Businesses exist to solve problems and add value to people’s lives.
When I was eight years old, I opened one of my first businesses: making and selling friendship bracelets outside the public library. (Who else remembers the totally analog days, before Etsy or IG?) I loved making the bracelets, making the money was nice, naturally, and most of all, I loved spreading friendship. Wouldn’t everyone be better off with more friendship?
Those early venture days taught me a lot about entrepreneurship and purpose, (and likely helped me in my first true start-up which, as CEO, I led to mass market scale and ultimate successful exit…more on that later.)
What eight year old Heather didn’t yet realize was how this bracelet business was putting me squarely in an ethical dilemma of Capitalism.
Real Quick Capitalism Refresh
Capitalism operates with investors (capitalists) and producers (laborers). While it incentivizes more production which has created more jobs and improved living standards compared to prior systems like Feudalism, it also fosters a drive for lower costs which can result in negative externalities such as environmental degradation, cultural appropriation and unfair wages.
So, while I was busy selling handmade bracelets and spreading friendship, I was also increasing demand for the thread made from polyester — aka ancient dinosaur tears.
In other words, more money, more harm.
This dilemma followed me all the way to law school where I dived into economic theories.
I began to wonder, "What if more money could mean more good?"
This isn’t pie in the sky. The truth about money is that it’s subjective; it means whatever we ask it to mean. What started as a literal barter system, i.e. one clay pot I harvested and created = one wooden spoon you harvested and created, then evolved into symbols, like ten seashells = one wooden spoon, then ten seashells turned to 10 paper money, and now modern digital currencies. The meaning of money has always been a choice based on what values are included.
Rather than blaming Capitalism as the problem, we need to adopt a more accurate accounting of the “value” of a good or service.
How To Realign Values & Business
Business For Social Good
Businesses and entrepreneurship have an opportunity to reframe this ethical dilemma. A business’s job is to exchange goods and services for a monetary price based on a set of values. Because every single good or service can only be sourced from people or from the planet, a business’s role in value-setting is powerful.
For example, after I left law school and finished my time working for a venture capital attorney, I started a company with my brother dedicated to reframing value. Our most well-known product was a sustainably designed toothbrush called Bogobrush. (It’s since been rebranded after our exit.) In creating Bogobrush, we used environmentally friendly materials, contributed profits to environmental and social causes, and set targets for improvements as a means to account for a more complete valuation of the product.
Consider also companies like Patagonia, Cotopaxi, and Bombas who work to include more social and environmental externality costs into their value models.
Research and Science
Other components that are critical for making values-driven business work are research and regulation.
Businesses need scientists, economists, and mathematicians working to discover more accurate tools for value-setting. We can see examples of this already. One group of researchers from the University of New Hampshire is valuing all the world’s resources based on the amount of solar energy it took to create them. Even ESG (Environmental, Social, and Governance) reporting is an effort to redefine value through financial risk management, albeit imperfectly.
In a utopian world, business would fix this all on its own, but unfortunately that’s not likely. Regulation can speed this up, when used properly. Yes, capitalism can be regulated — it is all the time. Simple examples are vehicle emission standards and tax breaks on fuel efficient vehicles.
Weighing the Costs
A common critique of my proposal is, “won’t this just cost everyone more money?” The answer to this is nuanced and deeply academic. For the sake of conversation, let’s look at this in terms of long and short term costs.
As upfront “cost” may increase, long term costs decrease. Under the current system of valuation, humanity already bears long term costs through impacts like poor health and loss of resources — and typically these costs are unjustly distributed to poorer communities or developing countries. With a more accurate valuation method, instead of cleaning up messes down the road, trying to reverse engineer solutions, the system can flourish more wholly, and arguably more cost efficiently overall, from the start.
A Brave New Mindset
Ultimately, we must train our minds to see the world differently; a whole new mindset. Eventually, we won’t compare an old system to a new one - things in the new system just become what they are. It’s like moving to a country outside the US and becoming accustomed to celsius — you just know 36 degrees feels hot, you don’t need to know it’s 96 degrees Fahrenheit.
One of the most impactful tools for shifting value mindset that I recommend to founders, leaders, and activists is a gratitude practice, but maybe not like you think. When you toss something in the trash or recycling bin, say “thank you to the animals, plants and people that created this object.” When you get in your vehicle or metro, say “thank you to the resources that were used in this vehicle - the dinosaurs, the polluted air, the manufacturers, the creators, the improved lives.”
Nothing is singularly bad or good. The more we see the truth of what goes into something, the more willing we are to implement new systems of valuation in our businesses and our lives.
This Can Be Done!
As purpose-driven business leaders, we have the opportunity to unlock a creative key to helping the world be a better, more balanced place. Harness the power of values-driven pricing, tell the stories of why it matters, and share the data with the researchers who will help amplify the impact toward an evolved system for economics.
This can be done! If eight year old Heather was to start again, she would do it, and so can you.
About Heather McDougall
Heather is an investor, speaker, impact entrepreneur and filmmaker. For ten years Heather was co-founder and CEO of a sustainable products company, which she led to international mass market and then successful exit in early 2022. She then joined the investment committee and general partner of 701 Fund 2 out of Grand Forks, ND. Heather received her JD with honors from Mitchell Hamline School of Law in 2009 and has since lived across the world from Europe to the Middle East using her passion for entrepreneurship as a vehicle for change. She is currently producing a 6 part documentary series, “Voices of the Maldives,” amplifying indigenous leaders from the Maldives and their world-changing wisdom and innovations. Heather is a frequent keynote speaker and executive consultant on leadership, global sustainability, entrepreneurship, and wellbeing for organizations including Edward Jones, South by Southwest (SXSW), and ND Farmers Union. She mentors for accelerators gener8tor and ILT Academy, and loves singing, yoga, nature, sunshine, her husband and her dog.