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B-Corps & building a purpose-driven business: On Tap with Jay Baydala

This is an excerpt of our On Tap interview with Jay Baydala on September 24, 2020. Questions and responses have been edited for length and clarity. Thank you to Village Brewery for being this month’s beer sponsor! 

Matt: Today we have Jay Baydala, who started a cool company called Goodpin. It’s a B-Corp, a social enterprise focused around helping other business owners give, or letting their customers give on their behalf. Tell us about yourself, Jay.

 

 

Jay: My name is Jay. I am the CEO and founder of a company called Goodpin. Goodpin is a platform that helps companies put their charity dollars in the hands of their customers to choose where it goes. I've been doing sort of IT stuff for the last 25 or 30 years. And I really get off on helping humans use technology to make the world better. That's my jam. 

We’ve been doing this for eight years now, and last year we started getting some pretty good traction and having some really interesting conversations with great companies who want to do good in the world. And we make it really easy for them to do that. 

Matt: Good. We’ll get deep into that later. I just wanted to say that this On Tap episode is sponsored by Village Brewery, and I'm about to crack their Neighbour Canadian Pale Ale. I love it. And as part of that series, they're giving 10% of their profits back to the community.

Jay: Yep. When Jim Button [of Village Brewery] started the brewery, he went out to the community and found community members or “barons” to be part of the founding 50 members of this new company. Because he knew it was all about the community. He’s the godfather of community and social good in Calgary. He’s the biggest influence in my life regarding social good and social impact. 

 

On Tap digital swag bag

Matt: And Jackson from Village hooked us up with some sweet promotions for this episode’s digital swag bag. There's a 20% off their online store and Goodpin actually has a good promotion in there too. 

Jay: Part of what we do is, we help companies put money in the hands of customers to choose where it goes to things that they think are important. United Way in Calgary is running a great campaign. They’re giving away 20 bucks at a time to people that want to help the community in different ways. They’ve got a campaign up right now – take your 20 bucks, and give it to the cause that is most important to you. It’s pretty cool. No charge, just free money.

Matt: You can choose between three causes: social isolation, basic needs, mental health. And there are no strings attached – I can just give 20 bucks? 

Jay: Yeah. The whole idea is to give people a voice and a lever of control in making the world better. And the more they practice that and feel good from doing it, the more they'll want to do it more. More good = more good, apparently. The virtuous cycle. It literally is addictive; it releases the same chemicals of dopamine and cortisol that keep you going back again and again. 

 

How does Goodpin work? 

Matt: For a small business, say True North wanted to give away a thousand bucks and let our clients choose, how would that work? 

Jay: So it's all campaign based. You would talk to us, we'd set up a campaign for you or you can set it up yourself. You tell us how many clients you have. Maybe you have 50, maybe you have a thousand clients. Twenty bucks at a time, 50 bucks at a time. It's all up to you. You can say your preferred charities as a company. Like we stand behind these three, but give it to whatever you want. And that's a way to engage your clients. And then you let them all know. You post it to social media, send them an email, say, “Hey, this is how we want to do it this year.”

Matt: How long would one of these campaigns run? Until all the money's gone, and you stop promoting it? 

Jay: Yes, people can keep giving after the money's gone, which is great. But the “free money” component of it is done when the money's out the door and you usually see that happening within a week or less. 

Matt: How does the social media component fit in? 

Jay: So the cool thing about the platform is you can take your charity dollars as a company, or your social media advertising dollars as a company. It doesn't matter what you put in the machine of Goodpin. You give it out to your customers or to the public in general. They choose the charity and then they turn into your social marketing. So you get impact and social marketing from the same dollars, which is pretty cool. Most people want to let the world know that your company is doing something good. They want to tell the world about the charity that they're supporting. And there's something about us that also wants to let our friends know that we're doing something good in the world. We want people to know that we're good people. So everyone wins when people post about this goodness happening.

Matt: You can see how it can snowball; it’s win-win, and the charities benefit, too. 

