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For startups hoping to save the world, or at least make it a better place, balancing impact and profit can be difficult.
“Investor and shareholder expectations are often out of step with how difficult and intractable the problems we face as a society are,” Allison Wolfe, co-founder and CEO of A vibrant planethe said on the Builders Stage at TechCrunch Disrupt 2024. “I think in some ways we’re a little stuck.”
But it’s not impossible.
Wolfe’s company develops cloud-based software for utilities, insurance companies and land managers such as the U.S. Forest Service to model wildfire risk and response. To ensure the company monitors the mission, it has registered as a public benefit corporation, which requires companies to submit an impact report in addition to the usual financial information.
“This is a neat structure to consider if you haven’t already, and it’s easy to convert,” she said. “It’s a good forced job to do the reporting side of that, and really think about each year, what impact we’re having, and how do we take that into account.”
Another approach is to find a technology and business model that closely combines purpose and profit. This is what Areeb Malik and his co-founders did when they launched the company Glaciertheir robotic recycling company.
“When I started my company, I was looking for the right opportunity, and it was about aligning profitability with impacts,” he said on stage.
“If you can find a place where you can, for example, align climate impact, which is something I’m very passionate about, with making money, I would welcome a private equity fund to come in and take over my business, because it will motivate me to make money. These are linked Funds directly impact climate.
Sticking to the mission isn’t necessarily enough, though, said Hyuk Jin Suh, general partner at Sky River ProjectsHe said in a pause. Mission means nothing if the company’s scope remains limited.
“A lot of founders focus so much on building their widgets that this widget is all they care about. They haven’t figured out how to build the foundation for scale,” he said. “When you’re building a widget, you have to think about, how Am I going to mass produce this? How will I market this widely?
If all this sounds like a lot for startups, perhaps the mission part should be overlooked while mastering the basics. This kind of ambition is actually a sign that companies are on the right track, Soh said. “They almost have to bite off more than they can chew, because without that boldness and vision, I think it will be difficult to make a real impact.”
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