I recall meeting Perry Chen for the first time in the old USV offices on the 14th floor back in 2009 shortly after Kickstarter launched. He and his partners Yancey and Charles were onto something, I was sure of that. But they wanted to do things differently. He told me that Kickstarter always wanted to do what they felt was the right thing. He told me they were not building the company to be sold. And so, he said, they needed investors who understood that and appreciated it. I told him that approach was welcome at USV and that we were eager to figure out if there was another way to do things too.
Six years later, Kickstarter has formalized those desires and commitments into its corporate charter and in the process has reincorporated a Public Benefit Corporation (PBC) under Delaware law. A Benefit Corporation is different than a “B Corp” because it involves formally amending the company’s charter and being recognized as such under the law.
I encourage you to read their new charter as it outlines the things they will hold as dear as shareholder value and be held accountable to and report on annually. And you should also read their interview with the New York Times where they explain why they did this.
There are those who say that Benefit Corporations and venture capital are not compatible. We don’t agree and we think companies that align their values with their customers and communities will benefit over the long term, not suffer. And that alignment can produce value for shareholders sustainably and profitably. It is worth noting that not one of Kickstarter’s angel investors, venture investors, employees, and board members who own shares in Kickstarter dissented on the vote to convert to a PBC.
None of this should suggest to you or anyone that Kickstarter is not a for-profit business. It has made money since its second year of operation. Profits give it sustainability without the need to finance the business externally. And profits can enrich its founders, employees, and investors. But these profits are not the only goal of Kickstarter. The company exists to bring creative projects to life and that mission drives the company as much, or more, than the profit seeking motive.
My partner Albert has written a lot about Benefit Corporations and has worked with the State of Delaware to ensure that their statutes are workable for entrepreneurs and the investors who support them. USV is a fan of Benefit Corporations and we are thrilled that Kickstarter has successfully converted into one and codified their values and commitments for the long-term as a Benefit Corporation.
Thanks for this. Had missed Albert’s post.Love this direction.Wrapping my head around what it would be like to serve on a board of a PBC. Be a great experience.
This is “Greatest Generation” thinking — and action — made new. We sorely need more of this. Bravo.
Aww. You’re welcome!
Amen to that!
Congrats to Kickstarter team. Love that they foster innovation — hey Oculus raised there in 2013, didn’t they?* https://www.kickstarter.com…Personally believe social benefit and for-profit can go hand-in-glove.Rapacious unilateral greed = global financial crisis which is no good, ultimately, for anyone because the loss of value just destroys all the hard work of lots of people.
I read the charter and it makes them a pretty special kind of company, one that is kinder, gentler and more generous than most others. I can see how this can also give them an added competitive advantage for those customers that identify with those values.Re: “profits can enrich its founders, employees, and investors.” Will the future dividends mentioned in the interview provide the investors returns that are the equivalent to an elongated ROI over time, do you still expect some other ways to return cash invested?
I look at this as a smart business decision, not marketing upside at all.Almost all of their users will never know this.Almost all of their users will benefit from it cause it gives them the legal groundwork to make choices that are not 100% on profit.Huge deal and will impact their supply chain of projects more than it will their marketing to their users.Product pipeline not marketing impact in my opinion regardless of the motivation.
Thanks for this Arnold, as my first impression was that this was a bit of a millennial showboat move, kind of like Perry’s hair & their grooviest to the groove office space.But, typical of most AVC investments, its packed with smarts under the thick layer of hipsterness.It would be really unconventional for a place like Kickstarter to be in a suburban office mall or at the back of an actual warehouse, kind of like when Peter Lynch literally could not find the Pep Boys office when he was doing diligence on an investment.
I like your idea Arnold, but would be keen to understand how you think it will impact the supply chain of projects, particularly if their users will not know about it…do you mean it will impact the projects they take on board or market more visibly? I’m guessing not cos that is marketing impact….
