Crik Protein is out to transform the planet by transforming the way we eat. In this episode, founder Alex Drysden talks about the business model of a disruptive supplement company, following your WHY in the face of challenge, and building a brand to change people’s mindsets.
What is Crik Nutrition? How did it start?
Why are crickets good for us and for the planet?
Why is it taking so long for cricket-based foods to hit the market?
Are you developing your own farming, or focusing on brand development?
How do you maintain sustainable sourcing and methods?
How do you create a disruptive business model with e-commerce?
What has been the most important thing to keep you going when Crik seemed like it wouldn’t work?
Chandler: What is Crik Nutrition, what are you out to solve?
Alex: We are a health and wellness company, focused right now on building cricket-based protein powder. We want to bring more awareness to the environmental impact of protein right now.
The grander idea is to bring more awareness to environmental impact, what’s happening right now. And the reason that I got into Crick Nutrition is one that most people are totally unaware of: How we eat, and how it impacts the environment.
C: What is the backstory?
A: I had quit my career of 10 years and had an opportunity to get mentored in e-commerce. I dove in, I knew I wanted to learn as much as I could.
I was working with a couple of friends of mine that had been in eCommerce since the very, very beginning days in the late nineties. They took me under their wing and showed me everything they could. I build a test store. I wanted to make a pivot and try to come up with something that held more closely to my values. What I had started at the time was a wind and a solar electric lighting eCommerce company, just to do more towards renewable energy. Then, I saw an article posted by Tim Ferriss that mentioned a cricket protein company getting invested in. He’s usually ahead of the wave on the fitness stuff, that’s why I follow him.
I was sold on the idea of using crickets as a protein source, right from the second paragraph. It blew my mind that we weren’t using it and I figured it must be gross, but this company had some taste test video showing people that eating it and seeing it was pretty good. So, I looked around for a protein powder to use personally – I had moved away from my heavy days of supplementing and lifting weights to focus more on functional fitness, functional food.
I wanted to try this protein powder for myself, but nobody was out there making it. So I ordered a bag of ground crickets and started making my own protein powder at home. And actually, I’m kind of embarrassed that it took me a couple of days before I was like, “why don’t I make this my company?” And literally from that moment, I went do my office wiped everything off my board. It was dramatic.
C: How many years ago is that and where are you where the business now?
A: So that story happened about 5 years ago, when there was almost no information out there about cricket protein. Most manufacturers only want to work with high volume products, not with startups or test cases. So, I hired contractors to make a video and an Indiegogo campaign. So it took about 12 months from the initial idea to when I shipped a very first amount of product going the crowdfunding route. Then it was about two years before we had our second round of development done, with flavors and tub sizes based on our customers’ feedback.
Where we’re at right now is just our third round of iterations and getting ready to, uh, deliver an even better product now to customers by springtime.
C: So, I’ll recap: What I really like about your story here, Alex, is that you are out there looking for something.
C: You had mentors originally and I think that that’s how a lot of us start, right, with a shortcut to that learning curve by having some rock star mentors. You tested some different products and then you were looking for kind of a product whether or not you knew it. You found the Tim Ferris article and got into something that was somewhat of a blue ocean product that wasn’t really out there all the way yet. You see the opportunity and you struck on it and took a year – you guys, that’s a long time, a freaking year – to get the product out there and put in the muscle to get the Indiegogo campaign, get the product shipped, heard back from the customers, listened into the customer preferences, then found a certain segment in the market.
And when you doubled-down on e-com and put forth the muscle to go earn the customers, if you will, by commenting on the blogs, doing the freaking hard work (which a lot of us avoid when you’re trying to scale).
“But that’s what it takes. It takes the, it takes the button pushing and the freaking heart. Um, in the beginning when you’re getting started and it sounds like that’s what you’ve done and you’ve now overcome that stage where you’re now in stage three of the biz and you sold out, which is a huge win.”
C: So tell us a little bit more about the statistics that we should know about why crickets are so good for the world even though they sound so gross to eat.
