Startup with a mission: navigating with a strategic compass from the outset

There is a growing number of startups that place their social or environmental mission at the heart of their DNA. Beyond good intentions, defining and protecting this mission from the outset is a strategic asset.

Commitment to social or environmental causes is at the heart of the ‘startups with a mission’. Beyond good intentions, this ‘promise’ is a strategic lever for combining economic growth with the development of a fairer, more sustainable society.

From startup to startup with a mission

As global crises intensify, start-ups find themselves at a crossroads. They are often seen as drivers of innovation, capable of solving some of the greatest challenges of our time.

However, their initial commitment often conflicts with the pressure from the entrepreneurial ecosystem for rapid growth, leading some start-ups to compromise their values (Should Your Start-up Be For-Profit or Nonprofit?, by Cait Brumme and Brian Trelstad, Harvard Business Review, 2023).

It was against this backdrop that the ‘Mission-driven Companies’ model emerged, with the Notat-Senard report (L'entreprise, objet d'intérêt collectif, by Jean-Dominique Senard and Nicole Notat, Ministry of the Economy, 2018), which places the raison d'être at the heart of a company's DNA. This concept is gaining recognition, particularly in France, where many start-ups have already adopted this status.

Mission-driven start-ups offer a new way forward, where the company's founding ‘promise’ becomes a compass that guides every decision towards a lasting impact that benefits society as a whole (Société à Objet Social Étendu, by Collectif, Presses de Mines, 2016 / What Characterizes Organizations that Work-Mission-Driven?, DDC, 2024).

Why define a ‘by design’ mission?

A company's mission is more than just a slogan. It must be the backbone of its strategy, guiding every decision and action. As Ranjay Gulati explains in his book (Deep Purpose, The Heart and Soul of High-Performance Companies, R. Gulati, Harper Business, 2022), a well-defined mission from the outset creates an ”inside-out perspective’, where the mission is the starting point for all strategic decisions, rather than being dictated by external pressures.

Defining the company's mission ‘by design’, i.e. from the outset, means that it can be fully integrated into the heart of the start-up. This is the essence of the ‘Responsible Entrepreneurship by Design’ (RED) method (Le Guide de la responsabilité en start-up, by EDHEC Business School, 2023) that we have developed at EDHEC's Center for Responsible Entrepreneurship. This approach aims to support entrepreneurs in aligning their corporate mission, business model and operations, from the earliest stages of project development.

This approach allows start-ups to remain focused on their long-term goals, even when market or investor pressures drive short-term tactical decisions. It also allows them to avoid what we have termed ‘ESG debt’ (environmental, social and governance criteria), i.e. the accumulation of unsustainable practices that can damage a company's viability and reputation in the long term (What is the ESG debt of start-ups, this “invisible weight”?, by Ludovic Cailluet, Yasmine Machwate and Justine Soudier, Harvard Business Review France, 2023).

Create your decision matrix using the mission

As well as setting a clear course in a changing and unpredictable environment, moving from a start-up to a ‘mission-driven start-up’ is crucial in more ways than one.

Referring to a well-defined mission is an asset for creating the company's decision matrix, in other words a tool for evaluating and determining the best option among different choices (La mission de l'entreprise responsable. Principes et normes de gestion, by Blanche Segrestin and Kevin Levillain, Presses Mines, 2018). This is essential for making courageous and differentiating decisions, particularly in difficult times, such as Patagonia's ‘Don't Buy This Jacket’ campaign to encourage consumers to reduce their environmental impact (Don't Buy This Jacket, Patagonia, 2011).

While a start-up's business model may evolve over a number of iterations, the mission must be sufficiently flexible to adapt to these changes while remaining faithful to the initial objective. This sometimes means making costly short-term choices, or foregoing immediately profitable opportunities. But these decisions, in line with the company's mission, strengthen alignment and therefore performance in the longer term.

This is the case of Lush, which has decided to withdraw from the main social networks, which are considered to be contrary to the company's values. Or the French start-up 1083, specialising in jeans and shoes made in France, which chose to maintain 100% French production, rather than give in to the temptation to relocate in order to cut costs. This choice has not only won the loyalty of a committed customer base, but has also strengthened its mission of industrial relocation. As a result, Lush and 1083 have been able to federate a community of customers who share their values, contributing to their sustainable growth.

