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Social Entrepreneurship Tips from Annie's, Patagonia and Fund Good Jobs Going into business doesn't require sacrificing your ideals. Here are three lessons we learned about doing good and doing well.

By Nikhil Arora

entrepreneur daily

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When we started Back to the Roots during our last semester in college, we didn't really know what it meant to start a "social enterprise." We just thought it was really cool that you could possibly grow mushrooms on coffee grounds! We were passionate and curious about that idea and knew we had an amazing partnership to build off.

As we dove deeper into the world of mushroom farming and now AquaFarms, we've been exposed to a wide range of incredible companies who have all proved you can make money and do good at the same time. Here are three lessons we've learned from these companies:

1. Focus on quality (from Annie's Homegrown)
If you want to run and scale a social enterprise to really make a difference in the world, you often can't bank on people supporting you because "you're trying to do good." That will only take you so far. You must have an incredible product or service first, and then build the "goodness' around that. Take Annie's Homegrown, for instance. The company didn't spend years working on creating the best sustainably-sourced mac n' cheese, it wanted to produce the best mac n' cheese aound. Period.

Related: Benefit Corporations: Doing Good (and Potentially) Boosting Profits

That focus on delivering an incredible product has now led to an incredibly loyal customer base, tons of products and an extremely successful IPO. Along the way, they've had a massive impact on the lives of the farmers and customers they touch. It all started with putting quality first.

2. Transparency (from Patagonia)
We've been really inspired by the work and mindset of Patagonia. With the majority of clothing companies hiding the true materials and chemicals that go into their products, Patagonia decided to be bare-bones transparent -- telling customers through an interactive tool on their site, the good and bad inside their jackets. The choice is up to the customer to make the purchase or not. While skeptics predicted doom and gloom for the company's sales, the opposite happened. Sales rose. Customers appreciated going into a purchase with all the facts, and, through the process, the company helped push the entire industry forward.

No company is perfect. But they can all be transparent, about quality, processes, etc. Let the customer decide. They won't punish you for it. They may even reward you instead.

Related: Patagonia, From the Ground Up

3. Find good partners (from Fund Good Jobs)
We just raised our most significant amount of capital yet -- a convertible note from a new, highly innovative non-profit investment fund called Fund Good Jobs. Its mission is to create good jobs -- defined as positions that offer growth potential, health benefits and a positive work space -- by becoming a one-stop shop for growth capital.

The fund is in total alignment with our vision of how businesses should operate, which is great because, to grow, we needed capital, and you will too.

Don't be lured in by the myth that if you're raising money you have to work with the stereotypical "shark" VCs. There is a growing movement of socially conscious investors out there who want to not only see their dollars create more dollars, but also some good in the world. Find them and partner with them. Do not settle for business partners who don't believe in your vision and values.

Long story short, you're not alone in thinking you can make money and make the world a better place at the same time. We're extremely grateful for all of our forebears' efforts in paving this path for us.

Related: Pencils for Promise Is Giving Nonprofits a Hard-Nosed Entrepreneurial Facelift

Nikhil Arora


Nikhil Arora co-founded Back to the Roots in 2009 with fellow Berkeley classmate Alejandro Velez when they gave up offers to work on Wall Street to become urban mushroom farmers.

Their two products, the Mushroom Kit and AquaFarm, are sold in over 2,500 retailers nationwide, including Whole Foods, Home Depot, Costco and Nordstrom. Nikhil oversees marketing, product development and operations. The company has achieved triple digit annual growth over the past four years.

Nikhil has been named to BusinessWeek’s Top 25 Entrepreneurs under 25, Inc.’s 30 Under 30, Forbes’ 30 Under 30 and CNN’s 10 Next Entrepreneurs to Watch.


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