Project Guidelines

Social Enterprise Term Project – Social Enterprise Business Model Development

The focus of this assignment is for students (in groups of 4) to identify and design an engineering-focused solution to a pressing social/environmental problem. Students will develop an “investment quality” business model and investment pitch deck for a social venture, which will be presented to two panels – one with “social investors”, and the other with Angel investors.

The various components of the business model will mirror the content presented in the individual lectures, and students are expected to draw on the readings, lecture content and information provided by guest speakers to inform and guide the development of their business model.

Each group will be expected to have developed a compelling case for the development of their social venture. To achieve this, students will address the range of operational and strategic issues relevant to the feasibility of the social enterprise, including marketing, legal, financing and other considerations.

1. Practical application of the theoretical concepts discussed in the course
2. Understand the tensions that exist between business and social objectives
3. Build a feasible and executable business model for a social venture

The key deliverables for the term project are as follows:

• Part 0: Group members, and social issue, identified (no grade)
• Part 1: Discover, Interpret and Ideate on an engineering solution to the social problem (10%)
• Part 2: Model and assess the business potential of the idea (20%)
• Part 3: Identify and incorporate considerations (20%)
• Part 4: Complete business model and investment pitches (30%) (10% for social investor pitch, 10% for Angel investor pitch, and 10% for final hand-in)

Assignments should follow the following format guidelines

• 12 point font
• Single spaced
• 1” (2.5cm) margins
• If you choose to create figures, charts or other images, they should be embedded within the text (i.e. no appendices), unless otherwise stated.
• References should be made as endnotes (i.e. no in-text citations), and should abide by American Psychological Association (APA) citation guidelines.

Submission Format

All assignments are due, in soft copy, at the start of the class (6:00pm) in which they are due. After 6:01pm, a late penalty will be assigned (10%/day). No hard copies will be accepted.

All assignments are to be submitted via email to aps1015h@socialentrepreneurship.ca

Group members and numbers will be assigned by the end of class 2. Please cc all group members when submitting an assignment.

For simplicity, please use the following format for the Subject line of the email: “APS1015H – Group (#) – Part (#)”

• Your ability to ideate and business model a viable engineering solution to a social problem (e.g. does your solution effectively address the social problem at hand? Do you have a clear understanding of who your customer is? What value you are providing to your customer, and how you plan to deliver that value to your customer? Etc.). We want to know not only that you understand each of the components, but the relationships between each component.
• Your ability to convince others that you understand your business model and that there is a likelihood of both financial and social success (e.g. do you know your business well enough for an investor to want to invest in the business? Have you prototyped and market tested your idea? Do you know what social needs you are addressing and how your business will address them)

Part 0: Group Members and Social Idea Identified (Due by Midnight, Friday, September 23, 2011 – no grade assigned)

Students will self-select into groups, with group sizes of 4 members.

We expect an email from each group – one member of the group will email both Karim and Norm, and will cc all group members. List the full names of all your group members in the body of the email.

We expect in the email:

• A one to two sentence description of the idea (i.e. what you intend to do)
• Outline the social issue you are addressing (and what type of “social benefit” you will incorporate into your business)
• A very brief description (1-2 sentences) on the engineering solution(s) you are considering to address the idea
• Your preliminary thoughts on the business model, including potential target market/customer, and key considerations for the venture (e.g. the financial and social tensions you think the venture may experience)

Note that this is just a preliminary description. You will do more extensive ideating and business modeling for your venture throughout the course.

We will provide preliminary feedback on your idea via email by the following class.

Part 1: Discover, Interpret and Ideate on an engineering solution to the social problem (Due at the start of class 5 (Wednesday, October 12, 2011) – 10%)

Students will apply the Design Thinking methodology to begin thinking through the social problem and possible engineering solutions.

This deliverable will be a maximum of 6 pages (2 pages for each of the first three phases of Design Thinking). Using the Design Thinking Toolkit, students will provide the following:

• “Discovery” Phase (2 pages): A summary of the social challenge you plan to undertake, the sources and content of your inspiration, and the research you plan to conduct
• “Interpretation” Phase (2 pages): An analysis of the key learnings/key themes you undertook during the Discovery Phase, along with insights you made that will affect the business viability of the idea
• “Ideation” Phase (2 pages): A summary of your brainstorming session and outcomes, a brief description of the idea you plan to pursue, and a plan to prototype the idea

Students will have an opportunity to vet their idea in class 3, as well as in the Idea Jam session at Thing Tank Lab in class 4 (see syllabus for more details).

Part 2: Model and assess the business potential of the idea (Due at the start of class 7 (Wednesday, November 9, 2011) – 20%)

Students will continue to develop their venture idea through business modeling.

