The Difference Incubator

Melbourne’s first social enterprise cafe Kinfolk is located in a beautiful old building from 1891 on the corner of Bourke St and Spencer St. Formerly the headquarters of Melbourne Tramway and Omnibus Company, today donkey wheel house is home to Hub Melbourne, Kinfolk and The Difference Incubator (TDi) – which was one of the interviews I had been looking forward to in Melbourne.

Kinfolk inside donkey wheel house, photo credit: Josie Withers

Kinfolk inside donkey wheel house, photocredit: Josie Withers

I sat down with Isaac Jeffries, who has been part of TDi since day one; time flew by as we chatted about the program (business-driven), social entrepreneurship in Australia (sexy and growing) and his personal background (first-time founder at age 12).

The first thing that stood out to me was that TDi focuses on investable social enterprise instead of “just” social enterprise, the latter being defined as an organisation that makes intentional positive social or environmental impacts using a sustainable business model.

An investable social enterprise, then, is an organisation with a central social or environmental mission, a commercially viable business model, and the right management to deliver on the mission and model.

TDi’s programs focus on leveraging the three key elements: Mission, Model and Management to get a social enterprise ready for investment. Watch this video to learn how founder Bessi Graham and Paul Steele define the term of Investable Social Enterprise.


Program Structure

TDi offers different services for social entrepreneurs at different stages. The two-day business model workshop builds on the business model canvas for idea-stage as well as established social enterprises – never too late to revisit your basic business model, right?

Two Feet kicked off the day I was visiting. During this 6-month programs founders get together in group sessions every two weeks and have one-on-one mentoring sessions with the TDi team once a month. Topics covered through Two Feet are

  • Intent
  • Value proposition
  • Strategy and Operations including Piloting and Prototyping
  • Branding and Marketing
  • Business Finance
  • Investment 101
  • Designing for Success – Funding and Structuring options
  • Pitching to Investors
  • Theory of Change
  • Social Outcomes measurement
  • Governance
  • Whole of Enterprise reporting.

Other services TDi offers include consulting for social entrepreneurs and an investment readiness program.

Prototyping workshop

Prototyping workshop


Talking to Isaac I got a good sense for TDi’s approach to service provision in the social sector.

“We have a rule here at TDi: We don’t do anything for free. When people pay for the program, they come early, stay late, ask good questions, and challenge us to make the best possible program. It makes them sophisticated customers, we don’t get away with an average program. Remember that not all entrepreneurs are only just starting out, most of them have some money and consider it part of their startup costs. Very early-stage participants tap into personal savings, crowdfund, and find sponsors.” Isaac explains.

TDi values their program at AUS $15,000 and with the support of their corporate partner National Bank Australia (NAB), the cost comes down to AUS $5,000 per team.

“We wanted to be self-funded within 5 years. Sidney Myer Foundation and Donkey Wheel were our early philanthropic funders, and have been great supporters. In  Year 1 we were 50% self-funded, in year 2 65%, and this year, year 3, we are at 98%. At the end of the day, I believe that support organizations that operate like businesses instead of nonprofits develop better programs.

Business modelling at TDi

Business modelling at TDi

Look at this way: Most social entrepreneurs are not very good at watching their financial metrics. It is our job to eliminate the grant-dependent mindset. In order to do so, we have to show them how it’s done; we have to eat our own cooking.

Ensuring we are doing something that people value keeps us operating like a business. Click To Tweet

We know people value our programs because they are willing to pay for them. Any support organization should ask itself what their value proposition to social entrepreneurs is and how much these founders are willing to pay for it. At TDi, we need to make sure that we are doing something that people value, it keeps us operating like a business.”

I couldn’t have said it better myself.


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