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Hi, I'm Tyler Ry, professor of
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entrepreneurship in the management
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department here at Wharton. Sitting here
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today with Joey Hund, who is a social
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entrepreneur in residence here at the
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Wharton School for the Week. We're going
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to talk a little bit about Joey's
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experience as an entrepreneur, as well
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as the energy he's seen around social
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enterprise here in the Wharton student
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population. So, Joey, welcome. Thank you
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so much. It's nice to have you here.
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It's awesome to be here. So, you've been
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doing this for a few years now. Tell me
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a little bit about the background, how
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you got into social enterprise and how
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you ended up coming to Wharton to talk
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about it in terms of what I do here at
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Wharton or how I got here. Well, I got
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here from your invite about four years
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ago to come and guest lecture in one of
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your classes and then I discovered the
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Wharton Social Impact Initiative and
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just what's going on there um and Cheryl
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Coleman and and her the people she's
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working with to create a really unique
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platform for social enterprise here at
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Wharton in a very in a very powerful
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way. Um, so I've become sort of this
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social entrepreneur in residence and
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while here get to learn what they're
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doing at the impact initiative and I'm
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always amazed at how they're developing
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each year. These are super ambitious
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people developing something really
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unique to help nurture social enterprise
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and I guess within that um the intent is
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for me to come and lecture initially on
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not just social enterprise and social
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entrepreneurship but entrepreneurship in
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general from a deeply experential point
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of view. Um given that what's understood
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by faculty here and people who care
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about the student body is there's tons
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of drive for people to get a lot of
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students want to get into startup and
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into venture only they're coming at it
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from a very theoretical academic basis
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um lacking experience and so some
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awesome professors such as yourself will
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have students try to create startup
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ideas and work on startups in class
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which is getting them this much needed
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experential component and I suppose I
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drop into the system to try to work with
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them and and and get them heads up about
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um the experience of entrepreneurship
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and what they're missing and help work
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on their ideas with them and help them
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refine their ideas. Right on. So maybe
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let's dig in a little bit on this social
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enterprise piece. So this is one of
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these terms that's still thrown around a
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little bit. You know, we talk about
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social enterprise, we talk about social
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entrepreneurship, but in my experience
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when you start to really dig in around
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this, you know, people can be having
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really different conversations about
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what these two components mean together.
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Yeah. You know, there's a social,
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there's the entrepreneurship, which are
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both vague. you start mashing them up
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and you know sometimes you lose a little
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bit in the combination. So how do you
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define this stuff and what are you
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seeing in terms of the students who are
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working on it? Interesting. I define
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social enterprise or social venture as a
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company or venture nonprofit or
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otherwise some sort of organization that
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has a social impact baked right into the
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product or or right into the value they
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seek to offer society. Not like, hey, on
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occasion with 1% of our profits, we do
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this thing for helping people out. To
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me, that's too minor. Uh, more so it's,
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well, every time you buy this, we give
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the exact same value to another
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community or by virtue of you buying
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this product, people are getting
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educated just by being around. To me,
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social enterprise is when the social
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impact of either uh education, helping
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lift people out of poverty, helping
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provide access to food or drinking
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water, helping to level quality of life
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around the world. These sorts of things,
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lifting people out of poverty, um
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creating education, inspiration, that
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has to be worked right into the product,
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not like, hey, uh once a year we go
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volunteer. That's not it. to me uh an
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actual uh larger percentage of cost of
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goods sold or a larger percentage of
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gross revenues is is put at this purpose
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and it's continually reinvested in. Not
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only that, but the the values of the
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founders are commensurate with this
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creating impact. It's uh it can be that
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the founders have figured out that this
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is a market advantage. It gives them a
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leg up on their competitors. I don't
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really care if that's the driver. More
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so that the impact is consistent. it's
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measurable and it's doing something
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great in society. So there's a lot baked
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into that definition. Maybe we could
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just pull on the mix between the social
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and the financial aid. So what you're
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talking about is a real hybrid
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organization, right? I mean, you're
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pursuing some sort of revenue stream at
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the same time you're addressing a big
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social problem. Totally. So what sort of
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problems do these organizations run
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into? I mean, so there's got to be
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challenges that are baked in. Oh, yeah.
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But then what are the benefits as well?
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Got it. So in my own case, so I started
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the world's first green carnival in
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2011. All of our rides run on waste,
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vegetable, oil, wind, and solar power.
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And we we created the carnival
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specifically to educate people on
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sustainable technologies, and even more
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to inspire people about why to be
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hopeful about the future, why tomorrow
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could be better than today. Um now if
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you look at our cost structure uh us
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versus a typical carnival um we have to
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generate our own energy collect the feed
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stocks to make our own energy create a
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totally compelling and engaging
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educational layer on top of everything.
