How to Integrate the UN Global Goals Into Your Business

How to Integrate the UN Global Goals Into Your Business

Lila Karbassi is the Chief of Programs at the United Nations Global Compact. The UNGC exists to help companies implement the UN Global Goals, track their progress, and give them tools to continually improve their practices.

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Episode Summary

In this episode, you’ll hear:

  • What is the UN Global Compact, and who is involved?
  • Why should companies adopt the Sustainable Development Goals?
  • How does the UNGC help companies implement the SDGs into their business?
  • What will happen to the planet in the next 5 years if business practices don’t change?
  • What are some of the top initiatives?
  • Do you think we’re on pace to hit the SDG’s by 2030?

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Full Episode

What is the United Nations Global Compact and what are you set out to solve?

The UN Global Compact is the world’s largest corporate sustainability initiative. We have 9,500 companies in 165 countries. And our vision is to mobilize a global movement of sustainable companies and stakeholders to create the world we’d want.

So all these companies, nearly 10,000 companies, make a commitment to do business responsibly by aligning their strategies and their operations with 10 principles, which touch upon human rights, labor rights, the environment, and anti-corruption. These companies also take action toward broader societal goals such as the Sustainable Development Goals.

What is your personal mission for what you’d like to create in the world and how you got involved with the UNGC?

I got involved with the UNGC nearly 15 years ago. I was at that time in business school getting my MBA and I was fascinated by the universality of the values of the United Nations. I was very intrigued about how the United Nations worked with business.

So at that time I heard about a new initiative of the UN that was just launched, the global compact. I realized this was the best place to try to make a change in the world, and I decided to put all my energy, my time, and my efforts to advance the mission of the Global Compact.

That’s about 15 years ago. The global goals were adopted in 2015, the same year. The Paris Agreement was signed also by all of the members. These two landmark agreements shape much of the work that we do at the UN.

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Why should companies around the world at the end of the day adopt the SDGs?

Well, there’s a great interest on the side of the companies for the SDGs and it’s very clear that these goals have now been adopted by 193 member states. We’re three years into the goals. No single nation or sector can address the 17 global goals alone. So the private sector, the investment community, the impacts investor community, they all have a very important role to play.

Lila also mentions specific benefits of taking on the UN Global Goals as a company:

  • Shaping the sustainability agenda
  • For investment, the goals help to sort which companies are addressing certain topics or taking on certain business models
  • The mindset that: in order to be effective as a company to address the goals, you need to take full account of your positive and negative effects across your value chain.

For those that have been listening to this podcast for a while, we’ve been talking all about the global goals, right? So we have 17 major global goals with 169 specific sub-targets. And then we have 232 indicators, which are kind of like the KPIs that we’re using to measure the progress on these goals.

So I’m really intrigued to hear about the 10 principles the UNGC uses to integrate the SDG’s into a business.

The principles are extremely helpful for companies to understand what their positive and negative impacts can be on society. They can be a very helpful tool also for companies to prioritize which of the SDGs are more relevant to their organization.

Okay. Got It. So the principles show how you should tackle the global goals and then the global goals are really like the “what.” So the 10 principles break down into four main categories, which are human rights, labor, environment, and anti-corruption.

So regardless of whatever type of business you have or whatever industry you’re in, and whatever global goal you want to tackle, regardless of the global goal, the United Nations Global Compact would recommend that you implement these categories of principles.

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Tips to Take on The SDG’s

  1. Avoid the concept of Cherry-picking, or picking one or two favorite SDGs and ignoring the fact that you could have on other topics.
  2. The concept of blue washing. Or having some activities that do not address one of the issues and the targets behind the SDGs while still portraying your organization as making a very solid contribution to two particular topics.
  3. Look at the interconnectedness between the goals. There many interconnections between the different goals.

These are explained in the guidance material that we put forth. We put out, for example, the practical guide on how to report on the SDGs._

So how does the United Nations Global Compact recommend to businesses all around the world, big and small, right? Like, hey, maybe I’m a solo entrepreneur and versus a Fortune 500. How do you recommend that we measure our impact on the SDGs?

There are many ways to measure impact. This is a very hot topic at the moment.

Most of the time the tools that we have get you to a measurement of your outcomes, which is slightly different from measuring the impact that you can have on society, on people and the planet.

So for example, at the moment we are working with a partner organization called B Lab. We’re developing a platform that would help companies assess their performance across each of the 17 goals and also across the 10 principles of the Global Compact. Each of the 17 goals would have a very long list of questions associated with them that are tagged to targets and the indicators of the SDGs. That would be the most comprehensive tool on the market. We’re expecting to launch this to in early 2020 and we’ve been working on it for about two years now.

We actually had them on the podcast recently as well and they’re developing this incredible dashboard. Super excited to hear that it’s going to integrate with the SDGs so you can really track your impact at all levels internally and externally.

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What are some of the top other initiatives that the UNGC is working on that business owners around the world should know about right now?

At the moment, one of the platforms that is very popular is on the topic of ocean sustainability and sustainable ocean businesses. This is a working group that is looking at setting up some guidelines, some general recommendations for how businesses should operate.

