Entrepreneurship, Features

Launching and Scaling a Successful Social Venture: Gerald Chertavian, Founder and CEO, Year Up (MBA ’92)

“The untold story of how to create, launch and scale a social venture”- this is how Professor Allen Grossman framed the November discussion with Gerald Chertavian, MBA class of 1992 and Founder of award-winning nonprofit Year Up. Chertavian, who’s organization seeks to close the opportunity divide by equipping urban youth with skills, experience and empowering support, shared the ‘Year Up story’ with over 150 students, alumni, and community members in the Spangler Auditorium to kick off the Student Social Enterprise Track of the HBS New Venture Competition on Monday, November 19.

Laura Moon, Director of HBS’s Social Enterprise Initiative, opened the event, which she dubbed a session on the “journey of creating and growing a social venture”, a theme central to the Social Enterprise Track, now in its 13th year at HBS. In the early 90’s, Chertavian‘s HBS application essay conveyed his desire to start a mentorship program that bridged the opportunity divide for students without that opportunity. Ten years later, he founded Year Up to do exactly that. Today, Year Up has been dubbed one of the top 50 nonprofits in the US, with an annual operating budget of $50M.

Professor Grossman led Chertavian through the “journey” of reaching this success story by extracting the thought processes and key success factors of the creation, launching and scaling of Year-Up, a story which began at the grassroots level, with Chertavian’s contribution to the Big Brothers program in New York. His experience with a Lower East Side mentee became, through the “power of one”, the strongest pillar in a structure Chertavian began to build in his mind.

There is such a thing as the right time. After years in a financially stable software job post business school, Chertavian arrived at the “right time” to create his social venture. He described this right time as having three facets: the right emotional state, the right business case, and the right support infrastructure. This meant a sustained and strong passion for the problem he wanted to solve, the potential for a financially and procedurally feasible operation, and a family and spouse that were fully behind him. Ultimately, Chertavian found that the time was right, and his energy level and age were up to the challenge.

Chertavian embarked on an intensive research process across countries and coasts, and found experienced and insightful people to constantly bounce his ideas off of. There was no exercise of “locking oneself in a room for months”, but a business case development process that was fully engaged in the world around him.

Since you don’t know what you don’t know, the right resources are absolutely critical. Year Up was incubated at the well-respected VC firm of an acquaintance of Chertavian. The decision to house the budding organization was based on cost effectiveness, but proved to deliver an unimaginable network of donors, resources and motivations. He also realized that stacks of research and all his passion were no match for the experience of those on the ground from day one. “Find people who don’t look you.” He actively spoke with social workers and others in the communities he was trying to service to improve the organization’s business model, even if incrementally, each day.

You have to be relentless. Starting a nonprofit means literally fighting for the money, not because it’s difficult to convince others to do good, but because it’s difficult to find a voice in the right circles. Chertavian was out 3-4 nights a week, finding the “super-connectors” in Boston, making friends for the organization, and building a network of donors and board members that became the lifeblood of Year Up. With sponsorship and with hiring, you have to cater to intrinsic rewards rather than extrinsic ones. This requires relentless efforts, a keen eye for the right motivations, and a truly open mind. There is no checklist. You never know who will deliver value to your cause.

“Scaling” means something very different in the nonprofit world. Some social problems require the market to be very fragmented – think community afterschool programs. It doesn’t always make sense to grow in size and usurp a market. Socially responsible scaling is a very different ballgame. Year Up is approaching it by scaling an idea, a system, rather than just a company. Collaboration and idea-sharing is often one of the most successful scaling tools in the social impact realm. According to Chertavian, it’s critical for social entrepreneurs to understand that impact doesn’t simply mean reaching 1 million people or 2 million schools. It means changing a broken system in a sustainable way, even at the expense of growth.

Dream big. Chertavian shared several memorable messages in answering the eager questions of audience members and closing the story of his entrepreneurial journey. You almost always need to expand your emotional spectrum when transitioning into the nonprofit world. Make sure you’re not just running a good business, but are actually serving the clients you set out the serve. “Movements are going on in this country. Are you going to be the big guy or is someone else?”

The event was followed by a Team Building Mixer to facilitate the beginnings of social enterprise team formation and ideation towards the New Venture Competition. The winter term will see many more events building up to the Student Social Enterprise Track of the New Venture Competition. Interested students should visit the website for Student Social Enterprise Track: Building a Team as well as the Social Enterprise Initiative website. Competition details can also be followed on twitter (#HBSNVC).

December 3, 2012
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