24 - Cause Capitalism Unveiled | How Profitable Businesses Can Save the World

Welcome to the Impact Podcast. I'm Eddie Wilson, here to help you visualize what others cannot see, create opportunities where others have failed, and push you to build empires where once there was empty space. Let's embark on this journey together and make a difference in this world. In this podcast today, we're going to talk a little bit about what I call cause capitalism. Over the past 20 years or so, there's been a concept or movement tied to the word sustaino-preneurship. This came out in the early 2000s, and there are a lot of great companies that do well with this concept. As a matter of fact, you know three of them very well. The first one is Tom's shoes. Many of you have seen Tom's shoes. You know that not only do they build eco-friendly shoes, they also have a buy one give one model where they build a sustainable eco-friendly shoe. But then as you buy one, it has enough profitability in it that it purchase another one that's given away for free overseas to someone that's less fortunate. While Tom's shoes is a great model for sustainability, often times the quality is lacking. And so I don't know if you've ever wore a pair of Tom's shoes, but the very first time I wore them on my motorcycle, I lost the entire bottom of one. And I was brought to this concept. I was wondering if a person around the world or on the other side of the world was also wearing a pair at the same time based on my purchase and was riding a motorcycle along with me. And did they lose the bottom of their shoe and were they disappointed in these free pair of shoes? So I think there are certain elements of sustainable preneurship that you have to be very, very careful. And one is quality and value. The second one that we see is the is to me one of the greater, one of the greatest examples of sustainable preneurship, which is Patagonia. Patagonia is a clothing brand that uses again eco-friendly materials. And so much of what they do is to provide not just a profit that then leads into helping other people in very specific parts of the world, but it has a very specific missional element to it. And I think Patagonia does maybe what Tom's does not, which is provide more value as well as reliability and an ultimately quality of product. And then the third one, which today is a very, very hot topic is the company Tesla. The brilliant Elon Musk not only set out on a mission to build unique cars, but he did it in a sustainable eco-friendly way. And by American car standards today, it's actually affordable. And he does it within the realms of American manufacturing. So very, very interesting concept. But today, I want to talk about you because it's not just enough to look and to participate and to be a part of these sustainable preneurship models and to support them. But the question is, what do you do with it? What do you do with that concept? Because I'm going to just talk for a minute about your responsibility as an American, as not just an American citizen, but someone who's producing commerce, producing capital, creating in the American economy. We are one of the strongest economies in the entire world. And based on this opportunity to live inside of the American borders and live the American dream and have the ability to create wealth and opportunity through small businesses, through working for other companies, we have a responsibility. And I just want to make the statement, I am a capitalist through and through. I love capitalism because it's the only model that in the world's stage over the last 2000 years that we've been studying these economic models that it works and it actually creates sustainability. But there is a problem with capitalism. And that is this nasty word called greed. When capitalism is used and used for oneself, it actually ruins the system. And for those of you that oppose this concept of capitalism, you're not opposing capitalism, you're opposing greedy people in capitalism. Because if capitalism is done right, it actually makes a massive impact on society. So for me, I'm not a sustainable preneur. I don't necessarily believe in all the concepts of sustainable preneurship, which we'll talk about in just a second. But I am in fact a cause capitalist, not just a capitalist, but a cause capitalist. I believe that my company should be profitable. And in that profitability, I believe that they do have a responsibility to the economy and to the people that it serves. And I believe that as I make profit, it should actually go to make greater impact on this world. So let's talk about these concepts today. Sustainable preneurship, which if you've followed this or you've looked at any of these companies, is what we would say is it's entrepreneurship that focuses on solving social or environmental problems through sustainable business practices, which I think is in concept good. And really, it's this concept, and part of the concept that I like is this innovation with a cause. Don't just tackle a problem in the world, tackle a problem that can be solved or solve multiple problems all together. The underlying kind of a model of sustainable preneurship is what's called tripling the bottom line. You're tripling, it's making impact on people, it's making an impact on the planet, and it's making impact on profits. Now, while I love those concepts, I think sometimes, just like the Toms model, one of those can compete with the others. And so we have to be careful to create the right balance. It also has this concept of long term thinking versus short term thinking. It's not just about short term profits, it's about sustainability. Can this stand the test of time? Can it create sustainable resources for those that it's trying to help? And then, obviously, I gave you the