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Jonathan Chang On The Golden Rules of Social Enterprise

Thirty-five-year-old Jonathan Chang understands both sides of social entrepreneurship. He is the Singapore-based executive director of the Lien Centre for Social Innovation and has also set up and sold several ventures.

Jonathan Chang, executive director of the Lien Centre for Social Innovation.

Thirty-five-year–old Jonathan Chang is the Singapore-based founder of four Silicon Valley social enterprises. He has two degrees from Harvard and has taught social enterprise in Rwanda to genocide survivors. Here he explains why society should look at social entrepreneurship as a business, not a charity.

What first inspired you to become a social entrepreneur?
In 2010 I went to Rwanda to teach entrepreneurship to genocide survivors. I taught them how to create a business plan and set up a company. I remember one particular student, Patruci. She noticed companies who were dumping chemical waste around her neighbourhood and she developed a business plan for a waste-recycling plant.

What surprised me about her was that she didn’t think about it from a purely financial perspective. She took it a step further and said she would like to create jobs for young people in her neighbourhood because unemployment was high. She also said that she wanted to use this business to heal the wounds of the civil war in 1992.

I thought that was very inspiring because it was the first time I connected the dots between social entrepreneurship and its positive impact. Since then I’ve seen myself as a vehicle to promote that idea.

What do you think is the perception of social entrepreneurship?
In the US the idea of social entrepreneurship already resonates. In Southeast Asia there is a misconception that social entrepreneurship should be non-profit in nature or similar to working in a charity. But that’s not true. Making money is okay; money is not a dirty word. As a matter of fact, profit will make your business better as it will allow you to retain top talent.

As a society I think we’re unfair to social entrepreneurs. If a banker makes a million dollars a year, most people will say, that’s understandable. If I say a founder of a social enterprise makes a million dollars, people say how dare they make a million dollars? But why not? Why can’t we celebrate people who make money for themselves and others? That means their company is doing really well.

What are the social companies that are making millions of dollars?
For example: Patagonia, Whole Foods, Seventh Generation, Ben & Jerry’s and TOMS. In the US, in particular, there a lot of a socially minded brands that are successful and committed to making the world a better place.

Would an investor be more likely to come on board if a company is socially minded?
Investors shouldn’t buy into social enterprise out of guilt, they should do it to make money; because it is a sound business idea that happens to give back. I give advice to companies: come up with a product that people want to buy first and foremost, and afterwards show them the story. I don’t believe in promoting a sob story that people buy into because they feel bad. That’s charity, that’s not a good business and it’s not sustainable. Investors need to look beyond pure financial return, but also we need to prepare the entrepreneur for the fact that they need to have a sustainable business too.

Is there is a need to educate investors in Southeast Asia?
In Southeast Asia the sector is still such a minority. Entrepreneurs need to find the right investors. Entrepreneurs make the mistake of thinking money is money. But that’s not true. A great investor should come with money, mentorship, advice, connections and support. Entrepreneurship can be a lonely journey in general. Sometimes I advise people not just to accept a stake from certain organisations that don’t have a vision and just want to ride a wave; you need more than that to grow a company.

Chang recently served as advisor and judge for the Hong Kong segment of Chivas Regal’s The Venture, a global US$1 million fund to find and support social enterprises.