How to grow a post-growth economy, one start-up at at time

Refections on our Post-Growth Entrepreneurship learning lab

Over the last few months, as an experiment, Michelle Legatt and I co-led a monthly learning lab in the The Bio-Leadership Project mycelium community on post-growth entrepreneurship (PGE). The idea was inspired by a mind-blowing lecture in the community last summer from Melanie Rieback , the badass wisdom-keeper of PGE.

What is post-growth entrepreneurship and what is it not? It’s not - building a small business that doesn’t grow, being against growth, or making a cute business in fair-trade coffee / lifestyle products and services. Actually PGE is all about the role of entrepreneurship in creating a fully functioning post-growth economy, an economy where the goal is no longer GDP / financial outcomes, but it’s a good life for all within the boundaries of our planet where money is an essential nutrient, not an outcome. How will we design such an economy? Melanie believes it’ll be one start-up at a time, one innovation at a time - across all sectors. Better get going then hey!

The nub of what this form of business innovation is all about is how to create financially non-extractive business models and ecosystems for businesses that want to do good in the world. The premise is that without intentionally designing the governance and legal structures of a purpose-led business to prevent financial extraction, the risk of these (horizon 2) innovators in environmental and social impact fields getting co-opted back into the dominant horizon 1 (rather than continuing on the path towards realising systemic change towards horizon 3) is very high once the business grows beyond a certain size.

Colleagues and friends that have worked with me over the years will know how deeply painful these particular dynamics of capitalism can be to founders and the whole business ecosystem. It’s healing to know we weren’t special or unlucky or not good enough, it turns out it's how our current form of capitalism works. Here’s Melanie’s explanation of Enshittification (6 mins) (as coined and explained by Cory Doctorow) to the European Commission.

5 north star principles I’m taking with me into my work are:

1. Business as a form of Art / Creative Expression

The most attractive ideas and businesses come from abundant love and creativity, don’t apologise for it or dampen it, relish it and feckin feed it

2. Can we have more words for profit please?

Profit is a dirty word in purpose-led business, and for good reason. Melanie has set up Radically Open Security as a steward ownership business with a golden share, all profits after paying everyone well and reinvesting into the business are channeled to a charity for improving the internet for the common good. A model like this literally designs out the possibility of financial extraction - and this is at the heart of PGE. However, the word profit is often used interchangeably with profit margin, and this is usually what we’re talking about inside a business when we’re talking about managing the ‘profitability’ of certain activities / product lines etc - and that’s really unhelpful - because this optimising for this metric is absolutely not extractive - rather this ‘reinvestable margin’ is one of the most important nutrients we need for business health - to pay everyone well, pay pensions, plan long-term, invest in improving supply chains, R&D projects and great customer experience etc etc. When we’re building a post-growth business, it’s arguably even more important to be pricing correctly and building in enough margin.

3. Where to focus in ESG

This was one of the biggest aha moments we had in the learning lab. As Melanie says, we can work on the E and the S, but without tackling the G, the dynamics of our current form of capitalism mean that we won’t make long-term systemic change. This is about moving beyond technology innovation thinking to business model innovation thinking. If we manage to make the G financially non-extractive, we can sometimes even get the E and the S for free

4. Extraction shows up in many forms

Working towards non-extraction is a foundational commitment and then it’s an ongoing practice to shine a light on it when it inevitably happens and alchemise it into a new and generative form. Get specific, what does / could extraction look like in our business ecosystem? From ourselves, from partners, in the supply chain, from the Earth, what could we imagine it transforming into?

5. Tackle supply chains deeply, one part at a time

Complex supply chains can’t be made non-extractive overnight or from a top down approach, it’s a journey, how can we break it down into parts? If we can help innovate one source/material/supplier to be non-extractive, others will buy that better product too and so our business makes potentially even more powerful lateral systemic impact. Take inspiration from Fairphone and Tony’s Chocolonely and take it one step at a time

How does PGE relate to Life-Centred / Regenerative Entrepreneurship??

My take is that frameworks like PGE and Doughnut Economics are super powerful practical nuts and bolts toolkits to help us innovate from/with where we are today, to shine a light on and shift real-world incentives and models in existing businesses and systems so that we can move in the direction of a potentially regenerative future. Combined with regenerative practices in parts of the business that can be designed from scratch (e.g. services, internal work cultures), inside the same business we can move and bridge between creating a beautiful future in the present (horizon 3) and shifting the imperfect horizon 2 parts towards horizon 3, and there’ll be huge creative rewards in staying on the path

Take the course! it's gifted free for all

Melanie Rieback gifts her course in PGE at University of Amsterdam - Economics and Business for free to the world - over 9 episodes on youtube - if you’re curious about building a business for the long-term, and making systemic change, I can’t recommend it enough.

I'd also encourage the learning lab model if you're part of a team - it's this simple: we watched one/two episodes per month, and then gathered for an hour to discuss them, pulling in real world examples and personal experiences, and I'd say my learning and engagement with the topic was multiple times richer and deeper by doing this, and as a bonus our community grew stronger through the learning and discussions

Bill Sharpe’s Three Horizons Model helps me frame and make sense of so much of this.

Huge thanks and hearty hugs to my co-learners in this Michelle Legatt Thomas Mansfield Anuradha Chugh Jon Conradi Fezile Mauncho M.Ed Emma Smith CMCIPD Emma Winter Laura Melissa Williams Evelyn Hull Tess Wehmeyer Christina Williams and of course Melanie herself and all her team at Non-profit ventures, oh and Franklin de Bekker who put us onto Melanie in the first place!