Jay: My BHAG (Big, Hairy, Audacious Goal) is to start tapping into that over $1 trillion that's spent globally on marketing. Companies are awesome for doing good in the communities that they work in. But what if we could also dip into that bucket of advertising and marketing that they're using and turn that into impact as well? So, I want to move all of that money into making an impact, and then they also get the marketing out of it as well. That's my goal.

People don't care about ads anymore. What they do care about is what's called friend-to-friend marketing. So if I'm looking for a new car, I'm not going to trust an ad to tell me that I should buy this type of car. I'm going to talk to my friend who happens to know a lot about cars, or my friend that just bought a car, and said, “My experience with Subaru was awesome. But I tried out a Lincoln and it sucked.” 

We trust our friends and at Goodpin, we help companies bridge that gap into the friend-to-friend marketing world.

 

Jay’s entrepreneurial journey

Matt: You’ve been around for eight, almost nine years now. What’s your journey been like to get to this spot? 

Jay: My background is corporate IT project management. I've been in technology my whole career. I'm not the guy on keyboards, but I'm the guy working with teams to deliver technology solutions. In that corporate world, you make a bunch of money. That's great. It's really fun, but it wasn't scratching that purpose itch in my life. 

I branched off from there to start an online charity called UEnd:Poverty, which reinvented the way that charity was being done online and digitally. When I started that online charity, it was at the same time that iPhones started. And at the same time that Facebook started. So in the 10 years that I did that charity, social and mobile just grew up. Ten years later, the way that I wanted to make a difference needed to change. And that’s where Goodpin grew out of. 

I used my technology background and that passion for engaging humans and using technology to make the world better and started Goodpin, which is this platform that helps companies do good. It’s been a pretty fun and rewarding journey. 

As a start-up though, it’s hard. It's not for everyone. It really tests your courage and your fortitude. I tell my friends, there is this line and you don’t really know where the line is. [On one side] you’re really diligent and you don’t give up easily. You’re courageous; you’re strong. But there’s this line, and if you go past it, you’re stupid for believing; you’ve waited too long. You’ve tried too hard and you should’ve let the idea go. 

Eight years is around that time where you could think I was stupid, but luckily we’ve started to hit traction now. Now it’s like “Good for you to not give up. Good for you.” But, it could have gone the other way. 

Matt: Good for you for hanging in there. You’re building out a platform; it costs money. You have to get investors. Can you speak to what are the expectations of investors when you are a purpose-driven company that's committed to balancing profits and social good – what’s their primary motivation?

Jay: That's a really great question. As a tech start-up, any early stage tech start-up, generally speaking, you're going to get people that believe in you, the person. Your idea's pretty good and believable, but mostly they believe in you and want to support you as a person. 

And that goes especially so for a purpose-driven start-up. I grew a charity (UEnd:Poverty) for 10 years. So people were used to seeing Jay as charity; it's all about charities, all about tax receipts. And then I switched gears because I believe that it was necessary to switch gears to a profit-driven approach to improve the world. So I switched gears to this, where we gotta make profit at the same time as doing good.

And of course the people that have been with me the longest, they believed in that and they believed in me and believed in my vision. So they participated in investing. But then when you get beyond that circle of the closest folks to you, they're still betting on the person, but they're looking at the financial upside to them. They have to have a return on an investment. Otherwise they want a charitable tax receipt. 

So they’re still looking towards the payoff. At some point, it has to be a viable business, even if it's a social good business. 

What I noticed is the kind of people that show up as investors is a different kind of person. So the typical, hard-nosed, pure numbers kind of person, they don't really get it. It just doesn't work in their brain that to make money nowadays, you actually have to have purpose woven in. They're still in the old model. The newer thinkers and the people that are tapped to culture and current events and society, they understand that purpose is not just a nice-to-have anymore. It's essential to do business. So they got it. And those are the people that step up and want to put money in as investors.

 

What is a B-Corp, and why do they matter?

