What are the benefits and challenges of scaling up vs. scaling out your social impact?

Scaling up vs. scaling out in social impact isn’t just about growth at all costs—it’s about finding the path that balances cost and impact. When we were expanding in India, we realized that going deeper in one area too quickly would drive up our Customer Acquisition Cost (CAC) and make the SROI less sustainable. Instead, expanding across multiple countries allowed us to spread our reach without spiking costs, creating a more balanced approach to impact. This way, we could keep our expenses low while still maximizing our social footprint, proving that sometimes the second-best path can be the smartest.

In my opinion scaling is essential especially if we want to solve a social issue for good. At Micro Rainbow for example we want to solve the issue of homelessness and violence of LGBTQI people fleeing persecution. We have scaled our housing scheme in three UK locations and plan to do more. However, it is also important to consolidate the operations in between scaling rounds to make sure that the infrastructure is solid and that the team has the enough capacity and doesn't burn out. One of the biggest challenges is probably the availability of and access to financial tools that balance financial returns with social impact in addition to having investors who are willing to wait a bit longer for a return compared to for-profit only companies.

Scaling as a social business is more complex than scaling a for profit. The questions scaling up oder scaling out is just one of many more possibilities a social business can scale. What is the difference? A social businesses scaling efforts aim to generate more impact, not more money. Scaling impact can be within the organisation or within the ecosystem. In other words, scaling impact is not the same as scaling the organisation - growth in size, revenue, etc.

Scaling up can bring many benefits, such as increasing efficiency, reducing costs, and expanding your social impact. Expanding your enterprise can help you leverage economies of scale, enhance your brand recognition, and deepen your engagement with your target community. However, scaling up also entails significant investment, management, and coordination. You might face several challenges while scaling up, such as maintaining your social value proposition, adapting to changing customer needs, and dealing with competition and regulation. By scaling up effectively, you can achieve greater social impact and financial sustainability, and contribute to building a more inclusive and equitable society, which is our mission at After Cloud.

Scaling out, whilst ensuring quality and accountability across different markets and partners is a significant challenge. The enterprise needs to put in place systems and processes that ensure the quality of the product or service is maintained. This may involve setting up monitoring and evaluation mechanisms, providing regular feedback and support, and conducting periodic reviews to assess the impact of the enterprise's work. In conclusion, it requires careful planning and execution, as it involves selecting the right partners, adapting the model to different contexts, and providing adequate support, in addressing these challenges.

It's a great achievement; when a social enterprise can both scale up and scale out, albeit; not alway simultaneously. It is possible to achieve both, when the following steps have been taken: - The enterprise is clear about their 'Why' and are able to execute their 'How' ie delivery, well - When a social enterprise has tested out their ideas or delivered their programme successfully -Able to measure impact and identify where scaling up opportunities are, in their current context. - They have partners and beneficiaries who believe in the vision and are willing to invest. I believe successful scale ups, make room for more impactful scaling out opportunities.

There are very few industries where scale out conditions such as policy, availability of capital & talent, purchasing power etc will replicate your 'home' market. So to scale out succesfully 1. Examine a range of markets along a set of criteria such as above 2. Don't be afraid to look afar, often a country on a different continent with simialr conditions can be a help because you start with collaboration and dont assume you know ground reality 3. Have metrics in place to know how you might measure progress / pivot / wind down if needed!