Successful businesses take many forms, and founders and owners of purpose-driven businesses have a distinct advantage--they are fueled by a passion to do good while doing well.
Two such founders had the opportunity to tell the stories of their purpose-driven businesses as panelists at this year's Inc. 5000 Conference: Christina Stembel, founder and CEO of Farmgirl Flowers, and Ken Jacobus, founder and CEO of Good Start Packaging.
The panel was chock-full of inspiration, advice, and even humor based on their entrepreneurial experiences. What follows are five insightful and wise observations and recommendations.
1. Solve a problem.
Stembel came up with the idea for Farmgirl Flowers, which is disrupting the e-commerce flower delivery business, while working at Stanford University.
"I saw how much money was being spent on flowers, and it led me down a research rabbit hole of why flowers cost so much.
"It reminded me of all the times I'd buy my mom flowers in Indiana, and I didn't like the process. So, I created a model where I could change the way flowers were purchased online in the United States."
Jacobus, who founded Good Start Packaging to bring sustainable packaging to restaurants and other foodservice companies, agrees. "A lot of startups and products are solutions in search of a problem because people haven't actually gone out to talk to potential customers.
"But if you spend time with potential customers, it challenges your beliefs, and then you find opportunities."
2. Be ready to pivot.
When she first started the business, a big part of Stembel's mission was to support local agriculture.
"To start with, we only bought flowers grown within 200 miles of San Francisco," recalls Stembel (Farmgirl Flowers is headquartered in the city).
The business, which Stembel ran from her dining room for the first two years, started growing immediately. Farmgirl Flowers went from bringing in $56,000 in sales in the first year of business to being on track to bring in between $33 and $34 million in 2019.
"We had to keep expanding our sourcing, and we literally just ran out in the U.S.," says Stembel. So even though it was not part of her original mission, Stembel looked outside of the country for farmers who could step in as this critical part of the supply chain.
Today, while Californian farmers still comprise a large percentage of the company's suppliers, it also sources flowers from other countries, such as Ecuador.
"One of our early team members said it best when she said, 'Every two weeks at Farmgirl, is like a new company completely,'" grins Stembel.
3. Be transparent with your customers.
Farmgirl Flowers didn't run into supply issues simply because there weren't enough American-grown flowers to go around.
It was also, Stembel believes, because she is the only female founder of a larger-scale flower company in the country.
"Agriculture is very male-dominated, and that is a real thing," says Stembel. "I never used to talk about it, but we need to call a spade a spade. A lot of the large growers that I needed to sell to me just wouldn't; they still won't."
Having received a lot of positive press coverage around their initial, home-grown mission, Stembel was nervous about potential backlash from customers who didn't know the reason behind Farmgirl's outsourcing and might think the company had sold out.
She proactively communicated the reason for her decision to customers via email and social media, and didn't hide it when mainstream media came calling.
"We had full transparency with our customers, and just let them know, 'we don't have enough flowers, we need to expand, and we'll do it by finding farms that align with our values.'"
Customers appreciated the honesty, sharing feedback like:
"I wish more companies would tell us."
"Just tell us the challenges you're encountering."
"Don't sugarcoat it, don't pretend everything is great."
4. Focus on customers first.
Keeping customers at the heart of what you do is critical for a purpose-driven business. But even if you're driven by a higher purpose, what is the best way to communicate that to customers?
"What clients care about most is themselves and the viability of their business," Jacobus points out. "So, we always meet them where they are. But we really focus on our clients and what they want to accomplish."
"To be a purpose-driven business is really about recognizing that the purpose of business is not profits, not shareholder value. The real purpose of business is to improve people's lives."
5. Do what you're good at.
It's easy to get seduced by changes in technology and market trends and start to veer away from your core offering, but sometimes it's necessary. Agility is, after all, a large part of what can make or break a business.
But there's a difference between being agile and getting distracted.
"We really have to be able to compete in the traditional packaging industry," notes Jacobus, "which largely competes on price.
"So while we still have to have incredible expertise on supply chain, and negotiating good prices, and so on, we very mindfully focus on what we're really good at."
That, according to Jacobus, is the sales and marketing piece.
"We have a brand that we call Good Start TV, where we tell our customers' stories. They really appreciate us doing that because they're not always good at it themselves, and it inspires them to come back."
Solve a problem. Be honest. Be helpful.
These basic tenets of human decency seem simple, but often aren't as easy for business owners to incorporate into their operational framework. But doing so can pay big dividends--for the bottom line, and for the world.Jacobus and Stembel--and their growing companies--are living proof of this.
Jacobus and Stembel--and their growing companies--are living proof of this.