Social Entrepreneurship Indiegogo

Question: Discuss about theSocial Entrepreneurshipfor Indiegogo. Answer: Introduction: Indiegogo is a website which works on international level. The website is on crowdfunding and was founded by Danae Ringelmann, Eric Schell, and Slava Rubin in the year 2008. The company has its headquarters in San Francisco, California. It is one of its first kind which offers crowdfunding. It helps people in soliciting funds for a business idea, start up, charity, and others. It charges in addition to the basic pay of a five percent for its services. Those who want to provide support monetarily, or in other ways to create a fund for a new business plan are in the market domain of this company. These funds are used for financing the goals of the start ups and new entrepreneurs. In a month, around fifteen million people from all around the globe visit this site (Clarkin et al. 2014). The objective of the report is to show how adaptation of a social entrepreneurship orientation in conducting business helps Indiegogo. The strategies and tactics which can help Indiegogo to achieve competitive advantage over its rivals are discussed here. An entrepreneurs job is to assume the risks and rewards assigned to a business. The entrepreneur is a business leader who innovate new business ideas and processes. There is some specific leadership qualities needed to obtain positive results of entrepreneurship. The report shows how these qualities work on Indiegogo. Key Elements of Indiegogo: Back ground of Indiegogo: The product range of Indiegogo is of a huge magnitude. It offers variety products of new and modern technology. The site first worked on the film projects. The key members are from different career backgrounds. The site invests on those ideas which promise future in consumer market. The investors investing in this site for various projects receive gifts rather than an equity stakes in the companies. Indiegogo launched Indiegogo life which invests in life events. The entrepreneurs who get help through Indiegogo mostly have product ideas which can disrupt the traditional businesses. Some of those ideas are so strong that those can create industry of their own. In the case of a failed project, the investors have the option of getting a refund. The purpose of the websites like Indiegogo is to provide start ups with great ideas to raise capital for production. These investments come from common people who as a reward of investing get what the site offers. Crowdfunding has transformed many business ideas into heavy industries. This is one of the positive effects of globalization. Without globalization this phenomenon will not be possible. As the investors belong from around the globe and different classes, there can be no cluster of investor is possible in this format of investing (Indiegogo 2016). Competition: This global funding platform industry has many big names like Kickstarter and AngelList. These are the competitors of Indiegogo. Some developed countries like the United States of America has made some rules and regulations to promote a favorable environment for the global funding platforms. Jumpstart Our Business Startups Act or JOBS Act in the United States of America is one of the acts which promote these platforms. Since the launch of the site of Indiegogo in the year 2008, 100,000 projects from 196 were promoted by them. Recently the firm has invested fifteen million dollars in order to get ahead of the competitors. The market share capturing attributes in this industry are more than one. The percentage of fee if lesser than the other organizations draws more investors. The success stories of a firm also bring in investors. The number of successful returns builds the market reputation of the company. People tend to invest through those platforms which have a global market to add ress. The safety of the invested money is also another concern for both the investors and the company providing the platform. The funding scheme for most of the platform providing companies are fixed, that means, if the project sees success, the investors will receive their promised portions. The advantage of Indiegogos scheme plan is that it provides both fixed and flexible funding schemes. In the case of a flexible scheme, one gets the percentage whatever is raised (Lepoutre et al. 2013). Considerations Needed for a Social Entrepreneurship Approach: Social Entrepreneurship: The basics of social entrepreneurs are different from conventional entrepreneurs. Where, a conventional entrepreneur looks for new opportunities without taking any social considerations, a social entrepreneur targets to reach the disadvantage, under served, and broken markets. A social entrepreneur offers a large scale transformative change in order to achieve the goals. The social entrepreneurs are not risk takers as the conventional entrepreneurs are. They focus on ethical processes and approaches to reach the goals. A social entrepreneur sees a stable equilibrium, which might be in some cases being unjust. This is not the sub-optimal. Social entrepreneurs do not look for a creative destruction outcome (Lundstrom et al. 2013). Scope of Using Social Entrepreneurship: Indiegogo has the ability to use social