183: Make Money by Doing Good with Ricky Marton

28
Nov

Ricky Marton is the Founder & CEO of Koru, an easy-to-use software service that helps companies build a balanced and diversified impact portfolio through strategic partnerships. We discuss how you can become profitable by doing good in society, why you need to focus on ESG as a small business, and how businesses can become a catalyst for societal change. 

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Make Money by Doing Good with Ricky Marton

Our guest is Ricky Marton, the co-founder and CEO of Koru, a global platform companies to the impact they aspire to create in the world. Ricky, welcome to the show.

Hey, Steve. It’s great to be here.

Well, you’ve got an exciting topic. You record over 180 episodes, but this has not come up. ESG, and you will explain what it is. So, tell me, how did you stumble upon this idea of ESG to start a business in, and what the heck is ESG anyway?

Yeah, absolutely. So, I’ll save the long, drawn-out history of my life, but I’ve always been inclined to do something good with business. I was involved in some of the startups and social enterprise and ESG specifically, it stands for Environment, Social and Governance. And this is a big framework that’s getting a lot of traction lately that really looks at where companies are focusing their time, their efforts, some external funds, ensuring that they have a balanced initiative in these three different areas.

So they give environmental sustainability, think of social governance and everything that kind of combines that together. And so the business direction is one that we feel is really well suited. We’re going on the up and up. It’s increasing and there’s lots of data showing that companies that respond effectively to ESG perform better and they have a whole bunch of other benefits as well.

Okay, so ESG stands for Environmental Sustainability, Social Responsibility, and Governance?

More or less, yeah. Environment, social governance, those are the three terms and then there’s sub-definitions of each of them exactly.

Okay, got it. Okay, so why should a small business even think about this, you’re doing stuff with ESG, embrace ESG, what are the benefits for small business to invest energy and time and money into this area?

It’s a great question, Steve, and one that I absolutely love. And we like to break it down into just the financial return, which is one thing, you know, you’re bound to make more money, you’re bound to have better products and things like that. But the three main things that we talk about often are you can attract better talent. So think about your employee pool, you keep top talent or you can showcase that you’re doing something great and pulling new talent. It attracts new customers.

So your client base, whether you’re B2B or B2C, you can increase your customers as well as investors. You’re looking externally or internally. Saying that you’re responding to these ESG movements is something that is really desirable from the investor’s standpoint. So pairing those all together, you have a recipe for success and growth. It’s a small business.

Okay. So what kind of talent can ESG attract? Can you give me an example or two that when being involved in environmentally friendly and sustainable practices and being socially there and disposable and governing the business better, the organization better, that it attracts better talent.

Yeah, absolutely. And one fun statistic that I like to bring out that a recent survey actually said that 77% of employees, so just over three quarters, are more inspired to or motivated to work at companies that have a strong sense of purpose. So that’s a large number right there. And with the new generations coming in, the younger crowd, they really put a high value on finding companies that are committed to making the world a better place and are putting their foot down and saying, we’re no longer plundering the planet just to reap as many profits as possible.

77% of employees are more inspired to work at companies that have a strong sense of purpose. Click To Tweet

We actually want to do good. And so a specific example, as you look at new generations going through software programs at school and they’re looking for these tech companies or maybe a local business or a small startup. If there’s companies that have mission reports versus ones that don’t or sustainability or ESG reports versus ones that don’t, they’re heavily leaning toward that side to say, I want to be part of a company that’s not only progressing my own skill set, but I can find myself doing work that’s actually meaningful. And that’s what these new generations and the older ones are starting to realize is really beneficial. So hope that clarifies that.

It’s really interesting. I guess it’s a function of people, not just, it’s not about survival anymore. It’s so, I believe, I mean, I’m an immigrant, so I’m biased, but I believe it’s so easy to make a living in this country. It’s not really about whether I can put bread on the table. It’s all about whether I can make a bigger impact, can be part of a bigger story, that I can be excited to get up every morning because I’m furthering a mission that I’m very invested in.

