Companies that have a social mission can still make a profit, says one co-founder. Here’s how.
What do you think of when you hear “doing well by doing good” – that it’s a cliché? How about “impact businesses” – sexy? Or what about: “for-benefit companies” – confused yet?
No matter what you call it, many young women today want to align with an organization that is changing the world somehow. But most of us are not quite ready to give up our salary or live in a shared apartment at 32 in order to join a nonprofit we believe in.
But What If There’s a Third Option?
I attended a United Nations high school (UWCSEA), where the idea of compromise wasn’t discussed much. We were taught that, in any given situation, a solution that works for both parties (or countries, or disputed areas) can be created. Yes, the magical intersection in the Venn diagram is real!
More plainly put, we learned that you can always create a win-win situation to benefit both sides. For companies and startups today, making a profit and serving others are the two big circles — and that sliver in between, for the millennial generation in particular, is the sweet spot, aka “conscious capitalism.”
The line between the two worlds of do-gooders and money-makers is blurring. Companies are finding ways to make both goals definable and attainable. In fact, to stay competitive in today’s environment, you need to help people and serve society. Few businesses can stay competitive if their product or service is not providing value, solving an issue or making a real impact.
Whether in education, energy or health care, entrepreneurs are finding models to make their solution not just viable, but also financially sustainable. Rather than expending their best resources on fundraising and selling to donors, these entrepreneurs are focusing on building a product.
How We Founder Our Overlap
ContextMedia began seven years ago, in a dorm room kitchen one Friday night. The mission at hand, if we so chose to accept, was to educate patients living with a chronic conditions on how to live healthier lives via diet and exercise management. We envisioned them learning how to do this through engaging media provided during their office visit.
Three 19-year-old dreamers pooled their savings to buy TVs and DVD players, ripping content online, in order to provide a beta product to physician practices. The doctors loved the product and recognized true benefit to their patients and practice, but had no dollars to pay for it. Did we give up?
No. While we could have gone the 501(c)(3) route and actually drafted some grant applications, we didn’t want to go to sleep worrying each day about running out of money (which is the same reason we didn’t take external capital) instead of executing our vision. So we had to find someone else who also saw value in patients learning to live healthier: insurance companies? Or how about another industry whose mission is to help people live a healthier life – pharmaceutical and device companies?
3 Tips for Finding— and Funding — Your Big Idea
Self-funding an idea that does good AND makes money is possible if you know where to look (and what you want to achieve).
Here are 3 ways to get started:
- Identify what drives you in life. What problem speaks to you? For me, it was education — and the powerful freedom of choice that comes with knowledge.
- Identify your ideas, skills and resources for providing a solution. More specifically, ask, “What else do I need to do this well?” I had a passion for the power of media communication, but I knew I didn’t have sales or technology expertise. I taught myself a little bit but also surrounded myself with people more talented than me.
- Identify a financially sustainable way to execute your solution. Is it direct sales, channel partnerships, sponsorships, ad networks, etc.? If you’re not sure, list the stakeholders who may find value in your offering — and evaluate their ability to pay. As our story illustrates, the best revenue model for your company is not necessarily the most obvious one. Your checks may never arrive from the end user — but that doesn’t mean you can’t create win-win situations where some other company is willing to pay for the utilization of your product or service. You just need to find them.
Perhaps the most exciting news about the increasingly blurred line between doing well and doing good is that young women in their 20s and 30s don’t need to hit that big career brake when they decide it’s time to have a family or pursue something more impactful.
Instead, we can establish and run well-funded enterprises of our own, with a good team and a great model — all while giving us the freedom to choose our working hours, values and goals.
How does your do-gooder company make a profit?
The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.
About the blogger: Shradha Agarwal is the Chief Strategy Officer and co-founder of ContextMedia, a media tech company that educates consumers around critical health decisions. She was named to Crain’s Chicago Business 40 Under 40 list, and was the Stevies’ 2012 Female Entrepreneur of the Year. Connect with her on LinkedIn, Google+, and Twitter.