Opportunities for Purposeful Startups Critical issues as a shared value for new ventures
Opportunities for Purposeful Startups: there are many areas of opportunity for new ventures to address critical social issues, either directly or indirectly. Startups cannot ignore injustice without threatening their survival or long term ability to prosper.
By most indicators, the US is one of the world’s richest countries, but has a bigger military budget than the next 7 biggest spender countries combined. Perhaps that partly explains why we perform so poorly on most world social indicators, each one of which offers significant opportunities to create shared value in the USA.
Those opportunities to create shared value can be met either directly by creating products/services to mitigate human needs, by the way the new venture operates its business, or through its intent to make the world a better place. These three are threatened by the fact that “wealth creation and wealth inequality are both at all time highs, though many business leaders and politicians don’t seem to mind this contradiction”, says Michael O’Sullivan in his 2019 book, The Levelling.
Room for improvement in shared value abounds
Though we live in a very competitive country, we are far from producing a winning performance in many parts of the community. Our ‘scores’ show plenty of room for improvement by comparison with international standards. The opportunities for purposeful startups are abundant
So, with each of the spheres of activity to create shared value, room for improvement abounds, and so do the opportunities for purposeful startups. There are many ways to assess and list social issues, but the two that figure below generally figure highly.
Healthcare outcomes create opportunities for purposeful startups
In healthcare, the US ranks 37th in the World Health Organization’s Table of Efficiency sandwiched between Costa Rica (36) and Slovenia (38). Costa Rica is the 76th richest country and Slovenia is at 67th place, according to the Credit Suisse Research Institute Global Wealth Report published in October 2019. In the same report, the US stands by far the country with the greatest wealth—almost a third of the world’s total!
In life expectancy as one measure, for 2019 however, an American can on average expect to live to the age of 78.8. Top of the table is Hong Kong at 84.7 years, while Costa Rica is 80.1 and Slovenia is 81.2. And that is with US healthcare expenditures at double the OECD average per capita. In fact we spend twice as much per capita as the next highest country. France, a which comes out top for health outcomes, but they get a lot more bang for the buck than the top spender (US). I’d known that the US has the highest prevalence of obesity in the developed world, but not that in terms of access to water and sanitation, it ranks 36th in the world.
Social inequality creates opportunities for purposeful startups
In social inequality (such as poverty, education, labor markets, safety net, gender equity, income and wealth) the US is an international laggard. Whatever government and politicians may say, we can make change through enterprise, especially new enterprise, and we are doing so. The youth poverty rate in the US is the highest across OECD countries. A quarter of American youth live in poverty, by comparison with OECD average of only 14%. According to the Stanford Center on Inequality and Poverty, the US is last in the top 10 wealthiest countries in terms of labor markets, poverty, safety net, wealth inequality and economic mobility. About 55.7% of voting-age population cast ballots in the 2016 presidential election—and was in 28th place in voter turnout in OECD countries, the average being 75%.
Although different forms of measurement vary a little, most measures of salary and wealth inequality are similar. Inequality.org , for instance, shows that in the US the top 0.1% of the population has incomes 188% more than the bottom 90% of the population. According to Executive Paywatch from Afl-CIO, in 2018, CEOs of S&P 500 companies received, on average, $14.5 million in total compensation and the average CEO-to-worker pay ratio was 287 to 1. This a much greater disparity than any other country in the world. Even though the structure of our lives is more volatile than ever before, many startups however, are increasingly showing the way to a more balanced world.
Opportunities for purposeful startups—by product or service
Here are two purposeful startups who’re addressing social issues through what they offer in healthcare and two in inequality:
- Pilleve (founded 2017) The co-founders started Pilleve (a safer way to prescribe, distribute and use opioids) after they realized the devastating effect of the epidemic. Aside from the magnitude of the epidemic, they both experienced it first hand. Through their experiences and personal struggles with addiction, they understand the tools that work to prevent patients from becoming addicted, such as intervening early and identifying patients who are at risk before it turns into a long term health problem.
- Acorn Biolabs (founded 2017) provides live cell collection that is accessible, affordable and viable for regenerative medicine through the simple non-invasive plucking of a few hairs. This makes the future of regenerative medicine, genetics and powerful stem cell therapy accessible to everyone.Traditional harvesting methods—bone marrow harvesting, liposuction, blood draws and umbilical cord blood banking—have been expensive, invasive and painful. More recent DNA home testing kits only capture dead cells from saliva that are unusable in cell therapy.
- Propel (founded 2014) builds modern, respectful, effective technology that helps low-income Americans improve their financial health. The company is a for-profit startup that aims to help stretch (poor families’) food-stamp benefits as far as possible. There those who might criticize a for-profit model aimed at help the poor, but I don’t see why a reciprocal method should not work to the advantage of disadvantaged people, if done respectfully. They say, “the best way to change the system for low-income Americans is to build a thriving business that aligns our incentives: a system where our business grows if, and only if we help more low-income Americans improve their financial health.”
- Digital Undivided (founded 2012) is a venture capital company focused on Black and Latina women. They know that structural, cultural, and financial barriers have worked to limit the participation of people of color in economic opportunities. However, Black and Latina women are the fastest-growing group of entrepreneurs in the United States. Focusing on this demographic, DID’s programs provide empowerment tools, including mentorship and seed funding.
Opportunities for purposeful startups—by intention
Here are four startups (the last two concern sustainability) that are intentionally purposeful:
- Notarize (founded 2019) is an online platform to get documents notarized, that is 10x more secure than visiting a traditional notary. Every Notarize transaction receives sophisticated ID verification, audit trail and the highest level of security features. The process is also easier and generally less expensive than the traditional route.
- Re:Purpose (founded 2017) is a recruitment agency, based in Detroit that levers their matching technology and curation team. They claim to be the only company in the world that connects job-seekers and employers based on culture. They naturally also match based on role and compensation. At the core of the business their values run through everyone’s veins. They aim to be a B Corporation soon.
- Naja (founded 2016) is a new kind of lingerie business founded for the love of beautiful things and a deep desire to make the world a better place. They seek to empower women through their Underwear for Hope program teaches single mothers in the slums of Columbia, so that they can stay home and provide for their families . The company strives to be environmentally sustainable by using digital and sublimation printing technologies to eliminate water waste and by using fabrics made from recycled plastic bottles.
The Grandees and the Levellers
I freely use the historical reference used in the book cited above: the Grandees (the elite) and the Levellers (the ordinary people) struggled against each in the chaotic post civil war period in England (1642-49). In today’s world we see not dissimilar struggles occasioned by many inequities. The inequities are blatant and deeply ingrained.
The advantage that startups have is that while founders of those new ventures may have personal histories, their creations do not. They begin with ‘clean sheets’, without burdensome pasts. This is how they are able to pitch into changing the world for the better, given the opportunities for purposeful startups. Startups can have a rippling effect way beyond small beginnings. Small entrepreneurs have global impact.