How To Build a Responsible Tech Startup?
The tech industry has a responsibility to be a force for good. The question is: how can we do this?
The tech industry is rapidly changing, and there is no better time to ask what kind of future we want to build. We've seen how technology can transform lives, but also how it can be used as a weapon against us — whether through disinformation campaigns on social media or automated hacking attacks.
We need to take ownership of our products and ensure they're created and used responsibly. But what does that mean? How do we build responsible tech startups?
As a futurist, I have been thinking about this, so let’s dive deep into some important insights about building responsible tech startups in the current landscape.
Traditional Startup vs. Tech Startup
A traditional startup is a company that creates a new product and sells it to consumers. The founder(s) of the startup need(s) to have a great idea, which is why they are starting the business in the first place. The founder(s) also need(s) to be able to convince people that they have what it takes to run their own company and make money from their idea.
Traditional startups usually sell their product or service directly to customers, but they may also sell through other businesses, such as retail stores or franchises. A traditional startup can be a single person with an idea for an app or website or hundreds of people working together on a new product or service that has not been invented yet.
Tech Startups and Traditional Startups Differences
Startups in the technology industry have increasingly challenged traditional companies in recent years. A digital startup can disrupt established companies by using innovative technology to create new products and services.
Several factors explain why technology startups are more effective than ever at challenging traditional businesses. A technology startup can adapt much more quickly to market trends and customer demands thanks to its nimbleness and agility. Technology startups have much lower overheads than traditional companies, which enables them to spend more heavily on research and development to create new products and services.
As a final point, technology startups are often founded by people who understand the latest technology trends and can use them to create new products and services. Traditional businesses are often slow to adopt new technologies, which gives tech startups a significant competitive advantage.
In a wide range of industries, technology startups are increasingly challenging traditional businesses due to all these factors. Customers are often getting better products and services at lower prices from these companies, and a growing number of traditional businesses are being forced to adapt or die.
Importance of Building a Responsible Tech Startup
Despite the overlap between business ethics and social responsibility, there is often confusion over what makes the two distinct, particularly since neither term is widely defined. It is important to note that Corporate Social Responsibility (CSR) is used in various ways by various groups.
In the context of social responsibility, startups frequently experience the temptation to change the world on their own. The reality is that this is not only unrealistic. It can also constrain your ability to make a significant difference.
In startups that lack a corporate budget or even the resources to allocate to social responsibility, the facilitator role is often the most valuable and accessible. By connecting charities, individuals, or organisations that are already doing good with those you want to help, you can make a big difference by using your operational skills, communication, and organisational savvy.
Technology Can Play a Role in Solving the Problem
There is no doubt that government agencies and non-profit organisations are well versed in the nuances of challenges facing specific communities; they have the insight to enhance matters and often make a difference.
By using technology thoughtfully, many of these efforts can be aided. In the complexity of social-human matters, technology does not have 'solutions' in itself; rather, it can be an essential and sometimes unique piece of the puzzle.
Adapting to the digital age has proved challenging for government agencies, partially due to a lack of adequate public technology infrastructure and understanding of emerging technologies. On the other hand, tech companies provide clients with this infrastructure and agility daily. Therefore, partnering between the two makes sense when developing a responsible startup.
In a move that signals a step in the right direction, we learned amidst the COVID-19 pandemic in 2020, that Nuro, a Silicon Valley tech startup that is building the next generation of self-driving technology, announced a partnership with CVS Health to launch a pilot program for autonomous delivery of prescription medications in Houston, Texas, which aimed to help increase access to healthcare and reduce traffic congestion during those difficult times.
A tech company's platform or system can support the work of non-profit organisations. In fact, non-profits are not privy to this information; only 11% rate their digital initiatives as "highly effective." Despite 90% saying they collect data, technology can be used more effectively.
Likewise, tech platforms have had a profound impact on individual philanthropic activities. Take GoFundMe, the world-famous crowdfunding platform that makes social spending more accessible and personal. It has transformed charitable giving across the globe.
As a sector, the tech industry must be very aware of its full range of impact. Technology has improved human welfare over the years but has also had dangerous psychosocial and political consequences.
