Deceleration Patio

Why startups are important in achieving sustainable development

Off campus deceleration activity
Rafaela Cavalcanti and other ‘alumni’ learning about Menorca history in La Mola Fortress.

How startups can make the world a better place and contribute to the UN Sustainable Development Goals (SDGs)
The Sustainable Development Goals (SDGs) are a set of 17 “Global Goals” that address poverty, inequality, climate, environmental degradation, prosperity, peace and justice and other global challenges. Set to be accomplished by 2030, all SDGs must be met in order to achieve a better and more sustainable future for all. However, this is an enormous challenge to all countries, especially those that are more affected by these issues. We are in 2018; how can we end poverty in India? How can we ensure access to education in Myanmar? Or how can we provide productive employment and economic growth in Haiti? Now, how can we do all of it, at the same time, in only 12 years?
It is unquestionable that the UN goals involve complex problems with a short deadline. However, the United Nations are not the only one actively contributing to these SDGs. All around the world, organizations are popping up feeling committed to these goals. When I say “popping up” I literally mean popping up, as in “coming from nothing”. Those organizations “coming from nothing” or more commonly called as startups, are using all their creativity to build new business, processes, products and customers in order to solve some problem that other current organizations have not been able to solve.
Startups look at problems in a different way. They don’t look at problems such as “poverty” and think of the hundreds of obstacles, the huge amount of time, and all the capital needed to solve this issue.

They will look first at possible truly transformational ideas, then they will take their blood and soul to work on their MVP (Minimum Viable Product) for the next 3 months to verify their idea in practice. The idea will be tested in a small group so they can get direct feedback and if it works, it can scale to the world.
With all this in mind, when it comes to startups, a lot of impacting change can happen by 2030. So, why haven’t we seen more meaningful outcomes from startups since January 2016, when the SDGs officially started?

Non-traditional risk assessment is needed for non-traditional startups

Historically, NGOs, foundations, governmental organizations and some progressive organizations have been working on social impact issues. This is because these global issues are hard, costly to solve and results might take longer to become clear. Venture capitals, private investors, angels, are keen to have their 10x return on investment by the least amount of years possible. Such return on investment is much easier to achieve by investing in a startup with a business model focused in a market where the client has capital and means, or at least where investors are familiar with the legislation, culture and society. However, since the SDGs have been in place, some investors have been trying to ride the wave of “I too care about the sustainable goals”. Though, without much experience in investing in such startups, they tend to use the same risk assessment approach of startups that work on “traditional” problems. There is a need of a different assessment for startups that are working on the SDGs.

Resources to support such startups through different phases of growth

Startups can create break-through solutions that have tremendous impact in the society and on the environment. These solutions can solve problems that once were thought to be unsolvable. The challenge that these startups have is that it might be more difficult to prove a profitable and sustainable market with a global scale without support. The support needed can be in the form of mentorship, exposure and strategic partnerships. Accelerators such as Agora and Young Sustainable Impact have the impact approach from conception. Others more traditional accelerators are also adapting, like techstars with their “impact” program. Though, what is out there today is not enough to boost and support the work that startups are placing to solve the SDGs. There is a need for more accelerators and programs with focus on the SDGs.

Just words do not prove impact

Some startups work to solve one or more of the SDGs and some startups only say they work to solve one or more of the SDGs. The only way to separate the real solutions from the ones that only use for good PR and media is to analyse the impact indicators. The first question to be made to those startups that pledge to be working on a UN Sustainable Goal is whether they have a Change Theory. Eight out of ten startups will probably not know how to answer this question, because they don’t know what it means. In short, a change theory defines long-term goals, creates a map of actions and develop indicators to measure outcomes to assess the performance of an initiative. Without the right indicators, it is difficult to prove the assessment of a goal. Such quantitative approach benefits the startups as it the numbers speak for them.

The world as a better place

The SDGs are a great way to unite the world into common goals that will bring prosperity and hope of a better place. These 17 UN goals are interconnected and thus, working on them means that there is a  higher chance of an inclusive future where none of the SDGs is left behind. This time it is not only in the hands of the UN, governments, NGOs or foundations, but also in the hands of entrepreneurs that can popup startups out of great ideas, to experiment, verify, and quickly deliver the better world that everyone deserves by 2030.