Building and running a social impact company is one of the most rewarding gifts I have ever been given. It is also, by far and without question, the most challenging.
Simon Sinek recently said, “Working hard for something we don’t care about is called stress: Working hard for something we love is called passion.”
I believe there is much truth to that statement, however, there are, in my opinion, some very important things you need to know that nobody told you about that you need to take into consideration if you are thinking of getting into the social impact space.
While I know what Sinek says doesn’t necessarily speak specifically to social entrepreneurs, one thing I can say is that it is very rare for someone to start a social impact company if it’s not coming from something they love and are deeply connected to.
The first 3 are critically important to start with… the Bottom Line, the Double-Bottom-line and, the constant war between the two.
1) The Bottom-Line
A company’s Bottom-line is the business model (if pre-revenue or early stage) that investors look at in order to determine a future path to profitability. If you are a social impact entrepreneur that operates a for-profit business model, being able to provide clarity of the bottom-line is extremely important.
This includes when you expect to be profitable, how long it will take, the capital allocation necessary to support the company until you reach profitability, and other things that help determine, or at least predict the potential of an investor to make his or her money back.
If you are a social impact company, just because you are serving a great cause and solving a pain point, doesn’t mean that your business will be sustainable. Sustainability comes from the bottom-line. Companies with a great mission but a bad business model will not succeed.
2- The Double Bottom-Line
This is your purpose. This is that social cause that makes you wake up in the morning and want to conquer the world. This is the passion. This is the company’s mission to make the world a better place and your commitment to never stop until you do.
While Sustainability comes from the bottom-line, the social impact puts it on steroids.
More about that in a moment…
3- The War Between The Bottom-Line And The Double-Bottom-Line
Let me start by saying the reality is, there should be no war between the two, as I believe that a strong double bottom-line will end up contributing to a far greater bottom-line … hence the steroid analogy.
At Loosid, we decided to keep the reigns in the hands of myself and my two business partners in order to never sacrifice one for the other. This means we have invested our own money.
Recently, speaking to potential investors as we consider our first ever outside investment, we have fielded countless questions as to why we don’t splash ads throughout our feed and take advantage of every piece of real-estate to monetize.
This has upset me a great deal for a number of reasons. First, I find it extremely short-sighted and focused on short-term gains.
For social impact, it is absolutely critical to have the community love your brand before you whack them over the head with sponsored ads.
For a social network like Loosid, it is infinitely more critical as anything to aggravates our community, may not just have the member leave the app, but also, leave the app and go out and use substances again and possibly die.
This is why you have never seen a banner ad in Loosid’s feed.
We are in a constant battle between making Loosid safe and supportive AT ALL TIMES, and, now, amist fielding potential investors, showing them why this approach will ultimately result in an infinitely stronger ROI in the long-term.
Which brings me to the next…
4) What Is The ROI Of Saving A Life?
As a social impact entrepreneur, we are in the business of saving lives. That will always overrule any business decision. As I said, if you have a great social mission that has the backbone of a strong business model, you will ultimately be able to save the world AND provide infinitely greater ROI for investors.
But I ask again.. what is the ROI of saving a life??
To be clear, it doesn’t have to be literally saving a life, but also making lives better for both underserved communities as well as offering services and education for diversity equity, & inclusion. A few people who are doing this who deserve a very strong shoutout are James Oliver from Parentpreneur Foundation and Leslie Short from The Cavu Group.
Which brings me to the next…
5) The King And The Pawn Go Back In The Same Box
The truth is, at the end of the day, you are born broke… you die broke. You can’t take any of what you built with you. The question is, WHAT DID YOU DO TO MAKE A DIFFERENCE?
I say this in interviews all the time… I have never seen a tombstone that said:
“Owned a 20,000 square foot house, drove a Ferrari and had a Gold Rolex.”
What did you do to make a difference? People really need to get this.
Stay laser focused on why you are doing what you are doing. Do NOT let your ego get you caught up in a money chase. Money is not a purpose.
6) Money Hungry Investors Disguised As “Purpose Driven” Investors
Many money-hungry greedy investors disguise themselves as social, purpose driven investors simply because they smell the money by looking at market size and market opportunity.
Take the addiction market as an example…
There are 300+ Million people worldwide suffering from alcohol use disorder. There are 95.3 million in US alone suffering from substance use disorders. The addiction treatment market is 42+ Billion and projected to be 53 Billion in 2025.
Translation? Sexy market size and sexy market opportunity.
Sadly, too many come in for this reason. Lives are at stake and they are looking at those lives as dollar signs. They come in saying they are “purpose-driven” and come in and effectively kill people by prioritizing profits over people. I deal with this every day.
It is very unfortunate as there are amazing investors and companies doing it for the right reasons who get a bad name for the investors and companies that use “purpose driven” as a mask to get into a market only to make money.
7) You Will Not Sleep
If you are working on a cause that will not be solved in your lifetime, and you are a true social impact entrepreneur, you will never be satisfied. EVER.
At the time of this writing, Loosid is approaching 150,000 members, but with 500 million people suffering, I feel like what I am doing is not making a difference. I feel like I am losing the battle every day.
People are constantly asking why we don’t open in other countries, why are we not here, why not there… we simply cannot get to enough people quickly enough. I feel helpless.
A dear friend, Shelly Tygielski, who has dedicated her life to more social and humanitarian missions than I can count, recently got back from Poland after helping to provide supplies for the refugees from Ukraine.. and she posted that she felt (and I’m paraphrasing) as if she abandoned them because she did not stay. If you don’t follow her, I strongly suggest you do. Her company is called Pandemic of Love and her Book is called Sit Down to Rise Up.
