You are the owner of this article.
TECH

The heart in the machine: Madison startups combine free enterprise and public service

  • 10 min to read
The heart in the machine: Madison startups combine free enterprise and public service

As an astrobotanist, Richard Barker’s job is to research how plants grow in outer space. He spends his days at the University of Wisconsin-Madison working on NASA-funded research, which includes bioengineering plants and rocketing them to the International Space Station to monitor how they respond to space flight.

But as an entrepreneur, Barker’s job is to give high school and undergraduate students around the world a taste of how cool his day job is.

Barker is the founder of Collaborative Science Experiment, or CoSE, a startup that designs “easy-to-use” time-lapse photography equipment and classroom materials for experiments on plant growth. The products range from a 3D-printable machine that resembles a black rice cooker, to more sophisticated setups that let students tinker with microgravity.

“You can photograph other stuff with them too — microbes, stem cells,” said Barker. “There’s a lot of teachers, they’re trying to create really engaging classrooms for their students. But a lot of the engaging phenomena in the world takes longer than an hour to observe.”

The project is a for-profit company, but Barker said that making money is not his absolute bottom line. He wants to democratize botany and astronomy and help educators teach science literacy to kids. He wants his business to be accessible to all schools, even those that aren’t wealthy.

“We need to show people data is real. Science is real. And the only way we can do that is to help people process data,” he said. “The public school systems are doing their best. We just want to help them by giving them the latest technology.”

Barker is part of a growing trend of Madison-area entrepreneurs working at the intersection of technology, startups and philanthropy. The premise of the trend, often referred to as “social entrepreneurship,” or “impact entrepreneurship,” is to harness the hallmarks of 21st century startup culture — data-driven decision-making, an emphasis on leanness and flexibility, and resources like venture capital investment and accelerator programs — and use them to try to change the world for the better.

In Madison, social entrepreneurship ventures include a mix of for-profit and nonprofit groups, working on things like building clean energy systems for sub-Saharan African communities, creating open-source software for public libraries, helping teenagers apply for college and helping consumers make politically conscious purchases.

CoSE

The “SciSpinner,º one of the products developed by the startup CoSE,  lets high-school and undergraduate students experiment with how microgravity affects plants.”

Institutional support for such projects is on the rise: startup-centric groups like StartingBlock and gener8tor  have launched programs to foster social entrepreneurship ventures. At Forward Festival, the city’s annual week-long celebration of tech and entrepreneurship, social good is a central theme, with events ranging from a Social Good Summit to panels on socially aware investment.

Startup leaders have cheered on the growth of social entrepreneurship in Madison.

“It makes complete sense, because this city has such a tradition of public service. It’s part of the ethos,” said John Surdyk, director of the Initiative for Studies in Transformational Entrepreneurship at the Wisconsin School of Business. “And we have so many resources for entrepreneurs. It makes sense blending them would be a good idea.”

Some of those champions also stress that the public should employ some healthy scrutiny, and hold social good ventures accountable.

“We owe it to Madison as a community that we challenge, and we make sure, that these types of programs are making an impact in meaningful ways,” said Alnisa Allgood, the founder and executive director of the Collaboration for Good.

StartingBlock030-01252019132942

Carole Trone, the director of communications and strategic initiatives at the Fair Opportunity Project, works at the startup center StartingBlock as part of the center's Social Impact Initiative.

The rise of social entrepreneurship

From Girl Scouts selling cookies to finance their troops to clothing companies that donate shoes to children in need, combining enterprise with social good is nothing new. Social entrepreneurship, however, is a more recent idea.

Researchers credit Duke University scholar J. Gregory Dees with first identifying the trend in a 1998 research paper called “The Meaning of Social Entrepreneurship.” The emerging field, Dees wrote, “combines the passion of a social mission with an image of business-like discipline, innovation, and determination commonly associated with, for instance, the high-tech pioneers of Silicon Valley.”

“He kind of set the stage to say ‘What is it about all these organizations that are trying to be entrepreneurial, but also trying to deliver public benefit, that makes them stand apart?’” said the Wisconsin School of Business’s Surdyk.

Madison startup leaders largely credit Allgood and the serial entrepreneur Preston Austin as pioneers of social entrepreneurship in Madison. The two teamed up to launch the Social Good Summit in 2014 as a part of the annual Forward Festival.

“It paved the way for a lot of this in Madison,” said Maggie Brickerman, director of gBeta Social Impact.

Allgood, a data and tech guru, said that she launched the summit as a corrective to trends she was seeing in Madison’s startup scene. “I really didn’t like where Madison was going with its definition of entrepreneurship,” she said.

Allgood felt the Forward Festival paid too much attention to startups looking to maximize growth, with little regard for community growth. The Social Good Summit instead featured panels and workshops about channeling entrepreneurial energy for good.

That summit also paved the way for the Social Good Accelerator, an annual three-month program to help social entrepreneurs grow and develop their ideas. Projects that have “graduated” include board games to educate players about what it’s like to be black, community workshop programs on basic computer literacy, and apps that strive to connect low-income populations with information on health care in the Madison area.