Matt: I was just reading through the requirements to become a B-Corp. You have to consider all the stakeholders that the business impacts, like the community and the vendors and the employees and the clients, and they even put the government in there, which I thought was kind of interesting, but definitely environmental, social community stakeholders. Is there any sort of discussion about the stakeholders when you were talking to your investors to raise money for this?

Jay: Yeah, so we became a B-Corp about halfway through that process about three to four years ago. So early on, it was assumed and understood that we were about purpose because that's our business, right? Our business model is helping companies do good. So they got that. After we applied for the B-Corp and got that behind us, more and more people were attracted to the story behind how you get accredited and what that means to us. And it fostered more discussion around it, and it made them feel better in general. 

The fastest growing source of funds out there are impact funds, right? The ability to invest in companies that are doing good in the world or making some positive change happen in the world. So that's the largest sector of investment right now. 

So people are recognizing that they don't have to put their money in just any business. They can invest in a social business and feel good about where their money's going, as well as get the financial returns back. 

And as it turns out, social impact businesses are way outperforming, like four times outperforming standard, traditional business models on the S&P 500, for example.  Businesses need to put purpose at their core now because it is not just a competitive advantage; it's a determinant of success. 

 

How do you become a B-Corp?

Matt: So the B-Corp requirements, there's the type of impact where your actual operations and product is contributing to social good. But then also the profits from your main product are reinvested. And those are two ways to qualify. And Goodpin, obviously your core focus is that purpose-driven social impact product.

When you talked about these returns, to be purpose-driven and successful on the S&P 500, is it companies that are trading a profit, but then reinvesting back into their communities and putting a good chunk of their profit into these social or environmental initiatives? Or is it the ones that have their actual model driving social, like TOMS Shoes, for example? 

Jay: Another great question. The answer is both. So there are the larger companies that are really successful that are explicit, like TOMS Shoes or Warby Parker. Buy a pair of Warby Parker glasses, and a pair goes to someone in need. All of those are social impact businesses. 

But the B-Corp takes a broader look at the organization, and it comes up with a score card and a weighting of your organization on all those different categories of how you do business: how you engage your employees, how you do governance, how you engage the community at large, how you deal with the environmental impact. So it looks at everything. 

So the obvious impact businesses like TOMS Shoes, right? That’s the great example that we all can think of. The “Buy One, Get Ones.” That’s a slam dunk. B-Corp, for sure. But I think the more important components are the way that you run your business. And that's what the B-Corp really gets at. They really help you look at your organization and  focus on how you do business.

Matt: There's a big governance section. It talks about what are in your policies, what's in your mission? How are you committing to this stuff? And then you have to change your articles of incorporation and all this stuff. 

I thought it was interesting, the difference between corporations in the States compared to those in Canada. In corporations in the States, the directors of those companies, their fiduciary duty is to the shareholders, where in Canada, their fiduciary duty is to the corporation itself. 

So if the corporation has a purpose, the directors, their duty is to advance that purpose – not necessarily shareholder value. So the States started this benefit corporation, which changes that fiduciary duty to be the purpose of the company. But in Canada that structure isn't really required because you just have to have a purpose-driven governance model, I guess.

Jay: Yeah, exactly. In Canada, our fiduciary responsibility is to look at all of the stakeholders in a company. Which includes the environment, which includes the guy on the street, you know? So it's pretty cool that we as Canadians look at a company, a corporate structure that way already, even before B-Corp. And it makes me proud to be Canadian thinking about things like that. 

Like, the United Nations, what did Canada contribute to the United Nations? Peacekeepers, that was Canadians, that came up with that idea and brought it to the world. Like, of course it was Canadians. Like, we're nice. Let's bring peace. So the fact that we look at corporations like that already is, is pretty encouraging.

Matt: For anybody that is new to the concept of a B-Corp, which it turns out I was too, until I started researching it this morning. It's not an actual legal structure. You change your articles and put certain things into your purpose and your mission, but it's very different from a charity. You can't issue tax receipts to people. You don't have to fill out that T3010, not-for-profit or charity tax return. You file like a corporation. In the CRA’s mind, you’re just a corporation. You just file your T2 tax return and go about your business. If you have profits, you're not obligated to give them away. Right?