In the long term, the tech will benefit from a self-critical and self-aware disposition rather than triumphalism. This simple truth may be the greatest enabler of technology for human and planetary benefit. Human values must lead to technology, not the other way around.
Ensuring Alignment With Values and Mission
The startup world is a fast-paced, fluid place — and that is what makes it so exciting. But it also means that your company’s values and mission can get lost in the shuffle if they are not clearly defined at the outset.
With so many people working on different aspects of your business, it is easy to see how your culture can suffer from a lack of alignment.
But there are ways to ensure that you stay true to your brand's values and mission, even when scaling up and adding new employees.
In startups, as in any other business, the CEO/Founder is the most important person. Without them, nothing gets done. However, it is not just a matter of finding someone who can write code or manage people. The right person has to have a vision: What do they want the company to become? Who are they trying to serve? What problem do they want to solve? And how will they achieve that vision?
When you start a company, you create an organisation from scratch. You have no employees or customers yet — so how can you define your vision and values?
My answer: Start with yourself. Here is what I mean: If you believe in something — environmental sustainability, human rights, or open-source software — then that should be reflected in your product or service. Take Apple's environmental sustainability initiatives as an example; if Steve Jobs did not care about the environment and were not willing to invest time and money into making sure Apple products were built responsibly, then there would not be any environmentally friendly products.
Key Considerations for Building a Responsible Tech Startup
Amid rising concerns about the consequences created by technology, new approaches to building responsible tech start-ups are needed. It is essential to know the challenges that your tech company may encounter so you can overcome them and succeed. For instance:
- Tech companies need to succeed fast to stay competitive in a hyper-competitive market. Constant change is a given
- A competitive edge can be gained through customer and market research, and mistakes can be avoided.
- Hire a team of executives to ensure long-term success and prevent founder burnout.
Many aspiring business owners seem to favour technology as their industry of choice. It is an exciting, fast-growing industry with many investors, and if you succeed, the payout potential is substantial. In the competitive tech world, some entrepreneurs fail to consider the unique risks they will face when starting a tech startup. So, here are potential points for developing a responsible approach to a tech startup.
It is a common misconception that ethical behaviour is only for big companies or traditional startups. Startups often think ethics is irrelevant in the startup phase, as it is too time-consuming or expensive, and as they grow and have more time, they will incorporate ethics later. Nevertheless, the best companies know it is better to embed ethical thinking and strong values from the beginning of product development and company culture rather than trying to reverse engineer ethical thinking later when they find themselves in a firefighting situation.
Technology is constantly changing at a rapid pace. Companies need to keep up with these changes and ensure that their products are as ethical as possible and that is best achieved when ethics is embedded in your company from the start.
Digital ethics is one of the most important areas you can focus on as an entrepreneur or developer. It covers a wide range of topics, including privacy issues and data security. As more and more information about our lives becomes digitised, ethical considerations become even more important.
The main ethical consideration for tech startups is privacy and data security. Most companies do not think about these issues until someone hacks into their systems and leaks data that could get them into trouble with regulators or customers alike. Of course, then it is too late. The same applies to developing bias-free algorithms, as biased algorithms can come to haunt you years later.
The very essence of startups is to take risks, and a hefty number of startups fail. However, if one fails to consider society's ethical responsibilities and norms while taking such risks, the results could be irreparable. Thus looking at the broader perspective, most startups should be careful while they execute their vision in compliance with the existing social ethics.
All issues that directly or indirectly affect people are considered to have a social impact. To understand social impacts, it is helpful to look at whether they affect any of the following:
- People's way of life: the way they live, work, play, interact, and share beliefs, customs, values, and a language or dialect that they speak regularly
- Their communities: their cohesion and stability, their character, their services, and their facilities
- Their political systems: their ability to participate in decisions that affect their lives, their level of democracy
- Their health and well-being: Health encompasses physical, mental, social, and spiritual well-being and not only the absence of disease or infirmity.
- Personal and property rights: particularly when economic disadvantage or a violation of civil liberties have been experienced or if they have to fear for their safety, the future of their community, and their children's future.