I mean, hot dogs taste great and we all know (but don’t like to think about) what they’re made out of.
1. We all know that we can make better sustainability and environmental decisions.
I found out from first looking into this is that eating red meats and beef in the amounts that we do is one of the biggest contributing factors to climate pollution in Western culture. So we’ve made a product that tastes good and solves a problem in a more sustainable way, and our customers have backed that up with their, with their testimonials.
It’s the first small step in making a bigger change in changing the mindset that we have around what we eat.
2. Crickets can be used as a whole food source.
The second thing that actually is the biggest leader in what really impacts us: crickets are already really, really high in protein. So that means that we don’t have to isolate the cricket protein away from the cricket powder. So we use a whole ground cricket powder, which is a whole food and adds so much more functionality to your diet. We don’t have to strip out a lot of those minerals and nutrients that are in the rest of the creature.
3. Crickets are shockingly good for you.
They have 10 times the B12 of wild salmon, pound for pound.
They have more iron than spinach or beef.
More potassium than bananas.
More calcium than milk.
More protein than beef.
They use 1000x less space than cows or other protein options.
They use up to 2000x less water than beef does.
And they provide a plant-based, non-GMO option for people.
Why do you think that it’s taken so long in order for them to hit the mass markets?
Well, it hasn’t been long that we needed to look for options other than cows. It has been just as easy to grow a cow as anything else. But now, people are aware of the environment.
Also, one of the obstacles to overcome at the initial stage would just be that yuck factor.
It’s funny, anytime I’ve gone and given speeches on the topic or anything like that, it’s usually well over half the audience that has tried bugs before. They try it in another country and bring the idea back.
Let’s talk about Frass.
FRASS (Noun): Fine powdery refuse or fragile perforated wood produced by the activity of boring insects.
So, Alex, frass is interesting – the fact that it’s a byproduct. It seems marketable. Do you have a timeline for developing your own farming to get better unit economics and sell the frass as well?
Well, yes, I love farming as well. I grew up around it and did a lot of work on different farms and that was something that I wanted to get into. But it just made sense for me at the time to focus on that protein powder.
Especially now what I’ve learned about branding, building companies and the vision that I have for the future, and the impact that I want to make with this company, that is something that can only be done from a brand point of view.
And it’s something that the customer-facing part of the supply chain is where you can make the innovative products and try the different things that are going to get people’s attention so you can help educate them to make better decisions overall.
So all resources are, are focused on building the brand. Farming isn’t out of the question, but it’s not the most important.
C: What are you guys developing on the product side?
A: We do have some plans for later in the year for some different products, but we can’t get too far into those right now is we want to keep them a surprise.
It will take us until April though to get our products back in stock. You know, to really crush it. That’s a thing with vertically integrating too, especially in the supplement industry. You’re not constantly launching new products all the time. You might have two or three big projects in the year to focus on that, but once you nail a product, you either can go back and improve, or make new products. And really once you do nail product, as I mentioned, you sell that for a long time.
So it doesn’t really make sense to be doing a ton of development in that space and have your own facility with scientists full time developing stuff. It’s a lot easier to work with partners.
C: So, I’d love to learn a little bit more about what kind of protein companies or supplement companies you’re modeling in terms of the business model.
A: We’re not really focusing on the business models of other companies because I think we can really do a lot better in every single area of what supplement companies are currently doing.
We’re maybe not disrupting every single category, but at the end of the day, I do think we will disrupt things because we’re doing every single thing better.
Our core value is to make better decisions for the environment, for now, and for the future. So as long as we remind ourselves, what is that better decision everywhere from fulfillment to the ingredients we’re using? We’re considering all of that and our customer, and the customer service, so not leaving one area untouched.
C: Definitely. I think that you’re really positioning yourself to take the wholesome sustainability approach and to capitalize on that market.
So many people are stuck in their ways and it takes somebody that’s like, ‘Hey, why are we doing it this way? And what’s actually best for the customer? And what’s actually best for the world? And let’s make it happen… and let’s stop using those excuses that people live on and then just move on. I mean, come on, we are running out of time here!
