How Startups Can Build a Sustainable Future
When I talk to entrepreneurs in the sustainability space, especially those building consumer products, I often see the same mistake: Their products and go-to-market strategies are focused on people who are already committed to reducing their environmental impact. They’re targeting the small segment of people who’ll choose a product primarily because it’s the best choice for the Earth.
In other words, when I ask them, “What makes your product awesome?” the answer is something like, “It’s nearly as good as competing products, and it’s more sustainably produced.”
Even though I’m deeply dedicated to sustainability, it’s hard for me to get excited about that as a value proposition. The answer I really want to hear is, “It’s sustainably produced, and it’s better than the competition,” or “It’s fully recyclable back to virgin, and it’ll be the softest piece of clothing in your closet.”
Those are the kinds of products that will contribute to our shared goal of a sustainable future.
The reason is that as much as I like the people committed to living more lightly on the Earth, most people aren’t in that group. And they never will be. The vast majority of people buy products primarily to get a direct, personal benefit: it’s the softest shirt, it’s the tastiest food, it’s the healthiest choice, it’s the fastest car.
If you really want to build a sustainable future, then you need to create sustainable products that have an opportunity for mass adoption.
We need lots and lots of people consuming lots of products that are made sustainably — even if they don’t care about sustainability. They need to like the product even if they’re not especially interested in saving the present and building a better future. Those things are an added bonus they can feel good about, but that isn’t the main reason they bought it. That’s the way it works.
Consider the two best-known recent entrants in the plant-based meat world: Impossible Foods and Beyond Meat. These companies didn’t set out to make better-tasting veggie burgers for the 5% of the market that is vegetarian. From the start, their goal was to make “meat” directly from plants that outperformed the meat produced by animals. Their products are not marketed to vegetarians, but to the 95% of the population that eats meat. Not only is that a vastly larger market from a business perspective, but if they get the meat-eaters to have plant-based meat a couple of times a week, they create a huge positive environmental impact that doesn’t exist when you’re selling only to vegetarians.
Last year, in the almost unimaginable pre-COVID time, I saw this in action. I was attending a dinnertime committee meeting. One of the perks of volunteering for this particular committee is that the kitchen staff provides dinner, and that night, it was the cook’s signature lasagna.
In the past, he had brought out two trays, his “original recipe” with ground beef, and a small “vegetarian alternative” tray, but tonight he placed a large “original” on the table and left. While the non-vegetarians were commenting that the lasagna was especially good, someone went back to the kitchen to inquire if there was going to be something for the non-meat eaters. The cook came running back to apologize, explaining that he only made a vegetarian version, using a new plant-based “hamburger” instead of the usual cow-based kind. It was spelled out on the menu, but since we didn’t see a menu, we didn’t know. Everyone was happy, and the cook only had to prepare one dish.
Another, related example is the interest in organic and locally produced fruits and vegetables. People will go to the farmer’s market and pay more to get local produce they perceive to be fresher, healthier, more flavorful, with better variety, that supports local jobs, and has potentially positive environmental benefits. If it were only about saving the planet, it is likely the market would be very small indeed.
We also applied this idea at Tesla. Our first product, the original Tesla Roadster, was the quickest sports car you could buy for the money, and acceleration is a key value proposition among sportscar enthusiasts. It was also pretty good looking, didn’t need regular maintenance, “fueled up” while you slept at your own home, and it didn’t burn any gasoline. For most of our initial customers, being electric was the prime benefit. But there were many taken by the look and performance specifications of the Roadster, plus the exciting “newness” of the product. For them, producing zero tailpipe emissions with the equivalent of 120 MPG efficiency was an added bonus, sort of a fun talking point.
This focus on performance has allowed Tesla to sell cars well beyond “EV enthusiasts” and access a vastly larger audience of car lovers.
I’m not saying that there aren’t people who will choose inferior products simply because those products are better for the planet, but their number is small. In order to make a big difference, we need mass adoption, and to have mass adoption, the product must be better, cheaper, healthier, faster, stronger, or sexier than the competition. It needs something that makes it awesome as well as helping to save the planet. Having widespread success in the market is good for the company, good for the investor, and good for the world.
At Spero, we get excited about products that are better than existing products in some dimension and have a positive environmental footprint. If the product isn’t as good as the competition and its only selling point is that it is sustainably produced, it will be a difficult investment for us to make.
So, if you are an entrepreneur with an awesome product that is good for the planet, we’d like to hear from you.