Purpose-driven companies aren’t suffering from the Great Resignation, AppHarvest CEO says
Jonathan Webb, CEO of agricultural technology and indoor farming startup AppHarvest, wants investors and founders alike to know that he doesn’t struggle to balance purpose and profit; if a company loses track of the former, it’s only a matter of time until it loses the latter.
“We need to change the profits versus purpose narrative; purpose drives profit and, ultimately, is what makes an organization durable and resilient for decades to come,” Webb told Fortune. “I fundamentally do not think it’s a tradeoff. Good CEOs do both.”
Given the rapidly worsening climate outlook, all founders should focus on building a business that will be more powerful in 30 years than it will in 30 days, he said. “Do the hard work to create shareholder value now while also looking out for shareholders two decades from now,” Webb said is his credo. “CEOs can get lazy and only worry about the last 90 days; that’s easy. To do that and look out for the long term is true sustainability, or resilience.”
Webb, who began his career developing renewable energy projects for the U.S. Army, believes any company is either part of destroying the planet or part of rebuilding its industry to align with the planet: “I think it’s our obligation as CEOs to build companies that create long-standing values.”
Webb doesn’t mince words on the specifics; the most valued companies in 100 years, he said, will be the ones that “allow humanity to survive.” He names a few: electronic vehicle manufacturers, renewable energy companies. And because of the work they are doing, those companies will be able to hire the brightest people, despite resignation trends.
That narrow focus on societal good is what has kept AppHarvest fully staffed throughout the pandemic. “The Great Resignation has not affected AppHarvest, because people who were leaving companies were leaving worthless companies that added no value to society, or were destroying society,” Webb said. “They’re looking for purpose in their life; they’re looking for companies like us.”
The mission-driven approach Webb has prioritized is the company’s main selling point both for investors and potential employees, whom he works to lure away from billion-dollar conglomerates.
“At one point, we were thinking of putting up a billboard in front of several large tech company offices saying, ‘Come build tech that matters,’” Webb said. “When you’re building tech for tech’s sake, you start to question what you’re doing. People at large tech companies question what they’re actually building. We’re building important stuff with long-standing value, so the Great Resignation has actually helped us acquire talent.”
AppHarvest, which went public in February in an IPO that brought it $475 million in gross proceeds, is an ambitious venture. Webb founded it in 2017 in his native Kentucky; it became a certified B Corp two years later. Its flagship facility is a 60-acre indoor farm in Morehead, a town of 8,000 in the foothills of the Appalachian Mountains, and it solely uses rainwater for its irrigation. The greenhouse, completed in 2020, yields up to 30 times the crops a traditional farm would, Webb said.
But the journey hasn’t been without pitfalls. AppHarvest is recovering from a challenging third quarter, in which it reported a net loss of over $17 million; Webb attributes it to hyper-growth.
“We’re investing heavily in our future, so we’re spending heavily today,” he said. “We have one farm right now that’s 2.8 million square feet. By the end of next year, we’ll quadruple that. We’re building robotics and software that will ultimately be able to service the entire global agriculture industry. We don’t see it as losing money for losing money’s sake; developing that tech is investing in our future.”
Despite the off quarter, Webb has much to celebrate. AppHarvest raised $500 million on its balance sheet this year, went public on the Nasdaq, hired 400 people to work in its first facility, and brought its first product, beefsteak tomatoes, to grocery stores including Kroger, Walmart, and Publix.
Webb is a consistent presence at the company’s flagship greenhouse in Morehead. He often sleeps in an RV outside the construction site of its second facility. “If I were an investor, I’d want my CEO on the ground with the team, not just in an office tower,” he said.
“I could be in a penthouse in New York City, managing AppHarvest from the 32nd floor of some high-rise. But I don’t think that’s adding value to the company, or looking out for our shareholders,” he said. “I go directly into the facility and talk to entry-level employees and people sweeping the floors. I want to know what the problems are from them, not just our executive team. I want to figure out what I can do, as CEO, to ensure everyone has the resources to succeed. It’s service leadership; our team does not work for me, I work for our team.”
To that effect, he’s imparted a lesson to each of his team members: Every day, help five people. “They ask themselves, ‘Did we help five people today? Did we help them reach their goals? Accomplish what they wanted to pursue?’ If we’re all doing that, we have a pretty phenomenal organization.”
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