2018 was a major year for the rise of programming and resources for social impact entrepreneurship in Madison.

Three projects launched within the Spark, the new American Family Insurance building on East Washington Avenue: gBeta Social Impact, a short-term crash course for social entrepreneurs; the StartingBlock Social Impact Initiative, a similar program that also seeks to connect projects with mentorship and resources over a six-month time frame; and AmFam’s Institute for Corporate and Social Impact, which espouses a mission to “support leaders of social change, coaching them in entrepreneurial thinking, processes and partnerships.”

2018 also saw the enactment of a state law allowing companies to incorporate as “benefit corporations.” The companies, often called “b-corps,” operate like other corporate entities, but must have a public social mission, and a "benefit director" to help ensure the execution of that mission. (Such companies are not to be confused with companies that get certified by the nonprofit B Lab, also typically referred to as "B corps.")

CoSE’s Barker said that he’s incorporating his company as a benefit corporation. By establishing it as such, he said he feels some assurance that the social mission will remain a critical part of the company’s DNA, no matter how much it grows or how hands-off he becomes.

“I wanted to let it become its own thing,” he said. “But I want to make sure that its mission stays central.”

AlnisaAllgood001-01252019185039

As a co-founder of the Social Good Summit, and the executive director of Collaboration for Good, Alnisa Allgood is considered one of the earliest advocates of social entrepreneurship in Madison.

How Madison helps

Many of Madison’s social entrepreneurs availing themselves of the city’s growing resource pool have fully embraced the traits of Silicon Valley startups — they’re tech-oriented, high-growth and looking for equity investment.

NovoMoto strives to bring solar lighting systems to off-the-grid sub-Saharan African communities, made affordable through a pay-as-you-go program. Mehrdad Arjmand, one of two former UW-Madison graduate students who co-founded the company, said the project began through a class at the Wisconsin School of Business. However, he said he and co-founder Aaron Olson felt a drive to continue their work after the course ended. He said he was struck by the seriousness of the problem he was working on after seeing satellite imagery of Africa by night.

“Even though there are about a billion people living in Africa, there is no light in Africa,” he said. “I was like, ‘Wow, how is this possible?’”

Providing such infrastructure to communities in need has typically been part of the domain of nonprofits. NovoMoto said their corporate status makes them stand apart.

“Originally, we had the chance to talk to some people. The feedback that we got was to shake the idea of a nonprofit identity,” said Arjmand. “Anything that’s nonprofit, it becomes not sustainable. Someone donates money for doing something, and that’s great, but there’s a high chance that it doesn’t work after a while.”

He said that given the company’s desire to scale quickly, they’re chasing equity investment — NovoMoto has raised nearly $500,000 from a mix of investors.

Other social impact companies in town look to achieve social progress in a political context. Goods Unite Us, for example, said its mission is to reduce the role of corporate money in American elections. Its consumer-facing app grades companies based on how much money they donate to political campaigns, as well as to the kinds of causes they contribute to.

“I see (Goods Unite Us) very generally as a way to help test the integrity of the democratic process a little bit,” co-founder Abigail Wuest said in a 2018 Cap Times interview. “It’s a way to start adapting to life with corporate money in politics.”

Politiscope is another social impact company embedded in politics. The company’s smartphone app taps into resources like the Congressional Budget Office and the Library of Congress to give user-friendly updates on congressional activity, biographies of elected officials and voting records for elected officials, and help users register to vote online.

Politiscope co-founder Israel Lopez, who has long been active in Madison’s social entrepreneurship scene, said the company is both a media venture and a social impact effort to help improve political and news literacy, and connect individuals or groups with updates on bills and other governmental activity that matters to them.

“We want to become the No. 1 political resource, a place where people can get straight facts from,” he said.

NovoMoto

One of NovoMoto's customers in the Democratic Republic of the Congo poses with lighting fixtures and solar panels he bought from the company.

Nonprofits get in the game

While there are many for-profit corporations under the social entrepreneurship banner, nonprofits are also deeply involved, many working at a community level. Examples range from the Progress Center for Black Women in Fitchburg, which connects black women with mentorship and resources, to Just Bakery, a spinoff of the Madison Urban Ministry, which trains people struggling to find work as bakers.

For many nonprofits, social entrepreneurship is a way to look beyond grants as a means of income.

“In my mind, I think of it as a map, or a continuum,” said Surdyk. “You have traditional nonprofits relying on traditional sources of funding. Then, there are newer organizations learning new structures. They’re developing newer products and services. They tend to finance their work in ways beyond grants.”

Other nonprofit leaders said they embrace social entrepreneurship as an opportunity to think about solving social problems in a way that incorporates technology and outside-the-box thinking.

Chris Shaw is the co-founder and CTO of Sidekick Education, a nonprofit that has created a platform for “in-class internships,” in which high schoolers can work on real-world projects for companies as part of their core school curriculum. He said that he thinks of himself as no different from any other startup out there, despite Sidekick’s nonprofit status.