entrepreneurship for the betterment for both the society and the company. It can use its platform to invest in those startups and ideas which will increase the societys welfare. A start up which is coming from a place with high unemployment rate needs investment more than the same which belongs to a place with lower unemployment rate. Investing in the previous kind of firm will create employment opportunities. This will reduce the unemployment rate in that economy. Like this, there are many scopes for Indiegogo to use a social entrepreneurship orientation in its business and marketing activities (Kaplan 2013). Indiegogos Position in the Market Competition: Indiegogo lacks from having a more detailed and focused media coverage. The management of the organization has to invest in increasing media coverage of the website. This will bring in more investment for the companys projects. Some of the competitors of Indiegogo, for example Kickstart, has their own video hosting facilities, whereas, Indiegogo uses YouTube as its platform for video hosting. The industry in which Indiegogo is operating is a competitive one due to globalised markets and keeps the fees at check. This is the competitive price. Indiegogo charges 5 percent for using their platform. One percent more will crowd out the inflowing investments. Dropping the percentage further will decrease the profit margin largely. The company has two payment partners: Stripe and Paypal. With more number of payment partners it becomes easy for the investors to invest in the companys projects. Transferring money become easier and it will cost less for the investors, which works as an incentiv e for them to invest. The reward levels also determine a companys attractiveness. Where companies like Kickstart has more than fifty reward levels, Indiegogo has only twenty reward levels. Improving this number will increase the number of investors. This will be beneficial for both the company and its project providers (Huhtamki et al. 2015). Changes to be made in Order to Ensure Social Entrepreneurship: To become a social entrepreneur Indiegogo first has to recognize a perceived social opportunity. The management has to analyze the outcomes of investing in a particular idea and see its impact on the production and the society. Indiegogo, then, will need to transform the social opportunity into an enterprise concept to make sure positive results will follow. It also has to see to fact that it is beneficial for not only the economy, but also the society. In the next step, Indiegogo is required to identify the resources needed to execute the entrepreneurship goals. The resources are mainly scarce in nature; hence, efficient allocation of resources is vital (Copeland 2015). Indiegogo has to ensure that its business model has the potential to have a positive effect on its workers, customers, and the middlemen. The company has to address the societal need. Indiegogo has to generate awareness of the companys business. This will bring in more investment. This way the company can stay ahead of the competitors. Social entrepreneurship will offer voluminous supply chain resources. This will counted as an advantage. The management of the company has to keep in mind the positive outcomes of business sustainability and social impact. One ensures another (Santos 2012). Required Leadership Qualities: Vision: In order to achieve a social entrepreneurship approach, a leader must have vision of the future. The place where the company should be to ensure social entrepreneurship and its characteristics has to be critically analyzed by the leader before stepping forward. Clear idea of the first step to be taken will facilitate the vision. The management of Indiegogo has to find the path which will be beneficial for the website while keeping in mind the social factors. Effectuation: The leaders need to understand what production process an organization currently has. There are two choices for the leader of Indiegogo. He can either see a successful social entrepreneurship model or use it as an example for the Indiegogo, or he can use what Indiegogo already have and modify it in order to achieve social entrepreneurship with successful competitive advantage. This is called effectuation. Getting people on board: The leaders of Indiegogo have to find people who have the same ethical foundation and beliefs. These people will be involved in the production process in the form of investors, advisors, customers, talent, and others. Together they will add value to both the companys profit making attributes and social responsibilities. It is the leaders responsibility to recruit such workers who share the same ethical values. This will ensure a frictionless production process. Flexibility: The leaders of Indiegogo have to be flexible in adapting the required changes needed for the transformation. They have to record the feedbacks from the investors and the clients, who have the same ideology, and show flexibility in judging those feedbacks. The leaders who are not open to feedbacks often lose the market by stagnating, even if they have other great attributes. The company needs the ability to learn from the sources within and outside of the company with flexible attitude. This will help