example of Patagonia, Toms, and Tesla. Now, the problem with this is that the world at large, the business world at large, constantly wrestles with, is this a for profit model or is this a non-profit model? And I am 100% in belief that this is a for profit model. I think oftentimes, when we take on the responsibilities of entrepreneurship in the non-profit world, it sets the wrong precedent. And I believe that business, by and large, should create profit. If you can't create profit, then you've failed at the very first word of sustainable pernureship, which is sustainability. You cannot be sustainable without profit. Think about every non-profit, they all have a lifespan. If you study non-profits and I have one, it's the biggest issue is sustainability of non-profits. It's like, how do you keep them in perpetuation? I've built now a non-profit impact to others that's in over 100 countries. But my mind today in my mid-40s is not how do I do more around the world? It's how do I do more around the world? And as I pass it on to the next generation, how do I endow it? How do I make sure that it's sustainable? How do I make sure that it doesn't go away? Because all the good that I can do in my lifetime could crumble if I pass on this burden of or this financial burden to sustain it. And the good thing about capitalism is it's the this concept of if I create the right product or service and I serve people, I solve problems, then the world at large, the business world at large will reward me. And if I do it in a sustainable way, then the best product, best service, wins. And if I can make a profit at it, then it will in fact sustain itself. So I love non-profits. Non-profits are great at awareness and short-term relief, but they often lack scale, capital, and sustainable models. It's one of the things that I'm trying to tackle in my own non-profit. It's why I actually marry my for-profit business with the non-profit. If you look at how I've always structured my non-profit, it's always been in second place to the businesses that I'm creating, because there has to be some sort of sustainability. And oftentimes, the giving models of a non-profit do not allow for scale or sustainability. So I get asked all the time, and maybe you're asking the question today, should I start a non-profit? I've got a cause or I've got this belief system where I have this passion. And I believe that non-profits are important for the structure of how the capital moves. However, I believe that a non-profit should always be tied to a profitable model. Until you can create enough capital that sustains the non-profit, I think it should be tied to a for-profit. And I think a for-profit is a great complementary piece to a non-profit business. So what I would say is, if you've got a passion for a non-profit or for a cause, my question would be not, should you start a foundation or should you start a non-profit to take your cause on? My question would be, what are you doing to create sustainability so that when you tackle this problem, when you tackle this cause, you actually have the resources to do something about it? It's like people come up to me all the time and they're like, I want to start a non-profit. It's like they magically think that they start this non-profit, they put it out there, and the world is going to reward them with gifts and donations, and all these big corporations are going to give to it. And the answer is, that's not what's going to happen. You're going to have to work your tail off to get very, very small donations when you could do the exact same work in the for-profit world and give double to that non-profit if you would apply yourself in innovation. This is cause capitalism. That's why it's a differentiator between sustainability and capitalism. And again, business can drive systematic change faster than a charity can. Business can drive systematic change faster than a charity can. Oftentimes, as a charity, because you're so bound to those who donate to you, you have to navigate these issues and not offend those that are donating. And so, when you have your own sustainable source that then is feeding the non-profit, which is a great vehicle to help both domestically and internationally, then all of a sudden, you get to, because you are the resource, you get to make the choices based on what you want to do. I have a friend that started a non-profit, left his place of employment, built his non-profit, had enough donations that it covered his salary, and then he was off to the races. And so, his job was fundraising, and he was doing these very specific things. And he had a big donor that he was courting, and he was so excited because this big donor is going to allow all of his dreams to happen. The big donor demanded a board seat and his non-profit. And within a year, this big donor pretty much took over the non-profit because he had the weight of, well, if I choose to walk away, then we can't do these things anymore. And so, because he had the money, he began to steer. And within two years, my friend had stepped away from his own non-profit to go back to work, and now he's passionately trying to build resources so he can start a non-profit again. Think about how irritating or difficult that would be to have your passion essentially taken away from you. So, my belief is, is create sustainable resources, then create the vehicle, the non-profit. There's a lot of case studies, but one of the things that we could be solving. And so, next kind of step, what are you doing and what problems are you solving? If you would like to create a business that models cause capitalism, you do have to solve problems. And one of the old adages that my father always told me was that he would say, Eddie, if you solve people's problems, you'll never lack for business. Think