4 insights from our conversation:
1. Capitalism accelerates sustainable business
A lot of businesses receive subsidies in order to make a profit and, particularly in the sustainability sector, become reliant upon them.
But the most sustainable way to build a product is to create something that will support growth, without the need for subsidies.
That means the market needs to embrace it and for that, the product has to be good. The price must be competitive. People need to understand it. It has to look attractive. It just needs to be right.
Many entrepreneurs still see sustainability as ‘green drivel’. And on the opposite side, there is an old school green generation who believe that we shouldn’t even be driving Teslas. But there is a middle ground in which sustainable products and services can be profitable.
INSIGHT
A truly sustainable business can be found by embracing a ‘green’ capitalist perspective, combining profitability with purpose.
2. Creating system change from the bottom-up
Huge multinationals like Unilever, Nestle and P&G aren’t usually the ones driving the climate-led innovation we need. They are focused on their shareholders who are looking for safe havens for their investments.
Sticking to the status quo is safe, whereas the innovation that takes place in smaller companies is much riskier. Especially in relatively young markets.
But small companies are much more agile. They’re the ones that research customer demand and invest in innovation to respond to it. When larger corporations see an opportunity, it’s usually through the acquisition of smaller companies that they can scale up.
Although it’s sad to see the smaller companies being sold, they succeed in their mission by responding to demand, driving innovation and creating a change for good that is adopted by larger companies. That’s the circle of life.
INSIGHT
The innovation that is required for real change is more prevalent in smaller companies that are more closely aligned to customer demands. This is transferred and scaled through acquisition, transforming the wider markets.
3. The more successful you are, the more money you need
Something you don’t realize at the start of your entrepreneurial journey is that you need money to keep up with growth. And that often doesn’t become apparent until the money has run out!
If you don’t plan for this and end up having to borrow in a panic it can put you in a vulnerable position. You will have to give something in return, usually in the form of shares. But this can take a long time and leave you with a liquidity problem.
It’s difficult. You have to look at what works for your business model and make sure you can scale, preferably internationally, at a pace that you can handle.
INSIGHT
Be prepared. Plan for growth and make sure you are able to sufficiently fund it without leaving yourself exposed to unnecessary risk.
4. A language shift from sustainability to innovation
The term ‘sustainability’ comes with a lot of baggage. It is often associated with very high costs and the conversation often stops at climate change.
Electric cars are a good example. Yes, they solve the emissions problem but what about the materials and labor that goes into making the car? These are important issues which are overlooked.
Political parties often profile themselves as ‘green’ or ‘sustainable’ when backing climate policy, whilst at the same time standing in the way of progress in other areas.
So perhaps using the word ‘innovation’ is more accurate. Innovation represents an opportunity, a chance to do something differently.
INSIGHT
Shifting the language we use to describe what is happening in the sustainability sector may help to change mindsets and to foster a more innovative, inclusive and progressive way of developing.