They are a b2b2c model.They succeed by attracting projects that bring their own communities of supporters with them. The more diverse the better.To the end user, the pledger, this will most likely be transparent.It will however potentially allow them to support projects, possibly at different economic levels that if profit was their only motive could fall through the cracks.That diversity of projects is what makes kickstarter what it is and builds it community of supporters.I see this corp change as giving that some governance structure.
i think it’s both. their values are very loud, and that will propagate into the market.
I can’t think of any corporation of size and influence, and that includes Kickstarter, where their values precede them as part of their positioning.Many smaller ones of course.I get your point. I like KS. I like this move for a lot of reasons but it is unlikely why people will use KS rather than someone else.I use KS cause a higher percent of the projects there rather than other crowdsourcing companies touch me.
always felt that product companies are what b corps were designed for, Look at companies like natura as an example.
“Almost all of their users will never know this.”Anyone going to kickstarter.com will be met with a huge banner stating the change.
We shall see.Just because you interrupt the user when they want to go an support their friend’s project doesn’t mean that they will either care or be happy to know about this.to be clear, i want to be wrong here.
Perhaps you are limiting the marketing upside, but KS definitely isn’t.
you are rightglad to be wrong on this one.
With Kickstarter this is really priming at it’s best. If people land a site with a certain set of values (and see those values in the marketing message) they are more likely to spend money on a project that appears to be consistent with those values and helping someone else.Will be interesting to see how going forward this is wrapped into their marketing message.
Been a big fan since day 1.I wish them well. I agree with their values.I want to be proven incorrect.Whenever I”m smacked hard about the ability to some things to matter, this is goodness.
I don’t think you need a legal basis to not make profit your primary objective. Look at Amazon and Target (who gives away 5% of profits)…. there’s obviously something more to this I just can’t see it right away.
Its interesting b/c its a highly technical ‘fend off financial extractors’ legal vehicle, but it get promoted like its the World Wildlife Fund (in certain circles).I’m with you – you have the right people around, this isn’t really a problem. Maybe they are thinking 100 years out (although, thew wrong people likely just unwind the B Corp status, after all).I guess maybe it is daring in that it is still not done by very many people.Good on them, all in all.
one that is kinder, gentler and more generous than most othersWhat remains to be seen is whether a company like this can survive in more traditional business and with what footprint. Quite frankly for most of the products that I am buying a decision is based on price, quality, speed and value. The company attitude as “kindler, gentler and more generous” never enters into it. I not only don’t care I have no time to vet those things (and wouldn’t trust someone else if it did matter to me..)I am reminded about the time my daughter needed an important operation. My ex wife turned up a Doctor that she knew from her synagogue that was a nice guy and let’s stipulate a fine Doctor. I kept hearing what a nice guy this Doc was. That scared me actually. So I did a bit of research and found a Doctor at a major medical center who was a world renown expert in this particular operation. Went to visit and I have to say he was quite the asshole! Anything but a nice guy. But it was easy to determine he knew his shit (even without his credentials) and he performed two absolutely flawless operations. In these operations apparently a mistake would have left my daughter deaf or with a facial droop. Now given most things in life are not that critical and I am guessing most people would have done the same thing. But my wife was smitten by the pleasant nature of her local Doctor so she didn’t look further. But all I cared about was quality, not good bedside manner. The question is is this a marketing gimmick to give advantage to a particular company and get the low hanging fruit of people who care about this type of thing? What happens when more than one company selling has the same advantage and things get rough? Do they start to cut corners? (Or by that time are people onto the next new buzz concept?)
Thanks so much for the kind words William. The future dividends are a part of our plan for sharing the value created by the business with all shareholders.
I went to Tulane with Perry. I pledged under him at Sigma Chi when I thought I wanted to join a frat. During rush week Perry made a strong impression on me, he was the guy I could trust and had an easy aura about him. I ended up backing out of my commitment to Sigma Chi, but Perry never held it against me. I think Perry has a lot more to do with Kickstarter and I look forward to it.
modern capitalism is only 500 years old. it still has some way to go to reach a state of grace.kickstarter on the blockchain. i’d like to see that as a next move.