about the problems that businesses solve and the businesses that solve the greatest problems always have the greatest successes. That's why technology companies soar because they're typically solving a problem and they're typically solving it in a very sustainable way. Think about companies like Uber or Netflix or all of the companies that you've seen rise over the past 10 to 15 years. Most of them are solving a small but fundamental problem. When you solve that problem, you never lack for customers. So, what problem are you solving? And so, now we go back to the concept of sustainable entrepreneurship. Once you actually look at the world around you and say, what business could I create? What problem could I solve? Now, we can walk into those concepts, which to me, I've been looking a lot at investing in solar energy startups. Like solar energy is a very sustainable source that can solve problems, but done in a for-profit way could also solve a problem in some of the global regions that we serve. I've also been looking at clean water tech companies. We are digging clean water wells all over the world and there needs to be some breakthroughs in technology. There are some rural areas that water filtration and issues and I've been looking at some amazing technology and it's been fascinating to watch people innovating in this space of water. And then I also have been looking heavy at social enterprises that employ people like former prisoners or homeless or people that are struggling to get back on their feet. And we're doing things like that in places like Mexico and Nigeria and Pakistan where we are essentially taking someone who struggles to find gainful employment and then use the business to essentially train. Now, all of these things work in tandem, but they all should have one thing in common and that is they should be striving for profit. If you are not striving for profit, then you're going to lose the right to continue to influence and move that business forward. I get a lot of flak in this area because I speak so emphatically on this idea of cause capitalism. And I would like to challenge a few of you. And to me, I would have no problem with a debate on this topic. And for me, one of the areas that I get debated and I've been debated in this kind of sector and realm is in the space of religious construct. And so one of the arguments, I was in India and having this conversation at a university and preaching this idea of cause capitalism. And I had a Hindu man who thought he was going to oppose me, but he knew that I had Christian faith roots. And so he said, what about this idea of what would Jesus do? And he said, he was kind of like opposing me on this idea that essentially Jesus wasn't a capitalist. He actually made this statement while we were debating. He said, I believe that Jesus would be more of a socialist than a capitalist. And I pointed him. I said, you know, it's interesting. I said that Jesus, I don't believe, called us to give handouts. He called us to actually make disciples and transform lives. Like Jesus didn't, yes, while he did give to the poor, the mandate was to love and to disciple. It was to train other people up. And I think that there's a misnomer, because as we look at kind of faith construct, which oftentimes is where I get the largest opposition, you have to look at the teachings of Jesus, if you're going to go down this path. And one of his great teachings was tied to the parable of the talents. He talked about how the person who did more with what he had was given more. And the person who hid it in the dirt was everything was taken away from him or her. And so I think that even inside of the faith based construct, if you look at the life of Jesus, I don't think that you can make that argument. I think that still the idea of cause capitalism, working, using the talents you have in order to produce more and then giving to the poor, and then producing opportunity for others, I think is the actual model of what was presented in kind of the biblical construct. And so for me, as I break this down in my own life, I don't think it's an opposition to my faith. I think it's in correlation to my faith. And then some practical takeaways for you, because as you're listening to me talk about this, it's all good and well, but it's like, but I have a dry cleaner. I'm an electrician. I'm an HVAC provider. I am a mortgage broker, whatever it is. How do I actually involve myself in something like this? And so here's some practical takeaways. Number one, what problem are you solving? And for whom are you solving it? Right? Your business is solving a problem. And if it's not, your business is going to be short lived. So first of all, we have to identify who are we solving a problem for? Next, we have to see, we have to, I believe, look around society and determine, can I solve that problem for someone who has the ability to pay? And is there enough profit in what I'm doing to also then go solve it for someone who doesn't have the ability to pay? You know, if you're in the, let's say the building industry, projects like Habitat for Humanity and other places like that are a great place where if you're an electrician, make enough profit off of those who they have the ability to pay, cause capitalism. And then can you actually go give your time to go work for someone or do something for someone who can't pay? Right? Like, that's a great first start. Who are you solving the problem for? And are you willing to solve it for someone? If the people that you're solving it for have the ability to pay and you're profitable, can you now solve it for someone who can't pay? That's step number one. Right? Look at the world around you. Can I solve that for those who cannot pay? And then next, make sure that you are doing it and