Social responsibility is changing the way business functions. The old model of just giving money to feel like you are making a difference is dead. The new era of business sees entrepreneurs like Blake Mycoskie founder of Tom’s shoes changing the way business is run. I got a chance to sit down with Cole Hatter, the founder of Thrive, to talk about the idea of the “for purpose” business. I did a double take when I heard that, asking myself, isn’t all business for purpose? The difference is, that in a for purpose business, the philanthropy is built into the model, in which empowers the entrepreneurs and the consumer to make a difference. A study by Bonn University found that consumers are willing to spend 30% more for a product that is deemed to be “Fair Trade.”
As a 21-year-old man, Hatter was struck with tragedy in a very short period of time; he saw his own life in peril and lost two very close friends. After wresting with why he remained alive when friends so close to him were lost, as well losing ability work as a firefighter, he found purpose in entrepreneurship. Hatter realized that he loved what he was doing but now living on borrowed time, this new found love for entrepreneurship had the ability to make an impact. “The problem with non-profits is just that, they’re not profitable. Although their cause is almost always great, to make some type of an impact on people or the world, and that’s great — then they are always relying on someone else to write them a check,” Hatter stated. From this idea, he created Thrive, a live event, for entrepreneurs seeking to make an impact.
Thrive seeks to put a spotlight on businesses that operate in a way that philanthropy is part of their business model. I’ll go back to Tom’s shoes, because it’s the best example of how the model works. Tom’s charges a premium for their shoes, and built in the price is the cost of two pairs of shoes. Every time a customer buys a pair of shoes from Tom’s, another pair is donated to someone in need. Therefore, people that buy Tom’s are much more passionate about the mission of the brand and willing to pay a premium for a product they know is making a difference, just by their purchase. In the for purpose business model, the idea of organizations having to fundraise is removed, and they now have total control of actually creating an impact in an untethered fashion.
There’s essentially 3 ways to run a for purpose business:
- Build the cost into your product: this is the idea behind Tom’s Shoes’, the cost of the pair of shoes given away, is paid by the consumer.
- Start a non-profit or align yourself with one you believe in: this is the more well known model of writing checks, of a portion of sales, to empower a non-profit.
- Only hiring veterans: hiring those that have served our country to help them keep on track and give them purpose when they return.
Hatter has quite the road ahead of him to change a paradigm of business that has been slowly moving towards his goal. He’s not the first, but he is the one looking to create the movement behind it and power the idea of “for purpose.” The 2016 version of Thrive, boasts speakers such as Grant Cardone, Jack Canfield and John Assaraf. It will be held in San Diego, October 28th, 29h and 30th, and can be found at www.attendthrive.com. With such a large mission of impact set ahead, the only question is: “Will you make money matter?”