3 Insights from My Conversation with Jonathan Goldberg

Distilled from the Startups for Good podcast

We recently published the Startups for Good interview with Jonathan Goldberg of Carbon Direct. I wanted to share three insights that we discussed during the show.

For the full interview, you can listen online or using your favorite podcast player. These were insights that came up for me in the conversation. I wrote this piece without the guest’s input and it may not be a representation of the guest’s views.

Scheduling Note: I am taking some time off. No newsletter on Saturday.

Insight One: Don’t Confuse Your Stocks and Flows

Don’t confuse your stock and flow. And focus on the right one. It is a common mistake in startups or when learning a new industry to fail to distinguish between the two.

By stock I mean the amount of something (for example, how much is in the bathtub)

By flow, I mean the change in the amount of something (for example, the water flowing into or out of the bathtub) 

In talking about climate change, Jon mentioned that the stock of CO2 is important to address, too.

Much of the conversation about climate change is about getting to neutral. In other words, if focused on the flow of new carbon entering the atmosphere. If a company or a country is carbon neutral, it is no longer adding to the stock of carbon. But the stock of carbon already emitted will continue to have effects.

In the startup setting, a common confusion is to focus on the stock of signups. “We have 100,000 users” you might proclaim.  While it is fun and motivates the team to celebrate these milestones, total signups or users is often called a “vanity metric”.

For day-to-day focus and work effort, it is key to focus on the flow of users. How many users are signing up? How many are coming back to use the product? How many are churning?

(My favorite article on accounting for users in a startup is by Tribe.)

Insight Two: For Scale Offer Commercial Customer Benefits

Are you serious about solving a problem at scale? Don’t rely only on persuasion. Don’t expect people to join your efforts for “the right reasons”. You will want to get serious about capitalism (or the government). 

Jon shared that some startups focus on a “green” premium”. Their business plan calls for charging more  to climate conscious consumers who pay more to help the environment.

But if you want to get to real scale and reach the larger market, price your product to be cheaper (aka “a negative green premium”).

The lesson for social benefit startups more broadly is to make sure that your solution is full of other benefits besides the positive externalities. 

Insight Three: Nonprofit or Academic as Your Foundation

Before you enter a new industry or start a new company, a great first step is to learn and build relationships by involvement in an academic or nonprofit setting.

Before Jon started his company, he met experts in the field this way. Giving of time and money, attending events and learning about the key issues in the field are all beneficial.

You can build the relationships you'll need in a lower stake setting. Spend time in spaces that will put you in touch with the talent or customers that you may need in the future. You may find that you don’t want to make the shift into a new industry as you’re learning. Or you may find that the relationships that you make during this time are critical to success.