Do you want to make a difference in the world? I recently shared some real-life examples of impact entrepreneurship a key hallmark of the Impact Revolution—and in this post, I would like to continue to explore more of these inspiring ventures and some of the people behind them.
We all know the stories of tech entrepreneurs who, through their talent and drive, have come up with new ways to solve old problems, pioneered invaluable new technologies and reshaped our modern world. Hasn’t it been amazing to see how, within a few decades, new tech companies have overtaken giants that long dominated their field? Once-obscure start-ups, such as Amazon, Apple, Google and Facebook, have rocketed to the top 30 most valuable companies in the world in just 30 years. And just as tech, following the Tech Revolution, has become the sea upon which every ship must sail, the Impact Revolution is now adding another “layer of water:” Impact. To be successful today, businesses and entrepreneurs must consider and incorporate impact into their business models. Those that don’t will soon be overtaken by competitors and new entrants disrupting their fields. In other words, join the Impact Revolution, or be left behind.
While not all impact ventures yet measure their impact, they all incorporate it into their business models, and the more of it they deliver, the more money they make. Many such ventures across the world show incredible promise—from water to consumer goods, no sector is untouched by the ambition of young impact entrepreneurs.
Transforming Ideas into Actions
Meena Sankaran, founder of the water quality monitoring start-up KETOS, was motivated to take action after contracting waterborne illnesses while growing up in India. With the creation of her company, which raised $9 million in 2019, she is working to use software and data analytics to flag water contamination at a fraction of the cost of other monitoring practices. And water quality isn’t just an issue in developing countries; dilapidated infrastructure in wealthier countries can also jeopardize water sources, as demonstrated by the water crisis in Flint, Michigan. “Smart water grid management...is not just a nice-to-have, it’s a must-have,” said Sankaran.
The scale of impact that we can have on necessities such as water, air and food is enormous, but great impact can also be achieved in the field of consumer goods. TOMS shoes made the “one-for-one” model famous—with every pair purchased, TOMS donates another pair to someone in need—and positive consumer reception helped the company’s business model spread quickly. For example, after learning that socks were the most requested item at homeless shelters, American entrepreneurs Randy Goldberg and David Heath started Bombas in 2013, which sells high-end socks to consumers and also donates socks to homeless shelters. By 2019, they had donated over 20 million pairs.
Another retail impact business model that has achieved traction is repurposing and selling items that would otherwise end up as landfill. In the UK, Elvis & Kresse is one such social enterprise that turns fire hoses, scrap leather and other second-hand materials into purses and wallets. Since 2005, the company has reimagined 175 tons of discarded firehoses and has partnered with Burberry's fashion label to use their leather waste. They also donate 50 percent of their profits to charity.
These impact business models will, in my view, become the hallmark of the Millennial Generation. They are following on the heels of brilliant young tech entrepreneurs such as Steve Jobs, Bill Gates, Larry Page and Mark Zuckerberg, who have driven high-tech to dizzying heights and changed all our lives in the process.
I can see significant similarities between the disruption that high-tech brought to business and the disruption that impact is bringing today. I know we will see impact entrepreneurs that match the scale of the tech entrepreneurs’ ambition and success but surpass them in terms of the positive impact they have on the planet. To date, the best-known impact entrepreneur is Elon Musk. For all his quirks and the challenges Tesla, his high-end electric car company, has faced, Musk has single-handedly changed the automobile industry for the better.
According to Tesla’s most recent impact report, the company has sold more than 550,000 electric vehicles, which have driven more than 10 billion miles between them. That translates to a savings of over four million metric tons of carbon dioxide compared with internal combustion engine vehicles. Using the conventionally accepted cost to the environment of $300 per metric ton, this equates to $1.2 billion of avoided environmental damage. The story of Musk and Tesla has inspired a new generation of entrepreneurs who are motivated to improve air quality and reduce our dependency on fossil fuels. From start-ups like Ather Energy in India—an electric bike scooter manufacturer that has been called “The Tesla of two-wheelers”—to more than a dozen Chinese car developers that are backed by billions of dollars in capital, the global stage is set for battery-powered travel to overpower the fuel-burning engine. “Tesla paved the way,” said the head of one electric vehicle start-up based in Shanghai, “and now we’re taking this a step further.”
Closing the Gap
One of the main reasons I became a venture capitalist was my feeling that I could make a positive impact on society while also doing well financially. Apax Partners backed hundreds of entrepreneurs who enriched themselves, as well as the people working with them and their communities. They created many thousands of jobs in new fields ranging from technology to consumer products and media. I believed that providing new sources of revenue and jobs to improve people’s lives would elevate society. However, as the years passed, I could see that the gap between rich and poor was widening. Some companies ended up doing more harm than good, and things got worse rather than better for many people at the bottom of the social pyramid.
Additionally, the relentless consumption of our natural resources raised global temperatures, leading to the loss of wildlife, deadly wildfires, flooding and the destruction of the biodiversity on which our existence depends. If we do not fix these problems, the results could be catastrophic, so we need a new revolution in our thinking.
The state of our world demands that we embrace innovative solutions to society’s most pressing challenges. For the young entrepreneur, the examples above and in my last post offer huge inspiration. Across the world, young entrepreneurs are bringing innovative solutions to our most vexing problems, capitalizing on the new technologies that their predecessors brought to the world. When entrepreneurs aim for profit and impact at the same time, they are able to define ways to succeed without sacrificing financial returns and are often turning their impact into a key driver of their success. Because they place impact at the core of their companies’ business models, their profits grow together with their impact.
For those of you who are bold enough to lead the way, give yourself permission to try and fail, and above all, to set ambitious goals of doing well and good at the same time. Your ventures will bring positive change, and you will also set an example in how to achieve a healthier balance between what we do for ourselves and what we do for others.
Impact will help you succeed. It will enable you to recruit the best talent (because talent is attracted to companies that also do good). The best start-ups are those that solve significant issues because they are the most successful at attracting the most gifted teams and uniting them in pursuit of an inspiring mission. Finally, as impact investment gains momentum, investors will seek you out, because you are an early leader of an investment trend that will soon dominate financial markets.
There is one big difference between the past generation of young tech entrepreneurs and the rising generation of impact entrepreneurs: while tech entrepreneurs were able to thrive in only a few rarefied environments, such as Silicon Valley, impact entrepreneurs thrive wherever there are major social and environmental issues to tackle. They share the same passion and ambition to make a difference and to lead an entrepreneurial movement that sets the norms for a new and better world.
For more inspiration and insights on how you can make a difference, read my book, IMPACT: Reshaping Capitalism to Drive Real Change. Join the movement and be a part of the change for a better and more sustainable world.