FutureX Plus / November 20, 2020
Five things I wish I’d known when starting a purpose-led business
I set up Matter of Focus with my co-founder in 2017, driven by the desire to help public service organisations deliver better to benefit people and communities. I had been working in a knowledge mobilisation role at a University – working between research policy and practice – and so thinking about doing good was second nature to me. At the time we didn’t know we were setting up a purpose-led business, we just really wanted to make a difference more than we wanted to make a profit.
We recently passed our three-year milestone and are moving into scaleup mode. It has been wonderful to connect with other purpose-led businesses along the way, but each time I attend a business networking meeting or conference I feel that the challenges we face as purpose-led businesses are not tackled at all or are sidelined into the ‘nice to have’ section.
My most recent experience of this led me to think about what business advice and support I would have liked when we set out on our startup journey. So, if you are starting up a purpose-led business, here is what I wish someone had told me.
1. It’s all about purpose
Purpose-led businesses are just that – led by a desire to make a difference in the world. To be genuinely purpose-led means that your purpose is at the heart of all decisions. This is what we do at Matter of Focus. All our decision-making – customer-focused, financial, and how we build and support our workforce is rooted in our purpose. We want to make a difference in the world, build a sustainable company, and be a great place to work – these all matter to us.
Mainstream business advisors usually don’t understand this – they have cut their teeth in a world where profit is king. They minimise, ignore or sideline the purpose. At times I felt that business advisors were giving me a patronising pat on the shoulder. But being purpose-led is far more than a nice-to-have, or part of a marketing strategy that recognises customer demand for companies to do good. Being purpose-led is good – better for the planet, for people, and maybe also for your business in the long term. It needs to be central to everything you do.
2. It’s not always comfortable
Being purpose-led in a profit-driven world isn’t always comfortable. We are the pioneers of new ways of doing business, and the ecosystem for startups is yet to catch on. We found ourselves in a business incubator where the leaders, other companies and support just didn’t get what we were about. Advisors with traditional business models, who are there to offer support, often challenged the idea of being purpose-led and questioned our ideas and value-based ways of doing things to the extent that we were constantly having to justify even having a ‘more than profit’ mission. Getting advice is probably easier if you have a B2C model, or one with a simple ‘doing good’ model (such as buy one-give one). But for a business like ours – selling B2B on a niche idea, was lost to many from the traditional business world.
There is also commonly confusion between purpose-led business and social enterprise, or other more charity-focused business forms (like community interest companies). We are still carving out space to make purpose-led companies visible in this ecosystem, and the result is a feeling that we just don’t fit. Stick with it – you are right even though the people in the startup ecosystem don’t yet understand.
3. It’s easier with others
Of course, if you feel you don’t fit, you start looking for a like-minded tribe. We were lucky that the Zebra movement kicked off about the same time as us, and we also connected with the B Corporation sector and became a B Corp in July 2019. Here in Scotland, the Government has Scotland Can B to support the sector, and FutureX is building a community of founders and leaders building better businesses in FutureX Plus alongside their major annual events. So I started to find some other companies that were like ours, and connect with people who held similar values and were struggling with the same issues. Of course, this is a small tribe in a massive startup world, but I have found it much more rewarding and worthwhile to spend my business networking hours with these similar businesses than to try to find a fit in the profit-led business world.
4. How you grow is your choice
One of the elements that distinguish purpose- from profit-led business is that the growth strategies might look fundamentally different. We do not want to attract rounds of investment tied to maximising profits that include shareholders and board members who might sideline our mission or just not care about it enough. Unsurprisingly, it has taken us a long time to find a growth strategy that fits with our aims, values and vision. There is less help available to figure this out, but initiatives are starting to arise that support businesses like ours to think through what is right for us.
I have been admiring YNAB – a revenue funded and highly successful mission-led business. The Zebra movement have been putting together some alternative investment options. Caring about the purpose might also mean alternatives exist – like community, or employee ownership, for example.
One of the problems we find is that raising big investment rounds is one way for companies to be recognised in the ecosystem and more widely in the press. Being purpose-led can feel as if we are working away in the back room. My hope is that initiatives like FutureX Plus start to help change the status quo by influencing the press and infrastructure with some alternative milestones that can be celebrated and recognised.
5. It really matters
Despite all these challenges, I am proud and excited to be a purpose-led business. We are designing and growing a new economy – one where companies work for the collective good, not the good of the few. We must keep going and building even though we currently look like outliers.
I’m dreaming of ways that Matter of Focus can be a part of the future world I care about, perhaps even owned by the community that uses it, adding value and support in the long term. It’s that vision that keeps me going.
Director, Matter of Focus