Profit for Purpose – Bringing Heart Back to Business
It’s a confronting and vulnerable experience putting yourself out there on national TV wearing a love heart on your chest and professing your desire to build a business based on people, planet and profit for purpose. Now we are preparing for our seed round this is the perfect opportunity to explore our triple bottom line focus.
Someone recently said to me, ‘oh you’re a not-for-profit’ and I said ‘no actually we’re profit for purpose’ and they looked at me confused, seeking clarification.
Profit for Purpose
To put everyone in the picture a “Profit for Purpose” business is ‘led by a mission to achieve social, community and environmental benefit through trading and by channeling a portion of their profits toward their mission.’ (1)
And this is exactly how we operate – mobilising dormant goods and harnessing the circular economy leading to reduced waste while simultaneously creating profit for purpose for our customers who host events. To cement this even further we are in the process of formalising as a B Corps which means we:
- Aim to meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose and
- we will use profits and growth as a means to a greater end: positive impact for employees, communities, and the environment. (2)
But my question to everyone is “when did we start forgetting about purpose and just go full tilt at profit?”. And when I say purpose, that doesn’t include a purpose that revolves around just making profit! In venture capital land the chase is still very much focused on lassoing the next Unicorn. Why is doing good for people and planet, plus doing well financially, considered a crazy far-flung concept?
Borrowing from Ted Rheingold, a common question from investors is:
Q: ‘Why don’t you just earn your wealth first, and then donate it afterward?”
A: ‘Why don’t you want to build a highly profitable business that can provide impact more reliably than your future donations?’ (3)
To the investors out there my question to you is: “Take a long hard look at the why of a company, and I mean the real why (not the ‘to make profit’ why) and check whether they’re trying to make the world a better place, not just disrupt existing systems, gather a whole swagger of followers in a short space of time and make quick gains.”
Businesses Aligned to Purpose
I was really heartened by our RiverPitch experience, particularly when I heard Yohan Ramasundara President of the ACS say “It’s really exciting, startups are exciting and ones (startups) with a purpose are even more exciting (because they’re going) to change the world.”
And what is business really? Businesses are teams of people aligned to a common vision, who provide goods and services, to help others by solving problems. If they’re guided by Milton Friedman’s concept that the ‘only social responsibility of companies is to create profit’ then I think current sentiment would agree they are misguided. Larry Fink, CEO of BlackRock certainly believes we need to move in a different direction, “As wealth shifts and investing preferences change, environmental, social, and governance issues will be increasingly material to corporate valuations.”
We need to remember that we all spend so much of our waking lives working in business or interacting with business – whether it’s yours or someone else’s. Surely we want businesses to be led not just by profit, but to be underpinned by a basic human decency that requires care (aka love) for our environment and the community.
“The great women and men of the world were all givers, not takers. Renounce the common delusion that those who accumulate the most win. Instead do work that is heroic – that staggers your marketplace by the quality of its originality as well as from the helpfulness is provides.”
We want to live and breathe this at World’s Biggest Garage Sale and build a profitable business, where people come to work expressing the best versions of themselves while helping others and solving the world’s problems. We want to activate the circular economy and reduce waste and give a large portion of the wealth generated from this enterprise back to the community along the way. And on this journey we want to address as many of the United Nations 17 Sustainable Development Goals as we possibly can and demonstrate a new type of business model that can help achieve #agenda2030.
We’re looking for investors who are aligned to our vision, for people who are patient with their capital (not greedily needing a return asap) to be part of a business that aims to provide impact every step of the way. As Vicki Saunders, SheEO Founder says:
“The pursuit of maximizing profit at the expense of everything else has created a global crisis of inequality, environmental degradation and countless critical challenges to humanity.
Only considering financial returns has led to a winner takes all mindset where 5 people have the same wealth as half the planet. This economic model is entirely broken and needs a radical rethinking.”
With that in mind, the capital we have in mind comes for a person who thinks long term and is comfortable with the following:
- Longer time horizon for return of capital
- Forgoing maximum financial returns for greater social impact
- Unwillingness to sacrifice the interests of the end customer/employees/community/environment for shareholder gains
- Greater tolerance for risk than traditional investment capital
This diagram demonstrates our position really well.
As a profit for purpose company, we strive for more than just a sustainable business model that creates wealth from waste in the community. Our passion and purpose is a triple bottom line focus, with community and sustainability (including the Sustainable Development Goals….aka the SDGs or #globalgoals) equal measures in the success of our scaling journey. We genuinely agree with Richard Branson
‘The brands that will thrive in the coming years are the ones that have a purpose beyond profit’
We are excited to be opening our Seed Investment Round. Please contact us if you would like to learn more.