The biggest sustainability challenges that need tackling - four startup founders share their experience
What do startup founders who are living and breathing the sustainability space feel are the biggest problems that need tackling at the moment?
I’ve spoken with four founders to understand their perspectives and what support and blockers they’re experiencing as they build their companies. Their areas of expertise cover materials discovery, food, agriculture and measuring supply chain impacts. So Sarah (Agreed), Andy (xtonnes), Jonathan (Materials Nexus) and Jack (Dodo) are all working across big issues in sustainability.
Between them they have raised significant capital, secured grants, delivered for customers, been through venture building and accelerator programmes and the founding teams have deep expertise in technology, behavioural science and sustainability challenges. They’re a bright bunch and it was a real pleasure to tap into their knowledge on this topic.
What are the pressing sustainability challenges for startups to work on right now?
A quick google will send you to a range of market maps and reports showing where innovation is thriving and venture capitalists are investing. These key areas were acknowledged in my discussions (including energy, food and agriculture, infrastructure, buildings, mobility and waste) but the founders also pulled out specific topics they think are worth digging into.
Sarah, co-founder of Agreed, who are helping accelerate the transition to more sustainable farming, pulled on her behavioural change experience to highlight the need for more connection to the consumer:
“If you look at the various sectors, the big gnarly problems like cement, steel, how we build homes, what we eat and how we travel are really important and there are plenty of people working on these.
An area that I also see as interesting is the connection with the consumer. How are we bringing compelling sustainable offerings to consumers and tapping into their drivers? How can we encourage the adoption of sustainable behaviours by creating better products and services? Things like Sojo and others in the circular economy space are prime examples. We need both the systemic government and business-driven change at scale and also new, innovative, creative products and services that engage, educate and delight citizens and consumers. We need to make sure we are driving the broader behavioural shift.”
- Sarah Power, Agreed
Jack, co-founder of Dodo, who help companies decarbonise, referenced supporting businesses in their transition and exploring alternatives to plastic:
“I might be biased but helping companies to become more sustainable will have a huge impact in reducing our global carbon footprint. There has been some focus on personal carbon calculators but the impact is quite small when the products that people buy aren’t carbon friendly.
An area that I also like is alternatives to plastics and packaging. There are some very interesting companies who are using algae and seaweed (e.g. Notpla) to produce packaging that degrades in a much shorter timeline.”
- Jack Kennedy, Dodo
Jonathan, co-founder of Materials Nexus, a revolutionary modelling platform for materials research and development, focused on the importance of the circular economy and the wealth of opportunity it brings:
“The circular economy is a huge area ripe for innovation. Due to the transition which is currently going on it is likely there will be both new and old waste streams which will need to be circularised.”
- Jonathan Bean, Materials Nexus
Andy, co-founder of xtonnes, who enable businesses and groups to measure and act on their carbon emissions, highlights the enormous number of opportunities in the sustainability space while also pointing to addressing demand and considering circularity:
“Where to start…..The scale of the climate crisis means the opportunities for entrepreneurs to make a positive difference are almost endless.
At the heavy tech end there’s a significant amount of investment and focus going towards carbon capture storage, renewable energy generation, energy storage, food and agriculture. Investment in these areas makes a lot of sense – not least because they’re all critical high impact areas – but most national-level Net Zero strategies around the world place a heavy reliance on technology in these areas - most of which doesn’t yet exist at the standard required - to support the attainment of their goals.
What’s interesting about the areas above is they facilitate and sustain supply. They don’t address demand. This is an equally important aspect of decarbonisation. For opportunities here look to reusing, reducing and driving efficiency in material use.
As for whats most pressing….stick them on a dart board, close your eyes and throw the dart. Whatever you hit, that’s the opportunity for you.”
- Andy Hale, xtonnes
What external forces are supporting and working against sustainability startups right now?
There has been a lot of positive press about the support available for sustainability startups and, in our conversations, Andy, Sarah, Jack and Jonathan shared their experience on the ground of the assistance available and challenges they’ve faced with four key themes emerging.
1 - Funding is available and finding values aligned investors is key:
“The support for sustainability startups has never been greater. I think last year around $40bn was invested in “green” startups – a 100% increase on the previous year. Having said that, this still represents less than 10% of total annual startup investment globally (based on analysis I’ve seen).”
- Andy Hale, xtonnes
“There is a lot of excitement and buzz around sustainability and with it, funding. There is talk about ‘patient capital’ but it’s unclear how patient the capital really is. It’s hard as we’re working in a somewhat broken system - a system predicated on continued growth and consumption - and therefore it’s important to find investors that are clearly values aligned.