These companies together with us are creating a set of guidelines that would help any industry that has anything to do with with the ocean.We know we have about 12 years to take drastic action on climate change to reduce our global emissions or we risk facing irreversible damage on the planet. The latest science tells us that we need to stay below 1.5 degrees warming, but the current trajectory for the emissions… if we continue with business as usual… we will reach 3.5 degrees warming by mid-century and this would bring real catastrophic damage to all of us.

Fantastic. I mean, we have got to figure out a solution to climate change. We hear it from all different sorts of angles… it’s so interesting to hear we have 12 years for climate change. 

I know that you have several different reports on your website where you showcase, “Listen, if you have a product-based business and you have a specific value chain of how you develop a package and send a product, you can play a huge part in integrating and tackling the SDG of climate change into your business model.”

What size companies, on average, are in the compact right now? And how do you plan to grow this number over the years to come?

At the moment, the majority of companies participating in the Global Compact are small and medium-sized enterprises, we define that by companies that have annual revenue of 50 million or less. We do have a good portion of the very, very large companies as part of the global 500 companies, we have about 65-70%.

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Targeting Companies to Work on Certain Goals… Like Gender Equality

Say for example, we want to reach gender parity, 50% women in leadership positions in a segment of companies in the global compact. So what are the tools? How can we deploy these tools through our local offices, which we call the local networks to help them achieve this target.

It’s a double-edged sword, right? “Hey, we need to bring in more new companies that are going to be integrating and taking on these principles. And then also the companies that are already in the global compact… how do we better support them, provide more resources, mentorship, and whatever they need to increase the depth of the impact internal and external for their companies?

Exactly. That’s, that’s exactly the case. And you know, it comes back to the first question about how do you measure your impact? They’re very fragmented tools that exist. Like, there’s not one unified tool that tells you as a company you are in a healthcare business.

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Do you think that we’re on pace to hit it or do you think we’re behind?

I think we’re behind. It’s very clear that inequalities are growing year after year. There are major violations of very basic human rights and labor rights in terms of the number of people in forced labor, in terms of child labor, et Cetera.

So I think we’re behind, however, I think that there are major, major opportunities to address these goals and they’re even quantified in economic terms to a level of 12 trillion US dollars of economic benefit for the private sector to address the goals. And I also see a lot of very encouraging and positive signs with new types of technology.

Right back at you for taking the stand that you do to empower businesses around the world to integrate these principles to better tackle these SDGs.

The 2-Fold Call to Action:

  1. Let’s create more businesses leveraging cutting edge technology to tackle the world’s greatest challenges. 
  2. Get more involved with the United Nations Global Compact Academy.

It sounds like incredible research that the UNGC has available for all business owners regardless of the size of the business to be a part of the conversation and to set a new standard for how we want to play and all the different kinds of industries.

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Quantifying Good with Impact Accounting

Quantifying Good with Impact Accounting

Ecotone Analytics is creating a new industry of accounting – accounting for the businesses’ impact on its community ecosystem. 

 

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Episode Summary

  • What is the mission and vision of Ecotone Analytics? 
  • How did it start?
  • How you measure impact?
  • What is the IMP framework?
  • What’s your call to action for those looking to raise capital?
  • Can you share the business model of Ecotone?
  • Can you share more about the App your building?
  • How do the algorithms work?
  • What are the biggest challenges you’ll have to overcome to scale?
  • How can impact accounting and measurement forward the Sustainable Development Goals?

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What is the mission and vision?

We’re doing social and environmental impact accounting as we like to call it, a generally helping people prove the impact that they’re having, whether it’s a social entrepreneurship nonprofit, done some stuff with the government even.

How did it start?

My business partner, Tim Roman and I started this about three years ago. He was researching environmental impact measurement, and we started getting beers and talking about how to make that data useful for funding and management.

You can’t manage what you don’t measure, right. So today, a lot of the good that has been done in the world has been set aside. So we’re trying to pull that research from academia and turn it into something operational that the management team or the people on the ground can actually use to make better choices or to understand what the best practices.

That data also simplifies the world of social entrepreneurship and startups who are trying to get funding.

How do you measure impact? What are some of the models?

At the highest level, the UN sustainable development goals are probably the most widely used at this point and highest level as far as like 17 different areas to just categorize what you’re working on. B Lab, Iris, and Gears existed before that. 

So Ted, can you share with us a little bit more about the framework that you guys use on how you specifically measure impact?

We use the term accounting because we are trying to attain for the industry. I mean, it took 40 years for the generally accepted accounting principles to be put together and we’re probably on year 10 on that process. So what we’re going for is global best practices and standards, 

Share a little bit more of the results. So for example, the Better Futures Minnesota. So what is the input of what they do in the community and then what’s the output available?

They do what’s known as demolition deconstruction. Better Features takes all the different parts apart, recycles the things that it should be recycled in the right way, but also resells the different materials depending on their quality or wear and tear through their warehouse. 