have the mindset of values and quality, right? Value and quality. Make sure you don't make the mistake of Tom's shoes, which is I'm going to have this great concept of buy one and give one, but the product is so crappy that it's not going to sustain itself. Right? Like, I'm not going to go buy my second or third pair of Tom's shoes when they fall apart. And when they fall apart, I start to feel guilty about the person overseas that received the pair because I'm wondering if they're going to fall apart as well. So make sure that you're doing what you're doing, not just for profit, but it also has the balance of quality and value. And then next, sustainability is what you're doing sustainable. I always talk about the five phase of business, everything from phase number one is startup, then you move into perseverance, which is kind of the pre-profit, you're running out of profit phase, then viability, then scale, then succession. In viability, phase number three, which is what all small business owners should be striving for, you should have this element, which is sustainability. I think that you should be actively working the single points of failure out of your business because those single points of failure, what that is, is if you remove any element, any person out of your business, does the business fail? If that is true, then it's not sustainable. How do you cross train? How do you build redundancy? How do you do things that do not allow your business to fail? Because if you build a sustainable business in a capitalistic society and you tie it to creating output, the last output to help those that need impact, then the last thing you want to do is resist a sustainable model in your business because then when your business fails, the output fails to the impact kind of component that you've tied it to. Then lastly in your business, measure impact, not just income. There are three KPIs that most businesses measure as they deepen their understanding of business. They measure their key performance indicator, KPI, Key Performance Indicator. They measure their key process indicators. That's when people are actually starting to measure and systemize their business. And then sustainable businesses also measure their key profit indicators. The next book that I'm coming out with that I'm almost finished with is the fourth KPI and it's the Key Purpose Indicator, the Key Purpose Indicator. And I'll release that book in short order very soon. But to me, we must be measuring impact, not just income. Are you actually, is there on your scorecard or your stoplight report or your weekly monthly measurement, can you measure the impact you're making? Do you know? Like one of the things that we do inside of the building here of collective influence, as I talk about the number of children that we feed and educate on a daily basis, you know, I did a lunch and learn yesterday and I started off the lunch and learn with my own staff saying, here's the latest on impact to others. We're up to 5,200 children that we're feeding and educating on a daily basis. Why? Because that is the impact measurement. And so if you're not measuring it, if there's no focus on it, then you're just a capitalist, not a cause capitalist. And then the last piece I want to do is just call you to action, call you to action. The world does not need more nonprofits. It needs more purpose driven businesses that last. I'm going to say that one more time because I feel like this is the conversation I have with so many people. The world does not need more nonprofits. It needs more purpose driven businesses that last. First of all, make sure your business can stay on the test of time, make sure it can last, and then use the profits to go make impact with it. I think that you should see yourself in the light. And I would say, I think that we are all called and we all exist to be redemptive agents in the world. And I kind of try to put myself into that framework on a daily basis is that as I kind of go through my morning routine, I think about being a redemptive agent. What is a redemptive agent? A redemptive agent is someone who sees the good in other people. And while maybe not they may not be getting it out of themselves, or they may not be performing at their highest level, I can see it and ask them or push them to perform at that level. Not only that, I can take pieces of this world around me, maybe it's a business or things that are failing, and I can actually bring it back into success, but not just success for success sake or greed sake, but to actually then create a waterfall effect to actually create bigger impact on the world. And so do you see yourself as a redemptive agent or one who just needs to be redeemed? Are you still struggling to get to your highest and best self? If you start off your morning, think through, how do I become my highest and best self, and then don't just focus there, focus on the people around you. Oftentimes, if you will focus on the other elements of society around you and how to redeem and how to create a to be a redemptive agent towards them, you are ultimately living at your highest and best use already, right? So instead of focusing on self, focus on others and what you can do there and automatically you begin to live at your highest and best use. And then next, I want you to go on this journey with me. So here's the ultimate ask. I want to know your ideas on not just sustainable prenuorship, what could we create to make impact on the world, but what can we do together as a community, right? Like I don't want this podcast just to be mentorship or just to be my philosophies or just to be the interviews that I bring in, but a community of people who have like thought who want to make impact on this world. If you're listening today, you've made it all