“Our next wave of true innovation will focus on social impact. No longer are the days of innovating for innovation’s sake. Social innovation is reinventing how we live, work and play.”
—Dr. Sokwoo Rhee, Head of LG NOVA and SVP of Innovation for LG Electronics
In business, meaningful growth can’t happen without innovation. Today, many organizations seek to channel innovation beyond the business to effect change and increase resilience across a broader, more socially impactful spectrum.
The next generation of transformative innovation will be focused on creating accessible, sustainable technologies and solutions that contribute to the betterment of people, communities and the planet.
With this mission now fueling innovation, the very definition of what makes a business idea “good” has evolved. Today’s innovators and decision makers evaluate their success against purpose-driven benchmarks that move a product or service closer to their organization’s goals for positive social impact.
Let’s take a closer look at the characteristics of socially impactful business ideas and how those ideas are shaping market trends across multiple industries.
The Anatomy of a “Good” Business Idea
As we brainstorm new business opportunities and set new goals, it’s common to ask, “What makes a ‘good’ business idea?” However, this line of thinking is far too subjective and constraining.
The question we should be asking is, “How does a social impact lens shape our business ideas?” At a fundamental level, the most impactful business ideas are those that meet the following eight criteria:
1. Market Attractiveness
Factors such as market size, growth rate, competitive landscape, barriers, trends and market dynamics are important determinants of whether or not you will be successful. Market attractiveness is still highly important within the social impact lens. Just because you're working on a business that is focused on doing good doesn’t mean that you can ignore factors such as:
- Who the business is for
- Whether opportunity for growth exists
- Which competitors are in the market space
- What challenges stand in the way of success
These are questions that are important to face head-on so you can determine how to pivot and build ultimately successful solutions.
2. Team Potential
Does your team value talent diversity, track record, domain knowledge, existing investors and external validation? The team make-up is crucial in any business, social impact or otherwise.
Diversity brings together a broader set of voices and viewpoints that can grow the market size, applicability and attractiveness of your solution. Expertise and experiences enable businesses to build upon the learnings of others, accelerate and make the right business decisions faster. Although a business is not necessarily social impact-driven just because it includes diversity, diversity in voices allows it to better address more communities and deliver solutions that will be more likely to solve their diverse challenges.
3. Collaboration Potential
The social impact is amplified when there are opportunities for new joint business with other social impact-focused organizations and access to complementary assets and capabilities in services, technology and channels.
4. Innovation
Powerful business ideas provide unique collaboration opportunities with existing technologies that together enable development of solutions that do not exist today and open up expansion into new markets.
5. Right to Win
The most impactful ideas leverage competitive advantages, intellectual property, differentiation and clear solution effectiveness to blaze a trail within the industry.
6. Traction
Successful business ideas must continually move forward and show gains in performance, user growth, product engagement, unit economics and other essential metrics.
7. Viability
Purpose-driven business ideas must be actionable and viable. This includes factors such as the ability to execute the idea, business model sustainability, long-term potential and scalability.
8. Focus on Impact
Socially impactful business ideas are purpose-driven, contribute to societal improvements and create sustainable change at the individual, community and global levels.
How Startups, Founders and Entrepreneurs Shape Business Ideas to Focus on Impact
Now that we’ve identified the components of an impactful business idea, let’s explore how startups, founders and entrepreneurs are applying these practices to shape business ideas that drive positive change across diverse industries and communities.
The top trends in today’s market focus on electric mobility, digital health, the metaverse and smart living. Although you may be less familiar with some of these industries, the rise of technical convergence all but guarantees you have been influenced by one or more of these technologies.
Electric Mobility
Electric vehicles (EVs) are rapidly gaining market share in some regions. However, sales are less robust in developing and emerging countries due in part to a lack of charging infrastructure and the high purchase price.
New technologies and business models, including “Charging-as-a-Service” mobile EV charging solutions, are expanding electrical vehicle and EV charging infrastructure to increase physical and economic access to sustainable EV technology.
Digital Health
Innovators are transforming the healthcare industry using a combination of AI and human insight to enrich and expand diagnostics and treatment options.
Wearable medical devices, sensors and electronic data management allow healthcare providers to deliver more comprehensive, accessible and affordable healthcare services.
The Metaverse
Even in its current early days, the metaverse provides almost unlimited opportunities for exploring innovative business ideas. Some early adopter organizations are using augmented and virtual reality technologies to build their own workplace mini-verses to connect global teams, create a highly collaborative work environment and provide personalized training.
Smart Lifestyles
Smart lifestyle innovation can have a huge positive social impact across a broad spectrum of needs. For example, innovations in assistive technology are transforming the lives of individuals, their caregivers and their families with smart homes designed to support daily living activities.
Innovating for Positive Social Impact
There’s no limit to what the right business idea at the right time can accomplish. Purpose-driven innovation is helping organizations take their “good” business ideas further, delivering transformative solutions that have a positive impact on people, their communities and the world.