They also employ men just coming out of prison. So they use what’s known as the stacked intervention. Which basically has cognitive behavioral therapy, a health home, two years of housing and then work training.

We were tasked with trying to figure out which of those different intervention types has the largest effect. Statistical rules get involved, so they’re both doing a social and an environmental impactful social enterprise. 

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How it works

  1. They are a nonprofit, but they have a revenue stream coming in from the sale of the services they provide. So we go through all that different research to figure out what the effects of the intervention types. 
  2. Then we also look in their internal financial information to figure out what it costs for a participant to send everybody through this system. 
  3. Then we figure it out what the effect on society is in our county in Minnesota. 
  4. Through all that you come up with a ratio that’s normally referred to as the social return on investments.

You could check out that report on the site where you can see that if a dollar and a half or so is invested into better futures, the economic output is several dollars.

What I like about what you’re doing at EcoTone is that you not are only sharing with people, hey listen, it’s important to measure impact, but it’s important to measure the granular components of the impact. 

Can you talk about the IMP framework you use?

Sure. 

  1. What: what are you trying to do?
  2. Who: who are you trying to impact?
  3. How much: How effective and how much of this change are you providing for your target community?
  4. Contribution: The research and economics of your impact
  5. Risk: The risk of the endeavor against the theory of change model.

What’s your call to action for business owners to measure their impact?

If you want to get a leg up on everybody else describing your impact in the same way as your financial opportunity, then measure your impact. So don’t throw away all the marketing materials you have, but this is a succinct way to describe what you’re doing.

For investors, there are more data points for them to choose with when they can see your impact quantified. More information is better, especially in a sorting mechanism. It also helps them know what they’re investing in and what it will look like over time.

Measuring the impact shows how effective your investment is – so if your $1 million created $10 million of value and impact where my $1 million created only $1.5 million… we know what’s worth investing in.

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Can you share with us just a little bit more about the Ecotone Analytics model and how your business works?

As organizations are more able to describe their impact in this way, it becomes an arms race on some level as everybody wants to be able to speak this new language. So that’s exciting. 

We’re also developing an app (because what would a startup be without an APP?) We see the potential for this to integrate into every business that exists.

Can you share with us more about the APP that you’re building? What is it going to do?

As you create equations to measure certain kinds of impact, you can create a “rate card” that you can pull out again for later measurements. The app will help people test ideas out, not necessarily to do a full impact analysis.

How does the math work to process that much data?

We do research, use existing formulas, and create new ones to solve for the needs of the company. Then we deliver this impact value map, which is the visualized version of what we’re talking about. It’s 20 pages or more of technical documentation that further goes through our methodology and the logic behind why we chose this number and said that number. I always liked to have other people look at this stuff and tell us what they think. We don’t pretend to be omniscient beings in this field!

At the end of the day is that the future of this industry would just be, “oh yeah, of course, you measure impact because you have to understand how your business is integrated into an ecosystem. Like you have to know your accounting!

What do you think are some of the biggest challenges that you’re going to have to overcome as you look to scale over the next couple of years and to make this vision a reality?

Education is the big one right now. Just getting people familiar with the language. 

The impact management project was kind of dubbed at the last SOCAP as like the Rosetta Stone of impact… and it has really been a global collaboration between practitioners.

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How do we go from knowing nothing about the quantifiable impact to a consistent laser pointer for a business?

More case studies, more trial and error. Fail fast. Let’s just do a bunch of it. Right now it can be cost-prohibitive. Trial and error has just been that there’s no real market out there to bounce off of.

And I think that when it can become a laser, it changes the conversation of, “Oh, you know, what does your company do?” When investors are asking, what are the financial returns it comes to? What could you do with $1 million and how many people would have an impact? Is that what I resonate most with? If I’m investing, I’m trying to find the company that can get the best output of the impact. And I don’t care how the machine works, I want the results.

How do you think the impact measurement industry will help us tackle these audacious sustainable development goals by 2030?

Allowing people to better manage what they’re doing so that they can make decisions. It’s all those little decisions that are really gonna make that big change. 

So giving managers the power to make better choices, I think that’s how our industry will help hit those goals.

It really challenged my own perspective of how we measure impact. I’m realizing that we’re pretty early in the process of measuring impact because there aren’t a ton of standards out there. 

 

My question for the audience is: what will it take for all of us to measure impact within one ecosystem as a planet, to have a standard, and to measure it as just part of doing business?

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B Lab’s Innovative Tools to Help Impact Companies Grow Sustainably

B Lab’s Innovative Tools to Help Impact Companies Grow Sustainably

B Lab exists to support the cultural change happening around business: How can we create social change with business? And how can we operate sustainably, from sourcing to selling?

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Episode Summary

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In this episode, we talk with B Lab executives Laura and Amanda to find out:

  • What is the mission and vision of B Lab?
  • Can you give us a quick background of B Lab and why you got involved?
  • How does the ecosystem work?
  • What stage of business would you recommend to take the assessment?
  • Why should people measure their impact? What are the benefits?
  • Can you share more about B Analytics?
  • What kind of companies are signing up to use this tool?
  • Can you share with us how you integrated the Global Goals with B Lab?
  • How can we get involved?

