2012-06-12

Co.Exist

The Case For High-Impact Entrepreneurs

Most of the time we talk about supporting small business entrepreneurs in the developing world, but what if supporting companies with dreams to be the next Apple or Facebook would have a larger effect on the economy?

In the U.S., land of kids who dream up clever tech ideas in dorm rooms and launch multi-million-dollar startups in their 20s, it’s a no-brainer to attempt to become a "high-impact entrepreneur" who creates companies that have a major impact on wealth and job creation. That’s not the case in many other countries, where people don’t dare to dream of opening anything but a mom-and-pop shop. "If you go to Mexico, Turkey, Jordan, Brazil, and tell them that high-impact entrepreneurs have the power for transformation, if people don’t laugh at you, they don’t believe what you’re telling them," says Fernando Fabre, president of Endeavor, an organization that selects, mentors, and accelerates those same high-impact entrepreneurs in countries around the world.

In an attempt to prove that high-impact entrepreneurship makes a difference, Endeavor teamed up with SAP to create an Impact Dashboard that shows the financial, employment, and social impact of entrepreneurs that work with Endeavor compared to small to mid-sized businesses around the world. The result: Endeavor’s hundred of entrepreneurial companies grew 5.4 times faster in jobs and 2.4 times faster in revenue than comparable companies. In Brazil alone, employees who work in Endeavor-supported companies have double the income of employees in World Bank companies, and 10 times as much access to private health care versus the national average.

Most of the public policy in countries like Mexico and Brazil, says Fabre, is about supporting microbusinesses or small businesses. "What we’re trying to prove with tools like this is that you modify slightly public policy to support high-impact entrepreneurs, and it has a greater impact," he says. Those small businesses you see on Kiva have their place, in other words, but visionary entrepreneurs with big dreams also need to be front and center. Because as the Impact Dashboard notes, the need for jobs worldwide grew in 2011 to over 200 million people while global GDP growth declined. High-impact entrepreneurs will create those jobs.

Fabre cites a handful of Endeavor companies that exemplify the kind of entrepreneurship that the organization wants to nourish. Café Punta del Cielo, a Mexican coffee chain that Fabre calls "the Starbucks of Mexico," started just six years ago. Today, the chain has 1,021 employees and 14 retail stores. Globant, an Argentinian software development company formed in 2003, now has over 2,000 employees and is one of the fastest growing companies in Latin America of its kind.

The dashboard is a self-promotional play for Endeavor, of course, but it does make a compelling larger point: We have to support high-impact entrepreneurs just as much as small businesses. Next, SAP plans to take Endeavor’s data to look into the future. Says Brittany Lothe, SAP’s head of corporate social responsibility: "If the Endeavor entrepreneurs are performing at these rates, what would happen with greater investments, and what could that mean for job growth, and revenue growth?"

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1 Comments

  • Herb Engert

    Ariel, I’m really glad that you're focusing on this important, and often overlooked, angle, as high-growth entrepreneurs are clearly setting the pace for revenue growth and job creation. I focus on advising, guiding and recognizing entrepreneurs in my role at EY, and we believe it's crucial for regulators and business leaders alike to think more about how to create an economic environment that is more supportive of companies with the potential for high growth. In a recent survey of almost 700 finalists from our 2012 Entrepreneur of the Year program, we found those entrepreneurs employ nearly 675,000 people and grew employment over the past two years by 30%. Also, interestingly enough, VC-backed companies from this group grew jobs the fastest at 79% as well as revenue at 123% over two years. Again, nice to see more support for this segment of the economy that is growing despite some pretty gloomy national statistics.