Here’s another biggie…
8) Most People Don’t Care
This is a hard pill to swallow. A recent post from Shelly did help me quite a bit. She said that it’s not that people are against you, it’s that they are ‘for themselves’.
That being said, it still rots me to the core. I have stayed off social media for a very long time because of the insensitivity to what’s happening in the world. We have so many problems to solve and too many people are self-consumed.
Another thing that helps me is a quote from recovery.. “For those amongst us, no explanation is necessary. Those not amongst us, no explanation is possible.”
For those who do not understand, it is my job to educate them on addiction and how they can help. Forgive them for they do not know.
Still, there are too many people that live their lives for dollar signs. It’s very sad.
Be prepared for that. Get over it and find the people who give a shit. It’s hard. We are constantly trying to find the right ones as well.
Ben Horowitz, in his book, The Hard Thing About Hard Things talks about a term called WFIO. He says that at many points in every entrepreneur’s journey s/he/they say “We’re fucked, it’s over.”
His book should be required reading for anyone looking to be an entrepreneur. Not just a social entrepreneur, but an entrepreneur. Period. End of sentence.
The book has so much insight, if you have read this post up until this point, you should order it now. He donates 100% of the proceeds so to be clear, he nor I are trying to “sell” the book for any reason other than the value it will bring you.
Be prepared for several WFIO’s.
10) Being A Social Impact Entrepreneur Can Be A Very Thankless Job
I was looking at a support ticket on Loosid from early this morning.
It read… Loosid feed needs more people. Advertise more. Grow quicker.
While this again, simply shows that we need to grow quicker, it is always both humorous and painful how people think that a social network comes out of the ether and is suddenly supposed to be Facebook. 🤦🏻♂️
11) Self-Funded vs Grow Or Die
As mentioned earlier, we have kept Loosid self-funded because I would never do anything to sacrifice the integrity of the platform.
That being said, after considerable investment, to take the words Bill Gurley from Benchmark Capital says to Uber CEO Travis Kalanick in Super-Pumped “grow or die”
To Loosid, this is something that I literally TWICE. I take that very seriously being that every day, the less Loosid grows, the more people suffering from addiction will die without knowing there is a platform that exists to help. So not only would Loosid die, but people would die as well.
So this leads to outside investors. For Loosid, in order to keep the integrity of the brand, we look for social impact investors who have an affinity to the mental health space.
Many people know about angels and VC’s. The angel normally takes part in seed rounds and VC’s come in a bit later when there is priced round that can easily be justified.
There is, however, an interesting group in the middle that I have become somewhat keen on… family offices. A family office is similar to a VC, however, the capital is only from one source, namely, the family.
A good family office that has an affinity for social impact can be a great fit.
I would recommend Mark Sanor and 361 Firm as they are doing some great things in Philanthropy and Social Impact.
12) Don’t Give Up… There’s Always Another Move… And Do Not Create a Plan B
Back to Ben Horowitz’s WFIO… There will be a point along your journey that you want to give up. Many points. No matter what, if you have created a product that has proof of concept, is solving a problem, and is built upon a strong business model, don’t give up.
If you feel like it’s over… there’s always another move (thanks again, Ben). If you create a back-up plan, a plan B if shit don’t work, odds are you will exercise Plan B, hence why Ben didn’t take the advice of his advisors to create a Plan B.
In my opinion, having a purpose, a ‘cause’, a greater good that you are serving will keep you going when others who are not in the social impact space may give up.
I have to remember Loosid is not about me. It’s far greater than any contribution I can make, other than to have created the platform to let it grow. It’s simply my job to keep it growing and protect the integrity of the community at all times.
Not so simple, but greater than me, nonetheless.
So don’t give up.
13) People Will Think You Are Out Of F*&!ING Your Mind
When you have a passion and serve a greater good that is far greater than you, you will never be satisfied. For that reason, you will be unreasonable with your expectations. People will not understand why you are doing what you are doing. This can include your family or significant other.
You need to know this. You need to weigh the assets and liabilities ‘cause this is not for the faint of heart.
14) It Will Be Worth It
Taking into account all the struggle, all the sleepless nights, the WFIO’s, EVERYTHING… if your heart is all in and it is something you love and is something you believe in from the bottom of your soul… it’s f&%!king worth it.
So yes, like most cases, Sinek is right.
Simon says … GO FOR IT.
Love to all 🙏🏻❤️
Loosid Co-Founder & CEO
P.S. To anyone in recovery or looking to get sober, read below:
First… a lot of people not familiar with Loosid mention that there are 12-step programs that exist for people in recovery so why Loosid?
I am very vocal that it’s the 12-steps that saved my life. What I need to clarify is that a very large portion of come to Loosid because they are too ashamed to go back to their 12-Step program, or they have the wrong ideas of what 12-Step groups are about. It is thanks to the Loosid community (not me) that we shatter that shame and guilt and get those people back into 12-step programs or other treatment modalities that work for them.
Two additional points of clarification…
Loosid is not against treatment in any way, shape, or form. We are against treatment centers who look at their success metric as money, instead of keeping people sober.
Again, it is the Loosid community that offers support to people who need professional help to give them the courage to go and seek that help they so desperately need.
One last clarification…
Despite the fact that 12-Step groups saved my life, Loosid is a community that welcomes other treatment modalities, and groups.
Some groups to mention, if you are in recovery are:
The Luckiest Club, Refuge Recovery, Smart Recovery, Sober Mom Squad, She Recovers, The Phoenix, Rock To Recovery, Herren Project, Recovery Playbook and various others who do great work to support people in recovery.