A: You’d be amazing at how easy it is to fall into a rut and just accept things. But you gotta remind yourself every day of what you’re doing and why you’re doing it and what’s the goal in the longterm?
Everybody gets caught up in their emotional day-to-day. So it’s very, very important to remind yourself of your goals and your vision, and really run every single business decision by those values. And personal decisions for that matter.
C: I think that this is like a great reminder for all of us that are out there creating innovative products, whether it’s products or exponential technologies.
When you’re doing something new, people aren’t gonna like it and you just have to remind yourself like what you’re committed to because you will face more disagreement. You will face rejection and you just have to know that. If you’re ahead of your time, you have to know that you’re going to face that and look forward to it.
Because if people weren’t giving you that Alex, then you’d probably have a product like everybody else.
C: So, Alex, tell us a little bit more about what stage of business you’re in and what are you doing to get ready for the next stage?
A: Just getting ready to scale. There are many ways to scale, and we’ve been getting all the systems in place. I’m getting feedback from as many different groups as we can to segment our audience and see what is at the top of people’s minds.
Also, looking at some of the new science that’s come out in different ingredients and even crickets themselves and what they’re good for. And being able to use that information to meet the needs of our customers.
C: And so it sounds like you guys ran out of product because of the customer demand, which is always a great thing. You’re getting ready for scale. It sounds like the unit economics works in order to do that. And it sounds like you have a distribution partner in order to get the product out, whether it’s retail or doubling down on e-com.
C: Did you guys have to raise funding and if so, how was that fundraising process for you with such an innovative product?
A: I self-funded everything and made some silly decisions. But I’ve learned a heck of a lot along the way.
As long as you protect yourself and make sure you’re not putting yourself in a bad situation, and you test things properly before you take any big steps, it really pays off at the end of the day
I didn’t want to gamble with other people’s money because I still wasn’t a hundred percent confident. I had the right partners and the knowledge to be able to take it to that really big scale step. So I just waited and trusted my gut. And um, whenever I hadn’t trusted my gut is when I ran into problems.
C: For those of us out there that are potentially looking for the shortcut: just be reminded that in order to get ready for that scale phase, you got to put it in the muscle.
Well, Alex, thank you for what you’re committed to the world. Thank you for bringing crickets to the mass market and I’m excited to see it hit the shelves… and try it for myself!
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.
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?
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 Agreementwas signed also by all of the members. These two landmark agreements shape much of the work that we do at the UN.
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.
Avoid the concept of Cherry-picking, or picking one or two favorite SDGs and ignoring the fact that you could have on other topics.
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.
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.
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%.
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.
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:
Let’s create more businesses leveraging cutting edge technology to tackle the world’s greatest challenges.
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.
Ecotone Analytics is creating a new industry of accounting – accounting for the businesses’ impact on its community ecosystem.
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?
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.
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.
Then we also look in their internal financial information to figure out what it costs for a participant to send everybody through this system.
Then we figure it out what the effect on society is in our county in Minnesota.
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?
What: what are you trying to do?
Who: who are you trying to impact?
How much: How effective and how much of this change are you providing for your target community?
Contribution: The research and economics of your impact
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.
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.
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?
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?
_ 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.
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.”
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:
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.
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:
Are you producing a certified organic product?
Are you involved in fair trade
How are you treating your workers?
What’s your governance structure?
How are you engaged with their community?
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
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?”
AtbImpactAssessment.netyou 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.”
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.”
“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.
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.
Impact Investor Josh Campbell reveals his unorthodox formula for scaling companies: stigma + brand storytelling + trends + team.
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.
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.
StarbucksIf 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 WellnessThe 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.
DosistSo 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.
CannabisIt’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!
Commodity product that you’re excited about.
Trend watching for low-competition and high opportunity (usually involving changing a stigma).
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.
There’s the product pillar
a creative pillar
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:
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.