A company can conduct an environmental and/or a social impact assessment, which analyses, monitors, and manages the intended and unintended consequences of planned interventions (policies, programs, plans, projects), both positive and negative. Ideally, all startups should do this before launching their product, especially when their mission is to impact millions.
An example of how to assess environmental impact would be the carbon footprint of a company, the life cycle assessment of a product or service, expert analysis, etc. Social impact assessment methods include surveys for all potentially affected people, case studies, expert analysis, etc.
Transparency and Accountability to Stakeholders
It is the founder(s) who should be embracing more transparency and accountability. It is in their interests. And the sooner founders grasp this, the better off everyone will be.
A growing number of founders are realising the benefits of accountability. As a startup matures, accountability plays a crucial role (this clearly was not the case with FTX). Otherwise, employees, customers, and partners cannot trust it. It is crucial to build and maintain trust in startups and leaders with transparent communications, proper documentation and all-hands meetings to attract the most talented employees.
Customers prefer companies they can trust, ideally those that publish and adhere to their product roadmaps. Entrepreneurs who deliver on their promises are more likely to find partners who want to collaborate with them.
It is important for future investors to understand the inside operations of the company, as well as the value drivers, both good and bad, to make informed investment decisions.
Taking a Long-Term Approach to Stakeholder Relations
With greater transparency and accountability, founders can align their employees and investors and assist them. If you are upfront with your investors about where things stand and your "stay-awake issues," you will be in a better position to access their help — whether for strategic advice, sales leads, referrals to talent, or partnership opportunities.
A responsible startup is a startup that has a long-term stakeholder approach instead of a short-term shareholder approach. As such, stakeholder management is crucial for responsible startups.
Communication accounts for 90% of a project manager's job. Without effective communication, conflicts can arise, and projects can fail. As part of transparency, stakeholders must be kept informed about the progress of a campaign via open, two-way communication.
Getting and keeping individual stakeholders on your side can be difficult when your team is working on a new or long-term client-facing project. Learn how project transparency can help your campaign succeed by winning the confidence and trust of even the most sceptical stakeholder.
Leveraging Opportunities for Positive Impact
A tech-focused volunteerism initiative can make a positive impact by assisting non-profits and social organisations in recruiting and retaining volunteers. A good example is Blackbaud, which uses social data technology to interact with volunteers across non-profits and social organisations to solve common problems, such as volunteer management, by engaging volunteer networks.
Utilising social media followers, they identify and mobilise influencers that go beyond fundraising. Similarly, Points of Light and HPE are developing a digital hub for volunteerism and community engagement in partnership with All For Good. It uses social data to encourage volunteer opportunities, like creating apps and digital tools to improve people's lives, with family and friends around the world, with friends and family.
Your employees could form teams among offices/departments and compete to solve humanitarian problems with innovative business solutions. By allowing everyone in the company to vote for the most innovative social project, not only will engagement improve, but the project will also achieve a social purpose when employees feel that their work matters. They are happy and fulfilled.
Digital Technology in the Social Economy
The continued rise of digital technology has had a profound impact on society. It has reshaped our economy, changed communication, and enabled new working methods. This is particularly true in the social economy, where digital technologies have created new platforms and tools that change how we think about how we live, learn and work.
There are many examples of how digital technology can enhance efficiency within social enterprises. In fact, a recent survey found that almost 90% of enterprises have embraced digital innovation to improve their operations and productivity.
Digital tools have also been used to help individuals who participate in social enterprises gain skills such as financial literacy and business planning, which are essential for starting new ventures or becoming involved in existing ones. This has led to increased innovation within these organisations as they seek new ways to improve their impact on society through technology.
Technical and sustainable solutions are available for the world's most challenging social problems. Many unsolvable issues in today's world can be addressed with deep technology if sensibly deployed, such as reducing food waste, detecting skin cancer, preventing disease, and more. Deep tech can make a significant social impact, like inciting social/environmental change, but it takes a long time to reach market-ready maturity and requires a lot of capital to develop and scale.
