Introducing Doing Well by Doing Good
Introducing Doing Well by Doing Good
Doing Well by Doing Good. Is that truly achievable in a society that values money, fame, and power over all else? As Hasan Minhaj’s uncle once said
Capitalism is built upon the fundamentals of meritocratic ascension but defines ascension through the root word capital. If you can make more money, you ascend, but those principles often do not incentivize doing good, only doing well.
In this series, we are going to challenge this myth by highlighting the companies doing both successfully.
What Does “Doing Good” Mean?
Before we dive into the concept, let’s first define what we mean by Doing Good in the context of businesses. Certainly it means different things to different people. In the personal sense, often we say we are Doing Good when we are helping others, and Doing Well when we are helping ourselves. For businesses, that same concept is a good start, though is a bit limited.
Here, we will categorize Doing Good for businesses by looking at 2 key questions:
What type of problem does it solve? Are these large scale challenges that are global in nature? Does it help improve access or quality of basic physiological and safety needs as defined by Maslow’s hierarchy? Examples include: Rapid population growth, increased climate related risks, widespread poverty, increased infectious disease spread, socioeconomic inequity, widespread hunger, among others.
Who is the end beneficiary?: Does it disproportionately, though not necessarily solely, help vulnerable populations? Examples include: the poor, old, sick, less fortunate, etc
Who is “Doing Good”?
Doing Good is something that both nonprofit and for-profit organizations are pursuing, yet their approaches are often very different.
Nonprofits are typically built to serve a social mission. Their key premise is to serve people first and reinvest their profits back into serving their key demographic. These can be created by wealthy individuals (e.g. Michael Bloomberg, Bill Gates, Marc Benioff), grassroots organizations, or inspired groups backed by grants and donations and are driven to, first and foremost, solve the social challenge nearest and dearest to their hearts. Doing Good is a key tenet of nonprofits by their very nature and is a key driver of success. Yet nonprofits are often highly dependent on funding and donations which makes them vulnerable to market swings and other macroeconomic events putting their long-term growth and overall sustainability as a business at risk.
For-profit companies on the other hand, are built to turn a profit first and foremost, regardless of the industry they are in. That said, big or small, most for-profit companies today have also accepted that Doing Good is good business and represent a trend toward “Conscientious Capitalism” because of 3 main reasons:
Global challenges, such as climate change, pandemics, poverty, among many others, pose serious risks to many businesses.
Employees want to work for a more socially conscious employer.
Customers want to buy from a more socially aware brand.
Doing Good for many for-profit companies ends up being a net positive on many fronts that contribute to a more sustainable and long-lasting business. The model we often see of Doing Good is some combination of charitable donations to nonprofits or investment in social missions that are often not directly tied to their core business. Most behemoth for-profit companies today, for example, have social good arms that focus on ESG (Environment, Social, Governance considerations) and broader social problems, from companies as traditional as BP and Procter & Gamble, to tech giants like Amazon and Netflix. A particularly creative example of this is the Pledge 1% movement, where for-profit companies big and small, investors, and people are encouraged to pledge 1% of their time, profit, product, carry or equity towards the causes they care about most. This enables companies of all sizes to participate in Doing Good, even before they generate significant profits.
For the for-profit companies above, these charitable donations typically, and often explicitly (e.g. Pledge 1%) are a small fraction of their overall earnings or profits, leaving a lot more room and potential to make an even larger difference.
In this series, we are NOT going to focus on the companies above but rather on a special group of for-profit companies who unlock their full potential for Doing Good by providing products and services whose core value directly solves some of these hairy global challenges.
What is “Doing Well by Doing Good”?
Doing Well by Doing Good is a concept characterized by for-profit companies that creatively tie in capital incentives through products and services that directly feed into immediate good for society from Day 1. These companies are a subset of those described above, but are differentiated by their ability to tie closer to 100% of their operating revenue to contribute towards Doing Good rather than a fraction like many of the other companies mentioned above.
We live in a particularly special time where Doing Good is widely accessible to for-profit companies small and large. Yet Doing Well by Doing Good, where your output directly contributes to societal impact is difficult because it means everything from your product, your service, your employees, your mission, and everything in between is built to solve pressing problems and help vulnerable people. Of course, as a for-profit business, profit goes back to investors and shareholders, but because the company offers a product or service which helps contribute to solving a fundamental societal challenge, it has tangibly contributed to making a difference just by conducting its daily business. Whether times are good or bad, if these companies are able to build a robust business, they can continue to sustain their societal impact.