Tune in to discover how you can use the Impact Assessment as a guide for your own business growth, and how you can use the B Lab Analytics to inform your investments.

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What is the mission and vision of B Lab?

“B Lab is a nonprofit. We’ve been around for about 12 years, and our mission from the beginning has been to serve people using business as a force for good.

What we see our organization contributing is infrastructure primarily to make the cultural shifts that are happening in the nature of business become long-term changes. Also, we are recognizing companies that exemplify what this redefined for social environmental good looks like, which are called certified B corporations.”

Can you give us a quick background of B Lab and why you got involved?

“It must have been 13 years ago! It started with three friends from college who had all gone into the private sector. One of them was more on the investment side of things in private equity and the other two as entrepreneurs. They were growing a company in the apparel industry and sensing that there was something deeply flawed in business.”

“As they tried to run their business with a social conciousness, environmental purpose, and logic, they found barriers. They identified two main flaws in the system. One was legal – a legal definition of maximizing return for shareholders in the short term. The second was a general question: what is a good decision from the social and environmental perspective as you’re running a business? That was the beginning of it all.”

Laura: “I’m Colombian, so I started out as the executive director of the Labs to partner in Colombia. That was about five years ago. As of two years ago, I’ve been based in New York with Amanda working primarily on newer initiatives. We’re trying to sta ahead of the game and moving the market forward. What about you, Amanda?”

Amanda: “I’ve been with B Lab for about four years now. I came to this work after having spent some time in the federal government, really thinking and working on policy and federal initiatives that we’re about promoting economic development.”

“I think one of the things that was lacking for me was the pace in which the government was able to move around supporting sustainable business.”

“But the pace in the private sector was responding much more quickly. So, there I was after about three and a half years in Washington, deciding to leave because I really wanted to be on the cutting edge. I have seen B labs push the conversation forward and provide real solutions for businesses, for investors and stakeholders (not just shareholders), and redefining what the success of a business can look like. I’ve also seen B Lab being progressive about how we spread that change and make it actionable for all businesses.”

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How does the ecosystem work?

Amanda: “When we think about the role that the Lab plays in this work, we see ourselves as one actor in this broader ecosystem of people using business as a force for good. We can take no credit for being the only actors in and thinking about the role of business and how it is changing and how it’s evolving.”

How it Works:

  1. Identify Leaders “Where we see our work really playing out, as Laura said, within the identification of business leaders that have put in best practices around their social environmental management. 
  2. Systematize Best Practices and Get Certified Companies have to go through a process to become a certified B Corp to systemetize those best practices. The first step is actually taking an assessment that assesses those policies and practices in place in that business. For example:
    1. Are you producing a certified organic product?
    2. Are you involved in fair trade
    3. How are you treating your workers?
    4. What’s your governance structure?
    5. How are you engaged with their community?
  3. Change the Legal Structure to a Public Benefit Corporation: Then we create a legal structure that allows companies to account for those shareholders, or excuse me, their stakeholders, not just their shareholders. And as they’re growing their business, as they’re making real business decisions in thinking about how they as a business can grow in the long term.”

Check out this video to see what it means to be a Certified B Corporation

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Can you share the origin of how you developed the assessment?

“The impact assessment has always been the cornerstone of our work around impact measurement, and a first point of entry for a lot of our companies. The first version of it was on an excel sheet. It was like an MVP, but it was about discovering those aspects of the business that we can measure and specifically asking, “how do we identify metrics that are objective and observable that a company can see where they are as an organization?”

At bImpactAssessment.net you can take the assessment. It’s a cloud-based, totally free tool that a company can register for, and as the buusiness goes through that assessment, we ask questions organized around specific stakeholder groups for a company.”

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What stage of business would you recommend to take the assessment?

We got asked that question a lot about five years ago, so we started this new category of B groups, which is called pending B Corp. The pending B Corp group gives entrepreneurs clarity from the beginning: they take it as a learning experience and it’s only a year after they’ve been in business that they actually have to go through the verification process that the B Corp does go through. So they do have a year from the moment that they decide, ‘okay, I want to be a pending B Corp. I want in a year’s time to really understand what the B Impact Assessment calls for. I want to achieve that minimum threshold within a year.’ Then, they have that time to build the elements that they may be missing.

So, my general answer about the business stage is… as early as possible! There’s no cost involved, it’s a login. And no one needs to know what your score is.” 

“We are hoping that companies use the impact assessment as a tool for their development and growth. That way, they can build a sustainable company from the beginning.”

How many companies have taken the assessment?

Great question. So we have 55,000 companies globally that have registered and started the B impact assessment.

I think that’s because there’s a broader consciousness happening in the business community. We’re now at over 2,700 certified B Corps globally, and there’s been companies that are leading the way for others: “Hey, if that company can do it, I can do it.” Or, “I really believe in that company. I want to be just like them in the business I’m building.” So we’re seeing that community as a whole movement, which is exciting.

