See you on Websummit? Write us a message if you are there.
Written by Mirna, Ljubljana, 2022
They say that what goes around comes around, but in business, we know it’s not always the best advice to follow this principle. But what if there was a way?
Many would argue that the 3BL principle (triple bottom line) could lead the way. Let's see the idea behind it.
“The triple bottom line wasn’t designed to be just an accounting tool. It was supposed to provoke deeper thinking about capitalism and its future.” ~John Elkington, 3BL concept author (Harvard Business Review)
Believers in the 3BL framework state it is the only tool to make real, meaningful change in the world. Famous B Corporations are standing on their foundations. The framework is widely used to assess a company's performance from several angles. Its 3 components can be referred to as the three "P's" in terms of the bottom line.
The startup ecosystem is the ideal setting for exchanging ideas, creating synergies, and eventually constructing profitable business strategies that benefit both people and the environment.
Early-stage entrepreneurs draw inspiration from issues throughout the whole supply chain and by supporting 3BL principles, deliver results that promote the UN Sustainable Development Goals. And while it’s still starting up why won't you do both - or triple?
Building a fresh business is by itself an art of balancing all sorts of things. But when it comes to strategy, we often stick by it when it’s set. Imagine planning 1 strategy with evenly important thirds and agreeing to adopt a trade-off every time the boundaries start to swing. That’s what working by 3BL is like.
The main struggle for a startup in most cases is to reach good traction. With revenue, as the most important and common traction to follow, ones could also focus on user growth, international expansion, and signed letters of intent at the start of their business. But having two more pillars to pursue could often lead to system overload. Obviously, the exception are markets that "award" companies that are sustainable. Great saying for founders struggling with this problem goes:
One way to do it is by learning from the “pros”. Pick your company role model and see what they do. Copy their KPIs for each third, and think about what they did at their beginnings. B-corps or bigger companies that successfully managed to embed the mighty 3BL in their day-to-day operations. Here are some companies which stand by this title: Patagonia, Ben & Jerry’s, LEGO, IKEA …
Always keep in mind that the 3BL model is not adapted to startups with little or no funds at all, and always relocate your assets to keep the business running.
Another thing to do is to include promising startups in your role model list. Their founders are often people who have embedded some 3BL principles to their core, maybe even without even realizing it. And that’s another beautiful thing about it. Many businesses decide to adopt the triple bottom line without formal certification because official B Corp requires a difficult application process.
Now one of the most famous startups is used in countless case studies. But in 3BL as well? How? Well, we can start by dividing the principles into three parts and make them clearer.
2. METHOD HOME
Now a B-corp creating non-toxic cleaning solutions in recycled ocean waste plastic bottles was once the idea of a lifetime too. See how they managed to embed 3BL principles deep in their product to apply to every aspect of it:
Combining impact and technology, that’s what they did. SweepSouth is an online service that connects domestic cleaners to homeowners, available in some African regions. This start-up focused on investing in employment opportunities, an investment that, as they say, pays off in dividends.
The most important objective at a startup should always be to start generating revenue as soon as possible - because if you screw up this one, you won't have the chance to worry about the other two pillars.
If it wasn't obvious before, it is now: 3BL isn't explicit for big corporations. And by looking at the good work startups are doing, hopping on this “trend” and embracing social impact might be crucial to the innovations of our future.
Think about it in a simpler way: why focus only on profit, when you can include all 3BL’s components - people around you, the lovely planet you’re living on, and the money you’re about to make? A reality, not too far away to achieve.
So make sure you embrace those principles at the beginning of your startup story and live by them once they have a working business. A few sum-up tips would be to: