November 5, 2020
Purpose-driven impact ventures are on the rise, and we have seen this with startups applying to Propel as well. There is an increasing number of startups who aim to grow not only in revenue, but also how they impact the environment or society. So, when I first began thinking about what kind of blog to write around purpose-driven organizations, it made sense to seek partnership with like-minded organizations to share multiple perspectives around the topic. We’re excited to be introducing an article trilogy in partnership with Upside Foundation and the Pond-Deshpande Center. Over the course of the next three weeks you’ll be hearing about the past, present and future of purpose driven organizations, which can apply to your venture be it a non-profit, traditional business or tech startup. - Charlotte Murray
The trend of impact driven ventures is on the rise across the board, ranging from publicly traded funds, Venture Capital firms, as well as within the tech startup space. The future of how purpose and technology intersect is here to stay, and the importance of how you position your venture around the triple bottom line - impacting people, planet and profit - is going to continue to grow.
Even before Covid-19, the year 2020 was marked to be an important year for the public markets growing in ESG (Environment, Social and Governance) related funds as well. KPMG said “In the hedge fund industry, ESG has gone from being a nice-to-have to a must-have.” The Global Sustainable Investment Alliance cited in 2018 that Canada had surpassed 50% of its assets under professional management to be classed under responsible investment strategies.
On the Venture Capital side, there are impact focused investment funds, such as, MaRS Impact Investing fund in Toronto that aims to find “innovative ways for investors to fund social enterprises and charities with investments that create both a financial return for them and a dividend for society”. In Sweden, the $100M EUR impact investment fund Norrsken, created by former founders, aims not at finding the next tech unicorn (Billion+ valuation), but instead at finding technology startups who can impact a billion people.
The growth in impact related tech startups is growing as well. Jenn Patterson, chief marketing officer at NEXT Canada, for example, noted that nearly 50 percent of the 80 finalists for NEXT Canada’s National Selection Weekend this year had a social impact mission at the core of their business.“There was a significant increase from previous years,” Patterson said. “There is starting to be a recognition that these types of businesses can be just as economically successful as their more traditional business-focused counterparts.”
At Propel, we are also seeing this trend, even prior to Covid-19. Propel alumni such as Side Door, Simbi, Reel Data, Foodbyte, Milk Moovement, Porpoise, Fundmetric and Tranquility have purpose-driven missions that would align with the UN Sustainable Development goals that was discussed in our second article in this three part series. These are examples of companies where impact and technology intersect.
When Covid-19 first began, during the unprecedented and acute shift in the workings of world, it was encouraging and inspiring to see the resilience and creative problem solving of tech founders, completely pivoting their businesses in a short time in order to address immediate challenges, or adapt their business models for the remote world. Many of the startups that experienced growth during the last several months, have a clear purpose-driven agenda. Startups addressing online education, and health care are obvious examples of sectors that will continue to grow.
Start with your Purpose
I first learned about the triple bottom line concept in 2000, and this influenced how I have approached conducting and operating business ever since. Throughout my 16+ year career I have been drawn to join or create ventures that have a big purpose and vision, where social and environmental impacts are a part of the mission.
As Simon Sinek says, “people don’t buy what you do, they buy why you do it”. His approach in “Start with Why” inspired the model that I developed around purpose-driven organizations that we encourage our startups to take into account when working on their value-proposition and positioning. How might you apply this model to your venture?
When you place Purpose in the center of decision-making and strategy, this can have a ripple effect on all aspects of operating and growing your business or organization, and how you position your value proposition to others. This mindset can be applied and be equally as valid across non-profits, charities, tech startups, businesses and everything in between. It’s a mindset.
Having a clear and genuine purpose is going to continue being of key importance in hiring and engaging the millennial generation, as “they are primed to do well by doing good”. Not only do they seek to have a positive impact in their own roles, but they also make purchase decisions with purpose in mind. Therefore, whether we want to recruit and retain millennials, or sell them a cause or a product, they will factor purpose into their decision making process.
- What is your purpose or mission? What impact are you hoping to achieve by solving the problem you are solving? How will you measure this impact?
- How well do you articulate your purpose?
- How does your purpose influence and relate to your vision, values and culture?
When you apply your purpose in the center of the problem you are solving, there is an even greater opportunity to impact the bottom line (profit) and as well to the customers you are solving the problem for (people), and the environment and society in which they operate (planet). Here the thinking is that profit and growth is a result of the important purpose you have, instead of being an objective in itself.
- How does your purpose impact people, planet and profit?
- How would you communicate your purpose to to customers, employees, investors?
You, your product and your stakeholders
Keeping purpose in the center can impact how you choose to operate at work and in life. It can guide how you evolve as a leader and interact with others, and help guide your decision making. Purpose can influence how you communicate your value proposition, how you innovate on your product or service and the philosophy behind it (for example, diversity, choice of packaging, choice of fair suppliers, choice of partners who treat employees well, being carbon-neutral, etc).
Finally, purpose can impact how you approach forging working relationships with stakeholders. The term Stakeholders in this model is intended to be all-encompassing, so this can include investors, customers, employees, partners, suppliers, whichever is relevant for your venture.
- How do you apply your purpose to your working relationships?
- How does your purpose manifest in your value proposition or differentiate you from competition?
- How do you factor in purpose to your own career choices and direction? How intentional are you in doing so?
- How might you coach others whom you are mentoring or working with to be intentional about their purpose?
- How do you identify if there is an alignment between their purpose and yours?
- How might you seek new opportunities that could exponentially have a broader impact?
What’s your venture’s Purpose? What’s your own personal purpose?
This is the third in a series of articles from Propel - the virtual accelerator for tech companies in Atlantic Canada, BE.for.CHANGE Ventures, a program of the Pond-Deshpande Centre at the University of New Brunswick focused on accelerating social entrepreneurship in Atlantic Canada, and the Upside Foundation of Canada,enabling founders of early-stage, high-growth Canadian companies to build social responsibility into their business by pledging equity to the charity of their choice and joining a community of like-minded entrepreneurs.
About Charlotte Murray:
After leaving her corporate career at Procter & Gamble in Switzerland and New York, Charlotte returned to Canada and launched a scuba dive expedition to mobilize local communities to clean up the underwater environment. Following this purpose-driven project across Canada, she co-founded her startup, PACTA in Halifax, which is where her startup journey began.
She has been through the ups and downs of a startup and has participated in a number of accelerators Launch36 and Propel cohorts in 2014 and 2015, followed by Founderfuel accelerator in Montreal and Google in Mountainview, California. She has been in founder shoes, bootstrapping a startup, pitching investors in Canada and Silicon Valley ( Google… ), raising money and growing a team, as well as the unfortunate risk and reality of startup life - having to close down. She channels her passion for supporting founders and growing the community by combining her corporate and startup journeys into all walks of life. She is a strong advocate for purpose-driven companies, for thinking bigger, where positive impact and growth reaches beyond the bottom line. She serves on the Board of Invest Nova Scotia, is a mentor and advisor for early stage startups and mentors for Techstars AI in Montreal.