Why should people measure their impact?

First and foremost it’s important to have visibility onto those aspects of your business that are not just about financial performance.

Laura: I think there’s an interesting opportunity here for companies to distinguish themselves in a marketplace to say, “This is how I’m doing compared to other companies.” That’s really important to us. I think people are demanding it. Customers are demanding it, investors are demanding it, employees are demanding it. And being able to respond to that demand is a critical and central part of a business being successful is being responsive.”

Are there any benefits to doing this?

Amanda: “I think employee engagement is one of the first things that we hear from companies; that either they’ve gone through it and now they’re seeing it as a mechanism through which to engage their employees. Some of it are doing the assessment as a response to their employees, to Laura’s point, as their workforce may be demanding it and wondering, “Are we amongst the leaders that are doing this?”

The political part of it in tracking your progress over time is important in the same way that you would track your balance sheet over time and your profit and loss statement. And, the certification process built in that consistent review.

For me, Patagonia is a great example of this. They have been a leader in sustainability long before B-Corp. Since getting certified, they’ve used the assessment and certification to improve their company and practices.”

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Can you share more about B Analytics?

“The data in it is by individual companies going in and filling out the B Impact Assessment. Then, B Analytics is a business intelligence tool that lets stakeholders actually engage with that data and understand it in a more in-depth way.”

“I think one of the things that we’ve seen is that there are a host of other stakeholders that want to be engaged in helping that business grow. Often it’s investors. Often it is supply chain managers. Understanding and having visibility into these nonfinancial performance metrics of a company can add value. We’ve had about 150 subscribers since we launched the platform, and it is about helping companies understand where they are today, then use that data to make better decisions and improve their impact over time.”

What kind of companies sign up to use this tool?

It’s a variety. I’d say investors are about half of our community and some of them are venture capitalists, some of them are sort of traditional private equity firms and some of them are debt funds actually that have engaged and invested in providing debt instruments to growing companies.

We also have non-investors who are using the platform. We have supply chain managers who have said “it’s really important to understand our impact, but we want visibility into our supply chain as well because we know that a lot of the value that we’re providing more broadly in the ecosystem is actually coming through our supply chain.” So they may be engaging with the companies that they source from in order to measure and manage their impact.

We also have business networks and local economic development organizations that are using the analytics tool to support sustainable business development in their communities.

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Can you share with us how you integrated the Global Goals with B Lab?

“It fits perfectly into this conversation because we’ll be beta testing in November and then launching in January, 2020. It will essentially be a module of the B Impact Assessment and a module of the analytics that bring the Sustainable Development Goals.

We really listened to many of the companies that use the B Impact Assessment, then so many of the partners that use the analytics and they’ve been saying to us for years that the SDG framework is incredibly helpful.

Anyone who knows the Sustainable Development Goals understands just how tangible they make humanity-wide challenges, but they were developed for countries and by countries.

What can we do to get involved?

I would encourage folks to be the change, which is what our newsletter and our content shows you how to do. Our content highlights the good work of the community and the companies that we have the privilege of working with and serving, and also the broader community of change agents that are driving a different system of capitalism.

So if you need some inspiration, if you’re looking for a mid-day, pick me up, check out Be the Change. It gives you an opportunity to sign up for our newsletter. That would be the best place to get updates on this new integration and the SDG work that we’re doing and to stay up to date on all things B Corp.

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The Secret Weapon of Scaling: Brand Storytelling

The Secret Weapon of Scaling: Brand Storytelling

Impact Investor Josh Campbell reveals his unorthodox formula for scaling companies: stigma +  brand storytelling + trends + team.

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Episode Summary

Josh doesn’t think about investing as a numbers game. For him, it’s like surfing. In this episode, Josh shares how to catch the wave of a trend and spot companies that could transform an industry by changing the narrative of a stigmatized product. His approach to impact investing is holistic… and all about alignment.

“Look at your time as the most valuable asset you have. You really want to spend it doing things that can be a global impact rather than just to make a buck or two.”

  • What is your personal mission of what you want to create in the world?
  • Can you share with us a little bit of background on how you got here?
  • How do you change the narrative on products that are stigmatized?
  • What are the pros and cons of getting into the product market?
  • What is your relationship to fundraising vs. bootstrapping?
  • What are the top lessons you’ve learned?
  • What are the next ventures your interested in?
  • What is one piece of advice you’d leave with them?

Listen in for ideas on how to leverage your brand story to scale strategically, and how to invest in companies that represent the next era in their industry.

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So Josh, can you kick us off with what is your personal mission of what you want to create in the world? 

You know, that’s an interesting question. When people talk about mission and vision, it often sounds a little contrived. So for me it, it’s, it’s almost like it’s simpler for me, it’s about having a meaningful impact, um, and doing things you love with people you love. 

Can you share a little bit of background, how did you get here? 

I grew up outside Toronto, Canada, about two hours outside the city, out in the country. I remember having a lemonade stand there. That was where I realized that location is everything. Lemonade stands and the country do not do well, a very humbling experience at the age of five. 

