Category Archives: marketing

The Real Role of the B-Corp

B the change

This week I attended the B-Corps Handbook book launch at the offices of Hanson Bridgett in San Francisco, the law firm instrumental in lobbying California to institute the Benefit Corporation legislation.

As a marketer myself, I don’t know that I’ve ever found myself in a room with so many lawyers – and I have to say it was heartening.  If lawyers in California think this topic is important,  it indicates that the infrastructure for the B-Corp certification is in the early stages of hitting its stride for becoming more than just a marketing initiative, but a substantive opportunity to influence the business community it is targeting.

The B Lab – founders of the B-Corp – launched 7 years ago to critical acclaim. Critical in that the market was flooded with sustainable certification symbols such as USDA Organic, LEED and Energy Star. Acclaim in that B-Corp took a much more holistic and lasting view of business’ propensity for net-positive effect, evaluating fundamental operational standards and also putting people into the equation. It is an agnostic certification process for any business that wants to take a values-led approach to doing business differently.

Twenty-seven states have now taken note of B Corps’ lead and passed Benefit Corporation legislation. (Note: the two are separate entities, one is a certification to receive a marketing benefit and one is a legal framework aligning shareholders and management to protect a company’s mission incorporating social benefit and prioritizing revenue distribution accordingly).

The real value behind B-Corps is not simply in its exhaustive process to evaluate a business’s operational policies as they reflect mission, community, employees and environment, but the POV that becoming a B-Corps extends to prospect customers, clients, partners and the supply chain in which the business operates. As one participant thoughtfully noted “It would make me evaluate prospect clients through a whole different values lens. I have the ability to work with many clients but this would help me know I’m having an even larger effect with like-minded businesses”.

B-Corp has stated that it hopes to become irrelevant and Benefit Corporation status is one step in that direction. However, B-Corp’s work is hardly done.   With only 1100 companies in 36 countries officially signed on, the evangelism has only just begun.

Social Benefit as Business Innovation Lens

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Last week I had the honor of guest lecturing in John Greathouse’s Entrepreneurship class in the Technology Management Program at UC Santa Barbara. The topic of the day was where to draw entrepreneurial ideas from. I proposed that new ideas might come from using a social benefit lens.

What is a social benefit lens? To think about social benefit is to think about a product or service that would benefit an underserved population and to provide it commercially.

Let’s start with underserved populations. A good example is the underbanked. In the US alone, 60 million adults have minimal or non-existent relationships with traditional financial institutions leaving them vulnerable to over-priced services that essentially create a financial vacuum for the customer that’s tough to get on top of.   Mango was founded in 2009 as a for-profit financial institution that empowers underbanked adults by providing customized, affordable, and high-quality financial services to help them better manage and get ahead in their financial status. With a presence in 6 global markets, Mango offers low-cost, sustainable solutions that provide convenience, service, and a positive customer experience.

Mango focuses on a specific marginalized customer but there are other opportunities to use social benefit as a lens for a for-profit business benefiting society.

 Ultra Testing is a for-profit software testing business that looks to leverage the unique skill sets of the underemployed 1.5 million adults on the autism spectrum. Reasoning that software testing requires an incredible amount of focus for repetitive pattern recognition and problem solving, and with 80% of these adults unemployed, Ultra Network launched a business that meets the special social employment needs of these adults while creating a business that has a 20% higher bug detection ratio than standard testing services. It’s this efficiency that Ultra sells its clientele on, not the dual benefit that it’s solving a social issue at the same time.

By looking at social benefit businesses, there is a new more sustainable way to think about invigorating economies and the people who participate in them. Products and services with transactional prices force organizations to build businesses that must compete on product performance but will also create social value. Instead of creating charitable services to address inequities, innovating around social impact could create entirely new industries that will change the way we look at product value.

Entrepreneurs using a social benefit lens will not only stand out from the pack from a financing perspective but could create revolutionary new business models with historical significance.