There are people building it
a few are…but they will have challenges given Kickstarter’s brand and other value points. it’s not just about the funding aspect.that said, there will be a market for just that. (i.e. crowdfunding on the blockchain)
I think this concept is squishy. I think you need to treat employees, and customers with empathy and compassion. At the same time, you have to run a business. That means tough decisions have to be made. I have seen people hide behind the B corp thing to shy away from making hard decisions. No company stays in business very long if they don’t treat employees or their customers well.
I think that’s a given, no?the B parts are extra.
In theory, I too really admire the intention of Benefit Corporations. I wonder though what sort of tax code would be applicable to them and exactly what sort of advantages Benefit Corps would have from C-corps as an example? Legally, it mentions protections to the Director of the Company from lawsuits by the shareholders, but I’m curious about what other legal protections it may have that does not already apply to C-corps?
What do we call “unicorns” that optimize for impact? Winged Unicorns? Props to firms that choose this route and to VCs like USV that enables them.
We call them by their name (ie Kickstarter)We don’t need trite names like UnicornI hate that word
Ooppss… missed this post – http://avc.com/2015/05/valu…. Sorry about the unpleasant “mess.” :)Never mind the label, on the related topic of measuring their impact & not their valuation, I wish that was a way PBCs can quantify and communicate these “softer” metrics.For Kickstarter, some of that is captured in their Stats page – https://www.kickstarter.com… (on a side note, I wish they had an API on that data)Maybe they can realign their (upcoming) Stats API to quantify the 5 goals they set out for themselves in the Charter?
‘Culture nudging companies like Kickstarter’ is usually the best turn of phrase
Well, technically a winged unicorn would be a alicorn. A pegasus does not have a horn. I’ll add it to my lexicon of ‘corns’.Unicorn = $1B valuation.Decacorn = $10B valuationDodecacorn = $20B valuationCentacorn = $100B valuationMillicorn = $1T valuationCandycorn = $1B valuation in mobile gamingPopcorn = $1B valuation, now worthlessAlicorn = 1$B valuation, PBC.Corn maze = silicon valley
On a related note – the accounting practices to measure and factor in these ‘squishy’ issues is getting better by the day – maybe kickstarter can take a lead on this too – especially if it became a part of their criteria for listing as a possible project to fund?
It is worth noting that not one of Kickstarter’s angel investors, venture investors, employees, and board members who own shares in Kickstarter dissented on the vote to convert to a PBC. Amazing.
Another post showing how USV takes on the aesthetics of business, if that’s a phrase. For more of these kinds of stories, I recommend Reinventing Organizations by Frederic Laloux.
Is this basically maximizing IRR for an unprofitable for-profit company that will eventually be profitable? Akin to the reason a startup might select an L3C election instead of non-for profit or LLC?
I’ve read through the charter as well as Albert’s post and I still don’t understand what the big deal is about a PBC. Is there a tax benefit to doing this? Shareholder benefit? Management benefit?Does it legally protect the management of the company from accusations by shareholders that they were doing things outside of shareholder interest?I think KS charter is fantastic– it obviously reflects the values of its management and majority shareholders– but don’t we all do that in our companies?
Agree… seems the major benefit is a 10x increase in good vibes. Whats the deal here?
The legal protection from accusations of not maximizing profit by shareholders. Basically legal cover to do good at the expense of profit and not be sued.
That makes sense thanks
philadelphia provides tax benefits to b corps. there are some others that are exploring it. http://www.environmentallea…the founder of b corps met with obama and asked for lower tax rates for b corps: http://www.csmonitor.com/Bu…so in sum, it’s basically the better business bureau at this point in time, but obviously if one seeks a codified new legal structure, there is probably something else in the roadmap.
