3 Startups Proving That ‘For Good’ & ‘For profit’ Are Not Mutually Exclusive

This blog post was originally featured on The Toolbox

Several days ago civic tech startup Citizinvestor shared with its followers their company values. What stood out to me was their eighth core value:

For good, for profit

Profit and social impact are not mutually exclusive. We believe the best way to create real change is by creating new value in the marketplace.

There is a misconception that if a company is for profit, it is inherently not “for the people.” — not surprising considering the turbulence we’ve seen on Wall Street over the past several years.

Thankfully, dozens of civic tech companies, along with organizations like Code for America and the Knight Foundation, are proving otherwise.

The intersection of ‘for profit’ and ‘for good’

Mark Headd, Philadelphia’s Chief Data Officer and civic innovation thought leader, provides great insight into what a civic startup looks like. He explains in his blog, Civic Innovations, that civic startups have particular qualities that make them attractive to both governments and citizens. Both parties have an interest in seeing these kinds of startups succeed because both will realize benefits when they do. Mark provides an excellent definition:

“Civic startups are those companies that, through the pursuit of their core missions, produce what economists call a positive externality. In other words, there are benefits inherent in the services these companies provide that are not reflected in the cost of that service.”

Here are three examples of startups who embody Headd’s definition.

Citizinvestor: the Public Sector’s Answer to Kickstarter

Citizinvestor (whose core values are the basis for this post) is essentially Kickstarter for government. Citizinvestor is a crowdfunding and civic engagement platform for local government projects. Any government entity can post public projects to Citizinvestor.com where citizens can make a tax-deductible donation to the projects they care about most.

ArchiveSocial: Ensuring Social Media Compliance One Tweet at a Time

ArchiveSocial enables public agencies to engage with citizens via social media, while automatically ensuring compliance with state and federal records laws such as FOIA. It provides a legal safety net, and eliminates the time and effort required to respond to public records requests. Essentially, citizens benefit from increased engagement with their government, and the promise of government transparency (i.e. freedom of information) being fulfilled.

SmartProcure: Changing How Government Does Business

SmartProcure is an online information service that provides access to local, state, and federal government procurement data. With 60 million government purchase orders in their database and counting, SmartProcure enables government agencies to make more efficient procurement decisions and save taxpayer dollars, while simultaneously enabling businesses to sell more effectively and competitively to government agencies.

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Dale M. Posthumus

I am glad you have raised this issue, although I would like to see it pushed further. There is a tendency in the “us vs. them” environment between private and public sector employment that only public service is of value to the public and that for-profit companies only care about making money. This is far from an accurate portrayal. I would argue that most people get into business because they believe they can do something better, or have a better idea, or want to resolve a specific problem. The Defense Department created the Internet, but it has been largely the private sector that built it into what it is today. Consider the great value the Internet has brought to everyone, including Govt. If what your business does is not what people want, or you don’t do it as well as your competitors, that is, you don’t give your customers “value”, then you will struggle to stay in business. I work for a Federal contractor. Yes, we work for a profit. But, we provide services to our Federal clients to help them serve their mission. We work along side our govt counterparts. That is also public service. I would argue that virtually any business is a public service in some form, at the very least, in that it is creating jobs for people and providing something for which enough people are willing to pay. Then, consider the non-profit sector, providing billions of dollars (in the US) to supplement/complement a lot of what govt does.

Having said all of that, I don’t mean to equate all private sector work/business as “public service” identical to that of govt. It is part of my on-going battle to tear down the “us vs. them” barriers.