SOCIAL ENTREPRENEURSHIP AND BUSINESS MODEL CANVAS: 

THE CASE OF SPIRITUP

Nguyen Dao Huy Kha, Nguyen Dang Minh Hien, Phan Thuy Cao Duong, La Thi Kim Anh, Huynh Le My Huyen and Phan Anh Khoa

 

Abstract

 

In recent years, business model canvas has been gaining popularity in the field of entrepreneurship and social entrepreneurship in particular. However, there are limited studies which have explored the application, advantages and potential pitfalls of business model canvas in social entrepreneurship from a comprehensive perspective. This study provides an extensive review of how business model canvas plays a role in social entrepreneurship. The study highlights the case of SpiritUP, a social enterprise that aims at improving the access to career guidance services for young people in Vietnam. If properly and innovatively applied, business model canvas can be considered a fundamental element for the future success of social enterprises.

Key words: career guidance, career orientation, adolescents, young adults, students, youth, social entrepreneurship, business model canvas, entrepreneurship, innovation

Introduction

There is a rapidly growing number of organizations around the world that are cater to solving social problems and creating value for society in recent years, which is referred to as social entrepreneurship (Seelos and Mair, 2005). Social entrepreneurs offer and implement effective solutions for societal problems, ranging from unemployment, poverty, provision of basic medical care to tackling climate change (Müller, 2012). According to Chou (2018), what primarily distinguishes traditional business and social entrepreneurship is their motivation of solving social problem and needs.

In order to optimally operate to create value for society, social enterprises need effective business models that align with the social problems they are aiming to solve (Sparviero, 2019). One prevalent and widespread tool for effective implementation of entrepreneurship projects is business model canvas (Türko, 2016). The purpose of this paper is to introduce the business model canvas and highlight its importance in social entrepreneurship projects.

This paper starts with literature and issues of social entrepreneurship. It then discusses the implication of business model canvas. After that, the case study of SpiritUp, which is a social start-up in career counselling and personal development in Vietnam, is presented to illustrate the new social entrepreneurship approach. A conclusion is provided at the end of this paper.

Innovation and Entrepreneurship

Purposely innovation and search for innovative opportunity

Modern society depends heavily on innovation, which frequently serves as the driving force for developments in science, technology, health, and other areas. Despite the diversity of contemporary conceptualizations and studies of culture (Giorgi, 2015), many academics still view culture as a restrictive set of standards (Lounsbury, 2019). Purposely seeking out innovative opportunities is an important process for individuals, organizations, and societies to engage in, as it can lead to discoveries, solutions to complex problems, and improved quality of life. The search for innovative opportunities can occur in various settings, including businesses, non-profits, government agencies, and academic institutions. The idea of opportunities is crucial to comprehending economic transition because it highlights the fundamental element of a capitalist economy—the pursuit of profit—which results from a new understanding of resources, markets, and how they interact (Holmén, 2017). To find gaps or inefficiencies, a detailed investigation of the current market or industry is one strategy. Another strategy is engaging with customers or stakeholders to learn their preferences and build solutions to address them.

Academic institutions are a significant source of innovation. Researchers and scholars are constantly seeking to expand the frontiers of knowledge, solve complex problems, and develop new theories and technologies. Universities may also act as a “incubator” for spin-off businesses that focus on knowledge. Scientific papers, lectures, workshops, and casual connections can all be effective means to convey academic know-how to the business world. However, since basic research is their primary focus, the knowledge they provide is rarely commercializable and frequently complements R&D efforts in the private sector (Fritsch and Slavtchev, 2007)

Innovation and entrepreneurship

Innovation and entrepreneurship are closely intertwined concepts that drive economic growth and development. Innovation involves the creation and implementation of new ideas, products, or processes that add value to society. Entrepreneurship shows creativity by putting an idea or concept into practice while incorporating resources, such as finance or institutional leadership support (Crumpton, 2012). Innovation is a fundamental component of entrepreneurship, as entrepreneurs must continually innovate in order to stay competitive and grow their businesses. Innovation and entrepreneurship are vital drivers of economic growth, as they stimulate investment, create jobs and new sources of revenue. They are particularly important in developing economies, where entrepreneurship serves as a powerful engine for poverty reduction and economic growth. The national innovation system in many developing countries has recently been improved through government backing for company incubators (Naude, 2011).

Recent years have seen significant interest in social entrepreneurship and organizations’ active participation in social initiatives, which proves that social entrepreneurship represents a key avenue to economic and societal well-being (Cortes and Lee, 2021). Small businesses are essential to entrepreneurship because they foster innovation, produce jobs, and promote economic expansion. Flexibility, agility, and the capacity to react swiftly to shifting market conditions are advantages of small enterprises. They also give people a place to pursue their interests and passions and give back to their communities. Controlling expenses, increasing productivity, and identifying development prospects are the main challenges faced by small businesses in the maturity stage (Scott and Bruce, 1987). However, small firms continue to be a significant and valuable part of the entrepreneurial landscape despite these difficulties.