And I see my clients as well, if they can articulate their why in a compelling way, then it’s like honey for bees. People love it, they want to be part of it, they want to be engaged, they bring all their emotional energies to it. It’s not just their intellectual capital and their heads, but they will actually be thinking about it even outside ours, how they can support the company. So that’s definitely a great benefit. What about attracting customers? How do customers, do they react the same? I mean, they are not part of the story themselves. What do they care?

And so another stat, we’re going through my pitch deck here. So I know these numbers inside and out, but 90% of consumers in recent surveys have said they’re more motivated to purchase from companies that are committed to making the world a better place. And so that’s the beautiful thing is we are now in an era where companies are realizing that consumers and users of their products, whether they’re new users that have never touched their brand before or existing ones, they’re saying if your product is sustainable, if you’re thinking about the environment, if you have good governance within your company, they’re actually more likely to switch over to your brand or your product or your service, even if, and stats show this, even if it costs more than what you’re originally using.

And so 90% is a massive number. And this is one of those things that’s really great because as a business owner that’s in the space, you read the tea leaves and you say, okay, if we are actually helping companies create this change and make sure that their new, their clientele, their old clientele, they know that they’re making this change. A customer who is in a store looking in an aisle, they’ll look for the green, the eco-friendly, or if they’re online, I get ads all the time, these shoes are made from recycled water bottles, or this company’s ensuring that every bit of technology puts out, it also tries to revert and do some good with the world, and those are the companies that I’m drawn to, and I know that I’m not an outlier anymore, and it’s only gonna continue to go that direction.

Consumers are more likely to switch over to your brand or product, even if it costs more, if it's sustainable and environmentally friendly. Click To Tweet

I mean, it’s great to know that you’re not putting more burden on the environment. My kids tell me that when they go to Goodwill to pick up some clothes, they don’t do it because they necessarily don’t have some pocket money, but they don’t want to create more waste by buying a new garment that maybe is gonna be out of fashion in a year and maybe the quality is not that reliable, not that durable, and they’d rather pick something up that is gonna be environmentally friendly.

The other thing I see is this whole idea of fair trade. So you don’t want to support companies that exploit people. So if you can pick up a tea that is fair trade, then that’s going to be, that’s going to taste better, right? Absolutely. Absolutely. That’s awesome. So what about the investors? How does it make sense for investors? Don’t they look for the most profitable investments? Why should they care about, or how can they even afford to care about ESG if it maybe puts an extra cost burden on the company?

And so this is actually the tricky one. And I’ll pull two stats for this and I’ll have to tie my head to your quiz to me here. But I know that on average nowadays, $1.4 million is put into ESG research by institutional investors. And that’s basically saying that they’re putting a lot of time and effort to say, okay, are our current portfolio companies paying attention to this? Or are future portfolio companies paying attention to this?

And you’re exactly right. By investors, their sole job is to create money, to create returns for their portfolio, their LPs and things like that. But the way that they look at it, look at those other two factors I just mentioned. If employees want to work for these companies, consumers want to purchase from these companies, then ergo, these companies are going to outperform companies that aren’t paying attention to this work. So, small business is a perfect example.

If you have a small client base, you have a local community presence, if you’re looking for external investments, you could say, I’m supporting not only our business, we’re not growing XYZ month to month, but we’re also supporting these local initiatives. We’re also ensuring we have an equitable and diverse board. And through that, we actually believe that we can outperform the other competitors in our space.

And the beautiful thing about this work, ESG, sustainability in general, and a lot of my research has actually covered this, is that we’re finding creative ways to showcase that sustainable business practices are actually beneficial for business at the end of the day and from a variety of aspects. But you can actually cut costs, you can make your supply chain more lean, you can find new suppliers that are doing things at better prices.

The beauty of ESG and sustainability is uncovering creative ways to demonstrate that sustainable business practices benefit businesses in various aspects. Click To Tweet

And I can give example if that’s helpful where one of my favorite companies is a used case story, Celestial Tea. You think the Sleepy Tea, there’s a little bear on it, very well known. Their headquarters in Boulder, Colorado, where I got my master’s. And at one point in time, they’re responding to all these environmental movements and they’re trying to make their product a little bit more eco-friendly. And they were the first company that actually got rid of the little string, the little tag on their teabag that you’re going to dip it in. And maybe you get your spoon to do it instead, or you get your fingers a little wet or something like that.