I went to school to study business accounting, I call myself a recovering account. Wall Street was the path that I was going down, but I had a very powerful conversation with a mentor of mine early on. We were working late on a financial model and he looked at me and said, you don’t love this do you. 

And I said, no. They said, well, why the F are you doing this? Great question. 

I said, you’re right. It was a key turning point for me. So after that I ended up leaving the world of finance. I joined a private equity company, went down to the US from Canada. I took the leap of faith to move from Canada into the US to do land development and take an active operating role at one of the businesses we had. So I did that, I scaled that business up and ended up selling it late 2007, early 2008 which if you recall, that was really when the financial crisis hit. I was very, very lucky to do it at that time.

So I got a great lesson early on in my career. After that I ended up coming back to Canada. I joined a small coffee company based in Seattle called Starbucks. I think you may have heard of it. 

What made you decide to start by scaling Starbucks?

I spoke French and wanted to scale and restructure this American Brand in a French Canadian market – I ended up having five different roles or five years at Starbucks. And I was the youngest executive ever in the company.

I ended up leaving Starbucks to restructure a 20-year old company that had promising financials. It seemed crazy at the time, but I scaled it and had a second exit. 

Tell us how you got into the next few companies?

I was approached to do basically a roll-up strategy to change the dynamics of a leadership team with a hearing health care business, restructure it, and then buy up a bunch of other businesses and consolidate them. You know, it’s interesting. My gut actually said not to do it… but I ended up doing it anyway. It was really a financial play and at the end of the day I just really wasn’t satisfied with what I was doing. 

“I wasn’t changing the world really.  I was really just doing deals at the end of the day, which can be fun at a very short time, but if you truly look at your time being the most valuable commodity you have or valuable asset you have you really want to spend it doing things that can be a global impact rather than just to make a buck or two, to try and appease shareholders.” 

So we did that for two years, ended up selling it. Then, at a Bachelor party in Amsterdam of all places I was approached to come and lead a cannabis business. I finally decided to sit down with the CEO at the time. And, and I was totally blown away with the team and the brand and the space. I was completely ignorant to the world of cannabis. 

Can you give us some background on your cannabis business?

The company’s called Doses. We’re the first and only dose controlled vaporization device out there. We don’t consider ourselves a cannabis company per se, we’re really health and wellness company that happens to use cannabis and some of our ingredients. 

So the positioning of it in the marketplace is quite different. We’ve worked very hard for the last couple of years to push the legislation forward in Canada to actually federally legalize cannabis. So we were changing the narrative and really breaking down stigma. 

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Why Branding is the Key to Incredible Exits

Starbucks If you look back at starting with Starbucks, Starbucks completely redefined what coffee is, right? They broke down stigma. People before thought coffee was 5 cents and came at a Styrofoam Cup. You would never pay $4 for a cup of coffee and you’re sure as heck would never wait 20 minutes to pay four bucks for that coffee. 

Sage Natural Wellness The next organization I ran was called Sage Natural Wellness. It was an essential oils retailer. Very similar story. You know, essential oils have been around for thousands of years. Recently they have had a very negative stigma around them, like snake oil. But we completely pivoted that stigma and actually turned it into more of a fashion brand. 

Dosist So when I saw what the team at Dosist was already doing this with regards to the brand, I said, this is incredible. Not only did you have a market that’s huge, you’ve got brilliant people and oh, by the way, you’re not talking about coffee or essential oils, you’re redefining an entire category that’s been negatively perceived for the last a hundred years. 

Cannabis It’s been criminalized last hundred years, which is kind of crazy. A lot of people have acquainted it to the end of prohibition. But I would say it’s more like the end of prohibition and then the doctor recommending you drink cocktails. Wow. It’s much, much bigger. So to be one of the only brands that’s truly changed that narrative is truly incredible.

The keys to picking a business: Catch a wave, don’t create it!

  1. Commodity product that you’re excited about.
  2. Trend watching for low-competition and high opportunity (usually involving changing a stigma).
  3. Branding that people will love and get behind – with a proven market demand.

Are there specific revenue models for these products?

It needs to be a commodity product with a negative perception. You wouldn’t start a low-cost hardware store, you’d be competing with Home Depot. That’s hard. 

Chandler: So it’s gotta be a case where you’re going left and everyone else is going right. What are some of the other criteria you use to decide to invest in a business or step in as an operator?

A humble leadership team I think is for me is personally really important. They need to be open to feedback. I’m not good at very much, but I know what I’m really bad at and have a good network to supply that. I think of myself as a land developer more than anything else, I watch trends and gather a good team around them.

Branding is Key

I think the brand is key. One that people seem to forget about it, right? There are so many examples where there’s a product that’s like a 10 at a 10 it’s amazing. But the branding is just awful. There’s no ability to resonate with the consumer. And I think that’s where a lot of people fall down. So I over-index on how much you allocate to actually brand-building versus some of the other functions of the business early on.

Especially if you’re taking something that’s truly different, you want to brand it and position in a way where people are excited about it and it’s something that they can get behind. You are changing the narrative in most of your businesses.

