Startups: The True Drivers of Social Impact

If you are part of the startup ecosystem in Latin America (or any other hub in the world), you have probably heard founders saying they will change the world. Even though some founders might use this phrase as a recruiting tactic for talent, I have no doubt that startups have more potential for social impact than the public sector or nonprofits. 

Since I was young, I knew that whatever I dedicated my time to, it needed to be something that would positively impact many people. In my college years, I thought that the public sector was the obvious path to do this. So, when I graduated I worked for a consulting firm, helping politicians and governments to develop their policies and communications. 

Some time into the job I realized there was a lack of alignment between social impact needs and political goals. Government and policies are run by politicians who often have different time cycles than social impact cycles. Politicians, if they want to be reelected or continue to their next position, need to show tangible results to voters during their terms (usually between three and six years). This is why most politicians focus their efforts on short-term policies, such as infrastructure or social programs. Nevertheless, policies that result in true social impact require more time than a politician's term to see results. For example, transforming the educational system in Mexico and making it truly accessible to everyone. 

Disillusioned with the public sector, I started looking to the nonprofit sector as the path for social impact. I found that even though the nonprofit sector doesn’t have the time pressure of a politician’s term, nonprofits face a bigger challenge: funding. Certainly in Latin America, the culture of donating to nonprofit organizations is still very poor and no matter how good the nonprofit’s cause is, without funds it is difficult to make a large impact. 

I remained disappointed as I was not finding a clear path to social impact. Then one of my mentors, Dr. Blanca Heredia, gave me the book, The Power of Unreasonable People, which had a huge impact on me. This book gives examples of entrepreneurs around the world building profitable businesses while simultaneously making a positive impact. I realized that it was necessary to look for the intersection between creating commercial value and doing good. After reading this book, I decided to pursue an MBA, to help me better understand the business world. During my MBA, I discovered the world of startups, entrepreneurship and venture capital. 

When I started working with startups (first as an investor and later as an entrepreneur), I realized that startups are true drivers of change because of their main purpose: to solve a problem affecting many by building a solution people love. Some of these problems, when solved, create a positive impact: fintechs enabling access to cheap capital to underserved markets, foodtechs reducing food waste or developing plant-based meat to reduce carbon emissions, marketplaces providing a source of income to marginalized sectors, and more. Even if the core business of a startup has no social impact (let's say an AI-powered CRM), it still has the opportunity to create social impact internally by building an organizational culture that empowers and develops talent. 

Finally, in the startup world, I found my path to having a positive impact. I can proudly say that Glitzi is changing the lives of female micro-entrepreneurs in the beauty and wellness space in Latin America. Glitzi offers a flexible work alternative with better earnings (3x better) than a full-time job in traditional brick-and-mortar salons and spas. This is key, considering that 90 percent of the workforce in the beauty and wellness services market are women who at some point in their lives become mothers and can't work full-time in the traditional spa or salon. With Glitzi, women in this sector do not have to sacrifice their professional career and economic independence because of their personal life. 

Glitzi also has expanded its positive impact by growing from being a marketplace connecting customers with independent beauty and wellness professionals providing at-home services to being the end-to-end solution for every beauty and wellness at-home service entrepreneur. Now, through Glitzi, professionals can also access courses and training to develop their skills set and techniques, beauty and wellness products at wholesale prices, and loans with accessible interest rates so professionals can buy products or pay for their training. So Glitzi has not only become a job alternative but a platform to grow the micro-businesses of  independent beauty and wellness professionals. 
After looking to make a positive impact in the public sector, in nonprofit organizations and in startups, I am a strong believer that startups are the best place to achieve this objective. In startups, incentives are aligned to prioritize the user/customer so, if the problems that startups choose to solve are related to providing access, improving quality of basic necessities (food, electricity) or creating new job opportunities for underserved markets, the probability of positive social impact is imminent.