The fundamental question then remains, which companies exhibit this lofty ideal? Is it really possible to achieve a high-margin, high-growth business, that delivers social impact and fulfills a similar societal role as a nonprofit? Is Doing Well by Doing Good possible?
Thankfully, despite the difficulty, Doing Well by Doing Good has become more common and is embodied by a number of startups spanning the spectrum from healthcare, finance, tech, to energy and beyond.
Who is “Doing Well by Doing Good”?
The companies who exhibit this pattern are unique because they embody the basic principles of capitalism but exercise an evolved form of it. While the concept of making a quick buck and building sustainable businesses is still a key tenet of their startup ethos, these companies define missions and build products and services that bind their core values of doing good with their profit-driven goals right from the start proving that growth can go hand-in-hand with positive impact. In other words, these companies have the direct impact of a nonprofit, with the DNA of a for-profit.
COVID-19: Startups Seizing the Opportunity
Given we are all stuck in our own homes quarantining in the best way we know how, it has become clear that the world has changed. The world is going through one of the largest natural experiments and we are experiencing it in real time. If nothing else, this has revealed something amazing, that the world can come together to solve hard problems.
In this first post of the series, I wanted to address the COVID-19 situation to highlight some key Doing Well by Doing Good for-profit startups that are rising to the occasion to make a difference and improve their business while staying true (and in many cases even truer) to their mission in the process.
Ride Health
Ride Health is a healthtech company streamlining transportation logistics for patients and healthcare workers, and they are bridging the gap by doing good through “Smarter transportation for every patient need” and doing well by building a profit-making business through partnerships.
During this time of crisis, Ride Health is finding ways to further both goals by expanding their transport network to help deliver food to the most vulnerable patients, transport healthcare personnel to the hospital, and keep everyone safe through PPE and advanced contact tracing and alerts within their network of hospitals. Once again, by staying true to their mission, they are driving better immediate impact, positive outcomes for healthcare providers, and overall goodwill with their customers.
Biobot
Biobot is a healthtech company with a mission “to transform wastewater infrastructure into public health observatories.” Biobot tests sewage to provide better public health info to decision makers, and helps ensure equal representation in public health records to enable more balanced decision-making while creating a for-profit business through partnerships.
Biobot is working on a pro-bono initiative to test sewage for COVID-19 to better provide data to public health officials given the lack of testing currently available to people. This initiative helps to test their technology, provide better data granularity to their customers, and boosts customer confidence.
Nova Credit
Nova Credit is a fintech company which enables U.S. immigrants to transfer over their credit history from their home country with a mission “to inspire and facilitate the flow of human diversity”. Nova Credit has a Doing Well by Doing Good ethos and mission, by tying revenue growth to the direct benefit they provide to immigrant populations seeking financial freedom in the US.
In response to COVID-19, Nova Credit has taken an active role along with a number of business owners and investors to write a letter directly to representatives requesting visa deadline extensions for immigrants. In addition, they have continued to compile helpful resources to enable immigrants better navigate government restrictions. These efforts benefit the immigrants who rely on Nova Credit’s service, their employees, and the clients and partners with whom they work enabling increased usage and referrals, while providing a valuable service to an immigrant community dependent upon credit to survive. This response is not only true to their mission, but a revenue driver which directly correlates to improving financial outcomes for immigrant communities.
Trying times have a way of breeding the best, most sustainable companies, because it forces companies to adapt to times. What’s exciting is that COVID-19 is showing that these special Doing Well by Doing Good startups are no different, in fact, their evolved capitalism may be the most resilient business model out there.
What’s Next?
In this joint Blog and Podcast series, we will highlight and interview for-profit private companies like those above at various stages and from multiple industries whose core existence embodies Doing Well by Doing Good. Each episode will highlight a single company and their key characteristics, missions, and methods to achieve both a profitable business and affect societal change.
Looking forward to sharing this journey with you and learning together how these innovative companies are adapting and making their positive impact on the world today.
If you know of any companies that are Doing Well by Doing Good and think they should be highlighted, please contact us at hello@doingwellbydoinggood.co
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