If you ever decide to move to this region let me know and I will set you up in a suburb that doesn’t bus students to other districts. (Note, it won’t be the City of Philly..)
Tax Benefits?? Don’t know about the Philly thing other than what you linked to but if that’s then that’s a joke. Philly city has a wage tax of close to 4%.  The story says companies get a $4000 tax credit.That and a nickel will get you a starbucks. Big fucking deal (not directed at you, directed at the City and their “gesture”). So if you make 100k per year you pay close to $4000 just for the privilege of working in Philadelphia. It’s brutal. And the reason that jobs moved to the suburbs and over the river to NJ.
Try to stay focused. My eyes are up here Kirsten.
This is really inspiring work all around.
The “environment” part of a PBC triple bottom line seems the strangest for a tech startup.Unless we are talking about jacking up rents for everyone else in their ‘environment’….
I really want to feel super hopeful about Benefit Corps. I guess like anything, they’re only as good as the people behind them.Cheers for Kickstarter!
I’ve been saying since I heard about Kickstarter that if there was one business I could have picked to start, it would be this one. Congrats to the Kickstarter team!
Fred, would Union Square Ventures itself ever consider becoming a B Corp? Why or why not?
I am getting increasingly annoyed by Kickstarter projects that raise a bunch of money then use that raise as “market proof” to sell the company and cancel the project.Sorry, a tad off topic but it happened to me again this weekend with Meld.https://www.kickstarter.com…
.Curmudgeon alert.I find these type of self-congratulatory utterances to be tedious and inauthentic. It is like the difference between a hand knotted bowtie and a pre-knotted faux bowtie.Not much difference.The list of the “benefits” as codified in the mission doesn’t really seem to be a great step forward and seems to be perfectly consistent with the client base and brand of the business. There is not much that is contentious or adventuresome.The actual codification is a little amateurish.They tout that they are going to donate 5% of their “after tax” profit to certain causes (causes which are perfectly consistent with their client base and which are therefore in support of their core mission) while stating they will contribute to 501(c)(3) organizations — a distinction which makes their contributions tax deductible and, therefore, really “pre-tax” dollars. Seems like a bit of gibberish.In another breath, they suggest they will not embrace “esoteric but legal tax management strategies” while being careful to identify the recipients of their largesse as being entities which enjoy a favorable tax advantage as a target for donations.I marvel at the wisdom of giving our government — which is clearly a monumental waster of the people’s money — more money. Not only does that seem to be folly but it seems to be a social “bad” akin to giving a heroin addict more heroin.In the end, this is much ado about nothing but a “feel good” nothing which I support.I support it for an odd reason — founders of companies should be allowed to and should be encouraged to build the companies they really want to build. This is why I preach that founders should maintain voting control of their companies so that they can engage in behavior beyond the ability of others to attack and to find fault with.On that score, I support Kickstarter completely and unequivocally if y’all would just get rid of the damn halos, please.I remember providing full health insurance (health, dental, vision, life, wellness) to a company I founded that grew to more than 500 employees. I did it because I felt that I owned my employees’ problems. This was based on hard experience.Others thought my actions were altruistic or enlighted but the enlightenment was not more than my sense that I owned all employee unresolved problems and therefore I was acting in my own personal self-interest. In the company’s self-interest.BTW, this plan is completely disallowed under Obamare as a Cadillac plan. Isn’t progress great?I also felt like it was my company and I could do whatever the Hell I wanted to do with it. I used to give folks the time period of Christmas to New Years off which used to make my CFO apoplectic. I’m not sure which I enjoyed more — the CFO’s reaction or the people’s reaction.Bottom line — much ado about nothing and a lot of feel good tripe that doesn’t begin to compete with the real path to goodness.Make a shit pot of money and then decide what you want to do with your share — don’t ride on the company’s coat tails — of it. Do it anonymously and don’t stand out in the public square inviting adulation while preening. It really is transparent and tiresome.One last point — in the course of doing overwhelming good and changing the world, the company will issue its first report of its goodness in 2017! Haha. So much good but they can’t give us a hint of it for a couple of years or so.Got to run, bullshit meter going off.Of course, I am often wrong.JLMwww.themusingsofthebigredca…
“I was acting in my own personal self-interest. In the company’s self-interest.”- JLM”We think companies that align their values with their customers and communities will benefit over the long term, not suffer.”- FredI think both perspectives are actually the same — doing good is good for business. I see some merit to Fred’s self-congratulatory post, as it draws attention to the “doing good is good for business” sentiment and, hopefully, will get more people to think that way. I also get your point, though, that we shouldn’t fool ourselves — in a lot of ways, even when you’re doing good, you’re still mostly doing business as usual (nice catch on how Kickstarter’s 5% per-tax donation basically pays for itself).I think both versions of this story are important to hear. I don’t think your side is curmudgeonly at all. I think it actually helps push the cause forward. People should remember that doing good in business is still doing business. Maybe if they make that connection, more business owners will attempt to do more good because they won’t forget that it all ladders up to making them more money.