This deliverable will be a maximum of 15 pages (1 page business model canvas, 7 pages detailing the 9 elements of the business model canvas (approx. ¾ pages per element), and 7 pages summarizing the business potential of the idea).

On the “business model” component, students will use the Osterwalder business model canvas to provide the following:

Business model canvas (1 page)

The target market (¾ page)

• Explain why you picked this target market over others
• Provide a preliminary demographic profile
• Complete an Empathy Map

Value proposition (¾ page)

• Describe how you plan to create value for customers
• Complete a Utility Map

Channels (¾ page)

• Describe how you plan to provide your value to your customers (e.g. deliver your product/service)

Relationships (¾ page)

• Outline the type and depth of relationships you plan to have with your customers, and how you plan to execute this (e.g. online vs. in-person)

Revenue streams (¾ page)

• Identify the different ways you plan to bring cash into the venture
• Outline your pricing scheme

Key activities (¾ page)

• Explain why you picked these activities over others
• Outline the activities you will use to deliver your value proposition (e.g. to execute your “channels” and “relationships” strategies)

Key resources (¾ page)

• Describe the key human, physical, intellectual and financial resources you require to execute your value proposition

Key partners (¾ page)

• Describe the key partners (suppliers, collaborators, others) you plan to work with to execute your value proposition
• Describe how you plan to work with each key partner

Cost structure (¾ page)

• Describe the key costs (variable, fixed) that are required to execute your value proposition

On the “assessing business potential” component – The key goal is to determine whether the business model you’ve outlined actually has the potential to turn a profit. A guiding question students can ask themselves is, “how do I know that my assumptions in the business model are accurate?” In other words, this is the research and analysis phase of your project.

Students are expected to conduct both primary and secondary research to validate their assumptions. Students will (in up to 7 pages):

• Analyze the target customer (who are they, what are their behaviours and priorities, what is their need/”pain”, what is their willingness to pay)
• Analyze the market (how big is it, where is it, what does it look like, is it an attractive market, what are the entry barriers/substitutes/etc, what is the growth trend)
• Analyze the competition (who are they, what is their ability to satisfy customers’ “pain”)
• Analyze the risk (what could go wrong, what is the impact if it did go wrong, what can you do to prevent it)

Part 3: Identify and incorporate marketing, organizational, financial and legal considerations (Due at the start of class 9 (Wednesday, November 16, 2011) – 20%)

The key goal is to figure out, in detail, the key considerations that you must account for when planning your venture. These considerations are often what investors and funders look for when making investment/funding decisions.

This deliverable will be a maximum of 4 pages (e.g. 1 page for each consideration).

Students will use the tools and frameworks presented in class to identify their key considerations for their social venture. Students will:

• Determine marketing strategies (what are the pricing/promotion/distribution strategies, why these strategies over others, what strategic alliances are necessary)
• Determine the organizational infrastructure (HR requirements (including the management team), overhead requirements, governance requirements, key competencies necessary, decision making processes)
• Determine legal considerations (what legal structure will we use and why, what legal framework must we operate in)
• Analyze the financial model (what are the projected revenues, expenses and margin, what is the up-front cost, where do you plan to get your financing from, what are the “best”, “worst” and “realistic” financial scenarios)
• Determine the “exit” strategy

Part 4: Completed business model and investment pitches (Due dates below, 30%)

Students will incorporate their business potential research and key considerations into their business models, and will develop two investor pitch decks – one targeted to “social” investors, the other targeted to business-oriented Angel investors.

The timelines for this aspect of the term project are as follows:

• Final business model (10%) – due at the start of class 11 (Wednesday November 23, 2011)
• Social investor pitch deck (10%) – due by midnight, Saturday, November 26, 2011
• Angel investor pitch deck (10%) – due by midnight, Saturday, December 3, 2011

The final business model to be submitted will follow the same format as that outlined in part 2 (above). Therefore, the business model to be submitted will be a maximum of 15 pages.

The details for the two pitch deck presentations are still being finalized, and will be provided to students when they become available.

As this course is meant to be as practical as possible, students are encouraged to seek assistance from both Norm and Karim throughout the course. If you come to us with questions or a draft of your work before an aspect of the assignment is due, we will provide constructive feedback and can direct you to additional resources.

Students are also encouraged to review the additional tools and resources found on socialentrepreneurship.ca

Students should also note that the Angel pitch is both an academic and a practical exercise. Should the Angels be interested in your idea and you are serious about implementing your social venture, the Angels may invite you to submit a proposal for investment. Any potential offer is separate from the requirements of the course, and an offer or lack of offer will in no way be reflected in the final grade you receive.

Group Listing