Top­icsWhat is Impact? — An intro­duc­tion for founders

An intro­duc­tion for founders

What is impact?

More than prof­it: Why your start­up should not only be suc­cess­ful, but also social­ly rel­e­vant.
Find out how you can change the world with your idea.

What does impact mean in entre­pre­neur­ship?

Impact is more than a buzz­word – it’s an atti­tude that takes your busi­ness start-up to a whole new lev­el. At its core, it’s about mak­ing a tan­gi­ble social or envi­ron­men­tal impact. This means not just offer­ing prod­ucts or ser­vices that solve a prob­lem, but active­ly and strate­gi­cal­ly con­tribut­ing to solv­ing press­ing glob­al chal­lenges.

While tra­di­tion­al com­pa­nies are pri­mar­i­ly focused on finan­cial prof­its, an impact com­pa­ny pur­sues a “dou­ble bot­tom line”: It com­bines eco­nom­ic suc­cess with the cre­ation of added val­ue for soci­ety and the envi­ron­ment.

Social impact

Your prod­uct or ser­vice can make a real dif­fer­ence, for exam­ple by pro­mot­ing inclu­sion, cli­mate pro­tec­tion or edu­ca­tion.(source)

Eco­nom­ic suc­cess

Impact is not a bur­den, but a boost­er — many impact-ori­ent­ed com­pa­nies are grow­ing faster than the mar­ket aver­age.(Source)

Rel­e­vance

Sus­tain­abil­i­ty is not a trend, but an expec­ta­tion. More and more cus­tomers, investors and part­ners are pay­ing increas­ing atten­tion to the val­ues a com­pa­ny rep­re­sents.(source)

Did you know?

Impact founders often man­age to open up new mar­kets because they offer inno­v­a­tive solu­tions to com­plex prob­lems. This not only cre­ates sus­tain­able busi­ness mod­els, but also real change.

Why is impact impor­tant for founders?

In a world char­ac­ter­ized by glob­al chal­lenges such as cli­mate change, social inequal­i­ty and resource scarci­ty, com­pa­nies with a clear social pur­pose are becom­ing increas­ing­ly impor­tant. But impact isn’t just good for the world – it’s also a strate­gic advan­tage for you as a founder.

Com­pa­nies that cre­ate added val­ue for soci­ety ben­e­fit from:

Com­pet­i­tive advan­tages

Sus­tain­able and social­ly respon­si­ble com­pa­nies gain the trust of cus­tomers faster and for longer.(source)

Investor inter­est

The mar­ket for impact invest­ing is becom­ing increas­ing­ly rel­e­vant. Investors are specif­i­cal­ly look­ing for start-ups that offer both finan­cial and social returns.(source)

Employ­ee moti­va­tion

Peo­ple want to be part of a com­pa­ny that cre­ates mean­ing. With Impact, you attract the best tal­ent.(Source)

Cre­at­ing mean­ing for you

A com­pa­ny with social impact gives you a mis­sion and a sense of mak­ing a dif­fer­ence.(source)

Lean Impact Jour­ney

Our Lean Impact Jour­ney pro­vides you with a step-by-step guide to inte­grat­ing impact into your busi­ness mod­el right from the start.

Whether you’re just start­ing out or want to opti­mize your con­cept, our play­book will guide you through the most impor­tant top­ics.

To the Lean Impact Jour­ney

Trends and exam­ples of impact com­pa­nies

Impact com­pa­nies set stan­dards and inspire founders world­wide. They com­bine inno­v­a­tive approach­es with a clear mis­sion and thus cre­ate solu­tions for the prob­lems of our time. Some suc­cess sto­ries:

Too Good To Go

This start-up com­bats food waste and helps restau­rants and super­mar­kets to reduce costs at the same time. A clever app is used to deliv­er sur­plus food direct­ly to con­sumers – a win-win mod­el for every­one involved.

Tomor­row Bank

Tomor­row Bank com­bines sus­tain­able finan­cial prod­ucts with a trans­par­ent impact approach so that your mon­ey con­tributes to a pos­i­tive change in soci­ety and the envi­ron­ment.

Bore­al Light

Bore­al Light uses solar-pow­ered water treat­ment plants to pro­vide clean drink­ing water to remote regions, cre­at­ing a sus­tain­able, life-chang­ing impact.

Cur­rent trend

More and more start-ups are inte­grat­ing sus­tain­abil­i­ty and social respon­si­bil­i­ty into their busi­ness mod­el from the out­set. This is not only appre­ci­at­ed by cus­tomers appre­ci­at­ed, but also by Investors reward­ed. Impact invest­ing has estab­lished itself as a key trend and more and more funds are exclu­sive­ly ded­i­cat­ed to impact-ori­ent­ed projects.(source)

Improve qual­i­ty through agili­ty and self-reflec­tion

Self-reflec­tion is a key com­po­nent of Lean Impact. Reg­u­lar­ly ask your­selves:

  • “Are we reach­ing the peo­ple we aim to sup­port?”
  • “How can we bet­ter use feed­back from our tar­get group?”
  • “What resources do we need to max­i­mize our impact?”

Use our self-assess­ment tool to eval­u­ate your project’s matu­ri­ty and iden­ti­fy con­crete ways to improve.

Explore the IMM­PACT MOD­EL

First steps towards your impact

Your impact does­n’t have to be per­fect – it’s the first step that counts. Every start­up begins with an idea. To imple­ment this idea effec­tive­ly, you should con­sid­er the fol­low­ing points:

Prob­lem analy­sis

Think about what social or envi­ron­men­tal prob­lem you want to solve. The best impact com­pa­nies tack­le issues that affect them per­son­al­ly.

