Fledgling social entrepreneurs may have a lot of passion, but they usually don't have much of a track record, a circumstance that leaves would-be backers to wonder: Which have the potential to become genuine world-changers? Which are likely to achieve significant social impact within an attractive business model? Potential customers are also left wondering: Which of these ventures are worthy of my attention and support? It turns out one of the best clues may be on Facebook. Last summer, Social Enterprise @ Goizueta set out with Village Capital, a peer-based accelerator program, to learn (among other things) whether social entrepreneurs with larger social-media followings are showing greater commercial promise.
In an analysis of data from roughly a hundred social entrepreneurs, we found a clear connection between a venture's Facebook presence and its commercial performance.
The average annual revenue for ventures that had set up dedicated Facebook accounts was roughly $142,000, considerably greater than the $77,000 for ventures that hadn't set up such accounts. For those with Facebook accounts, the correlation between number of likes and revenue earned was a robust 0.38 (correlations range from zero to one). Social ventures with bigger Facebook networks also were more successful in raising capital: The correlation between number of Facebook likes and capital raised was 0.34.
Ventures with active Twitter accounts earned more revenue, on average (roughly $149,000, compared with $69,000), and raised more capital ($147,000 versus $67,000).
However, the number of followers showed practically zero correlation with revenue earned or capital raised.
What does this mean for would-be investors and for the supporters (both individuals and organizations) of social entrepreneurs? A larger Facebook network suggests that a social-venture idea has legs. It seems to signal that an enterprise's theory of how to effect change resonates with a lot of people and that the organization is developing a "voice" for effectively communicating its ideas to customers — a crucial success factor. In other words, show me a fledgling enterprise with a big Facebook following, and I'll show you a venture that's poised to bring in revenue and capital over the short term.
So what does it take to create these larger online networks?
Here, we gleaned some additional insights from a separate analysis of 281 social ventures that applied to participate in the 2010 or 2011 Summer Institutes run by the Unreasonable Institute, the Colorado-based social-enterprise accelerator.
We found that social media is a young person's — specifically, a young woman's — game. Ventures with founders over the age of 40 tend to be less adept at developing their social-media networks, and female entrepreneurs are building stronger social-media presences.
Ventures dedicated to peace or human rights do significantly better when it comes to developing larger Facebook presences. On the other hand, Twitter-network advantages are observed among social ventures that are working in the Americas and among entrepreneurs who were invited to participate in the Summer Institute programs. The former effect might reflect the supply or demand of social-media networking — American social entrepreneurs might have better savvy, or typical stakeholders in the Americas might be more faithful users of Facebook and Twitter. The latter effect points to a possible specific benefit flowing to social entrepreneurs who participate in accelerator programs.
A multipronged approach to social media seems to pay off. Facebook likes increase when a venture has an active Twitter and LinkedIn presence. Similarly, Twitter followers are more numerous when the venture is active on Facebook and LinkedIn. This makes sense to Milaap.org, a social enterprise in Bangalore that crowdsources low-cost capital for microfinance institutions through its online platform. Milaap.org is highly successful with its social-media efforts and emphasizes that it works hard to link Facebook and Twitter as closely as possible.
One of the most encouraging findings to emerge from our research is that when it comes to generating social-media followings, social ventures in internet or marketing sectors don't do any better than their peers in other fields. Nor do we see advantages for entrepreneurs with deep experience or advanced degrees.
What this last point implies is that you don't need to be a high-tech whiz, a marketing expert, an experienced entrepreneur, or an academic star to generate social-media excitement about a world-changing venture. Instead, all social entrepreneurs should simply "keep an eye on what's trending, what people are talking about, what memes are popular — and then tap into that," says Shubhashree Sangameswaran of Milaap.org. Sangameswaran advises would-be entrepreneurs to "spend time figuring out what kind of an audience you'd like to attract. Then, create good content that's relevant to your field, and engaging. Basically, be visible."
Good advice, because the data seem to show that it is just this kind of visibility that translates into greater revenue and investment, two critical inputs for any entrepreneur who genuinely wants to change the world.