VermiSoks: One Man’s Food Waste Is Another Man’s Tomato
The VerniSoks case highlights the entrepreneurial challenges of building a social start-up and the circumstances surrounding a visionary idea that struggled to gain financial traction from private investors and the venture capital community. The VermiSoks story paints a picture of a complex business model with a strategy that may have been too convoluted for potential investors to believe in its financial viability. There is no doubt that the VermiSoks business functions were both intricate and technical. Miguel attempting to package an incredible complex system, the Virtuous Cycle, struggled to gain financial traction in its holistic form. VermiSok’business model was designed to be monetized; the “social” purpose often took the spotlight. The Virtuous Cycle, in its entirety, was capable of serving a huge need in the world. Miguel’s desire to “close the loop” of the Virtuous Cycle and build his start-up around the entire system, rather than individual components, stood as a deterrent to attracting needed investors. On their own, the compartmentalized business elements had strong potential revenue opportunities, but the system as a whole was still difficult to grasp and presented a much greater investment than financiers were willing to undertake.
This case can be used in any Entrepreneurship course that examines different types of business models and nascent entrepreneurs in the start-up phase of business development; and in a Social Entrepreneurship course, or other types of special topics Entrepreneurship and Management courses. It emphasizes the following learning concepts: start-up challenges related to the need for speed in business scaling, the ambiguity of a social business, communicating entrepreneurial vision, and the challenges of building a new industry.