Well, I think that’s what it has to be. I mean, otherwise, there’s nothing newsworthy about it.

Sure. So how do you go about changing the narrative on something like essential oils or cannabis? Like what is your process for how you even start that?

It’s about identifying what do people really want, what’s, what’s that emotional, which a compelling emotional connection they want to make for the product. And then going finding people that that resonates with them. They can actually do that work but are an actual creative type.

So finding the right branding team of somebody that’s emotionally tied and really passionate about the project to share this story in a new way, to change the narrative, um, from what it was to what it can be.

Each project has three legs to the stool. There’s the creative pillar, which is critical. 

  1. There’s the product pillar 
  2. a creative pillar
  3. and the back office stuff.

The “back office” is bringing the players together and holding the team accountable. It’s bringing product and brand vision to life. Here are some questions that I ask:

  1. What are the other players or even on the team?
  2. Where do we need financing from? 
  3. How do we actually bring it to market? 

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So if you love consumer products, are there specific kind of revenue models that you’ll go with?

Yeah, that’s an interesting question. I want to actually back that up a little bit. I think a lot of people jump into the technicalities, but if you back up two more stages is key. Why does the product even exist? Is there really a need for it? Starting with the why I find is so critical.

So many people jump to tactics right away. They’re like, I have this new shoe or this widget, let’s throw it in a subscription model. Go, go, go. And they’re like, wow, it’s not selling. I wonder why? Well, because no one really cares about the product. You haven’t built a brand or a narrative around it. And that takes time. Once you start with that real core part of the business and have that nailed, then it affords you a lot more flexibility. And you still have to be willing to try a few different things and then go after what starts to work. 


What are the pros and cons of getting into the product market?

Cashflow challenges for sure. You have to actually build it and have inventory. In the digital world, these things don’t exist. I mean there’s a ton of challenges from regulatory challenges to warehousing challenges. It’s a pretty daunting task for most people to dive into, which is also what’s really exciting.

How have you gotten around cashflow challenges?

Making a lot of mistakes very early on.

What is your relationship to fundraising vs. bootstrapping?

It depends on the project. I’m notoriously frugal, which everyone in my personal life can certainly attest to. But I really liked the idea of going through the first stage, bootstrapping it. And when I say first stage, I mean really validated the demand. 

What are the top lessons you’ve learned?

I think first was always trust your gut. I think the biggest mistakes I’ve made, I’ve tried to do things to make other people happy and it’s always been a mistake every single time. So that is absolutely number one. And be humble. I think we all have egos out there and people should be proud of the work they’ve done, but there’s someone who’s going to have a different opinion and engage them. Right? I really seek out people that disagree with me and love to debate and I think that’s, for me at least, I think it’s a healthy way to go about doing it and we don’t always have to come to an agreement on it, but I’d love hearing a different perspective on it and I’ll often take a different perspective just to get the conversation going with people. I think that’s when you truly get innovative ideas coming out when you have that.

What is one piece of advice you’d leave with us?

I think one piece of advice could be a little dangerous and it’s truly ask yourself why you’re doing it… why are you doing this business? And if it doesn’t resonate with you with an incredible passion, then don’t do it. Life is too short.

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Key Links

Conscious Company Acceleration with Fledge

Conscious Company Acceleration with Fledge

Fledge Accelerators have helped 95 companies from 27 countries since 2012. Their goal is to help foster a wave of companies that make a measurable impact in the world, collectively improving in the lives of everyone on the planet.

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Episode Summary

Listen in to hear the founder of Fledge talk through their learning-focused accelerator model and the community of impact businesses they are building across the globe.

  • What is the mission and vision of Fledge?
  • Can you share why you started Fledge?
  • Can you share more about how you structure the business model for Fledge?
  • What does the ideal business for Fledge look like?
  • Do you work with exponential tech companies? Why or why not?
  • Can you share more on the methodology to scale?
  • How are you measuring the impact?
  • What do you think it’ll take to solve the Global Goals?
  • Any final challenges to the audience?

Full Post

Introducing Luni Libes, founder of Fledge and Managing Director at the Seattle Fledge headquarters.

Luni’s Quick Bio from the Fledge.co website:

“Luni is a 25+ year serial entrepreneur, founder of six startups; Entrepreneur in Residence and instructor at Presidio Graduate School; and Entrepreneur in Residence Emeritus at the University of Washington’s CoMotion, the center for impact and innovation.

Luni is the author of The Next Step, a series of book and classes guiding entrepreneurs from idea to reality; plus blogger and incessant answerer of entrepreneurs’ questions on Quora.

If the pattern is not obvious, Luni spends most of his waking hours helping entrepreneurs.”

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What is the mission and vision of Fledge?

Fledge exists to help entrepreneurs who agree that the only way we can make an impact in the world at scale is through for-profit means.

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Can you share why you started Fledge?

After 20 years of building tech startups (5 total), Luni went back to the drawing board. “In talking with others and pondering what could I do for the next 20 years of my life, I realized that the most fun I’d ever had across those 20 years was taking an idea and turning it into the first dollar of revenue.”