But at the same time, if you’re producing millions and millions of teabags, and all of a sudden you don’t have a string, you don’t have paper, you don’t have printing for a little paper, that’s cutting a massive cost and expense. It’s also cutting a burden on what the actual production entails, a little staple, the paper, the pen, things like that. But at the end of the day, you’re actually reducing the cost of what your end product is while becoming more sustainable.

And those are the little angles that you have to look at how to be creative within your own business, your own niche. So that’s a perfect example where an investor would look and say, you are sustainable, you are green, you are friendly, and you also reduce the cost of your product. Sign me up for this. Where do I put my money?

Being sustainable, green, and friendly while reducing the cost of your product is a winning combination for investors. Click To Tweet

Well, you picked the right example because I am a big tea drinker. And actually, I love those pods because I can stir them. With the stingy thing, it goes on the spoon and then it drips. I hate it, but I can use a chopstick, I can really quickly stir this pod. I can throw it out and I’ve got a quick tea, which I’m into. So I definitely agree with this. And I think the bigger point here is that constraints catalyze creativity. So by putting this at cost to yourself, it has to be fair trade, or it has to be most cost-conscious, it will actually force you to come up with better ways of doing things which will end up being even more practical. So I love that. This is great.

Yeah, I could not agree more.

Now the other point I want to make, you talked about this community and support in the community, so I observed, actually, this gentleman who owns a local Midas car repair shop chain now. It’s a chain. He’s one of the most successful in the whole Midas chain. His name is Mark Smith. He’s here in Richmond. And he’s very big on community support. So his whole time he’s giving money to food banks. He’s sponsoring marathon dancing at high schools.

And he goes to disadvantaged kids and helps them with different initiatives. And he puts this up on his social media and he’s got a huge following. And I dare say, I mean, he’s very profitable. His prices are actually higher than the competitors, but his business is growing. He keeps opening new locations. His business is absolutely thriving. So this principle of community support, attracting customers definitely seems to be true in his case as well.

And if I can respond to that, too, I think that’s a perfect example. It’s like it’s a small business is growing, getting more location, more location. And what you have to remember too, you still need a good product. I’m sure he fixes the car, that’s a top notch job with it. But the fact that he’s also supporting these community initiatives, he’s thinking about it from a different perspective and showcasing it on his social media and things like that. Like, hey, we actually do care. We’re more than just a car manufacturer or sorry, a mechanic fixing your car, but we’re doing a couple steps beyond. And because of that, it looks like he’s gaining some benefits from it. So that’s a great use case.

So, okay, that’s awesome. So what are other use cases? So how can a small business further an ESG agenda? So we talked about the community support, we talked about innovative ways of cutting costs to at the same time improve the environmental friendliness of products. What are other ways that companies can think about this topic?

It’s a good question. That’s something that we kind of consult and speak up from time to time as well. It’s like, you know, you use one use case of the tree example or mechanic example, and this doesn’t apply to all businesses, of course. But I think the underlying velocity that I like to put forth is it takes a little bit creativity, but every business has its unique assets or materials or locations or something that they’re doing that sets them apart from other business sectors and what they’re putting forth in the world.

And I urge business owners to put their thinking cap on and work with their local stakeholders and say, how do I use what I have to encourage and help the community? And I use the term community just because a lot of local small businesses. They’re not interested in supporting international causes, like, you know, it’s wonderful and great, but they wanna help what’s going on in their own backyard, and I think that’s what they should be focusing on. And so a good example is there’s a small little coffee shop down the street here that I absolutely love, and I go to Starbucks every now and then, but I always prefer a small local brew.

And every, I think it’s every Friday and Tuesday night, they open up their place, they close at seven o’clock, but from like 6.30 until 9.30, they have just community programs. And that’s everything from school to local painting for underprivileged areas to really, you name it. There’s wide across the board. And that’s just a perfect use case. They have a space that’s open for it. And instead of having a local nonprofit have to pay for operation costs to keep the lights on to another location, they just allow them to open the doors.

