Creative Distillation - Episode 2: Entrepreneurship for Sustainable Development Transcript
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SPEAKERS
Jeff York, Asher Brewing Co., Brad Werner
Jeff York 00:10
Welcome to grave distillation where we distill academic research on entrepreneurship into actionable insights, all enjoying a tasty beverage here in Boulder, Colorado. My name is Jeff York. I'm the research director at the Deming Center for Entrepreneurship as the lead School of Business at the University of Colorado Boulder, and I'm here with my co host.
Brad Werner 00:29
I'm Brad Warner. I'm the Faculty Director for entrepreneurship at Leeds School of Business at the University of Colorado.
Jeff York 00:34
And don't forget the boulder at the end, because we don't want
Brad Werner 00:37
that one once a month. As much
Jeff York 00:38
as we love our colleagues in the university system, we will make sure you know we're at the University of Colorado at Boulder anyway.
Brad Werner 00:45
And actually we're at Asher brewery,
Jeff York 00:47
yes. And in particular, as your brewing stands out amongst many of the breweries here in the front range of Colorado and that they are an organic brewery. And so I thought that would be a particularly apropos setting for today's discussion, as we're going to be talking about research on entrepreneurship for sustainable development as the title of one of our papers puts it this week. I feel like last time we were together bread, I did not do as much justice as I could have to the paper and distilling it into actionable insight says is our goal here on Creative distillation, so I'm redoubling my efforts.
Brad Werner 01:25
The exciting part is is tying in the organic components of the brewery that we're at today, with also organics a hot topic around the country, not only in rural areas, city areas, and I think that we can break this down and shed some light and hopefully identify some tools that entrepreneurs can use coming out of the paper that we're going to discuss, most importantly, after our tasting.
Jeff York 01:47
Yeah, most importantly, after the tasting so let's get to it and try some of this beer and find out what as your brewing is all about. Perfect. Today we have Abigail and Tomi Camille. All right, I got it right. Abigail is the general manager here at Astro brewing has been involved in the brewing industry for about six years. And we're gonna be tasting some of their some of their concoctions here. So Abigail, what are we? What are we about to taste here?
Asher Brewing Co. 02:13
So this first one is going to be our green lantern. koelsch. kosha is a traditional German style beard, nice chairs like creature chairs. So I wanted to bring this one out because it is the most recent beer that we've started canning. Is all canning here is it as well. Just canning we purchased our own canning line a few years ago, we finally do own it. It's from wildgoose canning so local canning company great. And we can this our Green Lantern kolsch our tree hugger amber and our green bullet IPA. I like this one. It's a super easy drinker. It's definitely a crowd pleaser. Oh, yeah.
Brad Werner 02:53
You can see this to be an afternoon beer. Right.
Asher Brewing Co. 02:55
nice afternoon beer.
Jeff York 02:57
super clean, really nice flavor. A little bit like almost corny kind of flavor with the coaches a lot of
Asher Brewing Co. 03:03
the time so yeah,
Asher Brewing Co. 03:04
yeah, that that Chris, buddy. We don't log or anything. So this is kind of our way of providing a light crisp beer. Right. Still brewing 100%
Asher Brewing Co. 03:14
ales? Yeah.
Jeff York 03:15
But you're using like a lager yeast in this right?
Asher Brewing Co. 03:17
No, no, we use only ale. Yeah, we have one strain of yeast for all of our beers. Wow. Yeah. Okay, so pretty classic styles of beer
Brad Werner 03:26
is that because of your organic fence here, Jeff, and I mentioned your organic focus of the brewery. And it actually aligns what we're going to be talking about today. Can you maybe speak to the organic components, and how that works within your organization?
Asher Brewing Co. 03:41
Absolutely. So organic has been important to us from the beginning. We opened just a little bit over 10 years ago. And within that first year, we had our organic certification as far as East goes, and getting that organic certification, keeping the same supplier and the same strains is a lot easier so that our equipment doesn't ever get cross contaminated. And we can keep that flow going of certified organic beer. We have actually been using the same strain from the same supplier yeast the entire 10 years. Wow. So it's done us very well.
Brad Werner 04:20
So is organic to you a marketing I wouldn't want to say ploy, but a way to move. But I'm saying certified organic inorganic practices can be do different things. Sure. I mean, certified organic, there are regulations involved and all that. How does that fire though affect business? I mean, you have to compete price wise with the the regular breweries that aren't organic. How do you how do you play into that?
Asher Brewing Co. 04:46
Yeah, so it started off predominantly as an ingredient. Focus. Better ingredients makes better beer, it's better for you. A better excuse to drink beer. If you call it organic. Yeah, hops and grain that translate very easily into the consumption of that product. And so it started off as that. And it did become something extremely unique to us. We are still the only certified organic brewery in the state of Colorado. They are popping up nationally. But still definitely not a huge focus of the brewing world that is in part due to accessibility of certified organic ingredients. It is becoming way more popular way more suppliers are branching into that.
Asher Brewing Co. 05:31
And our customers demanding this now.
Asher Brewing Co. 05:33
They're starting to a lot of breweries use some organic ingredients. But then again, the standards of the organic certification, which you mentioned, going into later, it does have to be pretty strict, and you have to stick to certain things. And going through that certification project processes. It's a lot.
Jeff York 05:52
Yeah, to me, it's an arduous expensive, especially for a young company. But you were saying they did it within the first year starting the brewery. That's impressive.
Asher Brewing Co. 05:59
Yeah, I do believe it was within that first year that we got that organic certification. So we've had it now for nine years and just a little bit of change. And what happened for 10? Awesome,
Brad Werner 06:09
once you have a certification, is it a grueling process to recertify? Or is it pretty straightforward.
Asher Brewing Co. 06:17
We've got we've got a system down. But you do go through the initial audit the in person review, and then the final audit once a year. So every single year it is that function we have most of our suppliers have remained at least somewhat consistent, because we're getting that organic product, and there's not as much on the market. But it it's, it's a process.
Jeff York 06:42
Now does that um, does that bring any constraints to your supply chain? Like, do you guys ever have trouble getting ingredients for a certain style you want to brew because you have to stick with these organic suppliers or? I mean, most breweries would stick with the same suppliers anyway.
