Michael Wunsch On Progressing Social Enterprise & How Government Can Provide Ecosystem Support

Michael-Wunsch-social-entrepreneurship-germany

Michael Wunsch has worked in the field of social entrepreneurship for over a decade - first as a founder and later as a supporter for Social Entrepreneurs.

He is the manager of the Social Impact Lab Frankfurt and Co-Founder and Manager of scientific cooperation for the Social Entrepreneurship Network Germany. Michael’s passion lies within building pragmatic ecosystems that solve society's most relevant challenges… and chocolate!

Michael Discusses the Development of Social enterprise within Germany in relation to other nations, and how government could further social enterprise to help tackle some of our complex issues.

Highlights from the interview (listen to the podcast for full details)

[Anika Horn] - Welcome Michael. I'm so excited you took the time to talk to us today and it just occurred to me over the weekend that the timing has been fantastic because the German Social Entrepreneurship Monitor was just published. And here we are being able to talk about the findings and all of the exciting work you've been doing throughout Germany over the last few years! So thank you so much for making the time!

[Michael Wunsch] - Thank you for having me.

I know a little bit about your bio, but can you give me a short summary of what your current specific role is, or your roles are? I know you're pretty involved in a lot of initiatives.

To begin with, I understand myself as somewhat of an ecosystem builder. That's what I and a colleague of mine set out to do. Her name is Birgit and we've worked together now for five years in different positions, different roles and different organisations. So that makes it somewhat special as well because we transitioned through our different organisations together. Currently, we are working with the Social Impact Lab in Frankfurt, which is an incubator for social start-ups, probably one of the biggest incubators in Germany. You shouldn't compare it with what you have in America because we are always lagging behind around three to five years. But there's still a lot of things going on there.

We are also very engaged in the Social Entrepreneurship Network Germany (SEND). I'm doing the Monitor as you mentioned before. A lot of other exciting projects always have to do with encouraging partners to get into the ecosystem and strengthening the ecosystem. I guess that's the two most important things. And then I have a myriad of other projects, but it's always about building an ecosystem for social entrepreneurs in Germany and in Europe to do their work.

And with that, we are at the heart of the conversation! What a beautiful segue. Before we dive deeper into all of the questions that I have, help me understand: Are any of these a full-time job? Or are you piecing together the work as part-time positions and volunteering, which is really common with ecosystem building? How are you making that portfolio work for yourself?

I don't really like thinking in organisations. I mean I build organisations and I help people build organisations. So, it's funny that I say that, but I kind of like doing projects, especially projects where I see a meaning and a purpose, and projects that hopefully will better society at least a little bit. So yes, I am involved in different organisations and I am financed through different organisations, but I think that lies, as I probably implied before, in the nature of an ecosystem builder.

With the Social Entrepreneurship Network Germany, we have 400+ members, and we try to understand their interests and go to different actors in society, such as politicians and organisations, companies, civil society organisations, and make them understand why social entrepreneurship is so important.

As such, that's an organisation that is built for somebody like me because then suddenly you have the mandate by the community to work because the community are the members. They are social entrepreneurs or social enterprises to be exact, and these social enterprises, they are organised within us.

I love it! Oh God, where do I start? So let's zoom out a little bit from a lot of the work that you're doing on the ground, which I love. I know you've been involved in social entrepreneurship in Germany for years. With your inside knowledge, what is something that makes the social entrepreneurship community in Germany unique? What is something that you feel makes them stand out from other countries? Be it Europe, be it compared to North America or Australia.

We are quite late when it comes to social entrepreneurship. If you look at Canada, the U.S., the UK, Australia and other countries - and I've seen different countries and their cultures coming in contact with social entrepreneurship and I've talked to a lot of people now in Belgium, in the Netherlands and so on.

I think there's one point that crystalLises out of these experiences. And that is that if you have a strong welfare system in a country, then it is tougher for social entrepreneurs to get a foothold.

It sounds so counter-intuitive because you would think that if you are in a welfare state, then there will be actors that see the great work of social entrepreneurs and social enterprises and try to incorporate that into what they are already doing. But that's definitely not the case.

I mean, if you have true capitalism as you have probably in America, then there has to be people taking it into their own hands to make things better. And for us here in Germany, it's sometimes quite difficult to talk to those organisations and individuals that have been working in the welfare state for quite a while and to try to explain to them why social entrepreneurship is different to what they've been doing so far. I think that's one of the major differences. Other than that, it's probably also taking risks. We don't like taking risks. What we love is applying our knowledge to problems like in engineering, right? That has been quite a difficult thing as most university students don't see themselves as start-up people.

If you look at social entrepreneurship in Germany, (and I think you have a lot of insight, thanks to the study that you just published), what is one thing that could be better for social entrepreneurship to thrive and really scale in Germany?

There's so many things that could be less of a hindrance for social entrepreneurs here in Germany. Of course we speak about finance.

If you look at impact investment here in Germany, it's in its infancy. Structurally, social entrepreneurs are many times not allowed to get access to the funds and the funding of the government.

There are many programs for start-ups, for conventional start-ups here in Germany, but social entrepreneurs are excluded many times because what they do doesn't fit into the normal understanding of what an entrepreneur is.

That's the finance part. But also, when you are looking for help for your vision and your endeavour as a social entrepreneur, you will find very little resources. I mean, it's become better over the last couple of years, but it's still very very difficult.