The­o­ry of Change

Devel­op a strat­e­gy that shows how your solu­tion will have a real impact — from the first step to long-term change.

Impact Mea­sure­ment

Learn to make your impact mea­sur­able. This will not only help you to learn from progress and obsta­cles, but also to con­vince investors.

Build a net­work

No one has to start alone. Look for men­tors, net­works and part­ners who sup­port your vision.

The IMM­PACT MOD­EL

Ready to find out how mature a start-up is in terms of impact?
Our Imm­pact app helps you to assess your cur­rent sta­tus and shows you con­crete steps to max­i­mize your impact.

Try out the tool

Ready to make an impact?

Join the impact move­ment!

We’ll han­dle your data in accor­dance with our pri­va­cy pol­i­cy.

Sources

Social impact: Social enter­pris­es such as Viva con Agua and Good­jobs show how prod­ucts and ser­vices can make a real dif­fer­ence. Viva con Agua sup­ports water projects world­wide through the sale of water bot­tles, while Good­jobs is a job exchange that pro­motes employ­ment in the social and sus­tain­able sec­tor (link to study).

Eco­nom­ic suc­cess: Accord­ing to a study by Sage, ICC and PWC83% of the com­pa­nies sur­veyed world­wide have declared sus­tain­abil­i­ty to be an impor­tant goal, and 60% have tak­en steps to oper­ate more sus­tain­ably in the past year. This indi­cates that com­pa­nies increas­ing­ly see sus­tain­abil­i­ty as a growth dri­ver.

A BCG study shows that com­pa­nies that inte­grate sus­tain­abil­i­ty aspects into their strat­e­gy per­form bet­ter eco­nom­i­cal­ly than their com­peti­tors in a direct com­par­i­son. The study found pos­i­tive cor­re­la­tions between com­pa­nies’ social and eco­log­i­cal com­mit­ment and their eco­nom­ic devel­op­ment.

In addi­tion, a recent study by the Ber­tels­mann Foun­da­tion on the inno­v­a­tive capac­i­ty of Ger­man com­pa­nies shows that the net return on sales in the most inno­v­a­tive milieus is 27% high­er than the aver­age for all com­pa­nies. This under­lines the fact that com­pa­nies that focus on inno­va­tion and impact tend to be more suc­cess­ful.

Rel­e­vance: The Sage, ICC and PWC study also shows that cus­tomer expec­ta­tions are the biggest dri­ver for sus­tain­abil­i­ty in com­pa­nies. 59% of all com­pa­nies sur­veyed and 40% of Ger­man SMEs try to meet the sus­tain­abil­i­ty expec­ta­tions of their cus­tomers. This under­lines the fact that sus­tain­abil­i­ty is not a pass­ing phe­nom­e­non, but an estab­lished expec­ta­tion of stake­hold­ers.

Com­pet­i­tive advan­tages: Accord­ing to a study on the size and fore­cast of the glob­al impact invest­ing mar­ket, it is grow­ing dynam­i­cal­ly. It is expect­ed to grow from USD 1.33 tril­lion in 2024 to USD 1.88 tril­lion by 2029, with a com­pound annu­al growth rate (CAGR) of 7.17%. This indi­cates that sus­tain­able and social­ly respon­si­ble com­pa­nies are becom­ing increas­ing­ly impor­tant.

Investor inter­est: The FNG Mar­ket Report 2024 shows that impact invest­ments as a sus­tain­able invest­ment strat­e­gy in Ger­many grew by 80% in 2021 com­pared to the pre­vi­ous year. The invest­ment vol­ume rose from 16.6 bil­lion euros in 2020 to 29.9 bil­lion euros in 2021 More infor­ma­tion.

Employ­ee moti­va­tion: A study by the Liotec Think Tank from 2021 found that com­pa­nies that offer their employ­ees incen­tives and ensure that they remain moti­vat­ed achieve up to 20% high­er prof­its than those with­out cor­re­spond­ing moti­va­tion pro­grams. In addi­tion, employ­ees in com­pa­nies with a strong moti­va­tion­al cul­ture stay longer and are more com­mit­ted.

Cre­at­ing a sense of pur­pose: com­pa­nies with moti­vat­ed employ­ees expe­ri­ence faster growth and have a bet­ter chance of sur­viv­ing the com­pe­ti­tion. There is also a clear link between effec­tive employ­ee moti­va­tion and improved employ­ee health More infor­ma­tion.

Cur­rent trend: Accord­ing to the Ger­man Start­up Mon­i­tor 2024 48.1% of Ger­man star­tups are part of the green econ­o­my, an increase from 46.7% in 2023(more infor­ma­tion). The Green Start­up Mon­i­tor 2024 con­firms this trend: 29% of star­tups are con­sid­ered “green” and 47% clas­si­fy them­selves as part of the green econ­o­my — a record high in the his­to­ry of the GSM.

Strong growth is also evi­dent in impact invest­ing: accord­ing to the FNG Mar­ket Report 2024, the vol­ume in Ger­many and Aus­tria rose to EUR 58.2 bil­lion, com­pared to EUR 9.5 bil­lion five years ago and EUR 1.6 bil­lion in 2013(link). Glob­al­ly the Glob­al Impact Invest­ing Net­work (GIIN) esti­mates esti­mates the mar­ket at USD 715 bil­lion in 2020, which cor­re­sponds to growth of 42.4% with­in one year.