Developing long-term corporate partnerships with deep-tech startups could help your company address today's most challenging and unsolvable challenges.
Building a Diverse and Inclusive Culture
Diversity and inclusion in the workplace are beneficial to both employers and employees. Employers can promote diversity and inclusion in the workplace to create a more productive and positive working environment. In turn, employees who feel valued and respected are more engaged and motivated, which leads to better job performance.
Diverse and inclusive workplaces have many benefits for employers. They can attract and retain top talent, improve employee morale, and boost employee engagement. When employees feel valued and included at work, they are more likely to be motivated, engaged, and satisfied with their work.
Customers and clients also benefit from diversity and inclusion. Businesses that encourage diversity and inclusion signal to their customers that they value them as individuals, which can lead to increased customer loyalty and satisfaction. Likewise, businesses that are inclusive and diverse are better able to understand and meet the needs of their customers.
However, building an inclusive and diverse startup team involves a few key considerations.
The first thing you need to do is to have a clear understanding of what diversity and inclusion mean. Inclusion involves more than racial and gender diversity; it also includes age, ethnicity, religion, sexual orientation, and socioeconomic status. On the other hand, inclusion refers to creating an environment that values, respects, and supports everyone.
Secondly, it is important to establish a culture of diversity and inclusion for your team from the very beginning. This means making it clear that you and your company value diversity and inclusion. To do this, you may want to share your own story, write a diversity statement for your website, or attend events promoting diversity and inclusion.
As a third step, make sure you follow through on your words. There are several ways to do this, but one of the most important is to ensure your hiring practices are inclusive. In addition to considering a wide range of candidates, blind resume screening, and ensuring an unbiased interview process, you should also ensure that you take all candidates seriously.
Lastly, creating an environment where everyone feels comfortable expressing themselves is important. It means having open conversations about diversity and inclusion, providing unconscious bias training, and establishing policies and procedures to ensure an inclusive and diverse workplace.
Developing a diverse and inclusive startup team takes time and effort. It is not something you can do once and then ignore; it takes constant commitment and effort. In exchange for the hard work, a diverse and inclusive team will be more successful and more innovative, creative, and fun to work with.
Successful Tech Startups With a Responsible Approach
Here are some examples of startups using their influence for good:
Figma demonstrates a new way to combat climate change as part of their carbon capture deal. To curb carbon emissions, Figma, a collaborative design tool company, has committed to becoming carbon neutral by 2040.
Recently Adobe acquired Figma for $20 billion. The purchase, announced on Adobe's blog, will see the two companies working to integrate Figma's interface with Adobe's Creative Cloud suite of design applications. This purchase aims to position both companies in the design industries as number one in the market.
As part of its plan to become carbon neutral by 2040, the San Francisco-based company will pay Charm Industrial $250,000 for storing 400 tons of carbon by 2025. According to Praveer Melwani, Figma's head of business operations and finance, the carbon stored will counter the emissions the company produces.
As far as combating climate change is concerned, Figma's deal will not tip the scales. Despite this, carbon-neutral pledges are becoming increasingly popular within corporate missions worldwide.
Canva sets goals for tackling emissions beyond net zero as part of its "be a force for good" mission.
Having been one of the world's fastest-growing technology companies for a long time, Canva's CEO is confident of what it takes to reach ambitious goals. They reached their net zero targets in 2021 and still holding it for 2023.
All of Canva's emissions from global operations and print services are offset with verified, nature-based carbon credits.
The mission of Canva is to empower the world to design and do its best. Supporting the broader community is incredibly important to them. The Clean Air Council, Trees for the Future, Groundswell, and many other non-profits use Canva's Non-profit program to share and champion important messages and causes.
With 3D LOOK's mobile body and scanning solutions, brands can revolutionise the in-store shopping experience by creating virtual fitting rooms. 3DLOOK's patented technology allows clients to instantly create a product catalogue that is made for them, offering a precise fit and a more engaging shopping experience.
Apparel, footwear, accessories, and home goods brands use 3DLOOK technology to accelerate their omnichannel strategies, increase sales and reduce returns.
