Why we need entrepreneurs to be agents of change
With great power comes great responsibility
Relentless progress in tech and innovation has led to significant changes in consumer behaviour. What’s new today is old tomorrow. It’s hard to keep track of the plethora of new products that impact our daily lives. New technologies, the internet of things and innovation has the power to solve real problems. We need to harness the current momentum and encourage entrepreneurs to build businesses that will solve real issues and affect positive behaviour change to benefit consumers as well as the wider human collective.
Of course, founding a venture and banking on consumers’ willingness to adopt new habits is risky, but if your start-up strikes a chord with early adopters, solves a real issue and has a strong mission and purpose, anything is possible.
But it’s not just tech that has an impact on us. We consumers have the power to dictate what course we want technology and innovation to take.
NEF hosted an event at Huckletree, Shoreditch a couple of weeks ago and discussed the role of entrepreneurs and how we can get consumers to change their behaviour. I spoke to Ruth Handcock, Chief Customer Officer at Tandem Bank, Erik Fairbairn, CEO and Founder of Pod POINT, and Pradeep Raman, founder of Dwell Mortgages. I MC’d my first speaker event at the New Entrepreneurs Foundation and felt privileged to facilitate such a great panel. Here are some of the key things I took away from the discussion.
- The power of the mission-driven business
Basing your mission and goals on economic success is but should not be enough for any start-up success. Ruth and her team at Tandem are building a bank that will not only improve the relationship we have with our personal finances, but to fundamentally change that relationship. Everyone at Tandem is part of that mission. Working with focus groups and carefully listening to people who “feel stupid and stressed,” because they don’t understand the products currently offered by retail banks is a real issue. Tandem’s purpose isn’t to create new financial products, but to improve people’s lives through empowering them to save more. If they can find a solution, economic success will ensue.
Erik took on a whole different problem when he founded POD Point. Driven by “guilt”, the former, self- confessed petrol-head turned eco-entrepreneur, decided to put his engineering skills to good use and founded a business based on what he fundamentally believed in: travel shouldn’t damage the environment. He started with a mission and is now one of the leading distributors of electric vehicle charging points having sold more than 27,000 units across Europe. His mission is what drives his business. “Pick something that will actually move the world forward,” and make an economic success of it to maximise the impact.
What’s more, if you have a strong mission and your business is solving a real issue, you’ll have no trouble attracting great talent wanting to work for you.
Start with a mission and ask why. If you haven’t seen it already, Simon Sinek explores the power of starting with why in his TED talk — definitely worth a watch!
2. Changing mindsets takes time
Whilst you should stay true to your mission from day one, don’t expect a change in behaviour overnight. It would be foolish to expect a radical mindset shift in your customers — take baby steps towards your goal. If you want to see a radical positive shift in behaviour, don’t introduce radical changes “straight off the bat”, but take your time and slowly accustom people and introduce them step-by-step to new concepts.
Pradeep pointed out to also pay close attention to where the market is going and how consumers are already changing their habits. Understanding how mindsets and habits are already shifting is essential in helping you “come up with products that serve those changing needs”.
At POD Point, consumers had to accept that the way we currently fill up our petrol powered vehicles is actually very unpleasant, but we have come to live with it. For him changing behaviour starts with discovering a new concept, then to educate consumers about the benefits therein and finally to let them experience it. The three crucial steps to get people to adapt to new ways and habits.
3. Success doesn’t happen overnight
We hear of the success stories of UBER, Airbnb, and Slack. They feel like overnight success stories but the reality is that when you are scaling a business you get most of the things wrong most of the time. The key to success here lies in learning from those mistakes and not repeating them. Scaling a business in most cases takes a lot of time and every decision needs to focus on the future, from the early baby-steps to when things start to snowball. But again, always be clear about what the opportunity is, how big the problem is you want to solve and how big a commercial success your business needs to be to have a meaningful impact and lead to positive change in behaviour. A mission alone is not the solution.
And, to make the bumpy ride as smooth as possible you have to make sure that everyone you work with wants to work for your business, feels part of your business and is motivated by your mission.
4. Be wary of successes with early adopters
Are they a fair sample of the rest of the population? What scale does your start-up need to reach to be an economic success? Ruth pointed out that for the economics of a bank to work, you need to reach a substantial critical mass. It’s very important not to fall into the trap of focussing too much on your early adopters (the co-founder network at Tandem is naturally excited by fintech, but are the rest of the population as willing to break with conventional banking?) and not testing the water beyond the group that is most likely to change its behaviour and is closest to you, is dangerous.
But don’t forget the value of your first customers. Get them early, before you’ve invested heavily in making your product. Your first product is likely to be average at best, but you can still get your early adopters to become your evangelists and they in turn can become invaluable advocates of your mission from the outset. All this even before your product is perfected.
Read how some of the game-changers reached their first 1,000 customers: http://hbswk.hbs.edu/item/how-uber-airbnb-and-etsy-attracted-their-first-1-000-customers
5. Our speakers’ final advice
I asked our panellists what they would tell their younger selves and those starting out their career. Here’s what they had to say:
“Get a mentor. What you are about to do is really hard. Get someone to help.” Erik Fairbairn.
Pradeep Raman’s advice was to separate business from personal failure and not to take “failure personally”.
Ruth encouraged everyone to take risks, not to be afraid of taking a cut in salary and added “Don’t be scared, the worst thing that can happen is that you will fail and that you learn loads”.
Overall, what I took away is this: we need to build more mission-driven businesses, set ourselves commercial goals so we can affect meaningful change in consumer behaviour and tackle the big issues that so desperately need solving. Choose a big issue and start small. Solving a small part of a big issue can be…huge.
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