Making a profit vs making a change

“To register as a non-profit business is unsustainable,” begins Amaphiko academy alumni Zakheni Ngubo. “It’s like going into business with your hands tied behind your back and hoping people feel sorry for you. It just doesn’t work.” It’s a wintry autumn afternoon in downtown Johannesburg – the sun hanging without definition in the sky – and the founder of mobile learning app Syafunda is dressed in a grey knit jersey and a modest pair of black jeans to fend off the chill. It’s a sharp contrast to the sleek blazer and pointed toe shoes he wore while delivering a talk at this year’s Tech Open Air Conference in Berlin. Described as a “conference meets festival”, the event brings together leading authorities in disciplines ranging from technology, music and art (such as the Discovery Channels’ Mike North and SXSW general manager James Minor). It’s a remarkable feat given that Zakheni only started developing Syafunda a little over a year ago and only made it available to the general public in March this year. And while he continues to make sense of his newfound success, there are matters of a humbler nature that he still has to contend with – like whether his app will make him any money.

For as long as the term “social entrepreneurship” has been around, there has been an eternal tension between making a profit and making a change. Critics – while acknowledging that non profit organisations are unsustainable – generally argue that altruism and generating profit are mutually exclusive. In fact, American serial entrepreneur Steve Blank (the man famously dubbed “the Godfather of Silicon Valley”) once remarked that social entrepreneurship is “a bit of a fad” and that “startups that confuse doing business with social change” usually end up as tax-exempt NGOs. There’s also the contention that “for-profit” social enterprises end up “selling” change, with their intended beneficiaries (often marginalized and poverty-stricken people) becoming paying customers. Zakheni disagrees.
Zakheni Ngubo sharing a moment with some participants at Tech Open Air Berlin. Photo: Nika Kramer
Zakheni Ngubo sharing a moment with some participants at Tech Open Air Berlin. Photo: Nika Kramer
“The definition of social entrepreneurship is problematic,” Zakheni continues, creasing his forehead for emphasis. “We’re usually referred to as entrepreneurs who solve problems, but that meaning could be applied to any entrepreneur. All entrepreneurs are problem solvers; we’re just the only ones who aren’t getting paid for it.”

Zakheni also argues that profit is the lifeblood of any business and, whether you’re in the business of making profit or driving change, it’s the only thing that can continuously sustain your business. This is a sentiment shared by his fellow Amaphiko alumni Sifiso Ngobese. Ngobese; whose enterprise, Unconventional Media Solutions, offers free carts to township recyclers that are paid for by selling their sides as advertising space, believes that the complexities of South Africa’s social and economic landscape call for businesses that offer a positive return to society.
“Profit is definitely necessary to sustain any business but it shouldn’t be the only motivation,” he begins. “In South Africa, social entrepreneurs are tapping into an emerging economy that isn’t driven purely by profit margins. There are high levels of inequality and poverty in South Africa [that need innovative solutions] and social entrepreneurs are providing those solutions.”

Sifiso Ngobese, showcasing a protoype of his recyling carts in Kliptown , Soweto
Sifiso Ngobese, showcasing a protoype of his recyling carts in Soweto. Photo: Sydelle Willow Smith
As Johannesburg’s skyline darkens – the city’s frantic activity slowly being muted by the impending stillness of night-time – Zakheni is pensive. While both him and Sifiso don’t have the greatest assurance that their businesses will generate enough money to be self-sustaining, they continue to make plans for life outside of the Academy. Sifiso aims to extend his business’ reach by the end of the year while Zakheni improves his mobile app “to make sure it runs efficiently offline”. Eventually, Zakheni believes, companies and the general public alike will warm up to the idea of social entrepreneurship:
“The era where companies are all about making money is nearly over. People are holding companies to a higher standard – they expect them to contribute to society.”
Follow Ref Bull Amaphiko on Twitter @RedbullAmaphiko and Zakheni @Syafunda

by: Rofhiwa Maneta – 14 August 2014
Zakheni Ngubo in Berlin. Photo: Nika Kramer
Zakheni Ngubo in Berlin. Photo: Nika Kramer

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