Jeff Cherry wants to transform the way that capitalism is practiced in Maryland.
“The world would be a much better place, much more joyous and humane, if businesspeople, and entrepreneurs, and investors, cared as much about people as they do about profit,” he told a recent gathering of entrepreneurs in Columbia.
It’s an ambitious goal, but Cherry already has a plan in motion. In partnership with Howard County’s Economic Development Authority, he’s halfway through the first round of an incubator aimed at supporting budding new businesses with socially conscious mission statements.
The project, housed at the HCEDA’s Bendix Road headquarters in Columbia and dubbed the Conscious Venture Lab, has been fostering five businesses and one non-profit for the past three months.
The idea, according to Cherry, is to grow a new culture of ethical capitalism from the ground up.
Cherry, the CEO of New York-based investment firm Porter Group LLC, is providing seed money of $25,000 to $50,000 for each Conscious Venture Lab participant in exchange for a 5 to 10 percent equity stake in the business.
It could turn out to be a very profitable investment: a county release announcing the program last summer estimated that businesses housed at the lab could generate between $25 million and $50 million in revenue within five years of launch, if all goes well.
But when Cherry founded Porter Group in 2006, his initial goal wasn’t quite what it is today. He started out by investing in large, existing businesses, such as Whole Foods and Southwest Airlines, before deciding he could accomplish more by encouraging a socially conscious culture in new businesses, instead.
“Safeway is not going to turn into Whole Foods,” Cherry said of this new course. “They might mimic some of their product mix, but they’re not going to mimic that culture. So if we want to change capitalism’s practice, we think one of the best ways to do that is by starting [new] companies…”
The lab’s startups all share a goal of empowering consumers in their daily lives.
For Matthew Colbert, the founder of Spend Consciously, the idea is to encourage people to vote with their wallets.
Colbert has developed an app to educate consumers about the values of the companies they support.
Users can classify the issues that matter most to them – marriage equality, the environment or second amendment rights, for example – and then scan the barcode of their favorite brands into the app to see how they add up. Spend Consciously’s first app, “Buy Partisan,” which uses political donations by business owners as an indicator of their company’s values, will launch at the end of the month.
Colbert hopes the concept will push companies to align with consumer values. The venture makes its money by providing data to businesses on the values most important to their customer base.
“I really saw that in the 21st century… [people] want to know how companies align with their values,” he said.
Michael Couch’s non-profit, Making Change, aims to use technology to engage people, as well. His goal is to provide financial planning education to people with lower income levels, who often don’t have access to good guidance when it comes to spending and budgeting.
The group, founded in 1991 (Couch joined in 2012), already offers free financial seminars, personal financial coaching and free tax preparation. But being in a business incubator environment, he said, helped him realize that the next step would be to reach Making Change’s audience through technology.
“It has to be available when they’re ready for it,” Couch said. “Because a lot of [people], they’re living in what we call the tyranny of the moment… Everyone’s so busy, and everyone’s got things that are maybe more pressing. Most people know that they need some help making their financial decisions, improving their financial knowledge, but don’t know how to do it.”
Helping people improve their lives is the main mission at Self Spark, another business housed in the lab.
Self Spark coordinates “life hack” events that combine Ted Talk-style lecture series with guided “hack-a-thons.” The nomadic organization has already hosted “Spark Weekends” in Singapore and Seattle, and is planning another in Washington, D.C., focused on helping participants improve time management and productivity while reducing stress.
Self Spark COO MacLain Christie said the concept is to bring “behavioral science and behavior change into a more digestible format, and a fun format, for people, who can come for weekends and really work on the goals that are most important to them and fix the problems that have been troubling them for a really long time.”
Themes changes from city to city, and at the end of the weekend, participants are sent off to work on their goals for the 30 days. At the end of that time period, they report back on their progress to Self Spark. If they’ve accomplished their personal goals, the business will give back some of their money, or donate it to a charity of their choice.
The lab’s other business ventures include Shenami, “a digital lifestyle, PR and marketing platform that connect women consumers with women-owned businesses,” Just Good, “a marketplace that connects conscious products with consumers and influences buying behaviors to support a vision for a better world” and Shea Radiance, “a natural hair and body care products company that works with women’s cooperatives in Africa to help grow local economies,” according to an HCEDA information sheet.
In another three months, the current crop of companies will be sent off to flourish on their own – but first, they will pitch their ideas to investors at a demo day on Sept. 10.
The application process for the next round of participants opens July 1.
Julie Lenzer Kirk, the executive director of the Maryland Center for Entrepreneurship, the business incubator arm of the HCEDA, said the “innovative new business models” of the Conscious Venture Lab’s participants would help to create communities that are “a great place to live.”
Cherry says that’s exactly the point.
“We believe that capitalism is probably the single greatest force for human improvement, but if people think that capitalism is, as my friend [R. Edward Freeman, a business administration professor at the University of Virginia] says, ‘a bunch of greedy little bastards trying to do each other in,’ capitalism’s not going to fly. And we need capitalism to fly.”