Alignment: A Building Block for Business Models
The news has been full of interesting topics concerning tech companies and consumer data (Facebook, Cambridge Analytica, etc.) as of late. As the cofounder of a company that is looking to create new businesses, not based on being opportunistic as much as solving real problems that people deal with everyday, I actually think that the breakdown here is much less about data, technology, and the internet (though these have definitely exacerbated the underlying issue), and much more about the business models of these companies.
INVANTI strives to create business models that are based on a relatively simple idea: alignment. Before we ever spend a dollar building a company, we go on a search for a way to align all stakeholders behind a common outcome — specifically in our case, one that positively affects someone in a meaningful way. If we can’t find it, we tend to stay away from the opportunity because we know, while we may be able to make money, at some point (whether immediately or years down the road), the business will be faced with a decision between what is best for the bottom line and what is best for the stakeholders. Getting creative about alignment sets an interesting trajectory for companies, because once you find it, you can pursue the bottom line without worrying about who you are throwing under the bus along the way.
Facebook is facing this issue right now — what’s good for the bottom line has come in conflict with one of its biggest stakeholders — its users. Obviously, the availability of data and the ability to collect it has made this conflict even more pronounced and impactful, but at the end of the day, there is a business model problem. The business models of pursuing massive user adoption, and then selling that access, is starting to see its logical conclusion (should it really have taken 15 years and billions of dollars to figure out?). When those that pay are not aligned with those that benefit, problems will arise.
This is not to say that Facebook’s only path forward is to charge users. That may be an interesting option, but I doubt it’s the only one. In fact, at INVANTI, we get really exciting about finding ways to leverage people who can pay with people who will benefit. We actually try to reverse engineer our business models, by first imaging that we exist and are creating the impact that the business sets out in its mission statement. From there we ask, “Who would also care if that impact was created, and would they pay?” If Facebook’s mission is really to “give people the power to build community and bring the world closer together”, we should ask who would care and benefit from that impact, and how could we leverage that into a business model. We think looking for this kind of alignment can ultimately create businesses that produce long-term value for all of its stakeholders.
It shouldn’t come as a surprise that a solution to conflict in a business model is alignment in it. If we can challenge entrepreneurs and investors to use alignment as a fundamental building block for business models, we can create the next wave of startups that not only care about their users because it’s the right and responsible thing to do, but also because they’ve set themselves up to be financially successful when they do so. A mentor of mine says, “All businesses create impact, the questions are, What kind?, and Are you paying attention to it?.” Using alignment as a requirement, instead of a feature, of our business models can make sure we as entrepreneurs and investors can answer those questions well.
Dustin Mix is a cofounder of INVANTI.
If you’re interested in learning more about INVANTI, check out this podcast with Maria and Dustin and this podcast with Jada from Cohort 1. (Shout out to our good friend Jacob Titus at westsb.com for having us on). Also check us out at invanti.co. We have big plans for Cohort 2 in 2018, so stay tuned on instagram, twitter, and facebook, and medium to hear more!
