The collaborative ecosystem solving the world’s greatest challenges
When James Hygate received an invitation to join a community of pioneering businesses, which began with a two-week stay in a house with some of the leading minds in entrepreneurship, it came at an auspicious moment.
His company, Green Fuels, a leading supplier of waste-to-biofuel technology, was expanding quickly and Hygate needed advice on how to transform it from a 21-employee operation into a business with hundreds of staff and a global reach.
Collaboration with established businesses can help rapidly scale much smaller companies
"It was an incredible experience for the company," says Hygate, who started Green Fuels in his parents' garage in 2003 and now has customers in 80 countries. "It has really helped us focus on how we can scale the business in the next few years, maximising our impact by transitioning from a technology developer to a global-scale sustainable fuel producer."
The programme, facilitated by Barclays and Unreasonable Group, an organisation that supports growth-stage companies, is an example of how collaboration with established businesses can help rapidly scale much smaller companies as they try to solve some of the world's most pressing social and environmental challenges.
Since 2016, the Unreasonable Impact programme has supported 94 companies, creating over 20,000 new net jobs. Together, these companies have reduced greenhouse gas emissions by 28.8m tonnes, enabled 142.3m people to gain access to affordable, modern and reliable energy services, and diverted 275m kilograms of waste by means of prevention, reduction, recycling or reuse. Barclays’ global network gives it insight into what these growth-stage companies need to scale as well as how boardrooms around the world are viewing problems for which entrepreneurs are providing solutions.
All of that, says Daniel Epstein, founder and chief executive officer of Unreasonable Group, provides for a healthy partnership. "The key to solving global issues has to be collaboration and if we don't take that approach, we are not going to solve the problem," he says.
Epstein argues that forging such alliances builds on so-called “blitzscaling”, which prioritises business strategies that allow companies to achieve scale quickly in order to gain first-mover advantage. "You can find solutions within your own organisation but if you go out and form alliances, you will scale so much faster," he says.
Speed is important in any business or industry. But for those trying to tackle climate change, it is essential: in a report last year, the Intergovernmental Panel on Climate Change (IPCC) stated that humanity only had 12 years left to take action to avoid catastrophic environmental breakdown.
Damian Payiatakis, head of impact investing at Barclays, argues that this time frame has big implications for funding companies working on technology to combat climate change. "We don’t have the luxury of time to wait for the next generation to inherit money and then reinvest it to change the world. Investors need to consider how their portfolios can make a difference and take action now," he says.
The power of networks per se is nothing new. But how does a collaboration between a global bank and smaller companies developing new technologies help to speed solutions?
Rowena Sellens, chief executive officer of Econic, a UK growth-stage company that has pioneered a technique for reducing emissions by incorporating carbon dioxide in plastics, says that the Unreasonable Impact programme has opened new doors for her business thanks to the programme’s global network of entrepreneurs, established businesses and investors.
Sellens says that gaining access to the bank's mentorship has also proved invaluable for solving growth-related issues. "You get the chance to spend time with these people who are focused on understanding your challenges and helping you work out how to address them," she says. "Where possible, they also generate connections."
You can find solutions within your own organisation but if you go out and form alliances, you will scale so much faster
One looming question is how larger financial institutions benefit from such collaborations. After all, business advice, as well as funding, is usually provided by seed and venture capital, which demands equity in return for the support.
Deborah Goldfarb, managing director of citizenship at Barclays, says one benefit is that working with smaller, innovative companies exposes colleagues across the bank to the new technologies and market trends that are set to redefine established industries.
"All of that market insight and the opportunity to experience unique innovation frameworks is then brought back into our business," she says.
Ultimately, says Epstein of Unreasonable Group, such alliances work because established companies are champions of running global operations while smaller companies thrive at disruption and knowing where markets are going next.
"What large multinationals do best are the things growth entrepreneurs struggle with the most and what big institutions struggle with is what entrepreneurs are very good at,” he says. “That makes them natural partners.”