Good, Business, and Good Business
Here in the 20-teens, the roles of for-profit businesses, non-profit organizations, government, NGO’s, foundations, investors and philanthropists are beginning to blur together. We are quickly finding ourselves in a world where it is not only possible to do good while doing business, but expected.
This is quite a change from the “Friedman Doctrine” that claimed the sole purpose of business was to earn money for shareholders. Or as the Michigan Supreme Court decreed in 1919, to “maximize stockholder value.”
While this change may not be evident for those focused on Wall Street and Washington, D.C., it is quite clear from my perch at Fledge, the “conscious company” accelerator. In terms of format, Fledge looks like any other Techstars clone, one of more than 1,000 such programs worldwide. What is unique is that we focus on early-stage companies (often yet-to-be incorporated) that aim to do something good for the world, and specifically those that embed that goodness within their product or service.
With three sessions now complete and 19 companies fledged, there are plenty of examples of this blend of good and business, including:
BURN Manufacturing designs and manufactures clean-burning cookstoves. In 2013, BURN opened its first factory, in Nairobi, Kenya, and is on track to be the largest manufacturer of cookstoves in East Africa. They are poised to save their customers not only millions of dollars by burning less charcoal, but tens of thousands of lives in reducing smoke from stoves within African homes.
Community Sourced Capital crowd-lends money for small businesses. In 2013, this company began operations, raising a total of almost $200,000 in zero-interest loans for 13 companies, sourced from over 1,500 people, filling a gap in lending that our banks no longer serve. In 2014, we expect to see over 100 loans across multiple U.S. states totaling millions of dollars.
Snohomish Soap manufactures and sells natural soaps in Seattle. In 2013, they added online and subscription sales, but more importantly, they put together a plan to expand nationwide, to be the first national brand that always manufactures locally, using a distributed workforce of stay-at-home moms and disadvantaged women.
Working with companies like these is a big departure from my 20-plus years as a software entrepreneur. We often hear about the “drive” of the entrepreneur that pushes him out of bed in the morning, after pushing him to work late into the night. That drive most often is the reward of wealth after the big “exit”.
In comparison, this realm of “conscious” companies requires no drive. It is a world filled instead with passion, which pulls you out of bed in the morning with a hope of a brighter future, and refuses to let you sleep at night with the possibilities of making the world a better place. Few of the entrepreneurs dream of any exit from their company. They are called to solve one of the problems of the world, and selling their company won’t often solve that problem.
Meanwhile, these are not the non-profit organizers of ages past. These are business people, who are seeking customers, revenues, and profits. But with a mission embedded within their businesses, they are also attracting philanthropists and foundations. It is fascinating and quite complicated. Back in the software startup world, investors come in the form of friends/family, angels, and venture capitalists., Here in the conscious world, funding comes from those sources, plus donors and grants, mission-related investments, new financial institutions such as donor-advised funds and community investment trusts, and from all of the growing forms of crowdfunding.
This is a movement not limited to Seattle, nor to the other hotbeds of social consciousness, such as San Francisco, Portland, OR, and Boulder, CO. Fledge operates within Impact Hub Seattle, one of more than 50 similar co-working/community spaces located around the world. Fledge is a Certified B Corporation, one of 875 companies from 26 countries certified in treating their employees, their community, and the environment in a positive, sustainable manner. Many of the fledglings are Washington State Social Purpose Corporations and Delaware Public Benefit Corporations, two of 21 states that now codify into law the ability for a corporation to have a social purpose beyond its fiscal purpose.
Thousands of companies are proving every day that it is possible to do good and do business, to do good and make profits, and for more and more, to do good and make investors happy. We need all three of these outcomes to keep this movement growing.