Asher Brewing Co. 06:56
Yeah, and contracts are becoming way more common in the brewing world. Sure, these days, especially with hops and availability, getting certain types of hops on contracts so that you're guaranteed to be able to do certain types of beer. Right, right. And so really, the only time that it becomes a little bit tricky is ordering a specialty malt. So that was kind of thinking about right into our oatmeal. stouts. Let's do that. And so we purchase specialty malt for this once a year. And so making sure this is organic
Brad Werner 07:29
as well. So this is your holiday brew, and
Asher Brewing Co. 07:31
this is our craziness slash holiday slash winter winter brew.
Jeff York 07:37
Oh, it is it's got like a really nicely commerce coffee ish. Over time.
Brad Werner 07:41
What a great winter.
Asher Brewing Co. 07:43
Yeah, it's great. So this is our maceio Barker. Oatmeal stout.
Brad Werner 07:49
Did you name it?
Asher Brewing Co. 07:50
I didn't. Our wonderful Brewer Chris Asher is a huge fan of funk and blues and jazz, so
Brad Werner 07:59
I have no idea.
Brad Werner 08:00
I don't tell him. But I'm gonna look it up.
Jeff York 08:04
Who's a communist activist Brad?
Brad Werner 08:07
I have no idea.
Asher Brewing Co. 08:11
No, great jazz musician. And so the play on this is that our original brewdog was named maceio. So the Museo Barker, so a little bit of fun.
Jeff York 08:23
I thought it was pronounced.
Asher Brewing Co. 08:27
It's kind of
Jeff York 08:30
the James Brown band and you can hear me James. messy. Oh, ah. All right.
Jeff York 08:37
I need to clearly drink more.
Brad Werner 08:38
I have homework
Jeff York 08:42
to do around Christmas albums
Jeff York 08:43
I can share. Okay,
Asher Brewing Co. 08:44
I love that. So good dog. Good, good guy. All around. We use 50 pounds of organic oats in this to add that nice fluffy texture sounds absolutely wonderful. And then we'll bring out this last one Gosh,
Jeff York 09:01
tasting, we're saving these.
Asher Brewing Co. 09:04
So this is I want to bring it out. It's a double IPA, or green eight double IPA. So it's a little higher and alcohol. It is the first beer that was ever brewed here and we still have it around,
Brad Werner 09:14
really. So it's just always on tap here that it
Asher Brewing Co. 09:17
is always on top. It's one of our four flagships Oh, nice. And it is incredibly smooth. For
Jeff York 09:25
me. I'm like, Judge like Yo, like, you have to like smell the beer first and note all the aromas of it. I just
Brad Werner 09:33
I won't judge just because I'd rather just drink.
Jeff York 09:35
Of course. The judges don't like drinking you know.
Asher Brewing Co. 09:41
I hope they like to drink.
Jeff York 09:43
Yeah. Miserable job.
Jeff York 09:46
An academic Yeah. And you don't like to write
Brad Werner 09:49
Is this your number one seller at the brewery here at the tap room.
Asher Brewing Co. 09:52
If this is a very popular seller, number one is that green bullet IPA. You can find that in cans in the top room. It's around town. On top two, I I personally like this grenade because it packs a little bit of punch, right.
Jeff York 10:06
Super citrusy, lemony orange kind of hot flavors. really clean on the back end. It's just like a crisp, you know, done.
Brad Werner 10:15
So how would you judge a beerr? Jeff?
Jeff York 10:16
Oh, man, I haven't judged a beer in a long time. I have kids. So I stopped being a beer judge a while back. But I used to. I used to do it a bit. I mean, this is really good. You know? I mean, when you judge them, you're comparing a lot of times. That's right. And so you do around and you're ranking them, kind of like what we do with our students sometimes. Anyway, I give a very high marks. It's wonderful.
Brad Werner 10:36
I actually think these are three of them. Are they taste great. Very, very nice that a big beer drinker? Yeah. I mean, I'm really I am attracted to bourbon more, but a really good beer thing.
Brad Werner 10:48
But I do love
Asher Brewing Co. 10:50
before you head out today, we do have a super limited edition release on right now. It is a ginger beer. So that's a light amber that we see crushed ginger root. And we rested it in a whiskey barrel for over two years. That sounds out of this spread, because it's very high alcohol.
Jeff York 11:10
Yeah, that's right. We got work to do.
Brad Werner 11:13
I'm gonna run over there.
Jeff York 11:17
Celebrate making it through the podcast by purchasing large amounts of beverages or we are certainly what we did last time. But
Brad Werner 11:26
so if someone someone listening to this podcast that wants to try some of these amazing beers, how do they find you? Sure.
Asher Brewing Co. 11:31
So I would say the best stop first stop is always here. You can get all eight of our beers, we sell our cans here. It's an easy stop. We fill growlers, you can bring your own you can buy one here. Otherwise, we do have a list on our website of some of the places we are off site. And what's your What is your website? Asher brewing.com. And so those have both on and off premise listings.
Brad Werner 11:54
Oh, great. It can you find the extra be on Colorado?
Asher Brewing Co. 11:57
No, we are Colorado specific. We don't necessarily intend to go outside of Colorado. We like keeping it local, or local.
Jeff York 12:06
That's how we like to talk to the local businesses. And,
Jeff York 12:09
man, this
Jeff York 12:09
is delicious. I gotta say I came to this brewery. Right when I moved here about 10 years ago. And I don't remember this beer. But these beers I don't know. I remember thinking you guys are good beers. But these beers are quite exceptional. They're really nice. So I don't know. I guess maybe nothing changed except for I got older. I don't know. But these
Asher Brewing Co. 12:31
beers are for 10 years. We definitely were in a routine.
Jeff York 12:35
I came here literally like within months of your opening.
Asher Brewing Co. 12:37
I'm pretty sure wonderful. Yeah.
Jeff York 12:40
Yeah. It's wonderful. We'd love to see local businesses thrive and succeed. So, so good, so mashup marine products. That's
Brad Werner 12:48
right. And I also noticed you have some art is that local artists on the wall that's for sale are
Asher Brewing Co. 12:52
absolutely all around our brewery. We have some art a hung up by friends of the brewery who purchased it here and the money goes right to that artist.