And so that’s a really simple use case. Another one I like to use, and this is your list and you’re like, I’m not Uber, I’m not a large tech business. But just the other day, I was on Uber, the DriveRideshare app, and I got a notification that says, would you like to support the wildfires that are happening over in Hawaii? And horrible occasion, definitely. But what Uber did was they realized that they had an extremely large network, users on the millions day to day.

And by just incorporating a small little development change in their platform, they’ll be able to say, hey, we’re not profiting from this. We don’t want to take anything from it. But we want to showcase that we believe what happened over there was terrible, and we want to support it. And so what they did was they probably brought in a couple developers out of their army of technical guys and they said, let’s just put a little button that raises awareness, that raises some funds. And to me, this was such a brilliant but simple move because it showcased that Uber cares.

You know, it could be for PR, it could be for marketing, but at the end of the day, they’re probably funneling hundreds and thousands of dollars over to it. And it was because they were able to tap into what they already have, that network. And so a local community, a business, or a local technology company, they have access to networks, they have a platform, they have a location. And I think it’s just looking at it, taking two steps back and saying, what do I have that maybe I take advantage of? Maybe it’s a machine with warehouse space or maybe it’s some sort of equipment that I can pass along. And how do I encourage our employees to volunteer their time to support the local community? And how do I boil it all together into a friendly initiative that really helps out others that could use it?

That’s great. And while you were explaining this, I remembered another example, perhaps. Sometimes people are already doing good, but they’re just not aware of it, and therefore they cannot communicate with. And I had this CEO who was in an appeal group that I facilitated years ago, and he ran a laundry business, basically laundering linens for hospitals and for hotels. And he told the group that he was really struggling with attracting younger, high-flying executives flying executives to steam and it was a family owned business and they badly needed some fresh blood.

And the group brainstormed and one of his arguments was that, one of his challenges was that this is a dirty business, it’s no one wants to work in this, the environment is very steamy, it’s hot, it’s all these big machines, it’s not high tech. And then the group brainstormed and it turned out that they were really green. And we also figured out that it gives a lot of comfort to people to get these clean linens in hospitals and hotels. So they started to communicate this, and within six months, they attracted two high-flying executives on the team who wanted to be part of the story of creating this green movement in the laundry business. It was really fascinating.

Yeah, man, maybe I need to hire you for our marketing because those are the perfect examples that you sometimes don’t even realize that you’re already taking these steps and maybe you can purchase this or you went this direction because it was a great branded cleaning product or something like that. Or maybe in the back of his head, I want to support the environment, but it’s little decisions like that that can make such a large difference. And this was a perfect success story from that regard. I love that.

So, what does KORU does to help businesses create that positive impact? How can you guys get involved and what do you do?

I appreciate you asking. So KORU, we like to say that we are a company’s new private impact expert. That’s one of our tagline. Like you mentioned at the beginning, we help companies make the change and create the world that they should be and would like to help to build. And so we’ve done that by the 10,000 foot view here, but we’ve created essentially a platform that acts as, I like to say, a dating app between companies and what we call impact organization. So using advanced technologies, we essentially have an analysis function.

KORU is a company's new private impact expert, acting as a dating app between companies and impact organizations. Click To Tweet

So we look at where a company is, look at what’s material to their business, what industry they’re in, where they have geographic locations, and then we pair them with an organization that can help them do good for lack of a better term. This could be a research group that’s pushing forth with some really innovative research that’s gonna help with their business. It could be just a nonprofit, whether local or international, someplace that supply chain, and maybe it’s in the same thematic region.

So if they’re a beverage company, they’ll be supporting water projects. And then we pair them together and we pull it all together with a nice, profound database that allows them to really see the change that they’re making. So my whole philosophy, and like I said at the beginning, I’ve always been a proponent that business can be an extremely positive growth factor, a catalyst for change, and we’re essentially tapping into this growing movement, all this stuff that we’re talking about, all this ESG and sustainability works, and we’re trying to make it easy for companies. And at the end of the day, that’s what Cobra’s all about.

I mean, I’m also optimistic. I mean, maybe it’s not good to be optimistic because it makes one complacent as well, but I’m kind of, I believe that business, especially American businesses, are going to figure this out, how to save the environment, and it’s already happening with the electric cars and with the environment to defend the materials and the self-driving cars as well, and the raising awareness.

