The Pursuit of Ideas and Ideals
Dr. Lourival Carmo Monaco Neto, Postdoctoral Research Associate
Why Today’s Startups Pursue Both Ideas and Ideals by Ranjay Gulati
Harvard Business Review, May 13, 2021
Business landscapes are changing at a pace never seen before. The amount and diversity of data created every second is higher than anything we’ve ever experienced or imagined, and it will only continue to get faster, bigger and more diverse in the future. This extremely challenging environment makes innovation more difficult for incumbent companies; however, it creates a perfect storm scenario for startups to be created and flourish.
By definition, startups begin small and aim to grow at almost all costs. The concept of having a “greater purpose” is sometimes viewed as a luxury, and achieving a product-market fit may be the only thing that matters. Once a startup establishes its business and becomes profitable, it can be hard to change this mindset, but it is important to keep in mind that growth and purpose are NOT conflicting. Actually, having this “grand ideal” as a driver can help startups be focused and efficient, achieving growth while also fulfilling the need they set out to do.
This article from the Harvest Business Review by Ranjay Gulati points out three major advantages for startups that keep their ideals at the forefront while also pursuing product-market fit, growth and profitability. They are:
- Purpose Expands Entrepreneurial Ambition
More often than not, a startup is pushed to make bold and creative decisions. When faced with these decisions, people driven by ideals, in addition to business ideas, tend to tap into their values and beliefs, which widens their ambition to solve problems and enhances their overall value creation. It becomes more than just a business — it becomes a calling, but for this ideal to flourish, they must discover ways to be profitable and grow — a win-win situation.
- Purpose Attracts People
Every startup must pitch their business to a diverse group of stakeholders, including investors, employees, customers, etc. When an ideal — and the drive and values it brings with it — is added to a business idea, it makes the selling pitch much more compelling. Many times, young companies have a hard time attracting talent, especially younger people. But when the company shares the values and ideals it is based on, younger people tend to perceive it as more than a job. Instead, they view it as a deeper meaning and a solution to a need that makes a difference in the world.
- Purpose Helps Align a Winning Team
As startups grow, not only can they lose their strategic focus, but their founding culture often becomes more diffused and their intense spirit of community and team identity subsides. Fidelity to a purpose helps keep team members aligned and connected throughout the growth process, assembling them into a cohesive community over the long term. Purpose aids in collaboration, as well as creates a shared framework of values and assumptions that serve as a filter for strategies and executional tactics. More importantly, these ideals and ideas are the core of a startup’s culture, which is now more paramount to its success than ever before.
What this means for Food and Agricultural Business
The ag-food sector is as affected as any other sector, or more, by this increasing business complexity. As such, it has also been a fertile ground for new startups. For example, the record investment in the ag-food tech sector in 2021 is expected to reach over $30 billion with more than 3,000 deals (AgFunder, 2021). A large majority of these investments are being focused on ag startups, which have, or should have, more than just a business idea to bring these investors to the game.
In agriculture, finding an ideal is not difficult. Sustainability is an open avenue for any startup (or incumbent company) to find some real purpose in and focus its resources to solving real-world, time-sensitive problems. This sustainability can be on the social, environmental or financial level, even though they are all very closely related.
Let’s say a startup decides to create a modular indoor vegetable farm, and the idea (business) is to produce high-quality, lower cost vegetables for human consumption in large urban centers. On its own, this idea is interesting but bland; however, when you add the concept of higher-quality nutrition, the health benefits eating better can bring, the potential for reduced usage of inputs such as land and water, or the creation of new jobs in places of high demand to the equation, there is a much better chance at success. By having a bolder, more focused approach to the value proposition, this idea is more attractive to stakeholders and better creates a culture that drives people and processes in the same direction.
Many other examples can be created, but the message is the same for startups or incumbent companies in ag or any other sector: strive for success, but keep your purpose in mind and be faithful!
AgFunder AgriFoodTech Investment Report, 2021
Every four years, the Purdue University Center for Food and Agricultural Business conducts the Large Commercial Producer (LCP) survey, which collects data from approximately 2,000 farmers across the U.S. This survey has consistently shown that farmers behave differently when buying different inputs, meaning suppliers should be cognizant of these factors when designing their go-to-market strategies.
One thing that has always been clear to those in agribusiness is how closely our communities and businesses are united. While other industries are beginning to realize that managing the ecosystem’s health is the right thing to do to sustain long-term business, farmers and food production organizations inherently understand this.
As marketing managers know, creating an integrated and cohesive marketing strategy has many moving parts. They must continually examine where they are and where they need to be, while trying to efficiently and effectively allocate limited resources across multiple functions related to the marketing plan.
Betty Jones-Bliss, associate director for Purdue University’s Center for Food and Agricultural Business, recently asked Scott Downey and Justin Funk a few questions regarding elements important to a successful marketing strategy.