With our investors, they’re bought into the team and know the product might shift but they’re also very clearly aligned with our values too. A lot of our contract is tied to social impact and we’re obliged to report on this, which is great.”
- Sarah Power, Agreed
2 - More consistent policies and firmer industry standards would be beneficial:
“From a policy perspective, things could always move quicker. Often events such as COP26 garner a lot of public attention while they’re on, but the lack of meaningful action that results can be frustrating.
Ultimately, introducing more consistent and firmer regulation across industries has been and will continue to be the greatest catalyst to incentivise businesses to act. It needs to happen quicker.”
- Andy Hale, xtonnes
“The main challenge is the lack of industry standards/regulation when it comes to sustainability. This can be confusing to companies who want to become more sustainable but don’t know what parts of their business they should focus on when it comes to reducing their carbon footprint.
While regulation has been increasing in the last few years, a set standard or guideline would help to streamline many of the challenges and help companies to make an impact.”
- Jack Kennedy, Dodo
3 - Hiring the right talent has been a challenge:
“For us the biggest problem is around employment and the current jobs market, inflation caused by the Covid-19 pandemic, issues in Ukraine and Brexit has limited the rate of us being able to bring in new talent to enable us to scale.”
- Jonathan Bean, Materials Nexus
4 - The systemic nature of sustainability challenges and united purpose means there is a real openness to collaboration:
“We are working with a large number of organisations who add to the investment case of Materials Nexus. Our work spans government, NGOs, corporates, investors and academia. I don’t think it would be possible to build a company like ours without a supportive ecosystem.”
- Jonathan Bean, Materials Nexus
“We’re working with Universities, trade bodies, customers, partner organisations, mentors and independent specialists.
The systemic nature of Climate Change means it touches every aspect of our lives as well as every industry. Working with experts from across these different divides enables us to develop xtonnes in the most effective way as well as push the boundaries in terms of what’s possible from a technical view point.”
- Andy Hale, xtonnes
Advice for starting a sustainability focused business now
With all that in mind, how do you get involved and what tips do the founders have if you’re looking to start a sustainability business?
1 - There are lots of ways to get involved:
“Everyday gives new ways to engage with sustainability, from the corporate, investment or founding side. I don’t think there has been a better time. One of my friends, working in investment, recently said to me that he thinks sustainability is the new oil! I think this is true and the world is going to look very different in 10-20 years because of it. If you want to set up a venture there are amazing opportunities like Carbon13, which is a venture builder for those looking to find a team to build a new company. There are also accelerators like Founders factory/G-Force and Third Derivative in the UK who help existing companies to accelerate and scale. There is also the option of joining an existing startup or a climate VC which is a new emerging part of the industry. There are great initiatives like includedVC for those looking to get into VC.”
- Jonathan Bean, Materials Nexus
2 - Love the area you work in:
“Find something that you’re really interested in because you’re going to spend a lot of time in the space. Don’t get really attached to the product, as it will change.”
- Sarah Power, Agreed
3 - Be ready to learn:
“Be curious, be prepared to not know anything and learn everything.”
- Sarah Power, Agreed
4 - A real customer need is still important:
“It’s a cliche example but the reason why Tesla has succeeded is because they built a car that was better than their competitors, and not just that it was electric. The key to driving market adoption of carbon friendly products is to make them better than the alternative.”
- Jack Kennedy, Dodo
5 - Teams can be a source of inspiration and support:
“It would be remiss of me to not reference my experience of doing this in an incredible team. A huge source of motivation for me has been finding people that share my passion and aspirations. You don’t need a team or co-founders to start a business – and this isn’t a tip to find a cofounder. It’s more a key reflection that it wouldn’t have been a fraction of the ride without Bengt, Vanessa and Charlie. Interpret that as you will.”
- Andy Hale, xtonnes
6 - There are no rules!
“Well the first thing I’d say is to be wary of tips. There are no rules in starting your own business. No rights or wrongs. There will be plenty of people – most of whom have ironically never started a business – who will be at hand to advise you in the dos and don’ts of startup life. Just smile, nod, interpret/ignore and crack on in whatever way works for you!
Apart from that…. Do it! Don’t overthink it. Start now.”
- Andy Hale, xtonnes
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Agreed - Helping farmers profit, naturally. Accelerating the transition to more sustainable farming.xtonnes - Equip your business for a low carbon future. Take control of your emissions. Materials Nexus - Accelerating change to net-zero materials. Revolutionary modelling platform for materials research and development. Dodo - Accelerating the path to Net Zero. Dodo helps you decarbonise your company and supply chain in minutes. 