Jay: Yeah. B-Corps deal strictly with how you're running your business internally, like what you're doing in your business and how you're engaging the outside world. 

Matt: So, what kind of questions would they ask around, for example, vendors? Do they want profiles on everybody that you pay to do stuff for your business?

Jay: They don't require it. It is a scorecard, so you can sort of dive deep on the pieces that you're really good at. So if you're good at the governance piece and you have a diverse board and you have it in your articles that you do it a certain way that aligns with B-Corps, then you're golden. But on the vendor side, they ask you questions about your supply chain, and if they follow environmental regulations and rules? Do they hire using diversity? How do they govern themselves? So they try to dig deeper into the entire aspect of your business. 

Matt: On the employee side, what are some examples on what they want you to be driving in your own business with your own workers and your internal culture? Do they want you to be having a volunteer day or is it something more substantial or is there some guidance there?

Jay: They have some great categories or buckets to look at. One of them is diversity: do you have a nice diverse workforce? A big one is a living wage. Do you pay your people enough to live a life? Do you pay people a fair living wage? And then another part is around the environment in which they work. So is that up to par, that is respectful of them and respectful of the environment and those kinds of things. There’s quite a few different angles on the workforce piece.

Matt: And then there’s environment and governance. Is the environmental aspect weighted a certain amount? If you’re really heavy on the social side, can you be weaker on another one and still qualify? 

Jay: Absolutely. They’ve built the framework in a way that you can be a different type of a social business, whether you’re a “Buy One, Get One” or make donations or [have] volunteer days, or how you buy your products and hire your vendors and your staff. They’ve allowed for those different approaches to being a social impact business and allow the weighting appropriately. They just want to make sure that you’re up to a certain level overall that you can claim that you’re a B-Corp and get that certification. 

Matt: So the steps to getting certified as a B-Corp, you take their BIA assessment, which is pretty in-depth, a few hours commitment, right? Then you meet with their team and go through the results, and they might ask for some documents and support to prove that you're actually doing what you put in the application. How rigorous is that process?

Jay: It's fairly rigorous. It’s rigorous enough to get to the truth. In our own personal experience, we filled out the assessment. Like you said, it took a few hours. It required a lot of us. We put the time in, submitted it. Heard back within two to five business days, 

Here’s your score. Let’s meet and talk about it. We went through each component of the assessment to say, okay, you're doing well here. That's great. You said this here; can you show us the document for that? You're falling short here. All you would have to do is this, and you would bump your score up. 

So they’d actually coach you on how to get a better score and how to improve your business along the lines of being a B-Corp. There were actually a couple of back-and-forths. They’re very human in their negotiations.

Matt: Who are these humans – where are they, what is this oversight board or B-Corp people that certify you?

Jay: It's a group out of the U.S. that holds the stamp. I believe they're a for-profit organization but a B-Corp as well. They are the ones that do the assessment. They're the ones that you pay your fees to, your annual fees to, because you have to pay a fee to keep demonstrating that you are actually keeping up with what you said you were doing. Then they reassess you after three to five years as well.

Matt: Have you gone through that three-year re-assessment yet? 

Jay: Not yet. And it's coming up pretty quick for us. 

Matt: And you have to sign a declaration of interdependence. Do you remember what that's about? [You need to say] we're committed to our stakeholders. We believe that businesses are here to do good and are tasked with being the change they want to see in the world and really driving that change. It's a good little mantra that I guess you have to sign onto. The B-Corp certification is what you get when you've gone through the process and they give you the stamp. Is this sort of like certified organic? 

Jay: Yeah, exactly. It results in a measurable difference in your perception. At first I was kind of skeptical around how much of a difference it would make, but when people find out that you're B-Corp, it checks a whole bunch of boxes for them, whether it's on the investor side or on the customer side. 

