Borrowed Credibility

Venture development of start-ups has always been a mystery to me. It’s clear that upon having a brilliant idea one would have to go make the pitch to investors who would then loan the money for the start up. My interest has always been on the investor side—why do it? Perhaps, these investors are looking for the next new Kickstarter or DonorsChoose and hoping to gain twofold or more monetarily. But these days, I think it’s more than that. A lot has to do with image building and borrowed credibility.

When Coca-Cola partnered with One Degree Solar to bring solar power to kiosk owners in Nairobi, Kenya, they didn’t just do it for the high ROI. While they were extending their product brand more extensively in even the most rural parts of the country, Coca-Cola was able to borrow the credibility and status of One Degree Solar to “do good” and bring positive impact locally.

With the rise of Corporate Social Responsibility (CSR) departments in large corporations like the Nike and Nestles of the world, there is a clear trend in the way existing businesses are looking at social innovation or social impact.

Last summer I backpacked through Peru with a travel company called G Adventures over the course of a month, starting my trip in Lima and ending it in La Paz, Bolivia. During my trekking experiences through the Andes, my group was accompanied by porters and cooks who followed us on our journey. We soon came to realize that G Adventures had a partner organization called Planeterra, which was their non-profit arm dedicated to the development and support of small communities. Planeterra had porter training and education programs throughout Peru in an effort to promote sustainable tourism by employing locals. Additionally, Planetera helped the wives of porters by setting up weaving co-ops in villages to set up small business developments. By borrowing the credibility of Planeterra, G Adventures was able to brand itself as a sustainable tourism company invested in the lives of locals.

Borrowed credibility can be great for the ‘borrower,’ but does this make start-ups and new organizations who are trying to take their social venture to scale, dependent on these bigger companies? Could there be a healthy symbiotic relationship between bigger corporations and smaller groups?