Social entrepreneurship has emerged as an innovative approach to address social and environmental challenges by creating social value. However, few studies have explored the mechanisms of social value creation, particularly the simultaneous role of exploratory and exploitative dynamic capabilities in driving product innovation. This study aims to investigate the impact of exploratory and exploitative dynamic capabilities on product innovation and social value creation in the social entrepreneurship process. The research is applied and descriptive-survey in nature, targeting startups and innovative units in Iran. Field data were collected during November, December, and January 2022-2023. The sample size was estimated at 203 units using the Klein formula. Structural equation modeling and Smart PLS software were employed for data analysis. The findings indicate that social entrepreneurship significantly and positively affects exploratory and exploitative capabilities and product innovation. Additionally, exploratory capabilities positively influence exploitative capabilities and product innovation, while exploitative capabilities positively impact product innovation and social value creation. Product innovation, in turn, effectively contributes to social value creation. The results highlight the pivotal role of startups and innovative units in enhancing innovation and leveraging entrepreneurial opportunities.