“The first million in revenue was pretty fun too. But really the idea to the first dollar was with the absolute most fun I ever had. And I got to do that for seven of the 20 years. So I asked, how can I do that for a living? How can I get paid to help others or work with others to do that over and over and over again? And the answer is a business accelerator.”

Can you share more about how you structure the business model for Fledge?

“Well, it’s not by growing fast. It’s growing at whatever speed they think is the right speed. So we’re working with what others are calling zebras instead of Unicorns.

Zebras Fix What Unicorns Break. Magical thinking drives the startup economy — but we need a strong dose of reality.”

So, the idea that we were looking at was, ‘how do you invest in a company that will never exit?’ At the time there were two options for a startup to get funding,: go into debt or hope for an exit, which is the California capitalism model, which has been around for about 40 years. But many of the entrepreneurs I talked to didn’t want to exit or sell their company.”

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How it works:

We use a 3rd option, called a revenue-based loan. And the terms are simple. The loan company hands over some money to a company. You just take round numbers, call it $100,000. And in return, the company actually promises something. They promise to pay back. Lighter capital three, four, five, 6% of their top line revenues until a 150 to $200,000 has been paid back. So once one and a half to two times revenue has been paid back, then they’re done. No equities changed hands, no, no interest rate is there. No timeframe is set ahead of time. 

That’s how it works for companies doing about a million in revenue. Fledge.co-created a way to offer similar loans to new companies, too: “We buy shares of a company and they buy back half of those shares for twice what we paid.”

What does the ideal business for Fledge look like?

In terms of sector or ideas and whatnot, now we don’t have anything in mind. We just look through the applications in and see the ones that pop out as promising and interesting.

Could you just be growing chickens? We do have two chicken companies in Africa because they need a lot of chickens and they’re just not getting grown enough. Or it could be novelty, like on Zirconia or our client down in Latin America, which is recycling plastics. Sometimes it’s a business model that pops out like a crop. It’ll on the Philippines, which is crowdfunding funding for farmers. MMM. Uh, in terms of sectors, uh, we use the UN’s sustainable development goals as, as an ontology. And, uh, we’re covering 16 out of 17. So far we’re missing education.

Do you work with exponential tech companies? Why or why not?

“Well, we’re not a tech accelerator,” Luni says.

“We don’t get excited by high tech solutions. We get excited by big, important problems of the world.”

“So if you have a solution to world poverty, it uses a blockchain. Yeah. We might bring you in and if you have a solution to solving hunger that uses AI, we might bring you in. But it’s, we’re problem first, not technology first.”

How does Fledge help companies scale?

Fledge has 3 parts to their scaling methodology.

  1. MBA program: Luni teaches the curriculum he developed that is in his Next Step books, and licenses the curriculum for other professors to teach as well.
  2. Mentors: Fledge has 660 mentors, and each company meets 12-20 of them face to face.
  3. Storytelling: Fledge doesn’t do pitches, they teach Ted-talk style storytelling. Companies present their stories on demo day.

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How are you measuring the impact?

    1. The Pinchot Impact Index – learn about it in the video below!
    2. Showing the UN Sustainable Development Goals that are present in the Fledge portfolio
    3. Showing the gender equality in the companies they support – currently, Fledge has about 40% female entrepreneurs participating.

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What do you think it’ll take to solve the Global Goals?

“The anecdote I like to say is, you can blindfold me, stick me in an airplane, fly me anywhere in the world, drop me off in a village and within two hours I have a coca cola in my hand. Why? Why is that true? The answer is because Coca Cola makes money by making that trip. And that is not true at the moment for solar power in every home or good health care or even just food on the table to stop hunger.”

When we have businesses who every day worry about how to get the next customer to earn more profits, thoseproducts solve a problem of hunger, poverty, inequality, whatever you like on that list of 17 goals, then we will have these things link and it will simply take a trillion or $2 trillion of investment to get all those companies up and running to scale. Then that’ll turn into four, eight, $10 trillion of returns for investors. So it’s a good thing for investors, but there’s just not woken up to it yet or not. Enough of them are woken up.

Any final challenges to the audience?

  1. Do impact investment!

“We just need to find more ways to deploy more capital in more mission-driven businesses. We need to stop worrying about maximizing returns so we can give a little bit of way to do good in the world… like, every dollar of every investor should be focused on doing good in the world.”

2. We need more fund managers to educate investors who were never entrepreneurs

“The other struggle that we see is that since most investors didn’t make their money as entrepreneurs so they don’t know how to support entrepreneurs as investors. They know how to do public stock market trading because that’s been going on forever, and they made money there. They know how to buy bonds because they’ve made money there.

But you know, if you’ve never been an entrepreneur, if you never worked for a startup, the idea of a lending or investing money in an early company early being less than a million in revenues are less than 10 million revenue a, it’s scary and they just don’t understand it.

So we need them to do more of that investment, which really means we need more funds and fund managers to help them do it. It’s changing the flow of capital, right? Changing where it goes.

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