Purpose Driven Startups Challenge Accepted Wisdom
Purpose Driven Startups Challenge Accepted Wisdom, just as Alice’s Adventures in Wonderland, led her to exclaim, “Curiouser and curiouser!”. She explored the world conjured up by her fantasy, and was never phased by what she encountered. While founders of new ventures may seem as if they are living an unknown fantasy, they believe in their startups as strongly as Alice did in her journey.
Purpose driven entrepreneurs need to maintain their curiosity relentlessly and always avoid taking given business wisdom as fact. I encourage purpose driven founders to consider, for example:
- Health: Why is it that US per capita expenditure on healthcare is about twice that of the next most expensive country in the world? Especially when you know that considering the bang for the buck, we are 34th in the world in terms of health outcomes?
- Education: In 2014, the US spent an average of $16,268 a year to educate a pupil from primary through tertiary education (OECD), well above the global average of $10,759. Are Americans more equipped than others to enjoy ‘better’ lives and contribute help to create a ‘better’ world?
- Wealth: The top ten percent of households own 76% of all wealth in the U.S., while the bottom 50% of households own just 1% of all wealth. Put another way, The top 1% of Americans have about 16 times more wealth than the bottom 50%. Does this sound fair?
- Management Education: The graduate business degree is called a Masters in Business Administration? If you want to be an outstanding business manager, is it administration you want to learn or something else?
These are four examples of circumstances that do not make business sense, and yet we seem not to be able to ask the right questions to facilitate meaningful change for the well-being of society as a whole. They serve as examples to purpose driven entrepreneurs, if they learn how to approach their own circumstances with abundant use of WHY; Visit Startup Books for Purpose Driven Entrepreneurs and look for Simon Sinek’s book Start With Why.
In any event, my observation is that purpose driven entrepreneurs challenge accepted wisdom, and are likely to:
- make business decisions that clearly align with their intent to contribute to a better world;
- attract staff who are more motivated and engaged by a sense of purpose than accounting, data, or supply chain;
- gain committed customers who will identify strongly both with products and the way the business behaves.
Alice in Wonderland embodied radical curiosity in the way she was not daunted to unlock doors without knowing what they might reveal. She was free to drink the contents of bottles that ware simply labeled, ‘Drink Me’, without having the slightest idea about the consequences. The first time she, shrank to ten inches tall, and the second time she became a giant.
Seth Goldnberg’s book, Radical Curiosity, suggests that curiosity is an endangered species— it is the “greatest expression of what it means to be an entrepreneur… willing to raise the bar of our ambitions and expectations… an antidote to the apathy that leaves us content with how things are and emboldens us to ask what they might become.”
Seth’s book is a vital read for purpose driven entrepreneurs challenge to accepted wisdom. He insists that:
- we approach the world critically, rather than passively;
- we challenge the assumptions of our wisdom, rather than accepting tradition and convention as unquestionable;
- compelling entrepreneurial ventures, transformative social movements, and tech breakthroughs begin with an inspired sense of possibility;
- a wider definition of well-being is required and that in an interdependent world, there can be no well-being without justice;
- radical curiosity is built on an optimism that the extraordinary is possible.
A Different Way of Being in Business Can Have Negative Effects
The purpose driven entrepreneur has a deep conviction about what is to be undertaken. However, she does not necessarily take that commitment beyond he devotion to her nascent enterprise. That energy towards the internal new venture has to extend to the external world also. A clash between the two will be quickly perceived by potential employees, suppliers, customers, locals, and in fact, every stakeholder that could conceivably be imagined.
A year into our 1982 startup, we had an approach from a South African company. New business was vital in those early days. Apart from the three co-founders, there were only two other employees, but meeting payroll was a challenge. Even though we did not use the term back then, we were a purpose driven startup, so we declined the invitation. Apartheid did not end until eleven years later and we determined not to do anything that would encourage an undemocratic and racist state. It was not the sort of business we wanted to be.
I had had previous experience in trawling industry and we could easily have won a contract for work in that field on the other side of the world. I was tempted to make a bid, but my colleagues rightly called my bluff because we were about working in the social arena, not the economics of catching fish in the South Seas. Both the trawling and Apartheid decisions were not only about strategically sticking to our purpose, but ensuring that the company was not diverted from it. Both had directly negative financial consequences.
Cumulative Impact of A Different Way
It’s vital to also take stock of the cumulative impact of the different way of being. This is not to be done in a superficial way, as many companies do with their “would you recommend our company to others; please answer on a scale of one to five” kind of survey. A vital start can be to use the Venture Founders stakeholder strategy evaluation tool.
This requires purpose driven founders to regularly consider all their venture’s functions and make an informed estimate of its relative success or failure against it’s intended purpose(s). Every function of the business will have an effect upon others within and outside the firm. There is no point in having high-minded environmental goals, if one function, say production for instance, uses packaging that is only partially biodegradable or recyclable. Or, another function, say HR, does not consider the candidate-focus of its recruitment process.
Consistency of behavior and the policies of purpose are the responsibility of everyone in the company—top to bottom and side to side. Suppliers and service providers have to be involved almost as much as staff. Sharing the impact of the company’s reinforces the message, both inside the company and out. Clearly the sharing is not about boasting and bombast or making outlandish or exaggerated claims, but it does recognize the importance and reassuring nature of the purpose.
My own experience goes back to the 1980s and 90s, when our startup’s purpose focused on people as much as profits. Back then we might have been considered flaky in the business world, but refreshingly, it reinforced both sales and recruitment. No need to be shy—just be open and honest. Purpose driven startups challenge accepted wisdom all the time, thank goodness.