Back on the horse - in Austin

I'm trying to pick up blogging again after a long hiatus. Whenever I'm in transition I have a hard time thinking beyond my current reality, and we had a big transition in 2008 - my husband and I picked up our life in London and, in a several-weeks-long journey, made our way to our new hometown - Austin, TX. For a change, we followed our desire for good quality of life and sunshine, instead of careers, and it's turned out to be a great decision. This is a wonderful little city and we are enjoying getting to know it, along with our recently adopted dog, Blue.

I find myself in Austin at an interesting time for socially minded start-ups. Austin has the luck to have all the basic raw materials to be a leader in this field - it's a town of entrepreneurs, of socially conscious people, of great educational institutions, and of wealth. However the picture is still fragmented here, which I see as both a challenge and a great opportunity. I am of the belief that a community does not become a leader in this or any field without changes and innovations occurring in a number of areas, from public sphere to private sector (I blogged about this on Nell Edgington's blog, here). But there are also some promising signs that entrepreneurs are not sitting on their hands, waiting for Austin's infrastructure and capital markets to open their arms to social innovation.

Commercial companies like Blue Avocado and Greenling are following in the footsteps of older brother and local hero Whole Foods, building what they hope will be profitable businesses with clear social benefit embedded within.

Social enterprises are appearing, too, although they are still a bit thin on the ground here. English at Work is working toward financial sustainability, providing highly valuable services to employers by working with their employees to improve English skills. Emancipet, an organization with the mission to end unnecessary euthanasia of animals in Austin, earns a great deal of its budget through its spay, neuter, and wellness services. Southwest Key, a large Austin-based nonprofit, is making forays into income-generating social enterprise with a cafe and a maintenance company. If you're reading this and have other examples - anywhere on the social enterprise/social business spectrum, let me know!

Interestingly, as far as I know, most of the organizations above are entirely bootstrapped (with some grant funding for some of them). I applaud and support bootstrapping where it makes sense, but have to wonder what will happen when these start-ups (and others) reach that critical growth phase. For the highly commercial businesses, this might not pose a problem - if angels and VCs can see the business value and not get thrown off by the social impact, and if our economy doesn't completely implode, they should be able to get their hands on some capital. But for those who might provide investors with below-market financial returns, through equity, soft debt, or other mechanisms, where is this capital going to come from?

We seem to have a supply and demand problem that is highly chicken-and-egg. With so few social enterprises in Austin, can we go to funders and high net worth individuals with examples of success that might convince those potential investors to experiment with social finance? Or, if we can find some social investing pioneers to take a punt, will we be able to produce the deal flow to make it worthwhile?

My glib answer to these questions is Thank God for entrepreneurs. With some help and support, social enterprises will continue to appear in Austin, because entrepreneurs tend not to be hindered by the (lack of) resources at hand. But this is a big issue, and one that deserves intelligent attention. I'm excited to be here.