Why the WHY of an impact and social startup is crucial

by Nina Laenen | 16.11.2023 | Social Impact

The secret to the success of an impact and social startup lies in a clearly defined and inspiring WHY. The WHY of a company is crucial for the motivation and passion of the founders, it attracts customers and investors and serves as the basis for a clear vision and mission.

A strong WHY makes it possible to achieve a positive social impact and develop a sustainable business strategy. It creates trust and has great long-term value for the corporate culture. Successful impact startups always focus on their WHY. The secret to success therefore lies in clearly defining the WHY and using it as a driving force for the company.

1. the importance of the WHY for the success of an impact and social startup

The WHY of a start-up is essential for the success of the company. It forms the basis for a clear vision and mission, which in turn should serve as a guide for all decisions and actions. The exciting thing is that many people find it difficult to say why they are personally committed to an organisation. Simon Sinek has long been concerned with the question of why some organisations are more successful than others, even though they have the same access to knowledge, talent, capital and technology. He has recognised that the successful companies, in contrast to the less successful companies, know exactly WHY they do what they do. He uses his simple "Golden Circle" model to describe three levels of this phenomenon. The levels are called: What, How and Why.

Golden Circle

What: All organisations know what they do. These are the products and services they offer.
How: Some organisations know how to implement the products and services. These are activities that make their products or organisation special and differentiate them from competitors.
Why: Few people know why they are implementing the activities. Profit is not the right answer. It is only a positive result from the activities. The WHY is the purpose and raison d'être of an organisation.

I have already conducted many workshops on this topic at established companies and the difficulty remains: When I ask managers why they chose this organisation - and you take out all the factors like salary, distance between home and the office or chance - they start to ponder and realise they don't know. Sad, isn't it? After all, as a founder or manager, it's your job to communicate an inspiring vision to your teams, to attract new talent and, above all, customers. But if you ask yourself the question, you quickly realise that the answer doesn't come out of the gun. That's okay, but it's better to sit down and find an answer, because there are many benefits that come with it.

2. how the WHY influences the motivation and passion of the founders

It's about having a deep motivation and passion that goes beyond the mere pursuit of profit. When founders have a clear vision based on a strong WHY, they can pursue their mission with more conviction. This inner conviction enables them to overcome difficult times and cope better with setbacks. A strong WHY therefore not only influences motivation, but also the passion for one's own company. Founders are prepared to do whatever it takes to turn their vision into reality. This can lead to investors and customers being infected by their enthusiasm and also wanting to identify with the company.

3. the WHY as the basis for a clear vision and mission of the impact startup

For an impact startup, the WHY is the basis for a clear vision and mission. If you as a founder know why you founded the company and what positive impact you want to have on society, you can develop a clear strategy. As an impact and social startup, you have an advantage over traditional startups. As a founder, you deal with social and ecological problems right from the start and consider how you can solve or at least positively change the circumstances through your business. Here are a few guiding questions that can help you:

What social/ecological problems have you noticed in your environment?
Of all the problems you see, why do you want to solve problem X?
What would you like to see for the environment/society in the future?
Who are you solving the problem for?
What emotions do you feel when you realise that nothing and nobody cares about the problem?
Imagine you have solved problem X, how would you feel?
Why are you prepared to take the risk and go the hard way?
Why do you do what you do?

Answering these questions will help you to put your WHY into words. You need them to formulate a clear, inspiring vision. This vision, in turn, will help you attract people who believe in your WHY. Nowadays, when you have the choice between many different products, the WHY plays an even greater role. We want to be able to identify with the products, people and organisations and are willing to give more money and time to the organisations we believe in.

The goal is to sell your product/service to people who believe in your WHY.

An authentic and convincing "why" message creates long-term trust among all of the startup's stakeholders.

4. the role of WHY in the development of a sustainable business strategy

As a management consultant, I have to say that it is very difficult to support old, established companies with major change projects. Habits and beliefs are sometimes so deeply ingrained that it is very difficult to change them. I have often observed that a great deal of pressure is needed to get people to be willing to change. One of the reasons why I like working with start-ups is that they have the opportunity to build a completely new and fresh system with new guidelines, sustainable goals and a motivating organisational culture. Away with the old burdens!

"It's easier to build a new system than to completely change an existing one."

As a social or impact founder, you have a strong WHY, the North Star for the development of a sustainable business model. It serves as orientation and supports founders in decision-making processes.

5. how the WHY creates connections and develops a strong attraction

A vision that is developed through a strong WHY shows potential talent where the journey is heading and why it is worth joining. If talented people can identify with the founder's WHY, a sense of WE can develop relatively quickly because the team now stands together for the purpose of the organisation. The WHY is the first element that connects the team members of a start-up. In addition, the team should ask itself what values unite them, which in turn reinforce the WHY. The Viva con Aguas WHY is: Water for all - all for water. Water connects all of us! One of the four values they have is "development". They have further described this value as systemic, attention, culture, optimisation and continuity. This value underpins their WHY and supports them in pursuing their goal. Dealing with the WHY at team level ensures that

a) you attract people who believe in the same things as you.
b) a culture is developed that is orientated towards the goal.

It is important that the WHY is communicated regularly so that more people find out about it and the newly acquired talents always have the goal in mind. This lays the foundation for the start-up.

6. investors are also attracted by a WHY they can identify with

Not only new talent, but also investors are attracted by the WHY. In particular, you want investors who share your WHY. These investors have the staying power and are happy to give their time, expertise and network to be part of your company. Investors who are only focused on returns and have little identification with the vision are not the strongest partners you want at your side.

In the world of impact and social startups, the why is the key to success. It is the compass that guides founders through challenges and attracts investors and customers. But the challenge lies in clearly defining your why and communicating it authentically. So, dear readers, take a moment, sit down in a cosy bar and share your why. Because in these stories lies the power that can change the world.