Four years ago, (4!) the founding members of Thread were still practically strangers to one another and we had just received enough seed-funding to allow us to hire lawyers and incorporate into an actual business. We filed as an LLC. But, we knew we wanted to be a social business, accountable to more than just financial performance. We knew maximizing shareholder value was vital – but not something that had to come at the expense of the people and communities involved in our supply chain.
So, we added provisions to our operating agreement ensuring that Thread would be beholden to its impact on people, planet, and profit.
“This will never work,” was the response we got from folks accustomed to business as usual.
This will never work has become somewhat of an inside joke around our offices – and anyone who’s been involved in a startup can tell you that hearing you’re crazy and your idea will never work is a frequent occurrence (and a great motivator to prove the opposite.)
We’d gotten used to hearing skepticism around our business plan, “Haiti, huh?”; our team, “So which of you has a background in material science?” ; our company name, “You work for Fred? Threads?” and now our desire to be a solvent for-profit business that managed its operations without clubbing baby seals.
Social-business is still an evolving phenomenon. There are several ideas of just what constitutes a social business. There are skeptics. There are plenty of organizations jumping onto the social-business bandwagon because it’s hip. There are lots of investors who are nervous that social business means a company won’t be managed as well as a traditional start up. There’s also a strong and growing community of businesses already operating in this way. A year after we added those provisions to our operating agreement, Thread became a certified B corp, joining an amazing group of responsible businesses.
Personally, I think that social business will someday just become a matter of course and that the majority of companies will evolve taking into account social and environmental costs as well as the economic. Go ahead, call me an idealist.
Impact investing and social business isn’t going away anytime soon. And there is more and more evidence pointing towards the fact that social businesses can be profitable, and competitive, and make a return on investment.
It just might work.