Venture development & "The Hybrid Ideal"

Tip4Change is a social enterprise that works on a hybrid model that uses business processes to make a social change. Tip4Change (as shown in the above fig.) partners with Farmer co-operatives, NGOs, Government and global textile giants to produce and supply organic cotton to consumers worldwide. How? The farmer co-operatives sell to Tip4Change while it markets to textile companies worldwide. The company is partnered with Government and other Local organizations so that the co-operatives receive subsidies, input and insurance schemes, training etc. This is a classic case of what Stanford Social Innovation Review calls “The Hybrid Ideal.” (1)

Today, these Hybrid Ideals are organizational set-ups or structures established to take advantage of the existing ecosystem: to tap in to the rigor and discipline of a commercial enterprise and the social ambition of the Not for Profit. Hybrid Ideal is more than just model incorporated in to certain departments or teams of an organization, in fact, it forms the very DNA of the enterprise’s functioning. One model of hybrid execution is hence: the organization develops its idea/venture by establishing key strategic partnerships in execution while lobbying for public policy changes.


Strategic Partnerships:

Strategic Partnerships with local NGOs and Government bodies that are already embedded in to the system enables the hybrid organization to learn from its partners’ successes and failures. They spend less time and resources re-inventing the wheel and duplicating an already tried and tested model. Tip4Change ensures community partnerships in their decision making processes related to crop yields, price points, finance support avenues etc., by working closely with farmer leaders in the region. Partnering with Local Government bodies on another end would ensure transparency of the functioning while sometimes reducing costs. For Example, the government copays for half of the crop insurance value while the farmer pays the rest. Also, the government funds training programs that could have incurred significant costs to the company.

Lobbying for Public Policy changes:

When the company is at the grass-root level and is working in tandem with key stakeholders in the value chain process, it has a greater opportunity to lobby for policy changes than it normally would not have. Tip4Change partners with students in Government Universities and think tanks so there is a constant debate and dialogue between Academic institutes, organizations and government bodies about issues related to beneficiary welfare, impact produced and growth potential.

However, Hybrid models, in the pursuit of “managing and integrating social and commercial activities sustainably struggle to find a suitable place between the for-profit and nonprofit sectors.” (1) Internally, though there is the advantage of tapping in to the resources of multiple financial sources such as funding agencies, private equities and venture capitalists, these very sources act as administrative and management burdens, hindering the venture’s growth. Finally, the strategic partnerships established are based on a complex web of contracts and legal structures, making the process of scaling a tedious process.

Unless and until “a pathway to better outcomes is clearly laid out and the organization understands how other resource providers, allies and rivals, forces and trends could affect its success,” (2) venture development through the hybrid model could prove to be a costly, ineffective affair.



(1) Ideas borrowed from In Search of the Hybrid Ideal: http://ssir.org/articles/entry/in_search_of_the_hybrid_ideal
(2) http://blogs.hbr.org/cs/2012/06/how_to_take_a_social_venture_t.html
(3) Inputs from Tip4Change internal reports 

(4)IIdeas borrowed from http://dastkarandhra.org/policyresearch.htm.