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innovation Tag

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.

As the Spellbinder from Robin Sharma’s The 5am Club said:

“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.

Patient Capital

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.”

Original Image: Brian Trelstad, Kauffman Fellows

 

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.

 

References

 

  1. https://food-x.com/profit-purpose-business-model-whose-time-come/
  2. https://bcorporation.com.au/about-b-corps
  3. https://www.fastcompany.com/40420834/the-non-paradox-of-highly-successful-profit-from-purpose-businesses

RiverPitch – A fantastic journey!

The WBGS team is only just coming down from the epic time we had in Sydney for the #RiverPitch finale. There was incredible energy on the day – all of these businesses have amazing founders and proven market worth and I look forward to seeing everyone’s continuing journey. I’ll be able to say, “I knew you when…”

Some of the WBGS team with Peta Ellis of River City Labs & Harley Weston, Managing Director of Solaire Properties

Founder Sharing

Preparation and filming for the grand finale offered all teams a rare chance to spend a high-energy day with other awesome founders who have embarked on the same journey emotionally. We’re all going full tilt, all-in towards our dreams. 

Your 2019 #RiverPitch Contestants!

So spending time together with this wonderful team we couldn’t help but feel like our own team at the end of it, developing a strong sense of camaraderie and mutual respect.

James Fielding from Audeara,

Lucinda Hartley and Jessica Christiansen-Franks from Neighbourlytics,

Carolyn Mee from Sound Scouts,

Hanno Blankenstein and Jason Grier from Unleash live, and

Tony Wu from Weploy

 

StartUp Mentoring

Yas & Steve Baxter behind-the-scenes

Once again I was grateful to spend more time with mentor Steve Baxter, someone who knows what it takes to grow and scale a business. The opportunity to benefit from his experience is immeasurable. It was also brilliant to meet and learn from the other fantastic mentors Sheona Devin and Peter James who have been equally awesome with their teams. All helped me hone my pitch even further. And overall the RiverPitch journey been a great process for gaining pitch clarity and business focus.

Finale Questions

So when it came to Q&A time from the judges (Yohan Ramasundara, Siobhan Hayden, Andrew Johnson and special guest judge Duncan Davidson) I felt well prepared for the challenging questions that came my way! I say challenging with love, because I absolutely want hard questions. They help us find the gaps, holes or potential issues that lie ahead for us when scaling. It’s the only way we can grow successfully and be ready for what’s to come.

#RiverPitch Art Imitating Life, Yas watching herself pitch on the big screen!

And although we weren’t the winners on the night – congratulations to Weploy!! – we really can’t put a price on the experience we gained and the connections we’ve made by being part of the show. A huge thanks to ACS, River City Labs and Your Money for bringing the show together.

It has been an inspiring journey and one I am so grateful to have been a part of. If you haven’t yet had a chance, you can catch-up on #RiverPitch at Your Money. Take the time to check-out the amazing Australian #tech #entrepreneur #startup space – we’re worth it!!!

 

Circular Economy Brisbane Innovators in our Midst

Monday night was another fantastic Circular Economy Futures Meetup for Brisbane. We discussed ‘waste to wealth’ and explored innovative and sustainable solutions for building a Circular Economy. There are some excellent businesses in Brisbane doing some really great work, tackling different issues. From prolonging the life of industrial equipment, to creating useful products from waste, Brisbane has seem real innovators in its midst.

 

Brad Parsons, CEO, MOVUS

Harnessing the Circular Power of AI: ‘Turning Dumb Machines Into Smart Machines’

Our first speaker, Brad Parsons, CEO of MOVUS, discussed how they’re helping to bring sustainability to industry. MOVUS’ world-leading Industrial IoT (IIoT) solution FitMachine® transforms dumb equipment into ‘smart equipment’. It enables this through consumer styled simplicity combined with world-class artificial intelligence. MOVUS’ FitMachine proactively monitors the condition and operating performance of industrial equipment.

Brad challenged us to look at the ‘way’ we live. Their work really fits into the inner circle of maintain/prolong within the Ellen Macarthur Foundation butterfly diagram. Their devices improve asset management and lifecycle optimization, with maintenance teams proactively monitoring and maintaining equipment, rather than reacting to failures or following OEM preventive maintenance schedules. The overall outcome being waste reduction, increased efficiency and empowered people. There was some really great discussion around prolonging the life of machines and keeping them in good working order for as long as possible.

 

Brendan Lee, Circular Economy Manager, Closed Loop

Trash to Treasure: Innovation in Recycling

Our second speaker, Brendan Lee, Circular Economy Manager of Closed Loop, showed us some of the great work they’ve been doing. Very much focused on creating sustainable solutions within existing business models they are finding useful products from waste. Their work sits on the outer arm of the Ellen Macarthur Foundation butterfly diagram looking at recycling. With their Simply Cups coffee cup solution they’re providing an excellent mechanism to ensure the excess of 1 billion disposable coffee cups avoid landfill in Australia. They’re collecting the coffee cups and transforming this trash into treasure with several innovative products emerging, ranging from coat hangers and bricks to pallets and even a keep-cup the rCup®, made from the disposed coffee cups. If that isn’t circular, then I don’t know what is!

They’re also tackling food waste, by providing customers with commercial on-site composting units recycling organic matter, with the capacity to reduce food waste volume by up to 90 per cent in 24 hours. This is some seriously impressive technology, with the machines taking food and organic waste throughout the day, including fruit, vegetables, grains, dairy, meat, fish, poultry, eggshells, crustacean shells and liquid. Within 24 hours, the original material is transformed into a concentrated compost ready for the garden!! Significantly improving on allowed inputs and time of home composting.

Highlighting MOVUS and Closed Loop on the Circular Economy Butterfly Diagram – Source: Ellen MacArthur Foundation, SUN, and McKinsey Center for Business and Environment; Drawing from Braungart & McDonough, Cradle to Cradle (C2C)

 

Our First Youth Speaker: Activating the Sustainable Development Goals

Finally, we heard from Sarah and Simeon, co-founders of Illuminating Distractions, a mother and son team working together to educate and engage people on the United Nations Sustainable Development Goals. Illuminating Distractions is a start-up supported by St Paul’s School Centre for Innovation (CIE) and Entrepreneurship. With a passion for the world and a desire to make sure people are educated on sustainable practices, Sarah and Simeon created a fun and interactive card game to teach players about the United Nations Sustainable Development Goals. And we’re big proponents of SD12 Responsible Consumption and Production, where Circular Economy practices will really come to the fore to address this goal. They’ve already sold over 100 units including some to the United Nations! Our future is in good hands with young leaders like Simeon leading the change.

 

Slide by Illuminating Distractions, Sarah & Simeon Gover

 

The event has really grown over the last few months and the energy on Monday night was fantastic – plenty of robust discussion and connection before and after the talks. It’s a really innovative, encouraging and supportive group proactively bringing the Circular Economy to life in Brisbane and Australia, all with solutions that have the potential to go global. If you have ideas or really care about the Circular Economy, come along to our next Event Wednesday, April 24 to learn and share.