The idea of integrating the Doughnut Economics framework into the realm of early-stage startups can challenge traditional notions of rapid expansion and quick returns to market-savvy shareholders. Startups are typically driven by the capitalist ideals that support those who fund them, but there is a growing trend of incorporating Doughnut principles into business practices. This transition reflects a broader awareness within the startup ecosystem of the need for balance and sustainability.
1. Aligning Startups with Doughnut Principles:
In the world of startups, the conventional goals have always revolved around rapid expansion and generating substantial profits for their investors. Startups inherently exemplify the capitalist engine, fostering innovation and challenging more established yet slower-moving market incumbents. However, the funding mechanisms and ownership structures typically associated with startups do not naturally align with promoting a more inclusive and collaborative economic paradigm, as championed by the Doughnut Economics model.
The Doughnut Economics framework, as envisioned by Kate Raworth, does not serve as a direct, ready-made tool for the establishment and operation of startups. Instead, it provides a comprehensive economic framework rooted in principles of sustainability and social responsibility. While the Doughnut model may not offer a precise roadmap for startup founders, it does furnish valuable directional insights. For newcomers to the Doughnut Economics concept, its appeal lies in its inherent simplicity and a playful approach that encourages exploration. Framing a growth-agonistic economy within the ring or 'doughy' part of the doughnut while meeting the needs of all people and functioning regeneratively within all planetary boundaries.
Although this ethos may not seamlessly align with the profit-driven orientation characterising many startup support systems, there is an emerging trend within the startup community to incorporate elements of the Doughnut framework into their business practices. There’s no hard, fast rule to say doing good and being balanced is not also profitable - depending on your economic lens and timescale, it’s quite the contrary.
Certain startups are actively embarking on integrating social and environmental responsibility and ‘impact’ into their core operations, even if this transition does not encompass a complete adoption of the Doughnut model. They are taking steps to reduce their environmental footprint, adopt ethical sourcing practices, and champion social responsibility. These initiatives reflect a growing awareness within the startup ecosystem regarding pursuing a more balanced and sustainable approach within the business world.
2. The Need for Substantive Change:
However, it is essential to emphasise that for any substantive change to occur, the very function and definition of a startup must be addressed. True alignment with the Doughnut framework requires an openness to the fact that it transcends the mere act of sustaining the existing system; rather, it entails a profound transformation for the better. It is not merely about placing the Doughnut concept within the confines of capitalism; it represents a transition from a purely capitalist modus operandi to a more comprehensive and equitable approach, one that encompasses not only economics but also principles of justice and equality. This endeavour encapsulates as much humanitarian and environmental activism as it does economic reform, signalling a broader commitment to positive change in our world.
3. The Power of "WHY" in Doughnut Startups:
Embarking on the journey of building a Doughnut startup raises profound questions about where and how to commence. In truth, the answers may not be readily available. The sentiment persists that the time might not be ripe for such a venture, given the dearth of established tools or roadmaps. However, this isn't a matter of lacking the will to forge ahead; it's a challenge born of the scarcity of precedents and endeavours.
In essence, the act of daring to explore this uncharted territory already places you within the realm of a Doughnut startup. The very essence of venturing into uncharted waters signifies a pivotal step. What's needed is to convert ideas into tangible actions and embed them within adaptable and responsive models - that last. The path to building a Doughnut startup is a process of evolution, learning as it unfolds; there is not a way but many to be explored.
4. The Role of Integrity and Flexibility:
Regardless of the economic paradigms that may shape the landscape, one constant remains—people. Organisations are forged from individuals, and it's this very human element that fuels both the impetus for change and the resistance to it. In this context, leadership within a Doughnut startup becomes pivotal. The driving force behind the company's founder, their "WHY," becomes instrumental in shaping the Doughnut model.
The essence of "WHY" and to what function this “why” is aligned is undeniably critical in creating Doughnut startups. To embark on this path, we must do so from a place of deep belief and a profoundly personal set of values. For a model that revolves around inclusivity and sustainability, it's still essential, just like Capitalism, that our leadership is rooted in our self-interest, the key difference being it transcends a monetary/goods-based focus in replace emotional and even spiritual self-interest.
Our belief and commitment are the driving forces that will connect with people profoundly. It's our enthusiasm and our ability to effectively communicate a vision of a better world that will unite people, as that is all of our "whys” deep down. We all sense that things are amiss and that we've lost our way in our relationship with the natural world and new growth-intensive and profit-centric structures that divide, exploit and work us to the bone. Though we may not fully realise it yet, there's a deep longing to return to a state of balance and a more genuine existence and thriving.
Sharing your deep drive, vulnerability and "why" will give agency to others. In time, everyone will come to realise that the common ground we share is our ability to form a community in harmony rather than adhering to a worldview that's polarised and prioritises unbridled ‘economic growth’ at the expense of severing our ties to the Earth and the people who inhabit it. This sense of purpose and connection will drive the transformation and help us construct a world where balance and sustainability are at the forefront. It is through our "why" that we can inspire a movement toward a more equitable and harmonious future. So, we must first do the inner work to explore it.
5. Drawing from Multiple 'Isms':
Embarking on the journey of crafting a novel business function, one that seamlessly harmonises ‘value’ and values, commences with the discovery of your truth/drive. Nevertheless, a blank canvas, saturated with purpose alone, falls short; it lacks a vital ingredient to set the ink in place - resilient integrity. While integrity forms the bedrock, it represents the initial step, not the entirety; it must also be deeply anchored.
