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BUSINESS MONDAY

Doing well by doing good: Social ventures on the rise in South FloridaBY NANCY DAHLBERG

ndahlberg@miamiherald.com

NOVEMBER 12, 2017 7:00 AM

Chances are you’ve popped a pod into a Keurig machine today, and you may have felt a wee bit guilty about the environmental impact of thatconvenient jolt of java.

Daniel Buelhoff is aiming to mitigate the damage. Buelhoff is the co-founder of Gourmesso, the online market leader for environmentally friendlyNespresso compatibles in the U.S. and Germany. The company, now located in Miami, also has launched a 100 percent-compostable Keurigalternative, called Glorybrew, with Fair Trade-certified coffee to end the negative environmental impact of the billions of coffee pods ending up inlandfills.

Though research and development on the compostible product took about two years, it’s paid off. Sales quickly climbed into the millions and thebusiness is profitable.

“I saw an opportunity and I went for it,” he said.

Buelhoff, who moved from Germany last year, thinks of himself as an entrepreneur first and foremost — he has also co-founded companies in gamingand other e-commerce and food ventures. But with Gourmesso, he is also a social entrepreneur, because his company has an environmental return aswell as the financial bottom line.

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His and other social enterprises present solutions to challenges such as global warming, healthcare and poverty. It’s also a growing trend in SouthFlorida’s startup scene, with new programs designed to fund, nurture and grow companies that can improve life here.

But not all see themselves as social entrepreneurs, even when they are, says Rebecca Fishman Lipsey, whose organization, Radical Partners, has beenrunning social entrepreneurship bootcamps in Miami for three years. The bootcamp itself is already showing a social return because 75 percent of thebootcamp organizations have significantly expanded services or scaled their social ventures to other cities.

“The whole genre has expanded in people’s consciousness,” Lipsey said. “I would love to make a magnet out of Miami, where great people who wantto solve social impact issues want to be here doing that work, and people who want to fund work like that would look to Miami and wonder whatsocial innovations we are cooking up.”

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Rebecca Fishman Lipsey founded Radical Partners, which has been running Social Entrepreneurship Bootcamps for three years in Miami.

Four ways Miami startups are trying to save the planet

If it seems like social entrepreneurship is the flavor of the year, you’re right. Gustavo Grande has seen more and more social entrepreneurshipventures come through the Miami Dade College’s Idea Center, where he is programs manager.

“We already have a lot of students with ideas in social entrepreneurship, but we want to give them the structure to develop sustainable social venturesand collaborate with different partners in the community to accelerate that,” Grande said.

[RELATED STORY: Four ways Miami startups are trying to save the planet]

It’s a movement that gets a significant boost from the burgeoning millennial generation but encompasses all ages and ethnicities. In South Florida, agrowing percentage of participants in high schools and university entrepreneurship programs are focusing on social enterprises — about half,according to Grande — and a community of serial entrepreneurs and investors is forming to help them.

Some notable social enterprises in South Florida include Rising Tide Car Wash, now in two Broward locations, which employs people on the Autismspectrum; Mela Artisans, a seller of luxury lifestyle products handmade by artisans in emerging markets; and FIGS, which sells antimicrobial,breathable and fashionable scrubs and has donated more than 75,000 sets of scrubs in emerging markets. EcoTech Visions focuses on incubatinggreen manufacturing businesses, while the Urban.Us fund invests in tech companies with solutions that help cities.

RELATED STORIES FROM MIAMI HERALD

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But across the region, there are now also scores of startups in development that are focused on the environment (read related story), employment,alleviating poverty and improving access to education.

Trina Spear co-founded FIGS, which sells medical scrubs and gives a set of scrubs to a healthcare professional in an emerging market for every set it sells. So far FIGS hasdonated more than 75,000 sets.

It’s a global movement. An estimated 11 percent of adults in the United States between 18 and 64 are attempting to start or are operating in a socialenterprise, according to a Global Entrepreneurship Monitor study about social entrepreneurship by Babson College and other partners in 2016. That’sup from about 7 percent in its 2010 report. Social ventures are led by women 45 percent of the time, according to the study — far more than incommercial ventures.

Despite their noble goals, more than three-quarters of social enterprises fail before their fourth birthday, according to a Failure Institute study. Amongkey reasons, according to studies: the unequal access to financial, mentoring and educational resources and opportunities.

“The world will be a better place if we can determine the most appropriate ways to support social entrepreneurs and scale up their solutions,” saidone of the GEM report’s authors, Siri Terjesen.

That’s where new resources come in. A few recent developments in South Florida:

▪ Ashoka, the global organization that supports and accelerates social entrepreneurs, anointed both Miami Dade College and Florida InternationalUniversity as Changemaker Campuses because of programming and student interest on its campuses.

Malik Benjamin, Ashoka U Changemaker Faculty Fellow for FIU, said that by mapping out the university’s changemaker ecosystem, the school couldensure that there were well-publicized opportunities at every level — from the idea on a napkin to the growth stage to social impact investing.Strategies include creating an active pitch cycle — often with cash awards, curricula incorporating design thinking, resources and networks.

