Category Archives: Green Business

The Emperor’s New Social Venture?

Current Affairs, Green Business

Very interesting post last week from Steve King, in Small Business Labs. He’s looking at Ethos, Starbucks’ branded water linked to investing in clean water where it’s needed in so many places in the world. Here’s the kicker, but don’t settle for this little excerpt, read the post: 

As I sat in Starbucks, I realized my issue with Ethos is they may be doing too well financially relative to the good they are doing.  They also may be doing too well relative to their positioning.  Ethos positions itself as a mission-based social service organization, and their website makes them look like a non-profit.  I have a hard time reconciling this positioning with their pricing and my back of the napkin calculations of their profitability.

I give Steve a lot of credit for looking behind the curtain. So often there are questions we fail to ask.

Nonprofits with Legs and Teeth

Green Business, Nonprofits

Maybe it’s about baby boomers not retiring, and maybe it’s about ex-hippies in positions to do something they’ve always wanted, or maybe it is just about the world getting more crowded. Could there be a long tail of entrepreneurship, opportunities for people with motivation other than pure profit?  If all was ever fair in love and war, it was always just business for business. Until business became personal. And green. And socially motivated.

I just finished reading the Sunday New York Times piece called “A Capitalist Jolt for Charity”.

Today, the once-struggling venture has morphed into a primarily for-profit enterprise. And the striking transformation of In2Books is emblematic of a larger trend: charities are changing their spots and making use of some of capitalism’s virtues.

The process is being pushed forward by a new breed of social entrepreneurs who are administering increasing doses of bottom-line thinking to traditional philanthropy in order to make charity more effective.

In the old days there were nonprofits. They were foundations and the like, the alleged “do-gooders” that were conceived on missions like fighting poverty and racism, broadening the meaning of art, spreading education. You know them. You’ve lived with them forever. United Way. Toys for Tots. Meals on Wheels.

It occurs to me that the magic of the social enterprise has to do with control and power. If I build a nonprofit foundation to solve a social problem, I depend on being able to raise money through donations. But if I build a social enterprise instead, and figure out how to make my own money, at least enough to power the enterprise, then I’m in charge. I focus on the business model and the social benefit and the underlying purpose, instead of the fundraising.

So social enterprises are doing things like creating channels for developing country handicrafts, or PlayPumps distributing low-power-consumption technologies for poor countries. Bill Drayton, founder of Ashoka, talks about a new generation of people thinking they could “do better.”

I’m wondering now whether the tradeoffs between social enterprise vs. straight nonprofit isn’t a lot like the tradeoffs of bootstrapping instead of raising money through venture capital. With one course, you own what you build, you get to grow it and steer it and make it work as well as you can. You’re in charge. That’s bootstrapping and, I think, the social enterprise. With the other course, you get more resources but because of that you’re also not in charge, you might be the captain of the ship but you can’t change destinations without permission, and if you change course in mid-journey you’d better be able to defend your decision very well when the board asks about it later.

Of course I can’t make the straight parallel between these two ideas, because where they come apart is the matter of choice. Some bootstrapped business chose that option, but many other never really had the choice of investment. Does the social venture have the option of going straight nonprofit?  That’s hard to generalize. At the very least, these are interesting questions.

Better Green Late Than Never

Green Business

(Note: I’m crossposting this here from the Huffington Post, which is where I posted it originally. Tim)

It doesn’t just rain, it pours. Or perhaps melts is a better metaphor. By the time I’m watching the NBC logo turned green, and football analysts sitting in the dark at halftime, no wonder Al Gore won both the Oscar and the Nobel. It’s about time things turned green. Because it couldn’t happen to a more deserving world.

Last week the Wall Street Journal called it a "green stampede."

Business loves a bandwagon. Media love a story. And the greening of business is both. And suddenly it seems that in the world of business, at least, we have a veritable green explosion of convenient truth:

  • The most obvious is the global recognition that saving the environment matters. The canonization of Al Gore is as much a symptom of changing times as a cause. Look around businesses, and business press, and business blogs, and business schools and it’s now as plain as day that real people value the common sense of saving what’s left of the environment. Okay, I admit, the glass is at least half empty when we consider how little we’re actually doing about it, but it’s half full when we consider how frequently it’s taken into consideration. Real companies with real stockholders are now taking factors like carbon balance seriously. Inc Magazine has a special section on it in its latest issue. In today’s world, it makes good business sense to spend money on green factors.
  • I write this on the plane back to Oregon after two days at the University of Notre Dame helping with the preliminary round judging for two venture competitions: one for sustainable social enterprises and the other for business in general. A group of us went over roughly 60 ventures proposed by undergrads, grad students, and alumni. The fact that we reviewed 19 entrants in the social sustainable category is remarkable. More remarkable, though, was how hard it was to draw lines between the two divisions. Most of the social sustainable enterprises also looked like plain good businesses. Many of the ventures In the standard channel had social and sustainable elements. The trend was glaringly obvious.
  • Andrea Learned at Marketing Profs Daily Fix was one of a half dozen bloggers last week who noted a Slate Magazine article showing how buyers paid more, and happily, when offered fair trade goods at higher prices. 
  • Investors, always a good lead indicator, get it. In VC gatherings, Web 2.0 conferences, and VC-related blogs the green businesses are clearly hotter than the norm. And green isn’t just environmentally sensitive any more either, it’s also about social equality, governance, and distribution.  To confirm this, browse through what’s available at www.ted.com or the latest demo conferences.
  • Stock markets get it too.  Earlier this year Motley Fool said "the market for the green arena specifically has never been brighter." The underlying assumption is that green companies are less likely to be responsible for the oil tankers destroying Alaska or Enron screwing its people. Or they are more likely to win new business, like when Swedish company Hoover’s sensitivity to power consumption in appliances led to a huge contract with China that led to a big boost in valuation.Book Cover

There’s no denying that "Greening" has been a long time coming. A show of hands please …  how many  remember the stir caused by "The Greening of America?" Published in 1970, (Ok, a show of hands, how many were alive in 1970?) it was essentially a tribute to so-called "counter-culture" ideas of the late 1960s. We’re talking about Mario Savio and the free speech movement in Berkeley in 1964, then the anti-war movement of the late 1960s, the world wide student movement in 1968, civil rights, hippies, and, among all of that, environmentalism. It wasn’t global warming back then as much as Rachel Carson’s Silent Spring; but it was a start.

Better late than never, I suppose, but wow, did it have to take 40 years?