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I’ve argued for too long He VCs getting excited about climate change scary and that The goal of a startup is to survive, But I haven’t been particularly successful in outlining what startup founders can actually do to build a more sustainable company in a world headed toward climate crisis.
Enter Amit Paul and Nils von Heijne, who have spent the last few years thinking about how companies are built and whether there is an alternative approach we can take. In their native Sweden, the duo have come up with an alternative organizational structure that aims to redefine the way we think about sustainability and regenerative business practices.
called to Regenerative Community Organism (RCO),This innovative organizational model is not just a theoretical framework; It aims to be a practical approach to integrating sustainability into the core of operations. By weaving regenerative and circular principles into the fabric of the company structure, this model seeks to set a new standard for corporate responsibility and ecological stewardship.
The framework has already received a provisional seal of approval from the Swedish authorities, constituting the first company to incorporate this model. The company, Innerworks, was founded by Paul and von Heijne, and is trying to be a blueprint for how other startups can build on the same model.
Sweden’s tentative acceptance of the RCO model represents a step forward in the global movement toward sustainability and regenerative business practices. It provides a government-backed model that companies can look to for an approach to building a more sustainable business.
an idea
The origins of the RCO model can be traced to a series of discussions between Paul and von Heijne in business school, where they explored the limitations that existing business models burden when addressing environmental challenges. He acknowledged that there is a growing movement towards sustainability, but most of the efforts of startups remain superficial and fail to tackle the root causes of ecological degradation.
With a rich background in environmental science, Paul says he has long been a proponent of practices that minimize damage to the environment and contribute to its restoration. His career has been marked by efforts to bridge the gap between environmental stewardship and profitability – he is an Environmental Defense Fund fellow and was part of CodeGreen Solutions, an initiative to help move real estate down a more low-carbon path. Is focused on.
Von Heijne, meanwhile, is a serial entrepreneur of multiple companies (we counted eight co-founder titles on his LinkedIn) who converges on problem spots and acts as a catalyst for change. He is also an early-stage investor focusing on sustainable startups (as part of Sward von Heijne).
“I got very caught up in the culture and narrative of the business school,” von Heijne said. “We’re here to build things and then scale them as quickly as possible, and then someone makes money. This is the end of the story. Somewhere along the way, it became something more than just pleasing investors or looking like I’m successful to other people,” he explained.
rco model
Paul and von Heijne told TechCrunch+ that the RCO model is inspired by living systems theory, which emphasizes the importance of enabling organizations to be adaptive, resilient, and thrive in harmony with the natural world.
According to Paul, there are three unique parts to the RCO. One part is the constitution, or what the co-founders call the source code – the horizon over which the company is looking. “This horizon can never be the north; This is a question that represents the constitution of the organization and guides us,” he explained.
The second part is a union. “The association lays out and protects the company’s objectives and helps keep them on track. It can’t tell the company what to do, but in some cases, it can tell the company what to do. No To do,” he said.
The third part, which is the basis of the other two, deals with the life cycle of the company. “A startup is not a startup forever: the startup logic has to change,” Paul explains. “In the beginning a startup has to acquire a lot of resources, but at some point, it will start becoming more complex and build structures. Only then does it become a ‘real company’. The third aspect of RCO helps us think about the company as a growing and changing organization.
By drawing analogies between natural systems and organizational structures, the RCO model advocates for businesses to emulate the resilience, adaptability, and regenerative capacity of living systems. This involves creating efficient and adaptable business operations that can contribute positively to the ecosystems and communities with which they interact.
The twin pillars of the RCO model are regeneration and circularity. Regeneration focuses on enhancing and restoring ecosystems, communities, and natural resources. Businesses following this framework are designed to go beyond sustainability to make a positive contribution to the environment and actively improve ecological health and social well-being. Circularity is the concept of designing out waste and pollution, keeping products and materials in use, and regenerating natural systems.
implement it
Implementing the RCO model requires businesses to fundamentally change how they conceptualize their role in society and the environment. Contains:
- designing with purpose: Businesses must redefine their purpose to align with regenerative and circular principles, ensuring that every aspect of their operations contributes positively to the environment and society.
- create overall value: The RCO model emphasizes creating value across economic, environmental and social dimensions. This involves rethinking business models to optimize sustainability and resilience.
- Adaptive Governance and Leadership: The RCO model requires adaptive governance structures and leadership styles that are responsive to changing environmental and social conditions.
- engagement and collaboration: Success under the RCO model depends on involving stakeholders and fostering collaboration across sectors and industries. By working together, businesses, governments and communities can drive the transition towards regenerative and circular economies.
Technology plays a vital role in enabling the RCO model. From advanced materials and renewable energy to digital platforms and circular economy technologies, innovation is key to putting the principles of regeneration and circularity into action. Businesses should leverage technology to design products and services that are not only sustainable but also regenerative in nature.
The duo’s own company, Innerworks, aims to demonstrate how companies can grow economically while actively contributing to the restoration and revitalization of natural ecosystems as well as promoting social well-being.
no easy way out
As you might expect, the journey to pioneer and implement the RCO model was filled with many challenges, from legal hurdles to cultural resistance.
The co-founders told TechCrunch that one of the biggest challenges was navigating the complex web of legal and regulatory requirements. Corporate law is rarely equipped to accommodate business structures that prioritize the environment and social upliftment as core operating principles.
Another set of significant barriers arise from established cultural norms and mindsets that support traditional, linear models of operation. Convincing business leaders, investors, and even consumers to adopt a model that fundamentally redefines success is a work in progress.
It is encouraging to see that some countries are ready for change at the company structure level, but globally, it will likely be a tough, uphill struggle. Challenges will include overcoming established business models, regulatory and policy barriers, and securing the investment needed for the transition. However, these challenges also present opportunities for innovation, collaboration, and leadership.
My primary concern is whether this model introduces new risks to businesses. Early-stage startups are risky enough, but if an RCO could potentially block an exit opportunity (e.g., if a less honest company wanted to buy the startup), it could be a poison pill for potential VC investments. Can be proved.
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