.They ARE the same story but one without the side of sanctimoniousness.It gives me indigestion.Doing good is its own reward.JLMwww.themusingsofthebigredca…
Nobody but me understands you here. Your points are falling on deaf ears.Reminds me of a time with my ex wife when the realtor did a presentation to us and at the end he had pictures of his wife and kids. “See how nice I am”. And when he left I said to my wife “oh boy he is doing that to try and show that he is honest and a good family guy what bullshit”. And we got into a big fight about it she simply didn’t understand the angle I was coming from. All she saw was what he presented on the surface. He says he is a nice guy therefore he is a nice guy. (Note I think these guys are nice guys, just like I think Charlie is a nice guy. The rhetoric sets off automatic alarms though, that’s just a default setting..)That said there is no question that either Charlie, KS Guys, or Fred will 100% do what is best for business just like any business person would. So what we both are really reacting to perhaps is our perception that others are fooled into thinking that they will not do some of the things that others do. Or will maybe do those things in a nicer way or something like that.My Dad regularly gave people breaks on rent, late payment etc. But you wouldn’t have known it because he didn’t come across as sanctimonious in everyday life (quite the opposite, kind of like I do actually).
.You never really know anything about anyone until you put them under a little pressure and friction and see what’s revealed.The nicest guy I have ever known in business was a punk when he could have been a prince. To this day when I see him, I can see it in his eyes like he doesn’t want me to “out” him.Conversely, I have known little weasel shits of men who were giants when the feathers hit the fan.The pressure revealed something that was otherwise invisible.I’ve seen acts of bravery so intense that I almost can’t tell the story without tearing up.People are incredibly complex and interesting. For the most part, they are also good.JLMwww.themusingsofthebigredca…
Keep in mind that what Fred can support as an investor with risk spread over many companies is a bit different then a person with a company and everything on the line in that company. That person can’t afford to be wrong. An investor gets many times at bat and can strike out a few times and will get to play another day. They only needed: A batting average that is good.Let’s say hypothetically that a few of these types of companies making these choices begin to tank. What do you think will happen for sentiment toward this type of behavior then? It will be every man for himself and jump into the next lifeboat. It won’t be supported anymore.Look quite frankly people in business have a great deal of things to consider and worry about. With vendors in particular if Amazon gets me what I want quickly and at a fair price I really am not concerned with any other things they may or may not be doing unless it rises to the level of really bad behavior. (Hollerith machines; joking) I simply (and I think most people are like this) don’t have the time to spread themselves thin and perfect this angle of their operation.Look if all we did in life was shop at a supermarket and products were next to each other, clearly labeled and priced on the shelf, sure we’d pick the wonderful “companies”. But unfortunately it simply doesn’t work that way with buying decisions. At least not for me with the amount of decisions that I have to make in a day.
