height of the COVID-19 pandemic, we learned how essential grocery stores and restaurants were to our lives. While we were “sheltering in place,” our habitual sources of food were disrupted. We overwhelmed the grocery stores trying to stock up so that we could cook at home. When our favorite restaurant was closed and the grocery store shelves were sparse, a feeling of panic set in. How will I eat?

The pandemic exposed the reliance we have on business to support our lifestyle. Your local restaurant’s CEO may not think of herself as a social entrepreneur, but she is! Her business is serving society by providing food to her customers and a comfortable place to gather.

Your mobile carrier is providing a lifeline of communication to your friends and family.

Your department store or boutique keeps you stocked in socks, underwear, pants, shirts, shoes, and more.

Your favorite streaming service is connecting you with stories to educate and entertain, or even to babysit your kids when you’re pulling your hair out trying to work from home.

All of these businesses rely on a network of businesses that you don’t see everyday - businesses that run the internet backbone, that make that part that allows electricity to travel into your home, that manufacture the shoe strings for your shoes, that create the dye for your favorite tie, that provide the insurance for the actors who act in your favorite movie. Aren’t they also serving society in their supportive roles?

This leads to a bigger question - if a business stops serving society, is it still a business?

When a business exists to serve itself more than its stakeholders, more than its customers, employees, suppliers, and investors, it does not deserve the name business. When a business brings more harm to society than good, it ceases to serve its purpose. If a doctor’s office ceases to heal its patients but instead just spends time executing patient visits and sending out bills, it is useless. If a bank ceases to provide loans and savings accounts to the community but instead invents new ways of moving money around in risky investments leading to a financial bubble that eventually bursts, it is useless.

We need to hold our businesses to a higher standard than just being profitable. There is no place for the term social entrepreneurship as defined above when we truly understand how business is expected to serve society.