Nowadays, like I said, it’s not a nice-to-have to be purpose-centered anymore. It's a must-have to do business. The ones that aren't purpose-centered are going by the wayside quickly; there's a new way of looking at the world. And we're seeing it increasingly now, with what's going on in the U.S. and here and around the world globally with COVID and so on. So companies have to step up and do good in the communities in which they're working. And this just really helps simplify that conversation. It gets you through a whole bunch of stuff real fast.

Matt: It’s a good way to differentiate your brand – you can attract social media interest. But when you make those changes to your articles, you're legally required to consider the impact of the company's decisions on workers, customers, suppliers, all that. So that's an interesting piece of it.

Does it help on the recruitment side as well? Like attracting people that really want to work? Is that a big consideration in the workforce right now? 

Jay: In general, absolutely. As a start-up, you're competing for a lot of talent out there with a lot of different companies, right? How do you distinguish yourself? How do you stand out? And in general, because Goodpin is a company that does good in the world, we really benefit from that when it comes to hiring. Hands down, people are seeking meaning in their lives. And they work for companies that are great companies, but they personally don't find a connection with their meaning or purpose there. So they're looking for a job where they can do good work, but also scratch that very human primal itch to have purpose and meaning. And we check that box because of what we do, but when you have that B-Corp stamp, it just adds to that. If they know that they're working for a B-Corporation, they know that that company is obliged to do good in the world, more than just make money. 

Matt: And it seems like a signal that this company’s thinking is more holistic and long-term. So many businesses are in that short-term mentality, what have you done in the last 90 days? Or what's this fiscal year going to look like? This is very much longer term. Like we have a purpose, and it might take us a lifetime to get there, but I think that's a cool concept that business really needs.

Jay: I think that's a really great point that you just hit on there. It speaks to the perspective of the organization and the people in the organization. Not only is it looking long-term, it's looking at a broader scope as well. Like how does this impact my community, my country and so on. It’s a strong signal of that. 

As we look at the capitalist system, there's a lot of good and great things that come out of capitalism. And this sort of B-Corp is sort of the next evolution or improvement on capitalism. Taking it to a more human level that considers everyone else that's impacted by that business. 

Matt: Thanks so much, Jay. I think that was great insight into B-Corps. For anybody that's watching (or reading) and you think that this process might be a good fit for your business, feel free to reach out to me. Jay, can they reach out to you if they have any questions about your journey? 

Jay: Absolutely. I really can't thank you enough for having this conversation with me and involving me in this conversation. And I can't say enough about how awesome you are at what you bring into the world at True North just as a human, but also True North is a very inspirational organization. So thanks for being that to us regular folks, to be inspired by accounting of all things. 

Matt: Well, thanks for saying that. That was very nice. Hopefully we can do a campaign with you guys and everybody can see how it works on the receiving end. Everybody can go to our site and claim that 20 bucks from United Way to donate. Give somebody else’s money away and feel good about it yourself. 

We also have the Village promo code for 20% off merch and beer in their online store. And, our three eBooks are in there too: one on sole proprietors, one on starting a business and one on working with True North. And we have a Spotify playlist too, if anyone wants some tunes for their Happy Hour. 

Thanks again for joining us, Jay!

 

More About Jay Baydala

As a social entrepreneur, Jay created Goodpin to facilitate more good happening in more communities across the planet. He spent two decades managing major IT initiatives with companies like Shaw and a later commitment to the social impact space including founding UEnd:Poverty and Goodpin. Jay lives to experience life through friends, cycling, and social impact ventures.

 

More About Village Brewery

Some of the best things happen over beer. Ideas are born, friendships forged, deals struck. Village Brewery began that way too, with friends sharing beers and dreams for a community brewery. A brewery that would support Calgary’s artists and craftspeople. A brewery that would create the excellent ales and lagers our friends and neighbours deserve.

 

Read more about Entrepreneur Life topics that may be helpful to you and your small business. 

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