The mission, the basis for strong stakeholder commitment

A well-defined mission is also a powerful vector for creating and maintaining a committed community around the company. According to Kevin Kelly, co-founder of Wired magazine, a clear mission can turn early customers into ‘1,000 true fans’ (1,000 True Fans, by K. Kelly, kk.org, 2008). He believes that a company's early adopters are not simply customers. These ‘true fans’ are ambassadors who are passionate about the mission, ready to support the start-up even when its products or services are not yet fully developed or still at the MVP stage.

A good example would be the French fintech Green-Got, which offers banking products whose investments are directed towards industries linked to the ecological transition. Since its creation in 2020, this ‘green neo-bank’ has been able to count on a huge fan base to support it, even when it was not yet able to provide all the services of an online bank.

But what's the point of having the best product and the best strategy without anyone to support them? Every department, every team, every person in the organisation must know and understand their contribution to the mission. As the American theorist Peter Drucker summed it up: ‘The purpose of an organization is to enable ordinary humans beings to do extraordinary things’ (Why Read Peter Drucker? by Alan Kantrow, Harvard Business Review, 2009).

For lecturer Simon Sinek, author of ‘Start with Why’ (Start With Why - How Great Leaders Inspire Everyone to Take Action, by S. Sinek, Penguin Publishing Group, 2011), the connection between each individual vocation and the collective raison d'être of the company begins with the ‘why’. Why am I working here? Why does what I do make a difference to the company's ‘big picture’? This approach helps to unite employees, customers and shareholders around a shared vision and a common purpose.

The need to align mission and practices

A major challenge for start-ups remains to integrate their mission into their day-to-day practices, at every level. Defining the mission is not enough: every action and every operational decision needs to be aligned with it to ensure consistency.

That's what start-up 900.care, formerly incubated at EDHEC, which offers personal hygiene and cleaning products for the home, is trying to do. From the outset, the company's mission has been: ‘To innovate and create the bathroom products of tomorrow, to put meaning back into everyday care’.

The company lives out its commitments on a daily basis: reducing the use of single-use plastic by promoting the refill model, creating healthy formulas with no controversial ingredients, encouraging local manufacturing and short distribution channels, favouring rehydratable products to limit CO2 emissions linked to transporting water, etc.

The need to make informed compromises

Even with a well-defined mission, the reality of the market sometimes forces start-ups to make compromises in order to continue to grow. And it's a real balancing act to integrate a mission of impact while ensuring the company's economic viability (Three Challenges To Remaining A Mission-Driven Company, by the Forbes Business Council, Forbes, 2023).

A tool such as a ‘trade-off register’ can be used to document these trade-offs and evaluate them regularly. It ensures that the decisions taken, even if they temporarily deviate from the mission, are made conscientiously, transparently and with the intention of returning to the original objective as soon as possible. This is the example of the responsible marketing agency Badsender, which lists all its compromises transparently on its website, including the use of servers that consume too much energy and are based in the United States.

Protecting the mission

Once the mission has been identified and precisely stated, it is vital for a start-up with a mission to ‘protect’ it and make it last. This is particularly important during the critical phases of opening up capital or transferring the company.

Writing the mission into the company's status can be an effective strategy for ensuring that all shareholders remain aligned with this common objective, and that the mission is not sacrificed for short-term financial gain.

The example of Etsy is relevant here. After going public in 2015, Etsy had to juggle investor expectations with its original mission of supporting independent crafters. Although it managed to maintain part of its mission, it had to make concessions to meet growth demands, such as increasing fees for sellers, ending its B Corp certification or introducing paid ads, which drew criticism from its community.

In conclusion, start-ups with a mission offer a promising path towards a more sustainable and fairer economy. Their ‘promise’ is not just a catalogue of pious wishes: it is a veritable compass that guides every decision towards a sustainable future.

Yet in France, there are fewer than 1,500 mission-driven companies out of 4 million businesses created (Septième portrait des sociétés à mission, from Observatoire des sociétés à mission, 2024).

It is by meeting the challenges of formulating, integrating and protecting the corporate mission, especially in periods of rapid growth or capital opening, that they can hope to see this model adopted on a wider scale.