Why Every Entrepreneur Should Want To Save the World by Jerry O'Dwyer @FortuneMagazine December 17, 2015, 5:20 PM EST E-mail Tweet Facebook Linkedin Share icons When we think of the term ‘disruption’ in business, we often associate it with new technology; new products; new ways of doing business. Rarely does the idea of making a difference in the world come to mind, but social impact is becoming a strategic differentiator for many of today’s most innovative companies. Take Warby Parker. The online eyewear company leverages a “buy a pair, give a pair” business model, where it distributes glasses to communities in need through partnerships with local micro-entrepreneurs. By engaging socially-minded consumers, Warby Parker generated corporate and social value for the company – with estimated 9-figure sales and 1 million pairs of eye glasses distributed as of July, up from 500,000 a year ago. By cutting out licensing fees, working directly with suppliers and shipping products directly to consumers, and emphasizing the social aspects of its brand, Warby Parker’s low prices and differentiated image give it an edge in an industry with many venerated brands. Warby Parker and other so-called Born Social companies are staking out their market position based on business models that are inherently social (e.g. one-for-one giving) or tapping into growing consumer segments that purchase products and services based on social values (e.g. environmentally-friendly, locally-sourced, and fair trade). Investors are taking notice. When Bain Capital acquired 50% of TOMS last August, it was a recognition of the major growth potential for TOMS, and it’s one for one model, in the traditional apparel segment. Companies born with a social mission are expected to thrive in the coming years, and here are three big forces to watch driving the business model. Consumers care more about doing good Growing consumer segments prioritize social values beyond the traditional ones (i.e., price, convenience, taste). Understanding these social values and aligning products and services to these interests will appeal to a growing customer base that cares deeply about the environment, sourcing, and social impact causes. Across industries, socially-conscious upstarts are using social impact as a wedge to enter new markets, and today’s niche player may end up being tomorrow’s market leader, capturing market share and expanding its product line. Tesla is making waves not just as an automaker, but also a technology and design company focused on energy innovation. Its focus on bringing electric cars to the mass market accelerated sustainable transportation – giving traditional car manufacturers a reason to take notice. Leadership at the top wants to make a difference Ben & Jerry’s has incorporated its social mission into all parts of the organization. This includes a supply chain willing to pay Vermont dairy farmers above-market prices and a commitment to donate 7.5% of pretax profit to communities where it works. Since its acquisition by Unilever, Ben & Jerry’s has retained its own independent board of directors to help provide leadership for the social mission and the brand’s integrity.[v] Companies are searching for authenticity Revolution Foods has had an authentic purpose from its origins when co-founders and moms, Kristin Groos Richmond and Kirsten Saenz Tobey, developed their vision to transform the way America eats by providing access to healthy, affordable meals. Revolution Foods currently feeds over 1.5 million meals a week to children in 27 cities around the country with over 80% of meals going to students in the nation’s most underserved communities. Their model is to provide replicable, all natural, kid-inspired and chef-crafted meals for students and families. Today’s business landscape is changing. Consumers, employees, regulators and investors have a growing expectation for the role that companies should play in society. In this environment, social impact is becoming an asset for companies to differentiate and find new growth opportunities. For established players, Born Social competitors with authentic, inherently social business models are hard to compete with and are becoming disruptive forces in industries as varied as consumer products and automotive. Big business and new start-ups alike will need to adapt accordingly and consider the most appropriate, most authentic model to compete with their Born Social rivals. Whether it is investment in social innovation, a more strategic use of social impact, or even Born Social acquisitions, companies have a number of responses to this competition. Failure to take these competitors seriously could be a costly mistake. Jerry O’Dwyer is leader of Deloitte Consulting’s Social Impact Service Line. John Mennel is a Director and Nate Wong is a Manager.