How Do You Like Them Apples? The Tale of Goodwill Hunting


Like much of what and how we do things at Mustard Seed, we like to do the untraditional. So, we start with sharing this epilogue (Yes, it’s just a prologue by another name, but this was written after the fact).

This is the second year we’ve prepared an impact report — and it is indeed a preparation. We want to first thank our 16 founding entrepreneurs and their teams for their contributions to this report. Without you, this report is meaningless rhetoric based on unfounded data, and it is our continued privilege to work alongside you. We also want to thank each of our 94 investors — without you, what we do would be (financially!) and more importantly ideologically impossible. Thank you for believing in us.

Mustard Seed Founders

In the penultimate week before proceeding to print, our team was discussing (the much delayed) progress of this report. In the meeting, Henry (one of our co-founders) referred to this preparation as our ‘pseudo-intellectual foray into economic theory’, with perhaps the best, if not only, gem of the report found in the phrase “Goodwill Hunting in the Aegean” (quite timely as summer is coming — the team at Winnow has me to blame for this unoriginal corniness).

These words, pseudo-intellectual theory, inspired this epilogue. The last time I wrote on ‘economic theory’ was in school. It was amidst the triumphant Eureka moments and hair-pulling frustrations of wading through problem sets for courses in General Equilibrium and Financial Markets (shout-out to Professors Shiller and Nordhaus — little did I know that your words would still affect me to this day). Even as an (unsuccessful) student of economics, I do believe free markets are reasonably good at ‘optimally’ allocating scarce resources while satisfying our preferences as consumers. Yet, why do Thoreau’s words continue to echo strongly today, having been written half a century ago? “The mass of men lead lives of quiet desperation.”

We sought an answer, again, by revisiting theory (by much brighter, actual intellectuals), seeking data corroborating centuries of thought and empirically driven enquiry. Today’s commonly held theory states that functional free markets tend toward equilibrium, a ‘Pareto optimal state’ where there exists freedom of choice by consumers. In the same vein, within unhindered free markets every unused opportunity for profit is quickly corrected for. In other words, sooner or later someone else will come up with a similar idea or technology to address that market opportunity. However, there seems to exist a paradox in this alleged optimality of a free market equilibrium. This is based on what we see as two contradicting forces:

1. Free markets, as if “by an invisible hand…[each person] pursuing his [or her] own interest” also promotes the greater good.

2. Free markets exploit each opportunity to take up profits that remain unrealised.

Call us an idealist, but we do believe #1 is true — we may all be self-interested (and wired physiologically and evolutionarily as such), but we are also inherently impelled to consider the greater interests of our communities (also for social and evolutionarily relevant rationale). We also believe #2 is true. In particular, free markets tend to exploit weaknesses in the market — weakness either in catering to unmet yet unnecessary consumer preferences or weaknesses in the market that often revolve around unmet social needs (what we like to call the ‘white space’ for impact ventures). Stepping outside the cognitive confines of ‘theory’ and jargon, we realise that of course these two factors co-exist in contradiction. People are people. We all must have this internal conflict between maximising our immediate pleasures and listening to our (at times ignored) conscience.

But then, where do we fit in, as an organisation? What purpose should Mustard Seed have as a firm, as a collection of individuals motivated by purpose and profit? (as what is an institution without its people — merely a dressed-up asylum?). This new line of questioning evoked additional memories: at a team offsite over 2 years ago, we had asked each team member which super hero she’d be and why (my answer — of course, Dr. Strange). We realise there’s a host of ‘heroes’ we can more realistically aspire to, who’ve balanced the forces at play above. For example, there’s Florence Kelley, who founded the National Consumers League in 1899, who championed transparency in working conditions to cleanse commitment to employee welfare and product safety (through the League’s ‘White Labels’). Closer to home, in London ‘The Guardians, or Society for the Protection of Trade against Swindlers and Sharpers’ was created in 1776, allowing consumers to voice complaints that led to expulsion of businesses with unethical business practices. We’ve realised — real heroes have always been among us. And we will continue needing heroes as the forces at play above continue to battle it out in the free markets. For us at Mustard Seed, we fit in as an organisation that believes in similarly inspired heroes — the founders and teams of lock-step ventures who are battling today’s social issues through innovative, commercial business.

Before you delve into the quite lengthy (but hopefully easy to read pseudo-intellectual) impact report, we invite you to consider the ramblings above in the context of possibly the most powerful and yet most often unrecognised of heroes. You. And me. Our consumption — the products we choose and more poignantly not choose to buy and use — is one of our most powerful statements as global citizens. And with citizenship comes moral obligations. Feel free to take off that cape and mask and join us in heeding our own consciences, to lead lives of quiet intent and considered action.

Mustard Seed’s (pseudo-intellectual) Goodwill Dividend Theorem

Please find our latest impact report here. Good hunting ;)