Have you ever wondered what the makings of a successful startup are? Or how purpose-driven startups help yield success? Read on.
The economy is changing dramatically. You need to start thinking about your brand purpose. Consider the why’s that make your purpose relevant today and will launch your business in the future.
Creating purpose-driven startups doesn’t mean that you have to sacrifice profit. It is more powerful than you think. A Deloitte consumer survey revealed that 80% of consumers are willing to pay more if a brand is environmentally and socially responsible. Purpose-driven startups provide profitable solutions that will benefit people and the planet. How are they changing the nature of business today? Let’s explore.
Purpose as a Solution
Building a purpose-driven startup doesn’t mean that you are making a non-profit organization. Remember, you still provide solutions for your paying customers. Also, a purpose is not the same as corporate social responsibility. While CSR is a contribution to a cause, it is not necessarily the purpose.
The identifying factor of purpose-driven startups are usually made up of 4 elements:
- Business Model
- Governance and Operations
Purpose means that you create your business around a core goal that will benefit your consumers positively. This also means that you integrate purpose into your business core strategy. Essentially, a core purpose helps the organization make the best decisions whenever faced with tough choices.
How would you know that a business is purpose-driven? You need more than just an innovative business idea or product. Your purpose becomes the driving force and the thing that inspires your team. This goal helps motivate the organization to do its best.
Why Purpose helps Startups do Better
Businesses have an ethical responsibility to society. Naturally, purpose-driven startups are disruptive. This helps them attract a qualified talent pool, inspire them to innovate, make smarter decisions, gain more customer loyalty, and interest investors.
Purpose-driven startups also maintain good customer relationships. One study found that it costs five times more to attract new customers than to retain existing ones. When you build a purpose-driven startup, it is much easier to gain loyal customers. Additionally, your customers will view your brand as someone that cares. Customers also see what drives your business and what motivates your decisions as an organization.
Your target audience will know when you are leading with authenticity. So, you have to be authentic when you tell your stories.
Purpose and Money: How you grow your business
One exciting example of a purpose-driven startup is Dove. They were just like any other soap brand, talking about their products making you beautiful. But when they realized that they were encouraging only one version of beauty, they shifted their focus. Since 2004, Dove became an advocate for women, helping redefine beauty standards in the 21st century. Because they turned their messaging to talk about purpose, their sales went from $2.5 billion to $4 billion. Ultimately, profit and purpose co-exist.
Another example would be InnovateHER KC, a womxn’s leadership community that serves Kansas City and outlying areas. They support all womxn and nonbinary femme leaders committed to enacting and radiating positive change in the community. In the InnovateHER 2020 Impact report, they are continuously enjoying steady growth in new memberships. Intentionally they work with inclusivity, creating a diverse environment to elevate and educate womxn leaders. As a result, their members were actively engaged month by month at 95% in 2020.
Another thing that contributes to purpose-driven startups’ growth is demographics. More and more millennials are actively asking organizations to become socially responsible. Since millennials are also the workforce and leaders of the future, they are more likely to stay in organizations with the purpose they resonate with. With this, the organization will not have a hard time engaging their employees compared to traditional firms.
Purpose is Everything
Building your startup business not only involves a lot of planning. For it to make an impact, you also have to follow your purpose. When choosing a specific niche for your target market, the purpose will help lead towards startup success. This way, driving through startup challenges will become more efficient.
Purpose-driven startups provide solutions to benefit both the people and the planet. They usually share these traits:
- Provide long-term value and strategically build the business with a core purpose
- Clear-cut messaging that the organization and customers believe in and share
- Aligned individuals across the organization
- Leadership makes decisions around purpose and puts them into action
- Even in difficult times, they are value-driven
Leadership plays a vital role, especially in making big business decisions. The best leaders often are driven by passion and purpose. When your leaders are passionate about doing something good, they help inspire teams.
Earlier we gave examples of purpose-driven startups that chose to make an impact on women. Dove changed their messaging to celebrate beauty. They are selling a purpose, not necessarily their product that resulted in higher profit. InnovateHER KC commits to help womxn leaders and work with inclusivity to create a diverse environment. With a clear purpose, they impacted women around their core values: belongingness, growth, and respect.
When building a purpose-driven startup, you should not compromise quality. Creating software programs or tools to aid business success is essential. At Full Scale, we help provide quality software products, but we also advocate startup success.
We want to empower startup businesses to succeed in their goals. Our rigorous employment process helps make sure that the team you work with are committed to your success. Talk to us and know more about how we can help you achieve optimal results to grow your startup business.