Another very important perspective.Though I would predict that, in aggregate, that those who believe that doing good is good business will win in the end; hopefully, individual instances of failure wouldn’t be enough to deter people from thinking this way. But I guess time (and data) will tell.
Bzzzzzz — That’s my low false alarm rate PC (politically correct) anomaly detector going off detecting non-PC content! :-)!”Sacred cows make the best hamburger”! Freshly ground, loosely formed, rectangular, half pound, charcoal broiled, with Romain lettuce, heirloom tomato, and special Dijon mustard sauce viniagrette on a lightly toasted, split, half Baguette!
I remember providing full health insurance (health, dental, vision, life, wellness) to a company I founded that grew to more than 500 employees. I did it because I felt that I owned my employees’ problems. This was based on hard experience.I remember giving full health insurance to employees and was quite proud of the fact that I gave them the exact same insurance that I had which, at the time, was the American Express gold card of insurance. Go to any doctor, any time, no approval, no payments at all. Yes I was quite proud of that fact. The only thing was that insurance (the best there was Blue Cross Blue Shield) was only about $150 per month for an individual in today’s dollars. I almost certainly wouldn’t have been that generous if it was priced the way today’s insurance is.In another breath, they suggest they will not embrace “esoteric but legal tax management strategies” while being careful to identify the recipients of their largesse as being entities which enjoy a favorable tax advantage as a target for donations.This actually bothered me as well. The line is “is it legal and allowed”. What does “estoteric” mean in this context anyway? What they probably mean to say is cockamamie setups like Apple uses with offshore companies something rising to that level. Maybe. But where exactly is the line with this anyway? And why in the world doesn’t it make sense to use every legal option (whether well understood or not) to your advantage so the government doesn’t waste your money? I don’t get it.much ado about nothing and a lot of feel good tripeNot when you consider they are playing (as in politics) to the base.Speaking of politics, Ben Carson got nicked the other day, eh?
.Good point about their playing to their base. That is something that I miss sometimes. They may be gilding the lily but it is their lily. Point well made.Ben Carson has the “nice guy” vote in a business which places almost no real value on nice guys.This is shaping up to be the most polarized and mean spirited campaign in history, perhaps.I do not think the election is even going to be close. I think the Republicans have a redux of 2014 if they are smart enough not to snatch defeat from the jaws of victory.JLMwww.themusingsofthebigredca…
Ben Carson’s lack of experience in dealing with the media and public speaking left him to be totally flattened. Vs. Trump which is a well oiled machine of speaking in public, to the press, and saying what is on his mind. The teflon only helps with his occasional mistake.Carson not only has no teflon he has no experience even having this type of conversation. Kind of stupid for anyone without world class experience (or even local level practice for a few years) to think they can wing something like this just with brains and a coach.To me actually the idea that a guy like Carson can be taken seriously for President is a bit more ridiculous then Obama when he ran. I’d say a tie with Carly actually.
