Founders can change the world and still profit in the process
There’s a growing trend in startups to actually give a shit, to make something that unlike the next photosharing app, actually makes the world a better place. Call this milleniallism, call this common sense… whatever it is, it’s a good thing.
Whether it’s TOMS, whose buy one, give one model has given 86 million pairs of shoes to children in need, or Etnies, who plant a tree instead for every pair sold. There are companies like Beyond Meat and Impossible Burger, fighting climate change and awful animal agriculture one plant-based burger at a time. And others like Finless Foods, growing the fish and sustainable cultured meats of the future.
The thing is, these founders aren’t purely altruistic, if they were, they wouldn’t get far. Charities are ineffective drivers of change because they always need to be fundraising. And the expectations are all different (see this post for why).
But B-Corps and startups built with a real mission, that’s a different story. And in today’s Amazon Basics world of only the cheapest and most generic, that’s a good thing (here’s what your ecommerce company needs to know).
Have you noticed lately, everything you buy falls into one of two buckets: awesome, or acceptable. That’s not a coincidence. We splurge on our passions (travel, movies, ski boots) and save on everything else.
And why wouldn’t we? Do you really care what brand of commodity cleaning supplies you use? It’s the reason ecommerce (and retail as a whole) are being hollowed out. Traditional retailers cannot compete with the selection of Amazon. And brands can’t compete with the scale and low-margin metrics Bezos can (here’s more on Amazon and the future of ecommerce…).
So, upmarket we go. You can win at luxury or lose the race to the bottom.
But marketing isn’t enough, not anymore. Long gone are the days where a photoshoot and fancy sales pitch were sufficient to sell, let alone stand out. And in an interconnected world, you MUST stand out.
Consumers have UNLIMITED options. Why would they choose your product, your company?
What makes you unique?
For some companies, that’s their mission: not the Treat Our Employees Awesome and Customers Better and Change the World kind of mission. But the one you actually live by.
And nothing speaks your brand’s values better than actions, which speak a helluva lot louder than words.
John Mackey was tired of unhealthy options, he created Whole Foods.
Seth Goldman thought everyone deserved low sugar, sweetner-free drinks. Coke bought a 40% stake in the company in 2008 for $43 million.
And everyone knows the story of Patagonia…
None of this is to say every company should be a benefit corporation, or all businesses need a humanitarian component… But think about it, would you rather give 20% of your margin to Zuckerberg’s ad engine, or get a get a much larger than 20% boost in word of mouth by building a business that changes the world for the better?
Which do you feel better about? Which will keep you grinding for the next five, ten… fifty years?
Which makes a bigger effing difference in the world?
And this ISN’T a foregone conclusion. If you build the next Uber (and actually treat your employees and contractors right), you’d change billions of lives and employ huge swathes of the world. That is impact at an unprecedented scale.
But building the next Coca-Cola selling diabetes to kids wanting to “Crack open a Coke”… or e-cigarette company to sell teens on the appeal of vaping (and onboard them to smoking and harmful chemicals in the process)…
You can do the moral math for yourself.
There are a few things businesses MUST get right if they choose to go down the impact-focused route.
Here are a few branding & strategy pointers:
1. Sustainability can’t just be a PR play.
Authenticity is infectious, and the opposite is equally repulsive. We can all spot a fake smile a mile away. And the media (and internet writ large) crucify companies for much less.
This is like Pepsi building playgrounds or Facebook funding free internet initiatives… Phony doesn’t work, and eventually gets cut from the corporate charter. It needs to be baked into you and the essence of your company or it will never work. And it won’t resonate with customers or drive results.
2. Relevance really matters
It’s like those online pharmacies where you order Advil and they throw in free Viagra… Um, excuse me?
And what if Burger King donated a Whopper for every Impossible Burger sold: they’d kind of be missing the whole reducing animal agriculture and suffering deal — kill a cow with every plant-based substitute…
How many vegans would sign up for that trade?
Planting trees seems pretty generic when you’re in the business of epic ice cream.
3. Impact also HAS to be financially viable
Businesses NEED to make money to stick around. And you don’t change the world by dying tomorrow. Plenty of founders today live fueled by VC money. It’s the reason companies like Blue Apron, Uber and WeWork (see this post for more, and this one about Uber specifically) can grow unsustainably for years, only to come crashing down later.
Steroids stop working when you stop taking them, and your nuts shrivel up.
Unless companies have the fortitude to get unit economics right, they’re bound to collapse. And the same is true for mission-driven impact. Whether that’s donating shoes, replanting the Amazon, funding food shelters… if you’re hampering your business’s ability to grow, you’re hampering its ability to help.
4. We’re not talking about pennies here
On the opposite end of the spectrum, donating 1% of profits to fight climate change is a drop in the bucket. You can’t half-ass this.
Again, see #1. You either mean it, or you don’t. And customers will see right through it.
When was the last time a ‘We donate 1% of our profits to save the whales’ icon enough to get you to check out, and pay more in the process?
5. Tangibility trumps finance
If you go the donation/giving route, percentages feel meaningless. Customers don’t think about 1%, 5% or even 50%… it’s abstract, and it’s hard to grasp.
There’s a reason TOMS Buy One, Give One campaign worked so well. It’s real and physical, something people can grasp, and see on kids’ feet.
