When Tech Innovation Has a Social Mission

Published on NYT, by JOHN MARKOFF, April 13, 2008.

Palo Alto, Calif. – STEVE WOZNIAK built the original Apple I to share with his friends at the Homebrew Computer Club, but it was his business partner Steve Jobs who had the insight that there might be a market for such a contraption. Indeed, for decades, Silicon Valley has been defined by the tension between the technologist’s urge to share information and the industrialist’s incentive to profit.

Now a new style of hybrid technology organization is emerging that is trying to define a path between the nonprofit world and traditional for-profit ventures.

They’re often referred to as social enterprises because they pursue social missions instead of profits. But unlike most nonprofit groups, these organizations generate a sustainable source of revenue and do not rely on philanthropy. Earnings are retained and reinvested rather than being distributed to shareholders …

… STILL, most technology-oriented social entrepreneurs acknowledge that the hybrid model is by no means a one-size-fits-all approach, and there is significant debate about how far it can reach. Moreover, the approach hasn’t always worked.

For example, beginning in 2002, the Lotus Development founder Mitchell Kapor invested more than $5 million in the Open Source Applications Foundation, with the intent of finding a sustainable business. The group had a number of strategies for obtaining revenue from the distribution of free software, but it was unable to get far enough along to begin the experiment. The project never got to the point where the calendar program Chandler could be widely distributed, and Mr. Kapor has since scaled back the project.

The experience, however, has not dulled his optimism.

You can use a lot of the methods of business, specifically entrepreneurial start-ups, in ways that are directed at having a positive social impact, Mr. Kapor said. Mozilla and the Archive are cases where we are harnessing powerful techniques of value creation that were originally forged in the Valley and putting them to use. (full text).

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