Brad Werner 13:01
That is fantastic. So
Jeff York 13:02
definitely come out here to the tap room. It's got a great atmosphere. It's really I'm just looking at some of the light fixtures in here. Pretty cool, too. Anyway, it's a really neat place. You should come out. Check it out.
Asher Brewing Co. 13:11
Yep. Thanks so much. Thank you.
Jeff York 13:13
We really appreciate you having us and, and for talking. And we really appreciate the beer Sam.
Brad Werner 13:19
We will not be strangers. Yes. We will. All right, so
Jeff York 13:34
that was awesome. Really interesting. Getting a perspective on organic in the brewing industry because, I mean, as Abigail pointed out, there's not that many organic breweries but sustainability is a huge thing and breweries, lots of consideration and sustainable footprint. Of course, there's a New Belgium Brewing Company up in Fort Collins just up the road from here. It's an interesting aspect. So So which beer is your favorite read?
Brad Werner 13:56
Um, actually, I like all three I'm,
Jeff York 13:58
Oh, come on. In. I
Brad Werner 14:00
actually I really do. I would drink them all. And maybe that just says something about me.
Jeff York 14:06
I think I think I like the double IPA myself. It's a it's got a lot of really nice. limonene zingy hot player. I mean, you know, we live in Colorado. It's a throw of IPAs here. And that's right. You let me nerd out about beer. I'll just keep going on. And I guess we should get to the research for the episode. So we wanted to come here today to Asher and I pointed out to Brad I'm wearing my Patagonia recycled wool, organic recycled wool shirt and tribute to this episode. Anyway, we wanted to talk about this, the broad concept of entrepreneurship and sustainability and sustainability, obviously being a term that's kind of slippery, still difficult to define. So we're going to let the authors of the first paper we're gonna try to this week we'll see how it goes. We've got the paper again, I don't know why I've picked these literature review papers we're at other than they just did happen to come out. I thought they were interesting. And this is actually impressed at entrepreneurship theory and practice. It's not published yet.
Brad Werner 15:06
And let me stop you for a second, Jeff. And the audience needs to know that you are actually an expert in sustainability. You may not agree with that. Number, I'll
Jeff York 15:15
take it.
Brad Werner 15:17
Your focus in research has been sustainability, sustainable practices, and certainly in the classroom, you have a big push towards sustainability. So I'm really honored to be able to talk about
Jeff York 15:26
this, you always wait to kind of be on this thing. Well, then we
Brad Werner 15:29
turn the microphones off, and then I put my regular personality. But no, no, seriously, I think I think it's great to have an expert like you, because there is confusion about what is organic? What does organic mean? is organic, certified organic, actually better for me? Yeah. Is it better for the environment? Yeah. And do certified organic practices? Are the actual sustainable practices? Or is it? Is it something that's created? It's tough? I
Jeff York 15:54
mean, like answering all those questions, the answer would be it depends. It depends. It depends. You know, we don't we don't know a lot about what the long term effects of many of these practices are labeled as sustainable is because I mean, they're new, and they're new innovations, new technologies. We'll be talking about a second paper that is about the creation of organic standards, particularly in California. But you know, these are, these are tough questions to answer. And there's, you know, a handful of people around the world that study that, that try to understand, particularly in the realm of entrepreneurship, now there's, of course, a broader, a broader literature on corporate sustainability. And for folks who are interested in that I would point you towards the Alliance for research on corporate sustainability, the arcs, organization, it's pretty amazing organization, which the lead school is a part of a business schools that really look at the cutting edge research in the top journals on corporate standardly. But we don't care about that. We want to talk about entrepreneurship and stem, care about it. Don't get me wrong, but but we're really focused on entrepreneurship and standardly. So if you take like, if we think about business, school academics, right, sure. Let's think about them as a population. And we say how many of those folks are actually interested in sustainability as social and environmental outcomes of action? I would guess it's less than 3%. Not to say he's opuwo. Don't care about me like actually, researcher.
Brad Werner 17:18
But let's compare that though, with the students that have come through our class. Oh, well, yeah. And you and I have seen 1000s of people walk through the doors. Absolutely. And I would say 90% of them, at least in my case, are close Sure, are really concerned about sustainability, and are looking to integrate sustainability into their new ventures
Jeff York 17:34
almost universally, especially here. I mean, I think I think here at the LEED school, we got a lot of students that self select to come here, when they could have gone to other arguably, more highly ranked MBA programs, or whatever that's worth. I mean, honestly, I've had people that have come here who were accepted places like Stanford and Duke and, and I'm always a little surprised, I'm like, you know, okay, if I was your dad, though, I'd be like, hey, you
Brad Werner 18:00
need to go to Stanford. And I would just say, look out the window.
Jeff York 18:02
Yeah, well, there's that but but they do come here. It's not just because they want to go skiing, although that that's an awesome reason to come. But it's because they really understand that or Boulder. And, and the least school has a long history of working in, and particularly in the organic and naturals industry, but also in renewable energy. And the other specific industries that as well as tech, all sorts of tech startups happening here in Boulder. That's a more recent thing. You know, I mean, organics really kind of got started here to a large extent with the founding of celestial seasonings back in the 70s. And, you know, here we see it today with Asher brewing where we're trying to do
Brad Werner 18:38
so when you think of organic, yeah. Does it actually parallel sustainability in your mind?
