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