What is a Social Venture?

cca_logo On Saturday night, Steve Diller, a founding faculty member of the Design for MBA program at the California College of the Arts, hosted their annual Social Ventures dinner and  invited myself,  Adam Elmaghraby, Director of Social Invention at Kumu and Leticia Landa, Programs and Development Manager at La Cocina, a business incubation program for immigrant women in the food service industry, to participate in a panel fundamentally asking the question “What is a Social Venture?”. The conversation was really interesting given the degree of participation by the students in the audience and the unique experiences of my fellow panelists.   What follows are outtakes from that discussion:

QUESTION: Broadly speaking, what is a social venture? 

A business with social benefit as a lens for developing products and services designed for transactional consumption and the single source of business revenue.  Social benefit equates to serving a population that is otherwise marginalized to the extent it is unable to realize their potential as a participant in a community’s eco-system.

QUESTION: How has it changed as a concept over the years?

Market forces have created both the demand and the opportunity for a social enterprise to become self-sustaining.  We live in a time where our social problems are more evident.  We have a talent pool who sees opportunity and in some cases have been forced into creating businesses that differ from traditional models.  Institutional aid and business frameworks (such as agricultural subsidies that effect school lunch programs and banks that rely on their fees and services as revenue sources, while simultaneously contributing to the inequality gap) are missing broad slices of the widening economic gap.  With unique and more widespread access to funding via crowdfunding platforms and venture capitalists who are looking for innovative ideas, we’ve created a market place that is supporting the momentum behind thinking about social enterprise differently.

QUESTION: Is this the future of social enterprise?

Not exclusively.  Organizations like La Cocina are leveraging their 501c3 status to provide much needed opportunities to help develop and build the skills of their clientele.  Their business model is sound in that it earns over 50% of their revenue, minimizing dependencies on fluctuating donor contributions and grants and providing more predictive growth for their programs.

QUESTION:  Provide an example of a social venture that represents the future of this type of thinking.

Revolution Foods started in schools to get health, kid-designed lunches into every kid’s day.  They serve 1 million meals a week and 80% are going to kids who are on free and reduced cost meal programs.  The lunges work within the school’s cost structure and they’ve even been able to start packing the lunches for grocery stores.

QUESTION: How central is the idea of “under-resourced” or “disenfranchised” groups of people to the idea of social ventures?

100% central.  It’s the singular lens for social wealth creation, looking at disenfranchised audiences as either labor pools or as the audience for goods and services.

QUESTION: What makes for a successful social venture?

Products and services for sale.  Understanding the needs of the target audience in developing the product.  And a relentless focus on the performance of the product or service as the key driver of purchase.  We need to act as if the target audience has a choice and engage them as much as we do with a “traditional commercial product”, like a Nike shoe or your favorite brand of lotion, to deliver consumer value.  Revolution Foods could have just created healthy lunches but their goal was to create lunches that kids liked.  One of their core tenants was “kid-designed”.  This is understanding your audience and thinking like a competitive product.

QUESTION: It could be argued that Grameen’s business models were not bullet-proof to scaling, can social ventures scale and still be effective?

New legal and accounting metrics help to protect the values and operational integrity of a company with a social mission.  However, La Cocina does not want to scale so perhaps this is not the right way to look at the impact that a social venture can have on the economy.

QUESTION:  What stands in the way of being successful?

Getting trapped in the charity mindset. Social ventures do not need to succeed simply because they have social value.  It’s important for those running the business to seek relentless performance attributes in their products.   Creating a product that is competitive is critical.

QUESTION: Where are the greatest opportunities for social ventures to have an impact? 

Domestically and abroad the answers are virtually the same.  Healthcare – programs to help people proactively manage their health issues, prevent the conditions before they start, childhood obesity, affordable nutrition and healthy habit lifestyle products that target economically challenged urban and rural populations.  Also education and job training, targeting slivers of the population that don’t have access to education,  job training and financial planning or resources.   Basically looking at fundamental areas that help return dignity and a sense of ownership over their own futures.