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Engage students, nonprofits,
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foundations, government. You like we
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have a thousand times more relationships
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baked into our show to make it happen
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than the carnival that rolls into the
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shopping a shopping store parking lot
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sets up for 3 days. And then let's look
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at revenues. Their revenues are ticket
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revenues. 100% of their revenues are
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coming through tickets or people playing
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games or buying food. And it's that's
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100% of the revenue base for us. Our
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revenues are ticket revenues, people
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playing games and buying food. But much
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more so corporate sponsorship,
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government grants, u contributions,
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donations, the whole mix. And then if
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you look again at the cost structure,
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our show costs about 90% more than their
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show costs. So, we have this huge risk
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of having a wildly more expensive show
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than they do because we're serving so so
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many more mandates and we need so much
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more resource to make it happen. At the
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same time, it opens us up to all those
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other revenue streams. There's no
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company out there that really wants to
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sponsor a dingy carnival with
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questionable operators and safety and
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ethics. Whereas over here, you have the
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world's first green carnival which is
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engaging people in blowing minds and
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doing something beautiful in society.
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We're a sponsorable asset. And so with
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that, we have a diversified revenue base
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that a traditional carnival does not
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have. And at the same time, it's way
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more complex to run. It's way we need a
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total different acumen of operator and
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executives to make that all work.
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Whereas this is way more simple. There
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are definitely pluses and minuses to
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social enterprise. And I think that any
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social enterprise with a blended
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mandate, blended return to society is
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inevitably going to be more complex to
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operate and at the same time is going to
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get benefits for that like diversifying
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revenue streams lasting through economic
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recessions because they're seen as as a
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greater value than just a cash value. So
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is there any risk with that of
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abandoning social mission when the going
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gets tough on the financial side? And I
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mean, you know, what you're you're
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talking about is, you know, a cost
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structure complexity that's an order of
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magnitude higher than your competitors.
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Sure, it opens you up to additional
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revenue streams and additional
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opportunities, but I mean, there still
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has to be this tension. You know, what
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happens when you have these moments
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where it's just not clear, okay, we need
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to run this thing. We need to keep the
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lights on. We have the social mission.
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What happens when these things butt into
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each other? What do you do? I get it. I
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think that the question you just asked
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is going to change per entrepreneur that
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you ask because each of us exists on a
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continuum on the spectrum from I'm
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driven by social mandate to I'm driven
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by profit motive. I'm driven I'm I am
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towards the social mandate side and I've
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used I've learned to make uh better and
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better decisions as it relates to making
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money so that the organization can
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survive. But here comes my answer which
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is going to be a direct relation to who
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I am and the way I feel. when the going
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gets tough or sustainable, I there's
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nothing in my mind that says if we
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hollow out the education side that
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things will be better for us. It just
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that never occurs. Instead, um I use
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that stressful moment to find new ways
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to make the whole thing work. Here's an
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example. Um we're really good with big
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machines. We've got giant giant
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generators on site and we run them on
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waste vegetable oil. I got approached by
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a company and they have giant machines,
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wood grinders. They grind up waste wood
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like pallets and construction waste. And
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they turned to me and they said, "Can
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you run our grinders on your waist
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vegetable oil?" I said, "We sure can."