the company to earn a better market share. Persistence: One of the most important qualities needed to facilitate social entrepreneurship is persistence. The leaders of Indiegogo have to make sure that with time the website does not lose its focus. With constant trial and concentration, the company will be able to be successful in social entrepreneurship. Losing the focus in the mid path will cost the website by losing the market edge from their grip (Miller et al. 2012). Creating and sustaining a social value needs planning and a proper vision simultaneously. Adopting such a mission is beneficial for both the company and the society. Recognizing and pursuing the opportunities for the social value is a must for the website, Indiegogo. The company has to engage in continuous innovation and be flexible to learn the required skills in order to sustain in the future with the goals in the hand. Using the resources at hand and sometimes going beyond the limitations to keep the aim feasible are the leaders of social entrepreneurs main objective. The leaders have to make sure that the website is gaining their targeted profit while following social entrepreneurship. Otherwise, the purpose of following this path will not let the company survive in the long run. The leaders also have to make sure that the policies adopted are maintaining the ethical boundaries the company have. Without ethical choices the company will lose its targets of social betterment (Stern 2013). Conclusion: In the industry of crowdfunding, Indiegogo is an important name. The website of Indiegogo is globally famous with more than 100,000 projects under its name. More than 196 countries are with Indiegogo. The company has helped in creating various products which could not be created without the help of crowdfunding. The company has the potential to do something good for the society along with earning a huge profit. The investors of the company will be happy to invest if the social and environmental values of the company are enhanced by their actions. To achieve social entrepreneurship status, Indiegogo has to follow some steps which will ensure positive results. Indiegogo has to recognize a perceived social opportunity first. Investing in a particular idea has to be guided by thorough analysis by the leaders. The impact on the production and on the society has to be critically observed. The company needs to transform a social opportunity into an enterprise concept. This way the company w ill be able to stay ahead of the competitors. The company has to locate the resources needed for achieving the goals of the enterprise. The resources have to be used in an efficient way, as most of them are scarce in nature. To achieve the social entrepreneur status the leaders of the company have to possess some qualities. These qualities are vision, effectuation, recruitment process, flexibility, and persistence. Recommendations: The leaders of Indiegogo have to recruit professional who has the same ideology as the company. The leaders have to create an appropriate model which will reflect the companys goals. The social attributes to be addressed has to be briefed to the employees. Regulators have to change their framework in order to explore the need for hybrid corporate forms. Tax-incentive models have to be preferred in order to generate capital for social causes. References: Clarkin, J.E., Phan, P., Bacq, S. and Nordqvist, M., 2014. Crowdfunding, foundations, and impact investors as sources of financial capital for social entrepreneurs. Theory and Empirical Research in Social Entrepreneurship, edited by PP Phan, S. Bacq, and M. Nordqvist, pp.191-219. Copeland, A.J., 2015. Crowdfunding a New Church: A Multimodal Analysis of Faith-Related Giving Rhetoric on Indiegogo. Online-Heidelberg Journal of Religions on the Internet, 9. Huhtamki, J., Lasrado, L., Menon, K., Krkkinen, H. and Jussila, J., 2015, September. Approach for investigating crowdfunding campaigns with platform data: case indiegogo. In Proceedings of the 19th International Academic Mindtrek Conference (pp. 183-190). ACM. Indiegogo. (2016). Indiegogo: The Largest Global Crowdfunding Fundraising Site Online. [online] Available at: https://www.indiegogo.com/#/picks_for_you [Accessed 23 Oct. 2016]. Kaplan, K., 2013. Crowd-funding: cash on demand. Nature, 497(7447), pp.147-149. Lepoutre, J., Justo, R., Terjesen, S. and Bosma, N., 2013. Designing a global standardized methodology for measuring social entrepreneurship activity: the Global Entrepreneurship Monitor social entrepreneurship study. Small Business Economics, 40(3), pp.693-714. Lundstrom, A., Zhou, C., von Friedrichs, Y. and Sundin, E. eds., 2013. Social entrepreneurship: Leveraging economic, political, and cultural dimensions (Vol. 29). Springer Science Business Media. Miller, T.L., Grimes, M.G., McMullen, J.S. and Vogus, T.J., 2012. Venturing for others with heart and head: How compassion encourages social entrepreneurship. Academy of management review, 37(4), pp.616-640 Santos, F.M., 2012. A positive theory of social entrepreneurship. Journal of business ethics, 111(3), pp.335-351 Stern, J.S., 2013. Characteristics of content and social spread strategy on the Indiegogo crowdfunding platform (Doctoral dissertation).