In the past, social impact or corporate social responsibility (CSR ) was used by global corporations, energy companies and car manufacturers as a means of showing the world “we are doing the right thing.” In the world of business, the traditional perspective was always that you should first build a successful company and then think about its social impact for your community.
But startup founders should think about their company’s social impact even before getting started. Integrating positive social impact is not only the right thing to do, but it also ensures a higher chance of success in the long-run.
1. Social impact helps you find cheerleaders.
The early stages of a startup are mainly about staying alive and giving yourself enough time to build your product, find a market fit, develop a customer base and hit the next milestone. At this stage, you need cheerleaders to rally behind your company and promote your product.
Asserting your company’s social impact early on will show potential customers and investors how you plan to help people around the world. It can be the inspiration that brings people onboard early to support a company that’s working toward a cause — rather than one solely focused on profit and product. Social impact provides your community with a reason to want your company to succeed.
2. Social impact motivates founders to work harder and last longer.
The grueling schedules and high-pressure environment of startup life are commonly linked with founder burnout and partner breakups, especially during development stages. It can be very difficult to stay motivated during the hard times, especially during periods when your company doesn’t meet its targets.
Social impact provides a change of perspective that not only enables you to work toward building a successful company, but also building a legacy in your community. The idea that your company is much bigger than just your core team, and that it will potentially improve the lives of millions of people around the world, will empower you, and act as the light at the end of the tunnel during low moments. For example, after releasing the first version of our product, we could barely find anyone interested in using it. On many days our analytics dashboard only showed two active users, my cofounder and I. As a result our investors started to doubt the concept and delayed wiring a tranched investment. For a period of two months, the idea that our concept could still impact our community was our main motivation to iterate on the product and sales process until we showed the first signs of a product-market fit.
3. Social impact motivates your team to work harder.
Moving fast and being more productive are the key element of success for a startup, which often means going above and beyond as a team. As a result, your employees will probably find themselves working overtime, and sacrificing their personal and family lives for the good of the company during busy periods. Career and monetary incentives will only go so far in keeping this dedication and energy alight. Social impact will give your team a sense of purpose and value, even when they are working harder than ever.
4. Social impact opens up more funding sources.
Many investors, especially experienced angels, like to impact their communities with their investments. They’ll view your company as a vehicle to accomplish that impactwill be more likely to join your journey. There are also many early stage investment sources focused on companies with social impact, among which are Impact Engine, Village Capital and Omidyar Network.
On a larger scale, according to Case Foundation CEO Jean Case, impact investment has really taken off over the last two years. In February 2015, BlackRock BLK -4.73%, announced the launch of BlackRock Impact, a business unit which allows clients to invest in companies that address large societal and environmental issues like global hunger or poverty, Prudential committed $1 billion to socially responsible investments back in June 2014.
5. Social impact makes hiring easier.
Hiring staff is becoming excessively competitive, and tech hubs like San Francisco are witnessing a salary boom. As a result, companies are working to woo potential employees with higher salaries, bonuses and healthcare packages, which can add up fast, posing problems for companies with low budgets in their initial growth stages.
Instead of throwing money at employees, having social impact as one of your company’s core values can set you apart from the competition. It can attract potential employees by offering them the chance to be part of something that will really make a difference. Millennials gravitate toward companies that make an impact when they search for jobs and shop for products. According to Intelligence Group, studies have found that 64% of millennials say it’s a priority for them to make the world a better place.
Incorporating social good into your business plan early also enables you to target experienced talent who have found success and now want to do something even bigger with their lives.
At the end of the day, adding a social impact element to your company and business model may not make or break your company, but it can significantly improve your chances of success.
This article was taken from here.