There’s no reason your company has to sacrifice its values to make money, three successful founders assert at the Fast Company Innovation Festival.
Doing good and doing well have traditionally been mutually exclusive goals–but three leading founders speaking at the Fast Company Innovation Festival Tuesday, argue that they don’t need to be. Startups can live up to their values and still be successful, especially if they find ways to convince customers and investors to go along with them, they say.
“We don’t have to cheat in order to win,” says Scott Norton, cofounder of high-end condiment-maker Sir Kensington’s. The company, which prides itself on using real ingredients and avoiding harmful ones, was acquired by Unilever in a multimillion-dollar deal early this year.
“If you educate and entertain people, then actually consumer demand is going to shift away from ingredients that are high in sugar and fat and other things that have a disastrous effect on human health,” Norton says.
Gregg Renfrew, CEO of clean cosmetics brand Beautycounter says the startup’s consultants–its equivalent of Avon Ladies who sell its products in homes–act as marketers for the brand’s toxin-free message. “Our consultants are advocates for this movement,” she says.
“There are certainly economic advantages to using toxic chemicals, no question. We may not enjoy the margins of some companies by using safer ingredients. But at the end of the day, we have a commitment to the consumer to create safer products. It’s not really a trade-off. It’s part of our mission to operationalize our brand.”
Beautycounter also takes on the role of consumer protection champion, lobbying for new federal laws banning dangerous cosmetics. The industry is largely unregulated, Renfrew says (the last major law was in 1938). The EU bans about 1,400 personal care chemicals while only 30 of the same substances are outlawed in the United States.
“We’ve had more than 500 meetings on [Capitol] Hill. We’ve sent tens of thousands of emails and texts to Congress asking for better laws. We are a good example of a company that feels that regulation not only doesn’t stifle innovation but can actually support it,” Renfrew says.
Of course, many companies will claim to be living out their values these days, even if they don’t exactly walk the talk. John Collison, cofounder of online payments powerhouse Stripe, offers some advice for upholding words like “integrity,” “respect,” “communication,” and “excellence” (Enron’s mission terms before it imploded spectacularly in the early 2000s.)
He suggests startups ask questions about values in interviews and performance reviews (as in “when was the last time you upheld our values in your work”). Stripe sometimes asks potential hires to mediate a conflict between staff members to understand their ability to empathize. Collison said managers should take notice of how employees treat junior staff as this tends to be more informative than how they behave around executives.
Renfrew, Norton, and Collison have a few other tips about doing good while doing well:
Find the right investors: Renfrew argues that “cash is a commodity.” Good businesses can find the capital they need. The trick is to find investors who share a belief that profit and purpose aren’t necessarily in conflict.
Think long-term: “Following your values-driven approach can lead to a good place commercially. It’s valuable for competitive differentiation,” Collison says. “The problem is what happens when people optimize for short-term metrics.” In other words, manage the company for the next five years, rather than the next five weeks.
Have arguments: Beautycounter has a diverse array of staff, from environmental activists to Wall Street bankers. Arguments about the way forward are inevitable, but they’re not necessarily a bad thing. They may help get people involved and feeling that their voice is being heard. “We have huge arguments about how to move forward,” Renfrew says. “But once we agree, we commit and move together.”