the way to the end of this podcast. I want you to consider what would it be like as a community to grow in this fashion to make sure that we're not building capitalistic businesses just for greed or self-sake, right? But to build something that makes sustainability that helps impact others that can't impact their own lives and create massive change in this world. That's what I'm calling you to. And I want some response. I want you to hit me up on social. I want you to respond to this podcast. Tell me what your ideas are. How can I support you? How can you give me ideas? How can we collaborate together to make sure that the connection, the energy between all of us is not just there to create more for greed or self-sake, but to create more to then expand and expand into areas where we can make impact around the world. I want to ask a question and hear your thoughts on a particular part. You mentioned the waterfall effect of this process. I think one of the best examples I saw, it was the shortest A to B of what you're speaking about, is the sewing center in Guadalajara. So I wanted to ask your question on your thoughts on donations versus gains and then dependency versus empowerment. Sure. I love it. One of the models that I've been preaching to my board as we started off as just a nonprofit and then wanted to build into a sustainable nonprofit, and not just my own businesses, but we began to start building businesses around the world. One of the great successes of this concept for me is Guadalajara, Mexico, because what we have done is we've used our resources to find people who need to be rescued and helped. We've then taken these people. Let's take some of the girls that have been rescued out of very, very difficult situations. Maybe it's sex trafficking or maybe it's abuse or just living on the street and having no home. Then we created a sewing center and we found a lady who had the ability to create these beautiful cultural dresses. In every region of Mexico, they have a dress that a woman is tied to. They have a very specific fashion to this specific dress. This lady that we had talked to had a real passion to help girls. What we did was we actually seeded and we spent $12,000 to essentially buy the sewing machines, rent the space, and we began to take these girls that have been rescued out of difficult situations or helped out of difficult situations and give them gainful employment. Then as they began to produce revenue and profit, we began to create these cultural dresses that are nuanced to every single region of Mexico. We began to sell them. Then we created a sales arm. We were selling them in the marketplace. Now we have Ecom. They're being sold online back in the States. Then these girls began to learn a trade. That happened in about a 30-day window. Now we employ 15 to 20 girls. There's multiple shifts. Then on top of that, we built a small trade school in college. That trade school in college now is there to support and educate and train these girls, to give them an education, not just a physical education of how do I sew this dress, but now actually teach them the things they need to be successful in society. Now they have an educational component. Our requirement is if you come work at the sewing center, we give you a place to live. You live on site there. You're helped, but also then you go to school that we've created. The wildest part is as we started, we have an orphanage there. Now there's enough profit by doing all of that, that then it actually supports the orphanage on a weekly basis. We did that. That was the very first spark of we can create a business that then teaches a trade, that then actually has enough profit and sustainability that we could then create an education to level up all the girls that are coming through it. It makes enough money that it actually supports the orphanage for all the kids. If you think about it, it's this massive ecosystem. By the way, now we've started a coffee, little coffee company there, construction company. We've started five or six other businesses there, and not just for girls, but for guys and for all walks of life. But if you think about it, it was starting the business first that actually was the catalyst for all of this. Starting the business, we could solve a need. We solved the need of education of these girls. Then as we began to make profit, then we began to build the orphanage. Obviously, we seeded all the money for building the orphanage, but now it has sustainability. Now think about all the orphans we actually get off the street are ultimately going to be the ones that grow up in the system that now we can teach and train a trade that can go to higher education than just grade school and high school. Now they can go on to a college education and they can actually provide for everyone else in their community. That's true sustainability. That is caused capitalism to me the greatest example. Can I add something? Yep. We had spent a 12-hour day in Guadalajara filming, visiting the sites. We are getting tacos afterwards. And I think that's when you got the news of the sewing center now after your first initial donation. They have raised enough money through their business and they then took that same $12,000 you gave them and they donated it to another person. Correct. So that's the last piece in my mind. It's the big circle, yeah. We were eating tacos late that night after a long day of filming. I did. I was given the information that night that it wasn't just that they were now a sustainable ecosystem, but they actually completed the circle. They actually had saved their $12,000 and had donated to another program. And so not only that, I mean, they're making enough money off of this that now we've started, you know, we've seeded a bunch of other businesses, the