Jeff York 18:44
parallel? I mean, sure, I mean, aligned with related to, clearly, one of the better mechanisms we know of, of reducing the environmental impact of agriculture. Absolutely. where it gets a little trickier is when you start talking about the health benefits. That's right. And you know, the peer reviewed research is not conclusive about whether there is actually any health benefit to eating organic. Now, personally, I'll just talk for myself. I try not to take a lot of medications and over the counter drugs, like if I've got a cold, I'd like I think I'll tough it out. I mean, if you see things like now let's just find out Zantac causes cancer, for example. And I'm not trying to go out on a limb and say non organic food causes cancer or anything like that. Right. But I mean, this is something that people have to make their own decisions about. Now, clearly the actual footprint as far as pesticide usage and runoff and water contamination, things like that is better for organic. But there's a really interesting paper I believe it was in nature, climate change just last month, I'm not mistaken. that showed if the UK particularly actually of England and Wales converted to organic, the carbon footprint would be at best neutral and probably actually negative. And what I mean by that is it actually be more carbon emissions than there would be otherwise. Because the production that would would have to have happened in the UK would be pushed to other landmasses where they'd be developed. And you would actually have more carbon emissions due to agriculture. So the yield of organic is something folks struggle with. But I think it's actually gone beyond that now, people are now talking more about regenerative agriculture. And that's the idea of how do you do agriculture in a way where you're actually sequestering carbon? And that's actually sort of the the cutting edge of what we talked about in our classes here. And what the organics and naturals industry is really moving towards. But you know, are we at a place where that is actually a large scale adoption, though? Not necessarily, but neither was organic? That's right. You said even even 10 years ago, but but certainly 20 years ago?
Brad Werner 20:50
Well, we we start with small steps. Yeah. I mean, and entrepreneurs, though, are focused on what's the issue, and doing a little bit of background research for today's discussion. Looking into organics, because of the barriers to entry, it is more expensive to get going. That corporate farming is a big player in the organic industry. Yeah. And that environmental footprint is pretty much the same as if they weren't going for organic.
Jeff York 21:14
Uh, yeah. I mean, that's arguable. I mean, there's research on both sides. Let's talk about how they got there. I'd love to and that's that's kind of what this paper is about, right away. The first paper we're gonna do entrepreneurship for sustainable development, a review and multi level causal mechanism framework. Now, what does that title do for your brand as I just draw you right in right into another beer?
21:37
Well,
Jeff York 21:39
so here we go with the the distillation aspect, since we're not a distillery, right? Right. I guess this would be the fermentation. So we'll do that later, though. So this paper is by Matthew P. Johnson, and Stephen shell Tigger. Stefan is actually a faculty member at the Center for sustainability management. At the final University in luneberg, Germany, which I highly recommend visiting, I went visited him there once. It's a beautiful place, just a lovely town. And Matthew was his doctoral student. And he graduated I think, about two years ago, maybe maybe just a year ago. And he's on the Faculty of Business, economics and social science at the University of Hamburg, Germany. Okay. So So Stefan is really one of the leading thinkers and one of the founders of even talking about environmental sustainability in entrepreneurship. He's been doing this for longer than just about anyone, and is a really brilliant guy, and and Matthew, or I guess I should say, Matt, that's what he goes by, is also a really bright young talent in the field. So I was very excited to see this paper come out. And I was excited about that, because there's a growing literature on this idea, academic literature on this idea of sustainability, particularly environmental sustainability, and entrepreneurship. And the basic idea is, hey, maybe entrepreneurs can create things like the organic farming practice that eventually gets adopted at a large scale, like you were just talking about Brett. And maybe we need that, you know, it's kind of building from Joseph Schumpeter his classic ideas, where we take the title of this podcast of creative destruction, we need the entrepreneurs to go out and create these new industries go out and do these things. And when they do, so, they will supplant the less socially and economically efficient companies, and will have a wave of new companies. And we and we see that happen all the time. This is how industries emerge. Here's the problem, though. So these guys did a review of 161 papers. They broke that down from I think, literally, yeah, literally 1000s of articles and just went down and had some criteria to get more, you know, I mean, imagine that, like, as you imagine, like reading 161 of these things, much less now. 4269.
Brad Werner 23:46
I think there's a reason these guys are based in Germany, because the brewing There is also very, very good. And to go through 4000 of these, I'm telling you, I don't know if there's enough beer in Germany.
Jeff York 23:57
There is actually. So they went through all that. And they went through it with a very specific goal. And they talked about in an academic way. They talked about and they say, here's what they taught, called the research question is project, right? Which causal mechanisms articulated in the environmental environment, entrepreneurship, for sustainable development literature, that link macro meso and micro level processes pertaining to entrepreneurship for sustainable development? Now, that's the way we have to frame the question. Okay, what the hell did you say so? Okay, yeah. And so here's the deal. I think what you could reframe that is, how do we help individuals, entrepreneurs that want to, as we've talked about, many of our students want to make a difference and address the massive environmental and social issues we face as a global society. How do we help them make a difference? I that's why we're here.
Brad Werner 24:51
Yeah, that's why we're here. And that's
Jeff York 24:52
what that question really means. Because what they're saying is, look, what they mean by causal mechanism is just the relationship between two things. That happened? How do we understand the relationship between individuals spotting an opportunity to say, I'm going to create an organic brewery? Then to move that up to the meso? Or the organizational or community level? Yes. Create an organization be part of a community push others towards more responsible practices? And then how do we get that to the macro level, which generally means, you know, nation societies, institutions, so they're saying, what is the causal chain? That links from that individual saying, I'm going to do this thing, all the way up to actually seeing real change and the improvement of sustainability?
Brad Werner 25:36
So that totally makes sense to me. But I'm hoping is that wasn't the last sentence of the paper. So
Jeff York 25:41
Pardon me? That's the the first sentence, not the first. It's See, I couldn't count this many sentences. But but it See, generally, the research question in any academic paper is going to come right around the top of the third paragraph in a second.
Brad Werner 25:55
Okay. Thanks. And what we're looking for, though, at least in my my angle. Yeah. is are there suggestions in these academic papers? Yes, that we can actually translate? Yes. And say this would be actually a practical use to someone that wants to make a difference.
Jeff York 26:08
Yeah. And the thing is, they would they would have a hard time drawing that out of this paper, because it gets to that research question. And this is no slam on Matt. And Stefan, no, this is the way we write and they're not writing for that audience. So although I know they both care deeply about this this issue and do a lot of wonderful teaching and working with people, they're leaving things. It's just how do you take that. And that's sort of the point of what we're doing here like trying to trying to take these things and distilling them. And I like this paper a lot. I like it, because it's a very careful review of this literature. And this way, the problem with this literature, and my own work included, it tends to be about how do these things emerge? How did we come to have organic breweries? How did we come to have renewable energy? That's interesting. But it's not really useful if you're a student or an entrepreneur, seeing the classrooms like, okay, that's how they screamed.