I think it is business that can actually be much more nimble and move faster than government. Government is always going to be a controversy and tension and horse trading and all that stuff. But businesses can make a difference. When Amazon, some years ago, when Amazon announced that they’re going to go to net zero by 2030. I mean, this is awesome. I hope we are holding them accountable to do that. But the kind of stuff that makes a lot of sense. So what are some of the emerging technologies? And we have to wrap up in a couple of minutes, but I wanted to still sneak in this question. What are some of the emerging technologies that help people take advantage of these ESG opportunities?

It’s a fun one. And I know we’re to wrap up, but I could go for a while this conversation. But nowadays, and it’s something that that KORU really supports, is that the idea that these advanced technologies, call them AI, generative capabilities, we’ve all heard of Chat GPT. But also there’s other ones out there that are really changing the name of the game as far as what companies can do to support causes, but also the causes that people are aware of.

So a good, really clean example is this look at the basic Internet. Twenty, thirty years ago, there was no way to find a certain program or a social impact cause or organization. And now the snap of a finger, even using Cobra’s platform, but just Google in general, you can find certain causes, you can find organizations that you really care about, you can find ways, solutions for your own business to be more environmentally friendly. And so those are fairly basic technologies.

You think about Internet, the basic browser, computers and functions. But now the next stage of that is working with certain companies like KORU, but also there’s a wide variety out there that can really identify certain pain points within your supply chain. It can look at inefficiencies, it can incorporate really innovative technologies. Like a good example, one of our own team members who worked for sustainability at Chipotle for a while, and they put a little hockey puck-like sensor in their garbage cans.

I was able to figure out how often they were filling their cans to reduce the amount of times that trucks would come pick up their trash. So less trucks mean less emissions, less truck pick loads mean they can fill up more. And just, you know, there’s lots of data behind it. But, you know, everything from low flow toilets to more innovative light switches to AI and other natural language processing that’s really helping enhance the efficacy of their work.

It’s a wide, wide world of extreme benefits that we can see, and I’m loving the fact that technology is only going on up and up, and I think we’re only going to see more benefits and more supporting of companies and individuals trying to really bolster their own ESG initiatives at the end of the day.

Emerging technologies, like AI and generative capabilities, are changing the game for companies to support causes and be environmentally friendly. Click To Tweet

That is awesome, and it helps to be optimistic, and I just have to avoid the complacency.  So fantastic. So if you’re, if our listeners would like to learn more and check out what you guys can offer and how if they are small or medium or large business and they want to get more engaged and they want maybe a menu of solutions that they could pick whatever works for them. How can they find you guys?

So the easiest way is just go to our website. So it’s KORU.global. Simple as that. And that’s K-O-R-U.global. And I’m happy to fill all emails, any inquiries and things like that, you want to reach out, my email is just ricky r-i-c-k-y at koru.global. And right now, anyone that mentions that you saw the Steve podcast, this is obviously a great, great business resource. And I love listening to your episodes, I have to say so my little fan attention to you.

But we’d obviously love to work with you specifically and discounts and all that fun stuff we can work through. But more than happy to just speak through it. And a lot of times, I love this creativity. I love brainstorming around how your business can help. And that’s just a side fun project. So I feel free. Reach out, see our website, let us know what we can do to help. And I’d love to make the world a better place for you.

Well, that’s a very good segment of the final thoughts. So definitely this is the future. So let’s be more there, more environmentally friendly, and it can actually create more profit for us because it triggers of creativity. It’s a constraint that will help us think of new solutions. So Ricky, thanks for coming to the show and inspiring me and our listeners as well, hopefully. And if you’re listening to the show, check us out on YouTube. All the shows are on YouTube. You can also check out our LinkedIn company page, Steve Breda Business Growth, because we’re creating short, highly engaging videos with these frameworks that we’re talking about. So you can watch a bunch of them in a minute, a minute or so, so check us out there as well. So thanks for listening, and thanks, Ricky , for joining me today.

Thanks for your time. I really appreciate it, Steve.

 

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