coffee business, the construction business. And it's a massive ecosystem, but it's a replicable system where you can, we're now doing that in Nigeria. We're doing it in Ghana, West Africa. We're doing it in Trichy, Trichy India. We're doing it in Laos. We're doing it in various places around the world, Peru, Colombia. We're consistently now building it. It's become the model of what I've been preaching for 15 years, which is I believe businesses deserve to make a profit. But if you point that profit in the right area, it's not just sustainable pernureship where it's like you're trying to solve a problem with the economy or the world around you. You actually are starting with businesses through innovation that can actually solve someone's problem. And then in that, there's enough profit that you can create sustainability. It's caused capitalism. Yeah. You also mentioned you do not depend on donations for sustainability. Correct. Donations or for growth? I believe that donations are for growth. We do get a lot of donations today because of the Aspire Tour and the notoriety that my personal brand has received. However, I do not want to build this entire model on donations that are happening monthly because now again, it goes back to you're now at the back and call or you're at the influence of whoever is donating. And so these businesses that sustain and the businesses that I've built in the states that sustain give the success of this nonprofit globally the chance to continue to succeed and to live on. And so I love to raise project money or seed money for projects to actually start the machine running. Like when we started the chicken farm in Guyana, I don't want to continue to give the money to the chicken farm. My goal is to give the money upfront, start the chicken farm and then build the chicken farm that is sustainable. Just this last month, we started a business in Thailand. And the seed money was a little over 10,000, 15,000, something like that. And in month two, they already are profiting $2,000 to put back into that so that then the ecosystem is working. But again, it starts with the business. In every city or every place that we're serving around the world, when we started with the business, it actually works faster. The cycle turns faster versus starting with the need. Oftentimes what you want to do is you want to jump in and start with the need like the orphanage. And we have, we've done that, I don't know, 30 times now. But it's always then hard to get the business to run afterwards, right? And so that would be like the place of Columbia. It's like we started the orphanage feeding center. And then we've been starting the business and it's been more difficult to start the business after the fact. It's almost better to start with business, which again goes back to my belief on cause capitalism. I don't think you should start your nonprofit if you don't have the ability to sustain it. I think that you should start the nonprofit after you have some, some sustainable resources to make the impact that you want to make. Even though there was an immense amount of gratitude from everyone there in Guadalajara to watch you interact with the people you gave a shot to, and then them kind of joining you and being able to give other people. So like they were saved and now they have an opportunity to save others. I think encapsulates or encompasses like the goal of cause capitalism. It does. And I think you just put that so well. And it goes back to my belief that I'm a redemptive agent, but that doesn't mean I'm just redeeming someone. What it means is like I'm redeeming them to then go redeem someone else, right? Like it's, it's, it's a, a butterfly effect. It's, it's, you know, passing it on. And, and you saw it firsthand. I mean, the young men, young women that we gave the seed money to to start these businesses, they're so pumped up. They're so excited and they don't feel obligated to me. You know, one of the things that I love about this concept is when I go into an orphanage and they may say, and I kind of hate when they do this, and I tell my directors not to, I don't like when they prompt me up and say, Hey, this is the guy that's paying for all of your stuff. They almost feel indebted or they almost feel less than. But when you are in the yoke with somebody and you're doing the work together and they're creating value for someone else, it puts them at a status where they, they believe that they're, we're on the same, you know, on the same journey together and they don't feel obligated to me, which I love that. I love when they have, they have a sense of pride and belonging and worth because they're doing the same thing that I'm doing. You know, it's like, I think oftentimes people, and I'll kind of end with this. Oftentimes people get into nonprofits because they're very selfish human beings. They are doing things to serve and to satisfy their own dissatisfaction in their own lives. Right? So you serve someone else because it makes you feel good, but oftentimes in serving someone else, it actually makes them feel bad. So how do you serve them in a way that then they get to serve others? And that's what caused capitalism is all about. It's serving someone else in a way that then they get to serve someone else, and then they get to serve someone else versus creating these little obligation machines of, you know, I did this for you now what, right? Like that, that's not in my opinion, a true charity. A true charity is finding the greatness in someone else, and then allowing them to find the greatness in someone else. Thanks so much for being a part of the podcast and for listening today. Love to connect with you further and you can connect with me on social media at Eddie Wilson official on any of the social media channels.