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Participating in the extensive Changemaker application process — FIU and MDC are two of just 42 campuses globally — “showed us that not onlywere we doing impactful things but that we weren’t satisfied with where we were,” he said.

Next up is honing the definition of a “changemaker city” and connecting initiatives not only among universities but with the greater community,Benjamin said. “Between us [FIU and MDC], we have more than 250,000 students, faculty and staff. That’s a pretty big base when you are talkingabout impact. The real challenge is connecting those initiatives.”

▪ Rodrigo Arboleda, co-founder of the internationally renowned One Laptop Per Child, now heads a new Miami-based venture called FastrackInstitute. It accelerates the formation of companies and organizations to work on pressing urban problems. After piloting several successful rounds inColombia, the organization’s first Fastrack in Miami is underway and addressing mobility.

“Traffic — think about it. If we can solve it in Miami, then that becomes an export industry that applies to every city in the world,” said Salim Ismail,founding executive director of Silicon Valley’s Singularity University. He co-founded Fastrack with Arboleda and Maurice Ferre, former CEO of MakoSurgical.

After analyzing Miami’s transit problem, Fastrack established teams drawn from hundreds of exceptional minds from around the world. In a 16-weekFastrack, the teams have examined the conceptual, social, entrepreneurial and technological implications of mass transit solutions for Miami-DadeCounty. With that knowledge, they are creating initial solutions for community testing, feedback and accelerated development. The idea is that legal,regulatory and societal hurdles can be addressed while the concepts are being built and the technology is being tested. Once deployed, thetechnologies can be used by other cities.

From 23 presentations, two teams were formed with complementary skills including technology, business, environmental and regulatory expertisethat will use one methodology. On Dec. 14, Fastrack will award a winner to accelerate a minimum viable product, form public/private alliances andseek funding opportunities, Arboleda said. “What we have seen in other Fastracks is that the ideas presented complement each other and there isalways a possibility we will develop both. But one will be developed first.”

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A Fastrack Miami team tackles the issue of mobility.Fastrack Institute

[READ MORE: Can these tech and business stars solve Miami’s traffic mess? They’re set to try]

▪ Along with Nobel Laureate Muhammad Yunus, the father of micro-financing and world-renowned champion of social entrepreneurship, the CEO ofGrameen America announced last month that the micro-lending organization for women would be bringing its services by the end of the year toMiami-Dade County, an area with one of the nation’s highest poverty rates.

Grameen America facilitates micro loans to women to help them start businesses, as well as provides training and support. Miami will be the 13th citylocation in the Grameen America network that started in 2008. Over the next several years, the organization will likely add several more branches inthe area, said Andrea Jung, CEO of the network.

“We will be here for the long term in this city,” Jung said. “Our goal is to have a movement that offers a hand up, not a handout, and the only way todo that is through financial inclusion.”

[READ MORE: Grameen America will open mirco-lending branch in Miami]

▪ Lynn University in Boca Raton has partnered with Watson Institute of Colorado, an incubator for young social entrepreneurs, to create a programthat allows students to build a venture and thus earn a Bachelor of Science in social entrepreneurship.

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Students receive seed funding, mentorship and training in ideation, rapid prototyping, fund-raising, leadership and management and team building.Mentors and entrepreneurs coach participants in the Watson Lab and via Master Courses.

Jorge Mendez, who formerly worked at the Miami Dade College Idea Center, is helping Andrew Lippi set up the South Florida program, due to launchnext fall. Lippi is president of Watson Institute at Lynn University.

Mendez and Grande are also bringing a local lab of Uncharted, an accelerator for social ventures, to Miami, one of seven locations worldwide, forfive-day full-time programs for budding social entrepreneurs. “The whole purpose is to identify local problems and that way we can help local socialentrepreneurs to develop solutions and exponentially replicate this model in other cities,” Mendez said.

▪ A few years ago, Lauren Harper co-founded the Center for Social Change, a Miami co-working and educational hub for social ventures. This year,she founded a Miami chapter of the global Social Venture Partners organization to support social ventures in the growth stage through mentorship andinvestment and eventually grow social impact investing in South Florida, too. Social ventures chosen by SVP will be given $100,000 over three yearsin funding and support services.

Lauren Harper (center), founder of Social Venture Partners Miami, introduces the organization’s founding partners at the launch event Thursday at New World Center. SVPMiami will support selected social impact ventures with capital, mentoring and connections. Nancy Dahlberg ndahlberg@miamiherald

In its first round of applications, SVP Miami attracted 67 companies and organizations, including some of Miami’s best-known nonprofits who aredeveloping social enterprise models so they aren’t depending solely on grants. Final rounds of decision making are underway. SVP will likely chooseone company or nonprofit to back with the $100,000 and up to three others to help on specific challenges.

Harper believes the pool of applicants will continue to strengthen as more and more social entrepreneurs go through programs offered at theuniversities, such as University of Miami’s Launch Pad, Florida International University’s StartUP FIU and Miami Dade College’s Idea Center, as wellas Lipsey’s Social Entrepreneurship Bootcamp. “We need that bridge to get more social enterprises to the growth stage,” she said.