Brad Werner 27:05
If I'm studying the history of sustainability, yeah, I care if I'm actually trying to make a difference in the world, and start my business and make a difference. Are there three takeaways that you that you could come up with in this paper? There's two. Okay. So I'm really good, right? One is amazing.
Jeff York 27:23
Actually interrelated. So it is technically one, I'll just say like I've been teaching sustainable, venturing a class about environmental entrepreneurship and social entrepreneurship for like 10 years. And we need more work like this. I do a lot of this. I think, at the end of the day that what's needed and we've talked about this before, is for somebody to write the green startup. If you're out there, don't steal my Well, actually, you can steal my idea if you execute not great good for you. I don't think it's a particular original idea. But we need like a version of the Lean Startup for environmental and social entrepreneurs. Like here's how to do this, right? Here's some framework. Here's some easy ways. We don't have that. And that's why Matt and Stefan are really doing us a service by this paper.
Brad Werner 28:01
So we could write a book together to well, we could do that. Yeah.
Jeff York 28:03
So if you're a book publisher out there, and you're just looking for to pick up some this wonderfully insightful, creative distillation the book. Anyway, back to the paper. So insights. So here's the deal. There's two interrelated insights, I think they're really powerful, because they come from these guys going through all these papers, and then creating a framework about these multiple levels. And then how action works. The first one is, if you're going to move from the individual level, like I'm going to do my startup, right, and I'm going to do everything and I'm really responsible manner. And I'm going to like try to create an environmentally beneficial product, that's a wonderful thing. There's nothing wrong with that. And if you can find a market and and get that going and economically sustaining yourself, I think that's great. And we see a lot of things like that in our classes. Most of the people that do that want to move beyond
Brad Werner 28:53
100, their goal
Jeff York 28:55
is not just to create their own little startup and do that. I mean, there's nothing wrong with that. But that's not their goal, they want to have a bigger impact. What Matt Stefan highlight is, okay, if you're going to move from that, what they call the micro level, to the community, industry, organizational muscle level, you're going to have to engage in some kind of collective action, you're going to need to have some kind of a mechanism, a way to get from we're doing this thing to this thing is right, and lots of us are doing it. And we're going to we're going to make that just the way business is done. But
Brad Werner 29:28
isn't that actually what entrepreneurs do? Forget about sustainability for a second, but in some of your earlier research about effectuation, about how entrepreneurs look to, in a sense, gain partners and establish partnerships as they move forward and grow. Right. Is there a difference between those two thoughts?
Jeff York 29:47
Yeah, so So effectuation is very much a micro individual. So when we say micro, we're talking about the individual as a team theory. It's about how does an individual entrepreneur think and what does The things they do to succeed. That's right. And so when we talk about stakeholders and self selected stakeholders, the effectual model is all about what I'm doing at the venture level. What Matt and Stefan are alluding to here is moving beyond that towards, say, the trade association level. And some examples in this particular realm would be things like the B Corp certification, or the US Green Building Council that certifies green buildings, and then allow for the propagation. But if you think about it for a second, the US Green Building Council can't do anything, if there's not entrepreneurs, creating the products and services that allow you to engage in meeting their certification. Also, more creatively partnering, and this is the second part of this, the second so first one is you got to move into some kind of collective action at the the industry level. So you're not going to be able to really make an impact by just doing your individual business, you might on a very localized level, that might be a very nice thing. But if you want to actually have impacts at that micro sort of broader environmental aspect, you're gonna have to engage in some kind of before you move on SharePoint,
Brad Werner 31:03
I do think that that actually scares many entrepreneurs out there. Once you're, once you start going into this broader level, and you're looking for whether it's covered mental surfboard trade association support, it's, um, it's a dangerous part of your life, your life cycle for your company, if it's a necessary means to this greater end, is there a way though to alleviate entrepreneurs fears? Or is there a best practices approach to doing this, where you don't put yourself in the position that all of a sudden this trade organization doesn't agree with you? And you're shut out?
Jeff York 31:34
Yeah, you know, can we table that for just a minute, because I think the second paper we're going to look at actually dives into the great, great historic case study. So they don't, they don't, in this paper, make prescriptions of like how you should do that unnecessarily. Because again, they're doing a literature review, and try and do their and since doing their own distilling, of saying, here's the things that we found across, you know, 161 papers, that we can say, Hey, you know, you don't have to rely on your 61 papers, you get to say, if I want to make an impact beyond just my own venture, I'm gonna have to engage in that. And and in a related to their second point is, you have to broaden your stakeholder engagement and this is related to the effectual model. And what they mean by that is you got to start thinking about stakeholders, beyond certainly your investors up and and well beyond just being a good employer and taking care of your suppliers and starting to think well, who are potential stakeholders beyond that we just had dogleg get here. So we're like, Okay, awesome. I love living in Boulder. I love that we're in a brewery and a dog just came in, brought my dog. But so. And when you do that, and the effectual mode, when you and this is why I teach, I do teach this to students, like don't think about who should be my stakeholder? Like, how can I get a meeting with Elon Musk like, well, you're not going to. So don't worry about Elan Musk, worry about the person who will meet with you and who's willing to give you advice and put skin in the game. And what they're saying is, if you want to make a broader sustainable development impact, you need to think about a broader stakeholder engagement. And particularly, think about engaging with NGOs, and activist organizations in ways that align your interest. And when you do that, you might actually create opportunity for yourself to do something more on this point, we both agree heartily. And I think that beyond what this paper isn't a sustainability,
Brad Werner 33:34
I just think it's best practices.
Jeff York 33:36
Sure, sure. It's just but but I think it's I always talk about sustainable entrepreneurship as being like entrepreneurship on steroids a little bit, cuz you got to do everything regular entrepreneurs have you do, like, it's not like, Oh, I'm doing this sustainable thing. I'm, I'm making, you know, recycled wool shirts, therefore, nobody has to like them. And I don't have to have a good supply chain, and I don't have to make a decent margin and I don't have to manage well,
Brad Werner 34:00
like no. And then next week, you're gonna be working at the brewery down the street. Yeah,
Jeff York 34:04
exactly. Right. And you're in your recycled wool shirt like this. But you know, I think Patagonia is a great example of that. It's like they don't just do environmentally progressive practices. They make fantastic products, and they market them exceptionally well. That's right. I think Yvonne jannard is amazing.