.The thing about primaries that can be good is the ease with which ideas can be trotted out and put on display. Like a freakin’ swimsuit contest.This is why I am an advocate of brainstorming and letting ideas wrestle.Let everyone trot out their best and worst ideas and soon some of the most outlandish ones don’t sound so outlandish and some of the sacred ones don’t sound so sacred.Take Trump’s lament that nobody in the White House knows how to make a freakin’ deal. That they’re all incompetent.People want to say that because they see the weak men who lead us — both sides.Nobody has the cojones to say it. Trump did. And, now, it doesn’t sound so outlandish.The first people to fold are the “politicians” — maybe even good ones in Perry and Walker.The top 3 vote getters on the Republican polls are outsiders suggesting that the “over” is going to beat the Hell out of the under.Everybody likes nice guys until it’s life and death and then they want ruthless bastards who know exactly what they are doing.I had a company in a battalion which had the wickedest Bn CO. Everybody hated him. Except for the company commanders who got the supplies they needed before they needed them. The S-4 (supply officer) hated him and the maneuver elements loved him.He was a total prick but he knew exactly what he was doing.JLMwww.themusingsofthebigredca…
He was a total prick but he knew exactly what he was doing.As a very loose and general rule, I have found that a salesman who tells me that a particular competitor is “a nice guy”, well that means that that salesman gets what he wants from that competitor. He is an easy mark, and easy to deal with, and he can make his profit and he is rarely questioned, challenged or jerked around. So the salesman likes that behavior because it’s good for the salesman. To me it’s often a good sign when a salesman gets annoyed with me. Like anything not always but in some cases.I can’t remember much of what I watched on Netflix last night but I do remember an Irish Salesman for Xerox Corp. and what he said to me the first few months that I was in business about a competitor. It was:”Lenny he cut your balls off”. (The salesman was Irish so it was with an accent).Lenny ran a tight ship. God knows anytime I could I would try to hire anyone who worked for Lenny. If Lenny kept them and they survived Lenny, I wanted them working for me. This was over time of course. After I learned that the salesman was correct about Lenny.In the case of this particular salesman, well, he really admired Lenny because of that quality as opposed to the weak salesman who couldn’t battle him. He wanted to learn as much as he could from him. He saw opportunity. I actually learned a great deal from that particular salesman when I was younger.
HelloCkeck my video Funny Fails Girls Compilation 2015https://www.youtube.com/wat…
This is just another way to tell the world, “We believe in doing good AND doing well.” Why is that a message that no one wants to believe? Everyone’s looking for the angle. Maybe the angle is feeling good about your life? I believe them. Strong work, Team KS.
“we think companies that align their values with their customers and communities will benefit over the long term, not suffer. And that alignment can produce value for shareholders sustainably and profitably”. This is a very powerful statement – in its content, and in who delivered it (i.e. “famous VC”). I’m lucky enough to have a front row seat at The Kitchen, which is an impact-first, mission-first, definitely-for-profit business that is “building thriving communities through real food”, and creating a wildly successful family of restaurants as it goes about its mission. (Interested folks can read more in this great Steven Levy piece here: https://medium.com/backchan…. There are a few “fellow travelers” who are operating like this today – Etsy and Kickstarter being two great examples. But, given the incredible success these companies are having (combined with wider factors, like millennial’s desires to be more mission-centered, etc etc) i do believe this will become a very common model in the coming years. Lots of good stuff is about to happen 🙂
I wonder how many more famous companies like Kickstarter need to switch over to doing good and doing well before the naysayers and haters sound like the Luddites they are?For those of you who think doing good is charity work, I point you to the source of the “purpose of companies is to maximize shareholder value”, Dodge v Ford 1919 (https://en.wikipedia.org/wi…That ruling set of a paradigm that is embraced but Wall Street and elsewhere, but one that is starting to shift as more and more of us remember that corporations exist for the good of society, not just their shareholders.
Very pleased to read about your support for Benefit Corps. I hope this has huge knock-on impact in the investment community – there is much out there than can build substantial value for investors, but marches to a different (more sustainable?) drum beat. Good on ya USV.
True for not-for-profits, as well…”no margin, no mission.” Yes.