If you go to the normal organisations that aid start-ups, normally they won't have heard about social entrepreneurship or they don't know how to handle it.

And that's especially because of one thing that makes social entrepreneurship so much different to conventional entrepreneurship. That's impact, right? You have two models, you have your business model and you have your impact model. And that makes the whole building-of-your-start-up so much different.

We've talked from a systemic level about things that could be better for social entrepreneurs. We talked about sort of innovation resource support centres. We've talked about financing. I know that the government plays a big role in supporting social entrepreneurs coming up. Where do you see the individual purpose-driven founders struggle the most? Especially in your work with social impact, I imagine you have a lot of contacts. What do you find are these recurring obstacles that founders fall into and how could they address those?

I think one of the biggest challenges that we are facing right now, and it's one of those challenges that doesn't let me sleep at night, is that we try to solve very, very, very difficult, complex problems that are very systemic. But the people that come to us have not even founded an organisation before. I don't want to blame them because what they do is tremendous work. They are incredibly smart and brave and very humble.

But if we look at what lies ahead and what we have to solve, I mean look at the topic of plastics, right? Plastic packaging, you cannot solve it through one start-up alone and you cannot solve it by a team of university students that have recently graduated. And as I said, I love them. They are wonderful teams, but most of the time they need a year, sometimes two years, to understand themselves, their role as entrepreneurs, their problem, their solution and why their solution doesn't work and how it could work, right? It takes a very long time and I think we are not on this meta level, if you talk about professionalisation of the ecosystem, then I think we do not do enough.

The problems that we are facing and that we are up against need a different approach and social entrepreneurship alone will not cut it.

It's so interesting. You are the third German I'm talking to and you are the third German who says we're not creating systemic change fast enough. I think in light of that perspective of "we're not just trying to do a little bit, we’re thinking big!”, then I think it's true that a team of three recent graduates, however innovative, courageous and humble they are [it’s not enough] but in order to tackle systems that big, we have to step away from thinking of these single units and really think more about an ecosystem as you mentioned before. What are you most excited about in your field right now? Any developments or approaches? Any new actors? What are you seeing that gets you excited?

What gets me excited right now quite a lot is that the German government has picked up social entrepreneurship as a topic. Social entrepreneurship in Germany has been almost solely driven by these pioneer organisations. I mentioned some before, the BMW Foundation, the KFW foundation, SAP and some similar [organisations] like Haniel and Beisheim Stiftung. They have been supporting social entrepreneurship for almost 10 years now. As is in the nature of foundations or CSR departments, after a certain time, they change their vision or their mission, or people within these organisations change, right? So we see a big withdrawal in many cases of these organisations from the ecosystem. As we see this explosion of social entrepreneurship in Germany right now, we also see that many of the organisations that have been the first movers, that have funded the first movement, are drawing back. It will be very detrimental for the success of social entrepreneurship, the further success, to have the state on our side and to fund some of the endeavours that we have.

Can you think of two or three very specific tactics that you would like the German government to take to support social entrepreneurship? What's the role of government?

There's one, which I find funny, as well as my colleagues that I talk to, that when we go to actors within the state, and also others, but those are the important ones right now. If we go to them and tell them “We need funding for social entrepreneurship centres.”, they always say, "What? You need funding for those? Why don't you put it on, you know, economically viable feet and do your thing," and stuff like that. They always seem very dumbstruck when we tell them all of this start-up ecosystem, I mean the conventional start-up ecosystem and founders ecosystem in Germany, it's all funded by the state.

It's so funny that they say they don't have to fund social entrepreneurship.

That's one of the core things that I hope will make it into the draft [a proposal for a bill in the German parliament expected to be introduced this year] that they will hopefully bring out in the upcoming weeks.

The ecosystem, the organisations behind the social entrepreneurs that support the social entrepreneurs, that they get more backing. I mean of course financially, but also through networks and partnering and public procurement and all that.

I think that's really important. Other than that, and I just said the word public procurement, I think it's one of the biggest levers that we can pull for social entrepreneurs. If social enterprises can get contracts by the state, I think many of the things that the state wants to be provided with, social entrepreneurs or social enterprises can in some cases do even better than conventional enterprises. I think that's two very strong things that the government could help us out with.

Absolutely. Last question, what resources or books do you recommend for emerging social entrepreneurs or even ecosystem builders who are stepping in, who want to step up their game?

One book that recently made it to the shelves is Lean Impact. It's incredible. I loved this book. And I recommend it for everybody in the social impact sphere to read. Then of course, there's this classic by Donella Meadows, Thinking in Systems: A Primer. It's more about how systems work and how they are structured and how can you understand systems and stuff like that. It helps in every circumstance where you get in contact with systems and as a social entrepreneur you will do it undeniably. I mean, there's just no way around it. Then of course I love the articles. I think it's Kanya and Kramer in the SSIR, the Stanford Social Innovation Review, that speak about collective impact. Those are very, very good. You should have absolutely read Lean Start-up. I think that's a given right? If you are a social entrepreneur, you should have read that because it is one of the tools that's absolutely necessary as I see it.

Fantastic. Michael, thank you so much for your time today. I really appreciate you sharing your insights from Germany with us, and keep up the good work.