It was a fun night with a clearly engaged group of 4,5 and 6 year design cohorts that chose to come spend a precious Saturday evening with us.

How to Start a Startup Facebook Group

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Heat map of the regions participating in the FB group just prior to the start of the lecture series at Stanford yesterday.   What other proof do we need that a global entrepreneurial mindset is in motion?

Good Shirts, a Great Idea

Last week, through hard work, commitment to detail and occasionally seeming against all odds – a tri-fecta of organizations launched Good Shirts, a t-shirt collection to support UNICEF’s efforts to save kids affected by the famine in East Africa. I have never launched a product from scratch before, let alone conceived, coordinated and launched a collection of products as a fundraiser. This effort took a boatload of passionate, dedicated people, teams of people. It took senior level buy-in from two companies and one NGO. It took re-thinking the rules on every front. It took a super cool idea leveraging an artist’s vision. And a crack legal team navigating the tricky rules where the term ‘cause marketing’ can sometimes seem like an oxymoron. But most of all, it took stamina and sense of humor by more people than you can count on your fingers and toes. When BBH answered our call and came to us with the concept, we immediately loved it. It was simple, articulated the need and was in a word, fun. But I don’t think any of us knew what we were in for. Seven days into its launch, we are all hoping Good Shirts becomes not just unique idea for the records, but a disruptive and successful fundraiser. We know the idea is right but we know we’re only half way to the finish line with its introduction. If we thought a good idea could have overnight success (and I’m not sure we did), we are reminded that diligent execution is, and continues to be, everything. With a bit more luck, a lot more hard work and allies everywhere who believe in kids, this idea could turn great any day now. The teams at BBH, Threadless and the US Fund for UNICEF certainly won’t stop until it is.

Design for Good

Last night academia from leading design schools with social good curriculum and practitioners from the development space met to discuss the practicalities and learnings from designing for social good. Chris Fabian, co-lead at UNICEF”s Innovation unit, kicked off the evening by noting that designing for social good is not sexy. Rallying age-old institutions to deconstruct and re-position themselves to implement real systemic change is hard work. Constraints pose opportunities for designers to sink their teeth into but re-designing a system or process is a lot less hero-based and thus more of a challenge to creative design students. Mariana Amatullo, VP of the Designmatters program at the Art Center College of Design, noted that not all students are built to take on the complex set of challenges that designing for good entails and their program acknowledges and works with students to equip them for the some of the tough realities. Anne Burdick, Chair, MFA in Media Design for Media Designmatters at the Art Center, commented that designing for good can be a humbling experience which can be hard to teach around when there is such a cache of “successful design” around. There is often no “thing” that gets prototyped, but Allan Chochinov, Chair, MFA Products of Design, School of Visual Arts, pointed out that “information” should be treated as “material” in the analysis process. He also asked if it was arrogant to think that we could ever “solve” a problem, rather we work on iterations and evolutions which get us closer to affecting a change. Jamer Hunt, Director, MFA in Transdisciplinary Design at the New School for Design at Parsons, noted that they take on problems in their curriculum that don’t fit into other programs, the conceptual and speculative projects, and asked, how do you prototype the non-linear?

We all think of designing for good as working in the field – working in health, cash transfers or something that requires embedding yourself in another culture. Rarely do we think about the business models that we are up against here when funding social good. The “other” cultures which are our ir-retractable silo’d organizational models that have narrowed the opportunities and benefits that partnering for social benefit that can deliver. Fortunately for all us fundraisers, Allan volunteered to partner with UNICEF to iterate this problem and get us closer to change.

Day 2: Five Coffees Later

As is always the case, day two in the office drove a significant pick-up in the pace. Or should I say, day two and I learned how business really gets done in Kosovo – in the café’s. Part of my contribution here will be a retreat for the 6 month-old Lab. With 4 full time staff and 2 full-time volunteers, 21 projects underway and plans to expand the office and program by the end of summer, a retreat to reflect, refresh and re-calculate is warranted. My job: to create the agenda and facilitate that retreat, which has now moved from a week from tomorrow to Friday to the day after tomorrow as of lunchtime today!