First thanks for this very complete reply. It shows how much this means to you.Now moving on a few questions.We look at the labor practices of our suppliersWhen you say “we look at” is this a “SCOTUS” look (“we know it when we see it”) or is there some kind of formal review that you undertake and if so what kind? And how much time does that take? And how often do you plan to revisit the review to make sure they continue to uphold the values that are important to you? And how much wiggle room do they have?Also is it only labor practices? What about their other practices with the environment? How far is is practical for you to go with this? Is this like religion where everyone simply does the best they can and draws the line at a different place? But like with religion some people end up smelling better than others (until they are caught cheating on their spouse as only one example..)We’ve asked the question–should we sell packaged sandwich bread if it requires unsustainable packaging? So far we’ve answered yes, which feels hypocritical (see organic comment above), but we think we can do better over time and when we doPerhaps this is the main reason why it’s difficult to do what you are trying to do in such an absolute “mission statement” way. Because at any turn you can be thought of as a hypocrite and that’s going to kill your buzz from thinking you are helping to change the world by doing the right thing. And yes it is hypocritical and kind of self serving and feel good to say “but we think we can do better over time”. Kind of like someone saying “I am smoking cigarettes and eating junk food but I intend to do better over time”. Why not just say “hey unfortunately to make money we can’t do everything we would like to do or we wouldn’t have a business so these are choices we have to make”. For example do you only hire people who have healthy life practices? Do any people who work for you smoke cigarettes (not at work obviously). Is that part of your hiring practices? Would you not hire a smoker? Is that a fair practice or an unfair practice (I could argue either side of that one). In a business I had once, the best guy for the job was a smoker. So I let him smoke.I guess my point is really where do you draw the line with all of this? My biggest concern is that “regular” companies will seem less worthy “we are better than you are” by virtue of the fact that they are just trying to stay alive as a legacy company with legacy company problems. Let’s face it most companies that are established can’t operate the way you are operating. Most are just trying to get the help to show up everyday and not call in sick. And to sign new accounts.Lastly, if your bread is on the shelves at a supermarket or bodega and it’s priced higher than the competition how are you able to get the end user to pay more for the bread? Does the bread taste better or is it better made because of these values? Don’t people buy your product because of the product? You aren’t a retail chain where you can brainwash in values and a brand that way.
Great work by you Charlie! And thank you
You can buy Ford Transit vans with conversion to natural gas or get the more reliable diesel option and run bio fuels, both feel good options for your delivery vans.http://www.ford.com/trucks/…
.I admire people who do the right thing when it is not a step on the way to the pay window. It is what makes us human.Respect.JLMwww.themusingsofthebigredca…
Thanks for the detailed answers it all sounds good what you are saying.On this point: It tastes better because the ingredients are better (look for “added vital wheat gluten” which is a cheap way of propping up cheap flour).Things like the above should appear in your marketing message. As a way to differentiate you from others in the “organic breads category”.Which made me just think of this:Use the tagline “The Better Organic”. Doesn’t look like anyone has that trademarked from a quick check. Also – “Lancaster – The Better Organic”. Maybe “The Better Organic – from Wonderful People”.
.I have seen these vehicles and they are great. I don’t know the numbers.http://www.viamotors.com/JLMwww.themusingsofthebigredca…
By the way, kind of ironic don’t you think:http://blogs.wsj.com/briefl…And you wonder why I am such a skeptic and a cynic all of the time?This is a good example. Who would have thought they would have done something like this?According to the EPA, Volkswagen deployed a sophisticated software algorithm on some cars that detects “when the car is undergoing official emissions testing, and turns full emissions controls on only during the test.” The effectiveness of the cars’ emissions-control devices is “greatly reduced during all normal driving situations.” The Volkswagen software is a “defeat device” as defined by the Clean Air Act, says the EPA.Volkswagen’s software ensures that cars meet emissions standards in the laboratory or testing station, but during normal operation they emit nitrogen oxides, or NOx, at up to 40 times the standard, the EPA says.
I don’t know the numbers.I just took a look at that site. Note that no numbers are posted, what does that tell you? BOGU (bend over, grease up..)Suffice to say that a guy like Charlie, who should have his nose to the grindstone, has no business at this stage devoting any brain cycles to going this route. It’s a total waste of time with little benefit other than nominal party in the brain. I can’t even imagine this makes sense for him. This is like me trying to train a champion horse and spending time worrying about putting in solar panels above the stables.Lastly if the big guys at larger scale can’t make a vehicle that appears to be cost effective electric what kind of conversion van setup are these guys throwing together?