Brad Werner 34:20
And I agree with that. But I do think it can be a challenge actually, for entrepreneurs. And certainly, when you're starting to actually identify who the stakeholders are, right? Yes.
Jeff York 34:30
And what do you tell people to do in your class?
Brad Werner 34:32
Well, in my life and starting businesses, it's all about meeting as many people as yes you can meet less than what
Jeff York 34:39
yesterday why
Brad Werner 34:39
Yep, it's
Jeff York 34:40
a Don't worry about the people that don't like you. Listen, take what you can from it and move on. That's right. And that's and so so taking that that individual insight that we have as teachers and saying, Okay, let's let's see, the nice thing about paper like this, is because you know, you and I can say that and our students will probably believe us because you know, because we can be persuaded But to me, it's like when you look at the academic research, it's more like, Hey, you know, next time you you tell someone that you can say, hey, these guys, you know, in 2020, reviewed 4000 papers, and found across those 4000 studies, you know, and that's just a quick summarization. I'm not doing justice to their paper. But, you know, hey, if you want to be successful in making an impact, you're going to have to think more broadly than your individual venture, you're gonna have to think about how do we create a broader industry wide impact? And I'm gonna need to think more broadly about who my stakeholders are than the way normal, quote unquote, normal companies think. Yeah. And I think that's awesome.
Brad Werner 35:36
I think you're preaching to the choir here. I think that this is this is best practices for entrepreneurs. Yeah. And if this this paper points that out, and gets us talking about it, yeah. And people actually hearing this message. Yeah, I think we just did a real service to our listeners, in bringing this up. So I think that that's
Jeff York 35:52
what's cool, though, like, and I won't go into it, but they actually break down at each of these three levels, what are the specific actions you can do based on the situation based on taking action, and then based on transforming institutions towards greater sustainability? Now we are trying to be better at distilling. So now I gotta go into that. But you could, I guess I could probably will create a whole session of a class or a lecture about Okay, so let's look at the phase, your company, what you're trying to do, here are some specific actions you can take. And then how did those link to the next level, right. And so I think it's a really nice paper people, they're interested in trying to do that academics. You know, I mean, it is a literature review, it is dense reading, for, for a non academic, it's gonna have a bunch of language in it, that is maybe not the most interesting. But the cool thing about Matt and Stefan's papers, there's all these tables. So you don't have to read the paper. If you're not an academic, you know, read the
Brad Werner 36:47
paper, that's a hell of a plug for your friends, you don't have to, you don't have to read the paper, just look at the picture.
Jeff York 36:52
Now, if you're an academic, you should read the paper because it's great. It's gonna be very well cited, but a page 12 and 13. It'll be different page numbers when it's published, but in practice, and then page 21, there's nice little tables. So I mean, you know, if you're teaching your class on sustainable entrepreneurship, and your this is, you have no idea what you want to do, you could do worse than to start here. Yeah.
Brad Werner 37:11
And the bottom line is, broaden your stakeholders actually cast a wide net, I think that that was a really great way to frame that. Absolutely. And and then you'll find people that actually share your vision, or share your vision and can actually help you and, and, and I think that this collaboration that can come out of this can also be a really beneficial outcome for nurses.
Jeff York 37:31
I agree. And I want to very quickly talk about one more paper because at the end of this paper, what Matt and Stefan talk about is the need by involving stakeholders, environmental social associations are social networks into venture development, entrepreneurs can create business opportunities on the micro level through stakeholder support at the muscle level. So what they're saying is when we reach out to these stakeholders, at a broader level, we can perhaps create opportunity for themselves. What they don't talk about is what our next paper talks about. And we've been talking a lot about organic because this paper, which is this paper is a little older, but I thought it really nicely dovetailed with the other one. This paper is an organization science was published in 2017. And it is by Brandon Lee, Shawn Hyatt and Mike lawns brewery. And these guys, Brandon and Shawn, both are graduates from Cornell's Business School PhDs there. And Mike is again one of the leading voices and more broadly corporate sustainability. He's been doing this for a while similar to Stefan really a leader in this and back doing it before it became more popular. And their paper is really interesting. And the title is market mediators and the trade offs of legitimacy seeking behaviors in a nascent category. Now, if our last, our last title turns off, hello, Brad, I bet that one really,
Brad Werner 38:51
I still have a little beer left. So yeah,
Jeff York 38:52
I'm a little left on it. Okay, good. Man, that sounds good. So what's interesting about this is this is a deep dive into what we were just talking about, about how it happened. And I love I love this paper. So I saw this paper presented for years. And and like many creative papers, it took a while to find traction find a home because Brandon did this, if I'm not mistaken as part of his dissertation where he spent a lot of time looking through historic documents and interviewing people to do qualitative research, no statistical analysis, there's just a great story, and really interesting insights derived from it. So here's the thing here, the problem they're looking at with this paper is, you know, I think if we think about sustainability, clearly, we need new market categories. to emerge. We need things like organic, organic beer, we need things like renewable energy, we need these categories that are not clear to most people what they are when they first come, right.
Brad Werner 39:51
But I would say and I don't mean to use this as a pawn, but those categories should actually percolate organically. Yeah, right. Founded by Entrepreneurs micro level gains traction and then you go and
Jeff York 40:03
then they do and then and that's sort of the story. That's sort of what it's the How do you gain the traction? Like, how do you get there? And and this is sort of something we talked about is optimal distinctiveness. That's, you know, a $10 word I love. It's pretty. I mean, I think it's something that all entrepreneurs have to do is right, how do I be recognizable enough that people can get what my product is about, but be different enough where I'm valued differently. And this is really a problem with an emerging category. So the question here, in, you know, more applicable, impactful, hopefully insightful way is, how do fenders balance, this double edged sword of trying to be distinctive enough, at the same time try to gain traction for their broader industry. And so what they do is they study California, oh, gosh, I knew I was gonna mess up the CCLS.
