"Virtual Social Venture" Rubicon: A Marriage of Purpose and Profit
This post was featured in, and was the Smart Quote for, SmartBrief on Sustainability on January 5th, 2011!
Just before the new year I was lucky enough to sit down with Jason Haber (@jasonhaber)—CEO and founder of Rubicon Properties—to talk all things Rubicon and social impact at a Starbucks in New York City.
Rubicon is a three month old real estate agency in one of America's most competitive markets. It is also a three month old experiment in what it means to be a business. Knock on wood, Rubicon is poised to redefine what consumers expect out of the business they patronize.
The Rubicon Difference Since inception, Rubicon was set up to donate a percentage of profits from every deal towards organizations that are doing good and could benefit from increased sustainability. Currently all donations go towards Charity: Water, a non-profit which brings clean and safe drinking water to people in developing countries. Charity: Water, was chosen for its politically-agnostic cause to ensure that the widest range of potential clients would value Rubicon's extra efforts.
Haber decided to found Rubicon after an incident involving Libyan head of state Col. Moammar Gadhafi during his visit to the United Nations last September in New York. Gadhafi's agents were looking for a place for the leader to stay, and Haber refused to help them unless Gadhafi agreed to send convicted bomber Abdel Baset Al-Megrahi back to prison from where he had been released on the grounds of health concerns. After recognizing how important it was for Haber to conduct business on moral grounds he could stand on, Rubicon was born.
A "Virtual Social Venture" On first reaction, Rubicon may seem to be little more than “cause marketing”—where private companies market a cause in order to increase sales—such as Levis' focus on HIV/AIDS. Although there is absolutely nothing wrong with cause marketing provided the company involved takes legitimate and appropriately sized steps towards tackling the problem, it is not a new innovation. Differentiating Rubicon from cause marketing is its focus on social impact from the outset, and the partnership they have established with Charity: Water.
One definition of a social venture is that it needs to:
- Be financially sustainable
- Have a social impact
Based off this, Rubicon has set up what I call a virtual social venture. They handle the financial sustainability of the venture by diverting their profits, and Charity: Water represents the social impact. In this way, Haber has taken a for-profit business and an unsustainable charity to create a virtual social venture that is greater than the sum of its parts. Both organizations are then able to focus on what they do best. Although Charity: Water is primarily funded by private donors and not Rubicon, the idea remains.
A Successful Business Venture Too! During an address by social impact guru Jason Saul (@missionmeasure) I attended for the Net Impact conference in Detroit this year, Saul argued that aspiring social entrepreneurs should focus primarily on how profits could be generated by solving social problems rather than on the problems themselves. This would align both social and business goals, and leverage market forces to spark innovation and consumption.
In many ways, this is how Jason approached the creation of Rubicon. Social impact and business profit go hand in hand—whatever is lost by donating to Charity: Water is compensated for by the volume of clients interested in generating additional value for the same price and service. The company also benefits at client pitches, where Rubicon's social focus easily delineates itself from the other agencies.
Haber attributes this success to the extension of the consumer cycle over the past decade. R&D, development, marketing and sales only represent half of the equation today—with aspects such as consumers' social media conversations and CSR expectations being added to corporate considerations.
The Future Although Rubicon is currently very much a startup (present office space consists of a large cubicle located in shared office space), the future looks optimistic. Haber is confident of the firm's ability to crack the list of top 15 boutique agencies in New York over the coming year, and recently gave an interview on MSNBC to promote his brand of social impact.
As happens in capitalism, social or not, a successful Rubicon will spawn a host of competitors or clones looking to benefit from marrying traditional business with institutionalized social impact—whether in real estate or in another industry. Although this will only add to Haber's prodigious workload, such a development would be just another example of the good Rubicon has done for the world.
This article was written by me for publication on Care2.com