How social entrepreneurship helps the bottom line
Joe Huff is a co-founder of LSTN Sound Co, which produces high-quality headphones and uses some of the proceeds to help the Starkey Hearing Foundation provide hearing aids to some of the 360 million hearing-impaired people worldwide. This business model made him an obvious choice to be a judge at the Chivas Venture competition in New York last summer, aimed at finding the globe’s next great social entrepreneur.
With the Middle East’s regional round for 2017’s competition starting this month (see details at the bottom of this page for how you can get involved), Huff is a good person to discuss the opportunities for any company where doing good is not a bolt-on to the business, but rather the reason for its existence.
That journey for Huff began after the death of his father, which prompted him to reassess his life goals. “It became very clear that all I’m going to care about when I die is whether I was able make the world a better place,” he says on the phone from LA. This led to him quitting his job to launch LSTN in 2013, which in three years has helped over 20,000 people hear for the first time, or the first time in a long time.
At the Venture finals there were 27 finalists, including Taka Solutions from the Middle East, who had made it from the longlist of 2,500 worldwide entrants. The winner was Conceptos Plásticos, a Colombian company that recycles plastic into quick-assembly building materials to build cheap housing in the neediest parts of the world. This process tackles two huge issues: waste and housing shortages, and is easily scaleable.
Such an elegant, simple solution begs the question of why more businesses don’t build social entrepreneurship into their model. And equally important, why don’t more customers demand that component, be it for headphones or houses?
“The problem stems from past efforts where people felt they were being asked to purchase sub-standard products to further a cause,” says Huff. “And that’s wrong because then what you’re really doing is just asking for a donation. The challenge is to make your charitable product also the best product available.”
Though there is a cost attached to donating a portion of profit to a cause, Huff believes there are also opportunities.
In LSTN’s case, there has been added marketing exposure due to the company’s innovative approach to doing business. And of course the fact that they produce great headphones — in this case by using wood due to its outstanding acoustics — also encourages customers to choose them over rivals who appear to exist for nothing more than their next quarterly earnings report.
LSTN’s story mirrors the Venture competitor profile, where small companies with brilliant ideas but comparatively few resources compete against much bigger, entrenched business interests. It’s tempting to think what could be possible if a multinational was to think big and give back. Indeed, Huff offers the back-of-a-cigarette-packet calculation that one percent of international retail players’ profits could generate enough revenue to end the world’s water crisis in a few short years. (By 2025, 1.8 billion people will be living in regions with water scarcity according to the UN, so this isn’t a side issue.) “We need to make people realise that it is possible to fix these problems and there are no excuses,” Huff says. But in reality, he concedes, that will probably have to start with consumers. “They can speak out with their dollars,” he explains. “And once those dollars start talking we’ll see a shift in the way major corporations act. They’ll have to adapt to stay relevant.”
And on a more prosaic level, what can an individual do to make a change? “Find a way to incorporate what you love into what you do,” Huff replies. “There’s so much need around the world that there’s really no excuse for not finding a way to give back. For example, there are companies who let employees take a paid day off every month to volunteer at a charity of their choice.” Again, this isn’t something that automatically harms the company’s bottom line. The initiative will attract employees who care about the world, and the employees will know that their company cares as well. That’s a compelling message.
Huff thinks a paradigm shift is necessary for charity not to be seen as an expense or inconvenience. “It’s all about instilling passion and channelling that innate care for humanity that I think everyone has within them,” he says. “All it takes is the first step.” Seen in this light, that’s also a step towards success.
The Venture is Chivas Regal’s global competition to support social entrepreneurs. Entries open September 11 for the Gulf heats. The winner will progress to the global final in Summer 2017 where there’s $1 million in funding to be won. Visit theventure.com