Many of today’s most successful entrepreneurs are impact-focussed, motivated by personal values to set up businesses explicitly geared towards making a positive contribution towards specific causes they care deeply about.
Yet for these entrepreneurs, making an impact isn't just about the feel-good factor. It's intrinsic to why they are successful.
As part of a series of articles sharing stories from entrepreneurs across the world, we look at the examples of two genuine pioneers of purpose, David Yeung, CEO of the global environmental movement Green Monday; and Jean Moreau, co-founder of Phenix, a food waste reduction venture.
Both these leaders realised their own values were aligned to an emerging social consciousness among their customers that was not being addressed by traditional business models.
Purpose is the north star for a growing number of entrepreneurs
HSBC's proprietary Essence of Enterprise research indicates Jean and David may be part of a wider trend as purpose-led entrepreneurship takes off across the world [Figure 1].
Figure 1: Purpose-led entrepreneurs are often young and from a family business background
Q: How old are you? / Do you come from a family that owns a business? [Yes]
'Entrepreneurs with purpose' said they became an entrepreneur 'to have a positive economic impact' or 'to have a positive impact in their community'.
Hailing from diverse backgrounds, what these pioneers really have in common is a shared mindset. They are bold and unconventional in their thinking, which means they sometimes see new solutions to longstanding challenges. Or, as David puts it, "When everyone else goes left, we go right."
Sometimes they are even able to shift behaviours by awakening a consciousness in consumers that wasn't there before. David, for instance, had been a vegetarian for more than a decade before he decided to start Green Monday in 2012 as a platform to enable the transition to plant-based nutrition. At the time, he felt there was "zero awareness in Asia" of the impact of excessive meat consumption on the environment.
David knew that not all consumers would be willing or able to embrace plant-based nutrition, so instead, followers of the Green Monday movement adopt a vegan diet on the first day of each week.
Jean alludes to similar motivations compelling him to set up his food waste reduction venture Phenix. The business finds a second life for food across Europe by connecting supermarkets (which have high volumes of unsold and expired products) with charities, which are facing surging food demand.
He explains: "After working in banking, I had a crisis of conscience. I wanted my energy and entrepreneurial drive to serve a more noble cause, one that would have either a social or environmental purpose. Both came together in Phenix."
A common cause brings together an engaged community, working towards the same goal
Purpose and passion often go hand in hand, and entrepreneurs can feel the benefits in the form of a community of customers, partners and investors that are all bought into their vision.
Particularly in the foundational years of the business, an organic and ongoing communication between founders and customers can be a powerful catalyst for growth. Engaged customers can act as product testers and advocates, for example; while impact-seeking investors are thinking long-term.
Aurélien Drain, Head of Business Development for HSBC Private Banking, France notes: "The network effect is important. With a strong community of clients, entrepreneurs can scale up, and in these early days investors and founders are not necessarily looking for profit straight away. It's more about the number of recommendations and connections you can create with the same client, resulting in repeat business."
Community can take different formats. Green Monday, for example, forms deep partnerships with other businesses that share its purpose. David explains: "If we want to shift the world to a more plant-based diet, no company can do it alone as it can only serve a small proportion of the population. Green Ventures, the impact investment arm of our business, is creating an alliance. We were early investors in Beyond Meat and we invest in other food technology companies that share our vision and goal."
Purpose can drive the product innovation needed to accelerate change
For many purpose-led entrepreneurs, advocacy is not enough: they want to develop solutions to the challenges they see, all the while working tirelessly to raise awareness of their mission.
In its inception, Phenix wanted to reduce food waste at the consumer level in fridges but found the economic model problematic, so settled on a business-to-business approach instead. Recently, it returned to its original mission by launching a mobile app where consumers can buy unsold food items at a discount.
Impact is also accelerated through the set-up of Green Monday. It has a foundation focussed on education and outreach; Green Common and Omni Foods innovate new products, including meat and dairy alternatives; and Green Ventures makes impact investments in synergistic businesses.
Jean concludes: "We are showing that there is a middle path between traditional capitalism and the world of non-profit. We have tried to come up with a new model without sacrificing growth or ambition, while still having a significant impact."