I’d recommend following their lead, or, like companies like Patagonia (who source sustainably, pay workers fair wages and refuse to work with morally-compromised companies), make it inherent to the nature of your business.
If you can point to specifics, you aren’t fake news or financial manipulation…
Plus, percentages are negotiable. It’s much easier for your CFO to say, “let’s decrease our donations 1% to meet numbers” than to say “maybe we shouldn’t give ALL the kids shoes this quarter.”
The mission and purpose
But again, most of the great companies that make a name for themselves and change the world in the process aren’t simply slapping a buy one, give one logo on their brand and calling it a day. Instead, they’re building conscious companies, interested in their environmental impact, employees’ and customers’ lives and the world they leave behind.
And it makes YOUR company a more attractive place to work.
Would you rather work for Exxon or Tesla (before Tesla’s recent scandals and debacles)… for big pharma, or a startup actually trying to make people healthy…
The mission matters, especially to YOUR people. And building a world-changing, mission-driven company is ALL about attracting YOUR people: customers, employees, investors… And you’ll find, they’re probably more loyal, more motivated and will take lower salaries. The perks of purpose and passion.
But we’re just trying to change the world, right?
Promoting your mission
You probably came to this article interested in marketing. Your business needs sales and superfans to survive. So, if you go the conscious capitalist approach of baking a better world into your business model, how do you leverage that for maximum impact?
And before you think of this as cynical, think about it? Who does more good, the person volunteering to build homes in Africa, or the one whose business helps businesses in Africa get financing for building homes? Bigger can be better (exponentially so) when it comes to impact.
What good is curing cancer if you don’t get the word out?
But what should that look like? Is running Facebook ads highlighting the fact that TOMS donates a pair for every set of shoes purchased a good idea, or an accident waiting to happen?
Building your impact brand movement:
1. Creative product packaging
The box or presentation of your product is often the only (or best) chance brands have to make a good impression. What does yours say about you? And what does it say about the mission of your company?
Featuring brand promises and values on your packaging can be a great way to get your name out there with consumers and win the A-or-B option battle we have when looking at two types of toothpaste on Amazon. If you’re company’s donating toothbrushes or delivering free dental care to orphanages, that’d make a big difference in my book, all other things being equal.
(Which would also get bonus points if your product lends itself to customer unboxing/test videos)
2. Let your customers look good on social
How can you make your customers look good to their friends? That’s the real trick to getting people to share things on social.
Guess who just bought a XYZ air freshener, and pulled 2 tons of CO2 out of the air. #climatechange #goinggreen
Fido loves his FEEDALICIOUS dog treats, and helping house homeless dogs in Detroit and LA.
Get creative. The Click To Tweet option after customers check out can be a gamechanger for your business, if it is a gamechanger for their reputation.
3. Partner with initiatives and other businesses
Take the dog treats example above… How many dog shelters would love free food in exchange for “advertising” your company. A few posters in the shelter, social media mentions and emails to their list…
You’re helping feed their dogs for free, and the bigger you get, the more munchies their impoverished pups have. That’s what I call: win-win.
Ditto with kids’ clothes and orphanages etc… The opportunities are endless.
4. Leverage the Media
This isn’t to say you need a PR firm, but everyone loves a good do-good story. If your business is truly heartfelt, that’s a great way to get local support while scaling and national coverage as you expand.
How many articles have been written about companies like Khan Academy (reinventing accessible education) or Kiva (micro-loans for 3rd world), and on the products side, Warby Parker, Bombas and Better World Books, who all have the Buy One, Give One model?
Common problems with impact
Building a mission-driven business isn’t all rainbows and unicorns though. Many in the corporate world will deride you. And plenty of investors hear the term “impact” and run for the hills. They want cold-blooded capitalists willing to crush competitors for every last ounce of market share… think Travis Kalanick.
And in a lot of ways, they’re not wrong. That’s often what venture-scale returns dictate. But, fast-paced venture growth might not be for you, or your company.
And some investors actually care where their chips are placed. More and more VCs and LPs are focusing on net-positive companies. And when it comes to impact, the more the merrier.
The trick: target your ideal investors. If you need capital (which plenty of promising startups do), don’t go looking to mercenary moneymakers, you’re wasting both of your time. Investing a bit upfront in your research and outreach goes a long way.
And NEVER say you’re not interested in the money. The last thing investors want to hear is that impact is the only thing that matters. If it was, they’d write off a donation to a charity can call it a day. So, even if your business is built to change the world and turn a decent profit in the process, focus on the profit, and how that helps you change the world in the process… Trust me.
Closing thoughts
What do you think? Would love to hear your thoughts below. Is your company more oriented towards profit, or purpose? Why?
Would some of these ideas be applicable, maybe even help you grow faster?
Or maybe you’ve been inspired to create the next world-changing startup, or are looking for the right one to join now. If you are, say hey below. What are you struggling with, looking for, interested in… you never know
And if you’re looking for other ways to acquire and retain customers and build an explosive brand, here’s a solid guide to get you started.
Want help growing your startup or small business or better aligning your business for impact-driven growth and investment? I’d love to chat. I work with startups every day who are changing the world to help them grow and scale faster. And faster you grow, the bigger you go, and the bigger your ability to be the change…
Go make it happen.
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