Dongguan, an industrial city in southern China, is probably the most labor-intensive area in the world. Each year, millions of migrant workers from inland provinces leave their hometown to become workers on the production line in factories of Dongguan. These migrant workers not only want to make money, they also want their children to become citizens of the city. Therefore, more and more children are born here. But the education situation is worrying. One of the critical problems is the lack of diversity. There are no places for children to learn after school or during the weekend. Most of them end up wandering on the street or in the internet cafés.
Kidsdo is a learning space located in Houjie Town, Dongguan. It provides maker education for local children. The founder of Kidsdo is Ouyang, former journalist of Caixin Magazine. Actually, her father is still a migrant worker at an electronic factory nearby and her mother a self-employer who runs a small business in the community. After knowing the education situation of the neighborhood, Ouyang quit her job and started Kidsdo.
Usually, education services for low-income families take the form of NGOs. They raise money from foundations or the public and serve students for free. But Ouyang decided to do it differently. She charges the students fees. This is a social enterprise. Kidsdo attracted six paying students six months after its opening. Ouyang estimated that it only takes twenty paying students to make the learning space sustainable. She is working towards this goal.
This is one of the many innovative projects in China that I visited last year. I discovered an interesting trend: more and more start-up projects take the form of social enterprises. “Why did you choose this model?” I asked Ouyang. She replied:
“First, I want to have income to help the project survive; second, I want to build relationship with service users so that the students choose Kidsdo for its worth rather than because it’s free. I, then, have a way to test whether I am on the right path.”
Ouyang’s answer is typical among education innovators. They are no longer satisfied with doing good, but want to build an independent and sustainable enterprise.
Will social enterprise facilitate education innovation? I am optimistic.
Let’s imagine a situation. A current education service costs 100 yuan and people from disadvantaged backgrounds can only afford 50 yuan. What can you do? Commercial businesses will probably ignore these people and charge 200 Yuan for those who can afford. NGOs’ solution is to raise money from the public and offer services for free. Neither of them have the motivation to lower the cost. Social enterprises think differently. Its primary concern is whether there is solution that costs less than 50 Yuan.
This poses a challenge for the management of social enterprise. To make a profit of 100,000 yuan, a commercial company needs to find 500 rich clients. An NGO needs to raise 100,000 yuan of donation. And a social enterprise needs to find 2,000 poor people who are willing to pay, which is much harder than the other two.
Social enterprises face limitations in product design and business model. But limitation is necessary for innovation. iPod was made because Steve Jobs wanted an MP3 player that can “carry 5,000 songs in pocket”. We believe that limitations can stimulate social enterprise to innovate at a low cost.
This is the DNA of a social enterprise and will become its advantage when offering services to the disadvantaged.
Bei Ru also contributed to this article.