“What your tax structure looks like is pretty irrelevant,” he said. “If you have no money, and if you have value to provide someone, you're an entrepreneur … it’s part of survival to learn to be lean.”

Discover Madison news, via the Cap Times

Sign up for the Cap Times Daily Features email!

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Sidekick is one of four nonprofits that has moved onto StartingBlock’s second floor as part of the new Social Impact Initiative. Another is the Fair Opportunity Project, a nonprofit digital portal that helps high school students apply for colleges and financial aid. Carole Trone, the director of communications and strategic initiatives with the project, said the group decided to join both the StartingBlock initiative and the gBeta program in order to be around other startups and learn from how they operate.

“There is so much within the traditional nonprofit world that we know that needs to change,” she said. “When you get out of your groove, out of your comfort zone, is when you learn the most.”

Jessie Lerner, the head of development and partnerships at Sustain Dane, is also working out of StartingBlock as part of the initiative. She said her organization, which champions sustainability in the environment and economy of Dane County, hopes to learn about new ways to finance their operations. The chase for grant money, she said, can easily turn into a complicated “game of whack-a-mole” that’s not reliably sustainable for social impact nonprofits.

“You have this really cool program that gets funded ... and then you don't have a program revenue source to keep things going,” she said.

She added that once that program ends, the entire Sustain Dane team plans on moving into StartingBlock. Being among other entrepreneurs, she said, will help the team learn to think differently. Plus, coworking is a lot more affordable that traditional office space.

Funding isn’t just a challenge for nonprofit social entrepreneurs — even for-profit companies have to get resourceful in the hunt for capital.

Politiscope

Politiscope is an app that tracks bills and political activity, in an effort to improve political engagement and literacy.

For startups looking for private equity investors like NovoMoto, the challenge is to find financiers who are genuinely interested in a social mission, in addition to getting a financial return. Both Olson and Arjmand said it took diligence to find investors who are willing to get returns at a slower rate, compared to a typical high-growth startup. Olson also said those investors agreed to invest “if there’s a certain level of profit we could generate.”

Lopez said that Politiscope has found investors who decided to back his company because they were enthusiastic about the social impact element. However, he said it took a lot of work to find them.

“It’s incredibly difficult,” he said.

Chandra Miller Fienen, the executive director of StartingBlock, said that the difficulty of finding investors often means that social entrepreneurs end up taking on more than venture capital. They end up growing their venture through a mishmash of grant money, contest prizes and organic product revenue. NovoMoto, for example, gained early momentum through winning awards at events like the Governor’s Business Plan Contest.

“I think successful social impact entrepreneurs, they’re more likely to have a more varied funding solution than a typical tech startup,” she said.

Profits vs. social good

The financing challenge verges on another concern in the social entrepreneurship scene: if a drive for profit can compromise a drive for social good. Allgood said that finding the wrong investors, or taking on a board that doesn’t reflect the social mission, can be devastating for a social impact company.

“As soon as they think they’re able to get back your investment and more, and you’re not aligned with that, you’re ousted,” she said.

Others acknowledge that some of the biggest tech startups of the past two decades may have eroded some public trust. Companies that have touted their services as forces for good, from Amazon to Google, have come under fire for everything from worker treatment to privacy concerns.

Miller Fienen stressed that those companies weren’t necessarily social impact ventures at their core — they were companies with a singular goal of becoming billion-dollar companies.

“I think that’s how some of the previous generation of tech companies lost sight of their social impact goals, if they had them in the first place,” she said.

Allgood and Austin said that despite a sometimes complicated relationship between capitalism and social good, it’s important to have some faith in social entrepreneurs.

“You should harbor a certain amount of skepticism. But you should also give trust,” said Allgood.

They also stressed that it’s important to approach social entrepreneurship with a critical lens, and the importance of actually monitoring outcomes to ensure social good happens. Austin said he’s somewhat concerned that too many social entrepreneurs may be thinking about growth strategy, instead of thinking critically about the good they strive to do.

“I do think there’s a certain celebration of the bold challenge to the status quo that’s central to the notion of entrepreneurship right now,” he said. “And I think that needs some modification.”

“We have to be willing to question the good that we think that they’re doing,” he added. “My advice to entrepreneurs is, who’s the group of people you’ll be working with who won’t be boosters? Who will be a critic? Who will be the informed skeptic?”

Miller Fienen said she agrees that a layer of skepticism is healthy. However, she also said she has seen the ability of both companies and nonprofits to make an impact for good. She said seeing social entrepreneurs join StartingBlock through the initiative has ultimately reminded her of what inspires her about startups in the first place.

“It’s what makes startups and working with startups so much fun,” she said. “Entrepreneurs run at problems, and not away from them. And working with people who run at problems is so much fun.”

Erik Lorenzsonn is the Capital Times' tech and culture reporter. He joined the team in 2016, after having served as an online editor for Wisconsin Public Radio and having written for publications like The Progressive Magazine and The Poughkeepsie Journal.