Jeff York 40:55
California certified organic farmers.
Jeff York 40:59
And how that turns up period going from 1993 to 2006, from a collective of individuals who cared about this into a broad certification, of course, eventually gets sort of subsumed by the larger federal organic certification. And it's interesting, I remember, you looked at this, but you had a specific fall, like, what happens when the government gets involved?
Brad Werner 41:20
That's right. And when the government gets involved to me, it's always terrifying, right. That's the end of everything. Good. That's happened. And I and I, actually, and I actually think that the government is trying to do good things. But of course, for me, a general cookie cutter approach that works in one place normally doesn't work in another
Jeff York 41:37
Yeah, right. Yeah, sure. And, and so that's actually one of the one of the kind of lessons of this paper. And so so I might allow the insight here, and I can't distill this into like, a one takeaway, though. Okay, but but I do think they lay out a really nice a process model of how do you manage that, that optimal distinctiveness, we're a bunch of guys and gals, and we've started up our organic farms in California. And we want more people to do organic farming and we want to succeed,
Brad Werner 42:07
well, first of all, our interest even aligned, right, because success means different things to different people. So this is even though it sounds like wow, everybody, this makes sense. We should all go and do this. It's not that simple.
Jeff York 42:18
Yeah, no, it never is. And and in this paper, what they show is that process emerges. Now with qualitative research, you're not trying to say, this is the way it will always be done. And this is generalizable to everyone in every place. But you're trying to say, here's a story. Here's some insights that emerged from it very careful analysis, not journalism, either, because they're going through like every word of every record, analyzing it pulling out themes. It's not just saying, here's what happened. It's saying, here's what that means. And so first step in this, you've got to set and verify a standard if you want this to take off, yes, the reason you have to do that is because that defines what the category actually is, and makes it where people can understand and trust in what it's doing. Second step, you've got to grow membership. And as soon as you start to grow membership, you face a double edged sword of are we diluting what we were doing to your point? Do we even align on that anymore?
Brad Werner 43:13
Or does the membership get to a point where they rewrite the definition?
Jeff York 43:17
Yes. So what do you do? This is why I love this paper every time I must just say with these steps. I'm like you say what's wrong with that? Because I'm
Brad Werner 43:26
not trying to find
Jeff York 43:27
Oh, no, no, no, no, I just mean, because you haven't read the page right now. And I want you to bring like, you know, these are, this is what I would think about right? As an entrepreneur. Okay, so Yeah, exactly. So how do you how do you do that? What you have to do to avoid that is you have to professionalize. In other words, you have to have standards of what it means to be a member. And you have to frame what it means to be a member consistently. So you have to have written documents, clear charters, statements that you go by create
Brad Werner 43:57
an infrastructure,
Jeff York 43:58
exactly, almost a psychological infrastructure of this is what we're all about. Right? Yeah. That's what we were doing earlier tonight. We were trying to frame the podcast, right? And we're like, well, what's the, what's the Senate's gonna be right? Okay. Second thing, you have to engage downstream in the supply chain. In other words, you've got to get the people who are going to buy your products and market them to the general public to actually work with you. You've got to engage those folks.
Brad Werner 44:23
And that can be dangerous early on, because you may be dealing with single source suppliers, as you've early on, gain traction. And once you start to scale, that's dangerous. So in a sense, you need to resonate your message actually downstream as well. I'm just laughing I'm
Jeff York 44:37
here. This dog barking in the back. He's worried about this. He's agreeing. He's agreed he's agreeing with you, but he's worried He's like, be careful. Yeah. And so what they say you have to do to manage that is you've got to strengthen your verification processes. Because if you're engaging with these downstream suppliers, their goal is going to be to push you to make your product cheaper, faster, better. All those things that they do. And so you've got to make sure you're keeping those verification standards, you're ratcheting them upwards even
Brad Werner 45:07
so they can tough. You need intellectual buy in from your downstream suppliers,
Jeff York 45:11
which again goes back to the broader stakeholders.
Brad Werner 45:13
That's right, it is expanding your stakeholders 100%. But that's actually much more difficult, especially on a small scale. It's very, very difficult. And
Jeff York 45:22
that's why sustainable entrepreneurship is entrepreneurship on steroids. Yeah. It's it's like trying to run a race by putting on some shoes with lead weights in them.
45:30
That's right.
Jeff York 45:31
I mean, I, I think it's a great, I'm obviously a supporter of it. But I always like to make my students understand, well, this is gonna be hard.
Brad Werner 45:38
So but I do think that there is just off the top of my head, I'm thinking of a couple techniques that may be effective in doing this Sure. In, in a sense alliances with your suppliers, yes. Right. So if you can create this alliance and show how your business can actually help grow, they're absolutely gonna do no harm.
Jeff York 45:54
They might even be initial investor. That's right. That's right. That's absolutely. Okay. Third thing that you're going to be most scared of? This has got one kid authority from the state, right? That scares the crap out of me. Yeah. So what do you think you can do? I mean, like, they are saying, yeah, it should scare the crap out of you. Because as soon as the government has control of something, and you've vested the authority of what used to be your own private certification into the state, you know, you often will lose control. And you're going to lose the ability to be very innovative, because now you're beholden to all sorts of regulation and things like that.
Brad Werner 46:27
And tribalism is resonating so deeply in this country. What politics are and what's right. So that, to me is dangerous.
Jeff York 46:36
And see, and that's the thing. I mean, just as a brief segue, I must say, almost down topic. You know, I'd actually
Brad Werner 46:43
like to hear your thoughts on this as
Jeff York 46:45
well, no, I think like I mean, that's why entrepreneurship is such not just a not just an important thing for people and for companies and for the economy. I think entrepreneurship based on my own research, gives us a way to get past that divisiveness in our country. I think it's very hard to find people on the left or the right, in any prominence, who are opposed to people building new business products and services that are economically prosperous, and have a positive environmental or social impact, inherently hybridizes the arguments where it's hard for people to argue against, so I put
Brad Werner 47:30
my hope that I would love to do that. And I don't want to be a cynic. But I'd also like to tell you that last night before I went to bed, I saw the tooth fairy running out of my room.