A key component of 3DLOOK's mission is to inspire innovation in the fashion industry. Their flagship product, YourFit, completely replicates the convenience of buying clothes offline on a digital platform. With the help of its mobile body scanning technology, it offers brands the tools they need to thrive in an era of e-commerce and meet consumer demands for convenience, personalisation, and sustainability.
Customers tend to buy items they like and will keep if they fit well. Companies that have implemented the tool have seen dramatic reductions in returns since implementing it, according to some of their successful case studies, which has a significant environmental impact.
Wirex, a UK-based startup founded in 2014, is already a leader in cryptocurrency, offering a platform that lets customers buy, hold, exchange, and sell multiple crypto and traditional currencies. The company also launched one of the first crypto rewards schemes and one of the world's first crypto-enabled debit cards. As cryptocurrency adoption rates continue to skyrocket across the globe, this platform aims to bridge the gap between traditional and digital economies.
Wirex has announced that it will launch upgraded and innovative products in the UK. New users can now order Wirex's Mastercard debit card, allowing them to spend at over 81 million locations worldwide in various currencies. All UK users will have access to increased daily top-up and spending limits, exclusive OTC exchange rates, and zero fees on FX transfers.
In addition, in 2020, Wirex raised over €1 million in just 90 minutes and smashed its crowdfunding target by 370%. Their upgraded services and nearly 7,000 investors from 94 countries have supported Wirex's mission to democratise cryptocurrency access as a key step in the mass adoption of digital assets for financial freedom.
The Skyfri company is a cleantech company based in Oslo, Norway. It provides photovoltaic asset owners with a digital platform that maximises production and reduces costs. They aim to make solar energy the most accessible, brilliant, and cleanest source of energy. Monitoring and managing renewable resources is done using their automated and integrated software in real time.
There are two parallel trends in solar; the utility market is consolidating while the residential market is growing rapidly. As well, oil and gas majors are positioning themselves for the wave of the future by moving into this segment now that oil prices are high.
Thus, there is a consolidation of ownership, but there is also decentralisation, especially in the corporate and industrial sectors. Increasingly, multinational corporations are installing solar panels on their rooftops, allowing them to access cheaper, greener energy while meeting their Sustainable Development Goals. The market is exploding and is predicted to continue to grow for many years to come. Taking advantage of this market, Skyfri can grow into a leading provider of digital solar asset operations and significantly impact the global energy transition.
All these companies have a few things in common. They are forward-looking, include major global concerns in their main agenda, and give back to the community. This astonishing approach helps these companies thrive because they ultimately think and work for humanity and their future.
Startups need growth to survive, but they should also develop responsibly to ensure their survival and positively impact society. The only way startups and scale-ups succeed by addressing an unmet need. It is not just about increasing market share. Besides driving economic recovery, startups and scale-ups also need to shift mindsets to enable their technologies and ideas to be adopted.
The key to building a responsible startup is to embed sustainability into your business model from the beginning. Increasingly, with the energy transition, there are areas of profound economic opportunity that are intrinsically linked to reducing emissions and improving the environmental impact of traditional industries and processes.
A growing number of investors are paying attention to the ESG aspects of startups and scale-ups. Governments, large corporations, and consumers are now making purchasing decisions based on a given company's full environmental and societal impact. It is becoming a self-fulfilling prophecy that if you wish to survive and thrive, your growth must be sustainable and responsible.
A technology startup is more than a catalyst for growth; it is an engine for growth itself. They are creating jobs, stimulating the economy, attracting foreign investment, and stimulating the economy. They solve problems no other sector addresses with innovative thinking, thus pushing society forward.
As a sector, the tech industry is among the most creative and ambitious in the business world today, with the strongest commitment to its core values. In addition to driving economic recovery, it holds tech companies accountable for their social and environmental impacts. If companies do not hire fairly, pay equitably, and demonstrate social, digital, and environmental responsibility, investors, top talent, customers, and potential partners will not work with them.
Technology is not just about growth. It is the engine of change, and it is great to see that it forces companies to make sound business decisions.