When you put pen to paper, giving life to your Doughnut Startup, you step into the realm of constructing something dynamic within the existing system, where the tenets of capitalism still exert significant influence, at least for the present. This may initially appear paradoxical, but allow me to offer an analogy to assuage any apprehensions: Rather than approaching capitalism with the fervour of a relentless high-achiever locked in perpetual competition, adopt the perspective of the class clown who joyfully draws inspiration from the brightest minds in the class. Capitalism, at its essence, embodies a democratic spirit, where competition and ‘intelligence’ pave the way - an alternative system doesn’t have to; it can remain democratic by collaborating and embracing the wisdom and needs of others.
The process of establishing an early-stage Doughnut startup is more akin to art than to science. By this, I mean to ride the wave and trust that the prevailing momentum of trust will propel you in the right direction. Instead of exhausting yourself in relentless attempts to outcompete the system, leverage its strengths, and if necessary, be prepared to flex the rules a bit. Most importantly, maintain a warm smile throughout your journey. Let your time and that of your employees and stakeholders operate as the 'cheeky' yet democratic vote towards change inside the Capitalist system where time is money and money is time, and both are a vote that dictates the 'free market'.
It's a universal truth that people are naturally drawn to the cheerful class clown. Thus, if you aim to rally individuals to your mission, demonstrate that your endeavour is more about enjoyable work than arduous toil. Infuse your journey of building a Doughnut startup with an ethos of joy, and realise that by harnessing the potential of the existing system and its strengths, you can bring about the transformative change you envision. Think of the startup doughnut as a delectable treat adorned with rainbow sprinkles - a joy everyone can share.
Furthermore, remember that your canvas is unmarked, and you hold the tool to imprint it. Don't confine yourself to drawing solely from capitalism; explore and integrate concepts from various 'isms' as you see fit. Nature itself serves as an abundant wellspring of inspiration. The natural world is the master of fostering resilience. Ideas such as regenerative economics and the circular economy are deeply rooted in nature's principles. Embrace these frameworks and don different 'isms' as you navigate your journey – both the beneficial and the challenging. However, bear in mind not to become entangled in the political intricacies; those concerns are better left to the critics, not the artists.
6. Resilience in a Capitalist Landscape:
While the principles provided by DEAL (Doughnut Economics Action Lab) offer a solid foundation for a Doughnut startup, there are practical realities within the capitalist landscape that cannot be overlooked. As I mentioned earlier, the competitive nature of capitalism can be ruthless, often prioritising profit over well-placed values. This duality is both its weakness and its source of power.
Understanding your inner truth and adopting a more artistic perspective is crucial, but personal attributes alone may not suffice. A more practical approach is necessary to ensure that a startup built on integrity is supported by a model that safeguards its mission at all costs. Once values are lost, they can be challenging to recover. The value of a Doughnut business lies not in its position in the market and its competitiveness but in how resilient it remains over time.
7. Planting the Seed of Change:
Another important lesson is that change may not occur during our lifetimes as founders. We must build the startup and let time play its role. Change will happen when it happens, and it's not a game to be won; it's a mission that, through perseverance, will pave the way for change one day. We must be content with the pace, whether it's fast or slow. The only certainty is that our current treatment of ourselves and the natural world is unsustainable for our prosperity and survival. Capitalism, as we know it, has an expiration date and is showing signs of faltering. The consequences of this will be catastrophic. The transition will only occur when the scale of suffering is recognised, and the proof of concept in these new models is witnessed.
Therefore, it is essential to firmly anchor our missions in place, not just for now but indefinitely. The first brushstroke as a Doughnut founder involves embedding one's emotional self-interest into the very DNA of a company, which is built not only to succeed the founder but also to serve as a selfless act that fosters change. This entails reinventing ownership structures, looking towards alternative, more cooperative, steward/customer/employee-owned legal structures that link not only financial sustainability but also the mission and values to the company's functionality. A pioneering founder may initiate a Doughnut startup, but its construction is a selfless endeavour that extends beyond that founder. It's about planting a seed for change that will be nurtured by many, likely extending beyond the founder's own experience. Founders must engage in this journey not solely for the destination (which is a fortunate byproduct if achieved) but for the sheer enjoyment of embarking on an alternative path and finding purpose and meaning in the pursuit.
Moreover, this transition should be financed by people who share these values and the decline of degenerative enterprises that falter under the weight of their growth-centric models.
The truth is that what makes a brilliant and thriving company today also makes it incompatible tomorrow. The seed of success, "endless growth," is also the seed of destruction. In nature, nothing grows forever in isolation; the only continued life is within the ecosystem as a whole. To build these new collaborative ecosystems and transition away from competitive market dynamics, we must first create companies that hold resilience in their missions. When the time comes, our seeds of 'agnosticism' will be better suited to the changing landscape, and a new economy will emerge from the destruction of the seeds that limit the current paradigm from weathering the inevitable change.
Building a Doughnut startup is a journey of exploration and transformation. It requires aligning business with values, embracing change, and working toward a more balanced and sustainable future. While the path may be uncharted, the mission is clear: to build a world where society’s needs are met within the planetary boundaries - how we do it is still to be discovered, and the tools to start come from within; the road is long but full of joy, and we will make it happen together!
Get inspired, connect with others and become part of the movement. No matter how big or small your contribution is, you’re welcome to join!