It’s well under a year old, but Virgance has managed to do something completely unusual: attach a business model to activism. How? By starting anti-boycotts. By fostering collective bargaining for alternative energy buys. By letting ordinary citizens dip into huge corporate philanthropy funds.
What started last year as one novel idea – that maybe consumers should try to buy their way into making a business more sustainable – has grown into a venture-funded startup that calls itself a platform supporting Activism 2.0. If the Web 2.0 movement showed that the Internet could be monetized, Activism 2.0 might prove that do-gooders can turn a profit.
Brent Schulkin is an energetic 28-year-old who always seems to have a group of people around him. He certainly did when I met him at the K&D Market in San Francisco’s Mission district one Saturday morning in late March last year. In fact, there were hundreds of people, lined up nearly around the block waiting to get into a completely unremarkable bodega. Schulkin, by using email, Facebook and bevy of other social media tools, had managed to entice the crowd to arrive and shop en masse, forming what he called a Carrotmob (oh, that’s Carrotmob™ now). To earn such patronage, K&D agreed to use a 22 percent cut of sales made during the buying frenzy to make efficiency improvements in the store.
An incredible $9400 in wine, soap, Cheerios and other corner-store fare was rung up that day, and after subtracting all the taxes and CRV (California Refund Value), the store put $1,840 toward green renovations. But the bigger success was the buzz this Carrotmob generated. Consumers are drawn to the notion that they can influence a business to become more sustainable, and not by boycotting the business but by patronizing it – essentially giving it the funds to make sustainability improvements.
After that first mob, Schulkin hoped he’d parlay the effort into a thriving non-profit that stages Carrotmobs regularly and at all kinds of businesses. Instead, he co-founded Virgance with Steve Newcomb, a 39-year-old entrepreneur and political advisor who has been involved in nine other startups, which collectively generated more than $3 billion in market value (he founded Powerset and Loudfire). The two of them have pulled together a growing team of other fresh-faced upstarts and added a number of other campaigns to the agenda.
Last fall, Virgance acquired 1 Block Off the Grid (1BOG), an effort that was started by a San Francisco couple who decided that if they banded together, homeowners could make the process of installing solar panels cheaper and less arduous. 1BOG forms groups of potential solar buyers within cities – it’s up to four now (SF, San Diego, LA and New Orleans) – and then uses collective bargaining to get discounts on the panels and installation costs. In exchange for generating so much new business for the solar installer, 1BOG gets a cut of the profits.
Virgance also just partnered with SunRun, a well-funded solar purchasing program that installs panels on homes but retains ownership of the panels and in return the homeowner pays a reduced rate for power.
Other projects are in the works, including a Facebook campaign called Lend Me Some Sugar, wherein Virgance will act as an agent for managing and distributing a company’s corporate social responsibility funds (a process for which it will be paid) and then Facebook members will get to choose how the funds are spent. Another project to come is a green investment portfolio in which Facebook members will invest small amounts ($100 range) and Virgance will get a cut of investment profits.
Schulkin says the next Carrotmob in San Francisco is in the making, and that this time he’ll be crowdsourcing the business selection process – look for video pitches by three Bay Area business owners to appear on the Carrotmob site and you’ll be able to vote for the one most deserving of a mob.
Virgance also recently picked up a media company, too: Green Options Media. Its founder David Anderson says that what attracted him to the Virgance platform is the scalability it offers the Green Options sites (it published blogs aimed at a number of sustainability-related topics, from transportation to food). “Before, whenever Yahoo would pick up one of our stories, the traffic would crash our servers,” he says.
Indeed, it’s the bandwidth and Web development power that Virgance offers that adds the real business power to the projects it supports.
Virgance has raised $750,000 in funding and has noted that it’s already seen profits through the 1BOG venture.
“We are excited about any idea that causes positive social change,” Schulkin told me last fall, “and we are really excited that 1BOG is the first sign that this will work.”
While we have a spotlight on startups such as Virgance today on 3P, our coverage of companies trying to make good and make money is an ongoing interest, so if you have a tip on a startup we should be covering, drop us a line at email@example.com.