So far, 30 partners are part of SVP, including individuals, corporations and family foundations. Partners commit money, time and expertise.

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In January, the work begins. Once a company or nonprofit has been selected, SVP will work with the organization to create a growth plan with specifictargets. Along with mentorship from the SVP members, consultants will be hired as needed to help with specific challenges.

While more funding mechanisms such as SVP ramp up, the explosive growth of crowdfunding on platforms such as Kickstarter and Indigogo hasprovided a way for social entrepreneurs to get off the ground.

It worked for Juan Castellanos, co-founder of Alana Athletica.

Castellanos was born in Colombia and moved to Miami when he was 3, went to Stanford Business School and quickly landed a “dream job” atDeloitte. But after three years he left to join with his former boss, Azad Rahman, to co-found Alana Athletica, which designs and sells yoga pantsmanufactured by women in Sri Lanka who are abuse survivors.

“I knew I wanted to do something impactful in the world and I figured this is the time to take the risk,” Castellanos said.

Earlier this year, Alana launched a Kickstarter campaign, selling 650 pants in 30 days. The company hopes to ship next week. The young team foundthe production a tougher challenge than anticipated, but stayed true to its mission with an all-women production team that defies Sri Lanka’snotorious sweat shops.

“Having Cheynelle on the ground in Sri Lanka is an advantage,” he said. Co-founder Cheynelle Mendis is also the designer of the pants.

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Cheynelle Mendis is a co-founder and the designer for Alana Athletica, which designs and sells yoga pants made to employ and empower women in Sri Lanka who are abusesurvivors.Natalie Soysa

Miami social entrepreneurs are also grabbing attention through contests. All 2017 winners of the Miami Herald Business Plan Challenge’s high schooltrack presented social enterprise ideas — including the all-female team behind Smart Straws, which detects popular date-rape drugs. Half of thewinners in the community and FIU tracks were social entrepreneurial, too.

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The new American Entrepreneurship Awards at MDC, sponsored by the Libra Group, also award ventures with social mission.

Leyanis Diaz was one of this year’s AEA winners, taking home $25,000 for Major Marketplace, a marketplace for minority businesses and those whowant to support them. She is now trying to connect minority suppliers to anchor institutions such as hospitals and universities and has securedpartnerships with other marketplaces. Major Marketplace gets a percentage of sales and offers memberships to the businesses.

Leyanis Diaz founded Major Marketplace, a marketplace for minority businesses and those who want to support them.Major Marketplace

Diaz, a first-time entrepreneur and 2017 Miss Black Florida, has surrounded herself with mentors. She is participating in Startup FIU, along withCastellanos, and went through MDC’s Startup Challenge and its CREATE programs. She’s also in Babson WIN Lab for women entrepreneurs. MajorMarketplace currently is a team of four.

Diaz was inspired after attending an Advocates for Change event last year and learning that most of the country’s 8 million minority-ownedbusinesses will fail in the first five years.

Young entrepreneurs explain the idea behind "Smart Straws" 0:58

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“I knew then that as Miss Black Florida I wanted to help out in anyway I could, so I started a marketplace to bring more buyers to minoritybusinesses. I believed that if they had a platform and a way to tell their stories, people would want to give them their support. Major Marketplace isabout giving the little guy a chance.”

Follow Nancy Dahlberg on Twitter @ndahlberg.

SOCIAL ENTREPRENEURSHIP FINDINGS

▪ Miami ranks 16th among the top 21 ecosystems in which to be a social entrepreneur. The report — sponsored by Halcyon Incubator,CapitalOne, The University of Maryland’s Robert H. Smith School of Business and Deloitte — ranked the cities across four measures: funding,human capital, quality of life, and regulation and receptivity. Boston, San Francisco, Washington DC New York City and Chicago were the topfive, respectively.

▪ About 11 percent of working adults in the U.S. are involved in some aspect of leading social entrepreneurial activity, either at the startup oroperational stage, according to a 2016 Global Entrepreneurship Monitor study by Babson College researchers and other partners.

▪ 45 percent of the world’s social entrepreneurs are female, a much larger percentage than in commercial entrepreneurial ventures, the GEMreport found.

▪ Three-quarters of social ventures fail before year four, according to a study by the Failure Institute. Reasons cited include lack of access tofunding or resources such as accelerator programs.

RESOURCES FOR SOCIAL ENTREPRENEURS

A sampling of resources for social entrepreneurs in South Florida:

Radical Partners Social Entrepreneurship Bootcamp: http://www.radical.partners/bootcamp

Social Venture Partners Miami: http://www.socialventurepartners.org/miami

Center for Social Change: http://www.4socialchange.org

University of Miami Launch Pad: http://thelaunchpad.org

StartUP FIU, Florida International University: http://startup.fiu.edu

Miami Dade College Idea Center: http://theideacenter.co

Ashoka U: http://ashokau.org

READ MORE

A look at four ways Miami startups are trying to save the planet.