I had lovely welcome meetings yesterday and read through a myriad of documents to get me up to speed on the projects, criteria and administrative infrastructure the team built. Today it was time to get down to business getting to know each of the staff, their roles, their vision and the opportunities they see as critical measures of moving forward in the near term.

First up, two meetings at the Amelie Café across the street from UNICEF with Ron, the Lab’s Project Coordinator, and then Arbnod, the Design Center’s Project Coordinator. My days at Sterling came flooding back as I recognized the odds that are inherent within a small entrepreneurial group of people. Both Ron and Arbnod are diametrically opposite thinkers, yet both are what have gotten the Innovations Lab to this point.

Ron is an enthusiastic visionary who gets excited by the possibility of expansion and impact. He came to our meeting with a plan for what could be possible over the next 6 months, excitedly conveying a multitude of detailed points that included seeding outreach, training project coordinators, and essentially dramatically increasing program inclusiveness throughout the country leveraging the reach that PEN (Peer Education Network) has established over the last 7 years.

On the flipside, Arbnod, a Holland graduated double major in computer science and economics, wanted to skip the scoping and get straight to the intricacies of the technology and its potential to solve a problem. “I want to be at the 3rd or 4th meeting. I don’t care about the generalities, I want to get into the technical detail necessary to solve the problem.” Arbnod is excited about the platforms themselves and the potential that open-source applications can bring to solving the very urgent issues of birth registration, vaccine management and service mapping in the country.

33% of my interviews were complete and I was on opposite sides of a fence. Two people, two totally different views of the world and yet part of a tight-knit team.

My afternoon coffees only confounded my quest for synchronicity of vision and challenge. A four block walk that felt more like playing Frogger in our journey to find a café with an open seat, I met with Affie who is passionate about the vision, seeing for other youth what she wished for as a teen herself and understanding explicitly the skills building that the Lab is offering youth with very few opportunities for accessible cultural role models. Another Frogger game back to the office and then Etnik and I embarked out with hand-drawn instructions from Afertida to a café where Etnik pointed out that he could finally get full without having to order two meals.

Etnik is a wise Albanian national who is a third year U.S. college student, understanding that being part of the Innovations Lab format is big both for the country and for his future. The freedom to work on projects without the hierarchy of a traditional boss breathing down his neck motivates him to deliver his contributions on time and at best possible quality because he is an equal part of a team, passionate and energized by the same vision. He spent all this past weekend working on the web site because he wanted to get it done, not because he had a deadline.

And then came my meeting with Arsim. Closer to the office, Arsim picked a cafe that could have doubled as a bar. With front and back patios and a dingy smokey bar that had an NBA Finals recap on when we walked in the door (no, I couldn’t see the score), Arsim searched for a table as far out of the smoke as possible. Arsim was out yesterday during that critical introductory meeting so not only did he have this unknown “interviewer” land at the end of his day with a demand for an hour “to get to know he and his role”, he had the added pleasure of trying to communicate with me – not the slowest talker and in English – not his native language. Arsim has one of the most frustrating roles in that his responsibilities are for the project contracts and monitoring. In fact, his role really helped drive home the challenge that they all face in this new venture.

Arsim is responsible for tracking down twice monthly reports to assess project progress ranging from technical maps to hip-hop dance culture to recycling initiatives and balance those with UNICEF embedded regulation for payout – all while trying to prove to donors that the Lab is successful without killing the enthusiasm of the novice youth that the program is meant to engage with these new skillsets.

As this process normally does, despite the level of concern I felt building with each passing and completely diametrically opposed interview, at some point during the evening I began to feel serene again as I realized that the formula for getting everyone on the same page is interwoven in the format of the retreat. Sharing challenges seemingly irrelevant for the rest is often exactly what brings people together and creates the right environment for collaborative resolution.

Or maybe it’s just the coffee starting to finally wear off.