We live in a world in which financial return and environmental/social impact is often deemed to be mutually exclusive. Consequently, there is a lack of much-needed financial capital allocated towards sustainability-oriented innovation (SOI).
Yet, business need not be zero-sum. In other words, it is possible to “do good” and make money at the same time.
Recognizing this very truth, MIT Sloan launched a novel class for the 2015-2016 season: Sustainability-Oriented Innovation, taught by Jason Jay, Senior Lecturer and Director of the Sustainability Initiative at MIT Sloan.
32 students, myself included, reaped the benefits of an amazing new class this past semester that had been bootstrapped by 10 Sloan students in the Spring of 2015. These ten “guinea pigs” wrote case studies, sourced speakers, selected reading materials, and designed the class deliverable.
In addition to covering a host of topics, ranging from venture capital to policy engagement to simple rules for assessing innovations, the class helped define the different stakeholders of SOI: sessions addressed entrepreneurial champions, customers, investors, policymakers, and incubators. The class also addressed the role of corporations in SOI as customers, strategic investors, and innovators in their own right, with guest speakers from Enel, Dow, GE, Air Liquide, Shell, and Royal DSM.
Thus, the students in the class were able to enjoy a multitude of insights from guest lecturers and engage in a semester-long project limited by…nothing.
The beauty of the final deliverable for this class is that it knows no boundaries: in other words, students are allowed to pursue a project of any type, on any topic, as long as it is somehow related to the broad category of sustainability-oriented innovation. Project topics this year included: biomimicry, climate financing models, education in Ghana, domestic violence, food system mapping for prospective entrepreneurs, fossil fuel subsidy reform, low income obesity, low income college education, Iranian irrigation, sustainability consideration in policy legislation, sustainable investments…the list endures.
What is Sustainability Oriented Innovation?
In a world where performance and impact are often seen at odds, it is hard to imagine having the best of both worlds. A handful of startups and corporations, however, are breaking the mold with innovative new products and services, technologies and business models. These new breakthroughs are sustainability-oriented innovations (SOI).
– The Sustainability Initiative, MIT Sloan School of Management.
Collaborating with my friend and classmate, Hanson Gong, we sought to better understand the entrepreneurial ecosystem as it pertains to sustainability. Specifically, we wanted to create a toolkit for entrepreneurs, a collection of SOI case studies and lessons learned to help bridge the Valley of Death.*
Our Problem Statement: What are the common pitfalls as entrepreneurs take sustainability-oriented innovation ventures from idea phase to commercial viability, defined as the ability to engender positive impact on environment/society, while sustaining the business?
We thus spent the semester conducting research in order to find common pitfalls and criteria for success. The majority of our research was accomplished through interviews with local and national start-ups, as well as vital accelerators and incubators, such as Greentown Labs, Cleantech Open, the MIT $100K Entrepreneurship Competition, and the MIT Clean Energy Prize Judging Committee, in order to learn about companies that succeed and fail in these environments.
We focused on pitfalls commonplace in eight broad areas: target market, lack of focus, financing (diluting equity too early), over-promising, scalability & product design, differentiation, sales & marketing, and distribution.
The Larger Picture:
The mission of the MIT Sloan Sustainability Initiative is “to build a community of innovators for sustainability with MIT students and alumni, faculty and researchers, and allies in business, government, non-profit, and hybrid organizations. Together, we encourage innovation in products and services, management practices, business models, and supporting market infrastructures that make effective, sustainable use of natural resources and that advance human welfare.”
To current and prospective students: This class is NOT solely for entrepreneurs, rather it provides an amazing perspective of sustainability as it pertains to both enter-and intra-preneurship. I highly recommend taking this class as part of The Sustainability Certificate – not only was it a very enjoyable class with one of the best professors at Sloan, but the class completely broadened my perspective on the sustainability landscape both in and around corporations.
* The “Valley of Death” is defined as the stage in a new venture’s growth between the initial prototype and large scale deployment, which typically requires significant capital investment. The Valley of Death in the context of our project is seen to impede entrepreneurs’ ability to establish commercial viability for their products and services.