Jeff York 47:39
Yeah, but this happens, man, like, I
Brad Werner 47:41
hope so. But
Jeff York 47:42
it's happening. I mean, it's not that like it's happening in such a way that we don't have to worry. We talked
Brad Werner 47:47
about scalability, though. So it may happen on a very localized level.
Jeff York 47:50
Yeah, but right. So everything makes it look like it just makes sure I mean, I think you'd be foolish to not be nervous. But I mean, I don't know what else is gonna happen. Do you think that like corporations are all of a sudden gonna toe the line and totally agree with you? Okay, so the bottom line is what else we have to operate in the world that's in this reality. Okay. So how do you manage that? They got a really simple and pragmatic suggestion, you control the board. So when they partnered with the state, they made sure that six of the 13 board members on this certification organization, were members of the CCF right now, six of 13 is not a controlling share. But considering the other board members for from a wide variety of organizations, it's not it's not bad, you know, if you're doing a startup, and you're able to do
Brad Werner 48:39
that, so that's been the strategy with the big boys forever. Yeah. Right. So in a sense that the smaller players are thinking like this, I agree. But I do think that it's a challenge that when you're talking about taking on the big boys, and they control the boards, yeah, it's, it's tough. And once again,
Jeff York 48:54
you gotta maintain your you gotta maintain your small, centralized identity of the organization, you're gonna if you're gonna maintain that distinctiveness, right? That's right. But you got to have these steps, because otherwise you just remain silent, you'll never get beyond I agree.
Brad Werner 49:08
So I think in a sense, if you can build this team of stakeholders, right before you tackle these problems, and you come in with a crowd versus versus an individual, and these alliances, yeah, and the alliances, that actually gives you some power to actually take on, larger player,
Jeff York 49:23
so if I had to distill all that down, overall, the message this paper is if you want to actually create a new market category with some of these social good spillovers like the organic industry, overall, you've got to reduce the differences between what you're doing and what already exists. You've got to make it as small of a difference as you can because otherwise people will not adopt. That's right. But you also have to maintain specific clarity on what empirically is differentiable about about your product differentiated.
Brad Werner 49:54
And I would say that that might be the toughest challenge for an entrepreneur because all of a sudden you start to grow and you see another shiny ball bounce across your, your vision, you can lose focus.
Jeff York 50:04
That's the micro literature. That's not
Brad Werner 50:07
what I'm talking about. But all these things are real traits of human. Oh, yeah, sure, sure. Right. And I'm just trying to say Actually,
Jeff York 50:13
that's a great segue into into the but right, I would say that's the big lesson of the paper. But know that when you do that, the identity of the thing you loved, that you and your friends all created together, is going to become Obama's, by definition, less special. And it's going to get blurry. Yeah, it's going to inherently not be as much of the true believer kind of thing you had going. I mean, it's going to get
50:42
diluted.
Brad Werner 50:43
Yes. That change, though, is still better than living a week ago.
Jeff York 50:48
Yeah. And that's actually some things I'm working on now. Like, I've got a paper called Green daggone, where it's showing you a lot of these entrepreneurs in the green space fail. That's right. But we're better off for it. Right? If
Brad Werner 50:58
you want to turn an aircraft carrier, yeah, it takes a little bit of time, a couple degrees,
Jeff York 51:06
which is why I'm an academic and an entrepreneur. So that's it. That's, that's all we got for you this week. So again, check out these papers, organization, science, market, meteors and the trade offs of legitimacy. First author's Brandon Lee also was Sean. Hi, Mike Lansbury. Wonderful paper. just fun to read, actually. And I think this is one that anybody can pick up and read and actually enjoys us telling a story. And then a Matt Johnson and Stefan shot Tigger, entrepreneurship for stabled. Oh, that one's forthcoming in entrepreneurship theory and practice. And
Brad Werner 51:36
that's the one that comes with a case of German beer. Tell you what,
Jeff York 51:39
I'm hoping they're gonna provide us with some German beer for talking about No, I would have talked to anyway, I love these. I love these guys. I love their work. And they're, they're wonderful scholars. So anything, anything final thoughts on this topic? Right?
Brad Werner 51:51
No, I actually, I think that it was very insightful. And I do think that we picked up a couple pieces of valuable information, perhaps that that are actually practical. Well, I know, I know,
Jeff York 51:59
you've you've engaged in all sorts of startup activity that have more than an economic mission. And, and that's one of the things I love about you. And and I think this is something that, you know, when we can teach our students and when we can help other entrepreneurs who are trying to impact environmental social issues, but also make a living for themselves, because it's really tough to do these things. If you're not able to eat
Brad Werner 52:20
that's right and change the world. I
Jeff York 52:21
mean, it's such a great way to be too cliche. But I see the only thing I have much less somebody say, somebody told me how grumpy I was the other day. I mean, I'm not grumpy about this, this is something I actually maintain hoping. And I think it's where the change is gonna come at least I hope so.
Brad Werner 52:37
Yeah. And I totally agree with you. And I think that you've selected two great papers today. Well, that's the other thing that I'd like to have our listeners understand is we're going to throw a slide up at the end of the podcast, if you'd like to try for Jeff right to address a topic, email sent the emails provided. And we'd love to talk about some of your issues, and something that's pertinent. And if there's a way that we can distill something for you, that would actually provide value in your venture. Yeah, just let us know,
Jeff York 53:04
we'd really love if entrepreneurs wrote in and said, Hey, you know, I'm curious what the literature says about this. For sure, I'll do my best to give up. And, and we're really excited. We have a couple of, I don't want to give away too much, but we have some really cool guests coming up. So it will always just be Brad Nye talking about this stuff. And we're gonna bring in guests, we're gonna bring in guest entrepreneurs, guests, academics, and the Oh, breezy to find go to the Deming Center for Entrepreneurship and elite School of Business at University of Colorado Boulder, you can email us directly. Email, the Deming, sariel. Get to us and let us know your suggestions and questions. Perfect.
53:39
Thank you. So let's go out. Let's
Jeff York 53:40
go try that ginger beer. She talked about it. I meant I want to have the really strong one now that we will be talking. Alright, thanks again. Thank you forward to talk to you next time. Bye
53:49
bye.