Business model and innovation

To gain a better understanding about business model, it is crucial to concentrate on the responsibilities and functions associated with the notion to further develop and harmonize the numerous understandings of a business model (Spieth, P et al.,2014). A business model is defined by Osterwalder and Pigneur (2010) as the logic of how an organization generates, delivers, and captures value, which renders it easily discernible and enables discussion among stakeholders. According to Zott, Amit and Massa (2011), business models are simplified real systems that are applied for accounting for performance and competitive advantage. Business models play a significant role in the coordination and facilitation of communication and social action within an organization and with external stakeholders (Massa, Tucci and Afuah, 2017).

Creating value through business model innovation is a crucial aspect of entrepreneurship and business growth. The analysis of business models itself has shown promise as a starting point for innovation strategies (Spieth, P et al.,2014). By identifying new ways to generate revenue, reduce costs, and improve customer satisfaction, businesses can differentiate themselves from competitors and establish a strong market position. It offers an analytical framework capable of concurrently taking into account all pertinent internal and external aspects (Schneider and Spieth, 2013) including organizational structure, leadership, key partners, cost structure and revenue stream. Business model innovation has the potential to raise profitability, boost competitiveness, and promote consumer loyalty. 

High-tech start-ups and technology development organizations, often known as technical entrepreneurs, play a critical role in the development and commercialization of technologies around the world. A well-coordinated technology plan is one of the most important factors in achieving success and improved financial performance (Kropp and Zolin, 2005). Similarly, a business that uses new technology to boost productivity and cut expenses can boost profitability and reinvest those savings in more innovation and expansion. In today’s rapidly changing environment, adding value through business model innovation is a major success factor.

Sustainability innovations include novel processes, operating procedures and practices, business models, systems, and ways of thinking, in addition to new technology (Szekely and Strebel, 2013). Sustainability innovations require numerous components, including capabilities, stakeholder relationships, knowledge management, leadership (Adams et al., 2012); additionally, creating superior products, services, and production methods, as well as by exerting significant market, social, and political influence (Evans et al. 2017). In this process, collaboration and partnerships with stakeholders, such as clients, vendors, and neighborhood groups, are also necessary. Stakeholders including third party, employee and customer are the ones who affected by the outcomes (economic return, human capital and product/ service access) which is generated by the mechanism (Hermes et al., 2019). Businesses may create long-term value for stakeholders and position themselves outstandingly by prioritizing environmental and social sustainability.

Figure 1: Business model innovation and value creation for stakeholder (Hermes et al., 2019)

Business model canvas and its application to the case of SpiritUP

The Business Model Canvas, which was developed by Alex Osterwalder and Yves Pigneur, and co-created with the involvement of 470 practitioners from around the globe, is a strategic management tool that provides a visual representation of a company’s business (Burkett, 2013). It is a one-page template that outlines the key components of a business, including its value proposition, customer segments, channels, revenue streams, cost structure, and key partnerships and resources (Bonazzi and Zilber, 2014). As the business model canvas is extensively applied, the utilization of this framework provides both the users and potential investors with a clear understanding of the company’s uniqueness, which renders it extremely helpful with regard tocommunication in entrepreneurship (Sort and Nielsen, 2018). 

According to Vial (2013), the business model canvas for social entrepreneurship has to demonstrate its intrinsic difference from commercial entrepreneurship. Burkett (2013) suggests that the business model canvas for social entrepreneurship must takes into account the special characteristics of social enterprises. In addition, achieving social impact through a business operation is not necessarily cost neutral, which means both the skills necessary to deliver on a social impact and the costs involved in doing so need to be taken into account in designing a feasible and sustainable business model (Pirson, 2012). According to Müller (2012), while commercial entrepreneurs concentrate on value appropriation, social entrepreneurs give emphasis on value creation, which means while commercial entrepreneurs generate value for themselves and/or their stakeholders, social entrepreneurs create value for their beneficiaries and for society, and profits are an enabler but not the predominant purpose of the organization. 

A detailed application of the Business Model Canvas in the case of SpiritUP – a social start-up in the field of career counselling and personal development – is demonstrated in the figure below.

Figure 2: Business Model Canvas of SpiritUP (source: author)

Conclusion

In today’s rapidly evolving market, the Business Model Canvas plays a significant role in entrepreneurial success, which offers a straightforward and adaptable framework for examining key areas of businesses, enabling them to effectively identify areas for improvement. By leveraging innovation, businesses can differentiate themselves from competitors, create new sources of revenue, and contribute to economic growth. The Business Model Canvas facilitates entrepreneurs and business leaders in creating a unified and long-lasting business model, seeing potential risks and opportunities, and investing accordingly. However, innovation, entrepreneurship, and the Business Model Canvas also involve risk, as they require a willingness to experiment with new approaches and technologies, embrace change, and adapt to new market conditions. Businesses should promote an innovative and entrepreneurial culture and offer the tools and assistance required to encourage experimentation and risk-taking.

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