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And then I said, "Not only that, we can
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run it on waste vegetable oil and
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because we're you'll be the only green
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wood grinding company in Canada. Let's
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form a partnership and I can go get
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bigger contracts because we're doing
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something special and unique. Our name
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will rise to the top of the pile." So
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the going got tough. We sourced a whole
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another new partnership of wood
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recycling and it became a revenue center
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that has grown independent of how well
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the show is doing. And so it's just an
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example. I structurally cannot abandon
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um the impact side because I my brain
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doesn't even go there. So would it be
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fair to say then I I certainly don't
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want to put words in your mouth but the
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commitment to impact and to building a
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sustainable venture when these things
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start to create tension this seems to be
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very generative for you. Yeah. It seems
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like a source of creativity. Is that a
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fair comment? Totally. I thrive in that
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tension and I encourage entrepreneurs to
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get there. Um, and that's the part that
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you can't simulate for new young people
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that have not yet created a venture. You
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can't simulate the pressure cooker of
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that terrible moment of creative
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destruction where the thing the product
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as it is is not going to live past that
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moment as it was. And how are you going
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to change it in order to bring in more
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revenue, make it safer, diminish cost,
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whatever you have to do to make it
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survive. But but if the values are
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really baked into the entrepreneur that
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the inclusion of the social impact is
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going to be organic and h and happening
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naturally so that the solutions that are
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uncovered contain the room for that
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impact to continue. Okay. So I think
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this is probably a good point to pivot
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and start talking a little bit about the
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students here at Wharton. Yeah. What are
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you seeing in terms of the energy around
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social enterprise with what they're
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doing? Do you see the potential of the
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people who can mix the two? I mean
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Wharton has a reputation as being
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perhaps a little more financial than
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social lean at all. I think we're
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starting to even out the scales a little
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bit, but how's this resonated in the
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student base? Given that I've been
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coming here for four years, I can I can
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take metrics on what I'm hearing and
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what I'm seeing advancing. What I can
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say what I'm hearing from the student
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body is that there's this deep desire to
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do good in the world. And I think if you
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look at the millennial set and the
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younger set, there's something about
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these these young people that their need
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to see the world improve is really
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powerful. And if you think about what's
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happened on in their youth, they've seen
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a terrible recession, a lingering
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recession. They've seen a lot of new
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data on climate and ecosystems and
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terrible weather. And so this is
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constantly on their consciousness and
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it's affecting their decisions. Even at
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a school that's as competitive and elite
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um and high acumen as Wharton, this is
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seeping into people. So the cool thing
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is you've got these students that are
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just brilliant at finance and they're
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wanting to create a huge impact in the
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world. And you put that together, it's a
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very productive intersection. Now,
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they're also super high achievers, which
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is actually a down a bit of a downside
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because they can't stand failure. And
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and entrepreneurship is just an one
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failure after another. And what you do
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with those failures, the difference
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between a failure and a pivot is the
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entrepreneur that at the moment of
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failure um either they they put their
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tail between their legs, pack up, and go
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home. That's a failure. Or the
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entrepreneur that smacks into reality
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and their product breaks. they remake
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the product to I to to to more naturally
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suit that reality so they can now
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progress and that's a pivot. So while
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I'm seeing lots of desire to create
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something awesome in the world and use
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these unique skills and financial
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acumen, there's also a bit of a a
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mismatch between people's appetite for
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failure here and what's coming for them
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in venture uh should they get into it.
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That's part of our work is is is getting
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the student body ready to get hit on the
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head in re repeat. You know, I agree. It
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doesn't seem to matter how many times I
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hit them on the head in class, they
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don't like it anymore. Right.
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So, we're running a little short on
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time, but if you were going to leave
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students with one piece of advice from
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all of your experience, one
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crystallizing moment that they could
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take forward with them as entrepreneurs,
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spec specifically in social venture,
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what would that be? Start now. Start
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small. um start now because no amount of
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thinking about it and and
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and philosophizing about venture is
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going to help you understand whether or
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not you're you're fit for it or if you
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like it. You know, there's so much
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obsession about startup and it it'd be
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as ridiculous as there being a huge
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obsession about ballet and everybody
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wanting to be a ballerina. It doesn't
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work that way. you know, the same
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percentage of society likely somewhere
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around that is going to be fit for
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entrepreneurship and actually like it
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and thrive within the constant unknown
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and the huge pressures. The only way to
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find that out is to get into it, but you
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don't want to get into it at massive
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stakes for your first kick at the can
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because what if you don't like it? So, I
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tell students a lot to start a sub
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$1,000 startup of some kind to address
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some sort of social need if they want.
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It could be social impact, it could be
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real estate, it doesn't really matter.
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It's start that sub thousand dollar
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venture so that the stakes are super
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low, but you put yourself in the
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pressure cooker to understand if you
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like it. Lastly, because there is no
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great success, there's no billion-dollar
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company. Uh there's no selling to
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Facebook for 20 billion without small
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successes that lead to medium successes.
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Like the the lineage of success that
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leads to the mega success that everybody
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reads about in Fortune, it's a long
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tale. And so get started and build that
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momentum and and should should students
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discover that in that first thousand
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venture that they hate this then stop.
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Go take that awesome job at Goldman or
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for the UN or FAO or in Washington. I
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mean, you know, people can access
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amazing things from this place. So don't
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cut off all the other opportunity
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because there's an obsession with
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startup. All right. Well, that's
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awesome, Joy. So start small, small
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wins. See if you like it. Yeah.
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Terrific. That's all the time we have.
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Thanks so much for joining us and I hope
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you will come back in the future. more
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years at Wharton. Hopefully, this is
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just the start. Amazing. Thank you,
00:13:33
Tyler. Thanks, Joey.
00:13:37
[Music]
