I am a selfish capitalist

Last night I got called a selfish capitalist. It was not meant in a nasty way. It was an observation made by a young woman who was grappling with a serious question, which has wider ramifications for universities, business schools and our community.

But let me first explain the context. I was giving a talk at RMIT university to their “entrepreneurship” alumni. The audience of 200 are running their own businesses or want to run their own businesses. I was sharing the stage with three fresh faced – actually they looked angelic – young women who have started ventures.

One venture was the Clothing Exchange, a clothes-swapping business. The pair run the business at a cost that’s “inclusive rather than profitable”. And they stress the environmental benefits of the business: an anti-consumer approach that runs along the lines of ‘why buy more when you can swap and improve your footprint?’.

The women have developed a good brand, had traction with the press and were building their website traffic. But they made it very clear they had no idea how to build a sustainable business. The reason? One, they didn’t know how to. And secondly, they had great trouble with the idea of turning their business into a profitable venture because they were uncomfortable with the notion of making a profit.

Then a well-meaning young woman from the audience posed this question. She pointed out that a lot of emphasis through the evening was on social entrepreneurship even though that was not the topic. Her question to the panel was about money. Should you try to make money, she asked?

My reply was that of course you should. I have seen too many young people – particularly women – go down the route of starting a venture on the social entrepreneurship bandwagon. They work themselves to death and basically end up disillusioned and exhausted with a train wreck of a business on their hands.

I pointed out that if you set up a sustainable business you can create jobs, make a positive difference to the community through the innovations you bring to market, create business for your suppliers and a better life for your family. And you won’t run out of steam in five years or five months.

There were a few loud claps of support but then afterwards one woman told me it was a difficult choice: being a selfish capitalist or a social entrepreneur.

Where had she got this notion? I asked around some of the professors in the entrepreneurship programs at a few schools and they assured me that even social entrepreneurship is now being taught with a market-based approach. Even the models being offered to developing countries look at ways of mitigating poverty though a focus on sustainability and profit. One professor told me that it is now recognised that without such an approach the model fails.

But a few did report to me that there are small groups of individuals in universities and business schools who are teaching our young people that they should focus on the social perspective. These people often don’t have a business background even though they are teaching in the entrepreneurship business courses. Their message is appealing to the young who have a well-developed social conscious. It is also well received because it is a simple message for those who do not understand the complexity of business. Focusing on the social aspect of business is far easier than focusing on the myriad of aspects that it takes to build a sustainable business.

And sadly, it also appeals to many women who have been brought up to be socially minded. If you take a social perspective and trumpet it wherever you go, people pat you on the head for being a good girl. And by definition it means you are not greedy, profit driven capitalist focused on the short-term and wrecking our environment.

Universities and business schools need to have a good look at the messages being delivered to our young people. And the young people need to be encouraged to see the complexities of business and the big picture – not just focus on the “social” side. They should also be exposed to the case studies I see of young women who simply burn out “doing good”.

And they need to meet the entrepreneurs who are changing the community for the better – and making a profit.

There is a place in the market for all types of business. But let’s be very clear to our young people. Yes, social entrepreneurship has its place and makes a great contribution to society. But it also has its drawbacks. And profit is not a dirty word.