A Bay Area startup plays to the crowd, using masses of people to make good things happen.
Wed, Jul 15, 2009 at 05:48 AM
MOB MENTALITY: If your store or business wants major patronage, be willing to take some major green steps. (Photo: virgance.com)
There's a new company in the Bay Area, and unlike many in today's economy, it's hiring. It has a hot product that's attracting investors, international press and scores of followers. The product is called "good."
Virgance is the brainchild of entrepreneur Steve Newcomb and activist Brent Schulkin. It aims to harness the collective power of the people to enact change in small ways. In other words, it motivates the masses to do good things.
The company is like an earthy, tech-friendly parent to a group of inspired children; two of their most interesting offspring include projects called Carrot Mob and 1BOG. Both of these ventures harness collective purchasing power to get businesses to do things differently.
Carrot Mob, for example, uses social-networking applications like Twitter, Facebook or a blog to get huge numbers of consumers to patronize a store most willing to make a change. The Carrot Mob organizers do some background work first. In San Francisco, for example, they found the convenience store most willing to make eco-friendly changes in exchange for a dramatic increase in one day's sales. Schulkin promised thousands of customers to the store willing to set aside the biggest percentage of the event's proceeds. The winner, K & D Market, pledged 22 percent toward efficient lighting and refrigeration units, and the Carrot Mob rained money upon the owners. In three hours, the mob spent more than $9,000 on stuff they were going to buy anyway (beer, cereal, detergent, etc.) and demonstrated the ease of making a difference.
1BOG, or One Block off the Grid, operates on a similar principle. A website gathers families from specific areas who are all interested in installing solar panels on their homes. When, say, Atlanta has 100 families committed to getting a quote, the folks at Virgance broker a deal with solar installers. They find out who will offer the best group discount and hire that company for the work — a lot of work. In fact, for the fourth quarter of 2008, 1BOG installations accounted for 20 percent of the solar installations in the San Francisco area. The families save money, the solar installers get money and Virgance earns a flat commission for brokering the deal. When "good" is the product for sale, everyone comes out on top.
As it turns out, Virgance's positive model of activism shatters stereotypes people have held about the concept. "People are seeing that [making a difference] is so easy," Schulkin says. "Just buy a six-pack of beer and suddenly you are civically involved. People start to self-identify that way."
So why does Virgance need to be a for-profit company? If its product is good, shouldn't it turn as much money as possible back to the causes it supports? Schulkin initially envisioned his work in this manner. But then, he says, "if we were a nonprofit, I would still be waiting to hear back from grants I had written, working another full-time job. ... Fundraising makes up a huge percentage of the time and money [nonprofits] dedicate to causes, and we don't have to do that."
"People think that a for-profit business will somehow lessen or conflict with the activism," Schulkin adds. "What we found is that if we're a company whose product isactivism, which we are, in order for us to make money, people have to want to use us." Virgance avoids skepticism by making all of its data, from payroll and budgets to project plans, public. The transparency gives the company increased credibility, as the masses are free to comment about its processes at any time.
So far, the reactions have been strongly positive and Virgance is expanding its project portfolio — it eventually hopes to enact change in areas like education in addition to the environment. Schulkin is happy to see his faith in humanity paying off. "When we do things together," he says, "our power as consumers is ridiculous!"