Why does it matter?

Reading through a list of questions, that a venture capital fund will ask someone applying for funding, I came across this question:

"Why does what you do matter?"

This is the big WHY question. The "knowing your PURPOSE" question. Clearly you better have an answer for that and that answer better be motivational and inspirational. "We help middle-managers optimize their KPIs" will not cut it (or will it? ??).

Still, it is a very good question and at the risk of falling into a nihilistic anxiety-ridden mental state in case it turns out that nothing matters (or perhaps equally worrying, that everything matters), I will set out to explore what matters to us in Acumex.

Impact in fashion

In recent years it has become fashionable to invest in impact-companies. Impact investment is defined in Wikipedia as investments

"made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return"

It doesn't take much research to see that problems in this space are plentiful and important, which should definitely call for investing in companies aiming to do something about this on some level. Clearly these companies have purpose. They matter. Electric cars. Solar power. Eliminate food waste. Clean water. Better healthcare. The list goes on. There are many important issues to deal with.

How do they do it?

Whatever they do, it is not unreasonable to suggest, that from the outside impact companies look like most other companies. They need laptops, smartphones, offices with furniture, coffee-machines and coffee, food, pens and paper. The employees all wear clothes and use various means of transportation to get from home to their work. They use the internet and use loads of software. And much, much more.

All of this stuff is produced by other companies!

This is good, because it means, that a lot of other companies and their employees matter. They produce the raw materials, the tools, the services and the finished goods that are needed to drive the impact. But, I hear you saying, and right you are: these companies also need a lot of stuff. They do, and they get that stuff from other companies. This could go on forever like an industrial version of Turtles All The Way Down, but we prefer to see it as a giant network popularized as the global supply chain.

Since we all fit somewhere in this global supply chain, we all have the possibility to be a part of the impact. It comes down to choice. The global networks are impacted by the collective choices we make as individuals and as companies. Each purchasing choice we make has an impact down the chain and the complexity of choice is impacted by an opposing flow of "stuff" going up the chain.

In "The Devil Wears Prada" Meryl Streep offers an excellent short explanation of how "stuff" is connected in the global chain and how this is related to choice. Get a refresher here.

The example should only be taken as an illustration of how things are connected. The fashion industry itself is an example of an industry with huge impact, but not all entirely beneficial. Many impact companies are trying to change this.

One of my personal idiosyncracies is that I enjoy watching the end titles after a movie until the very end. I appreciate knowing, that despite appearances, no animals were harmed in the making of the movie, but most of all I admire just how many people were involved in some capacity in making the movie come to life. We are talking hundreds of people (compared to 2 or 3 leading actors). Without any of them, there would be no show. But I have yet to see an accountant get an Oscar for outstanding bookkeeping during the production despite handling hundreds of millions of dollars. Many people quietly do their job and make sure things happen.

So, why does what you do matter?

Around the world in thousands of companies thousands of people are making complex choices every day about what to buy and from whom. Whether companies see themselves as impact companies or not, all companies have an impact and choices will become more and more complex as more parameters play a role in the decision making. Price is only one of several decision parameters now.

In Acumex we cannot make electric cars. Make new medical devices. Provide affordable healthcare or clean the water.

But we can lend a hand - or rather an algorithm and a tool - to the many people who quietly and dedicatedly get up every day to make complex decisions and help them negotiate their way towards better choices.

In the end these many small choices will have a huge impact and this is why it matters.

#AI #negotiation #procurement #purpose