Why This Company Believes That Democratizing Data Requires a Social Impact Business Model
Brett Hurt of data.world Shares Why He Believes Benefit Corps Are the Only Business Models for the Future
The story that follows is an excerpt from the original interview published on Forbes.
On July 11, 2016, Brett Hurt, serial tech entrepreneur, launched his sixth business with three co-founders. Austin, Texas-based data.world, “a platform for data teamwork,” is a mission-driven company that received 100 percent investor support to operate as a benefit corporation to create societal value through growth, IPO and beyond.
“People say that data is the new oil, but the truth is, it’s crude, unrefined and hard to find,” Brett says. The company’s vision: To unlock the latent value of data (now only available to giants like Google) by making data and best-in-class data analytics technology universally approachable to universities, nonprofits and people around the world.
data.world is a 2017 Best for the World honoree. Find the full list of Best for the World companies and all of our stories about these companies setting the gold standard for people using business as a force for good.
In February 2017, data.world closed $18.7 million in venture capital funding at double the valuation of its previous round. This second round brings the total amount of capital raised to more than $33 million. Their investors include Chicago Ventures, Fyrfly Venture Partners and Shasta Ventures.
The co-founders of data.world, along with their board and investors, all agreed that to maximize the long-term value for themselves and society, the company needed to launch as a benefit corporation and certify as a B Corporation.
“For what we do, being a B Corporation makes so much sense. The majority of community members access our tools free, and we make money on corporations. I’m passionate about this form of business and this form of being,” Brett says. “So much so, that we had a hand recently in getting Texas to pass legislation to make benefit corps a reality here. We were called on to testify and work collaboratively with them on it, and it got passed. This is something I authentically believe in, it is something I am passionate about. I feel good to have had a fingerprint on it, to know we helped to make a difference.”
I spoke with Brett about why he’s convinced being a different kind of business may be the only way to do business in the future — and why it matters to data.world’s mission.
You and your co-founders already felt that the mission and ambition of data.world was to change the world. Why did you decide that your corporate structure and a certification mattered?
I have three answers:
№1: I was highly influenced by Neil Grimmer, founder of Plum Organics, who is in my Henry Crown Fellowship class [in the Aspen Institute Global Leadership Network]. He’s the one who really started to teach me about what B Corporations are.
№2: I was also highly influenced by Conscious Capitalism, for which I served on the board for two years. I just resigned a couple of months ago to focus entirely on data.world.
№3: I got to know Rick Alexander, head of legal policy at B Lab. As I got to know Rick, I couldn’t see any downsides to benefit corporations. It’s all upside. I think most people, when starting a business, just go through the normal motions. They incorporate as a Delaware C-Corp, and check, it’s done. Rick sent me the benefit corporation FAQ, and it struck me as a no-brainer. I knew it would be incredible for recruiting, for centering our board of directors around our mission, for setting the public tone, because we report against our mission publicly. For this type of business, it’s perfect.
Now that we are a benefit corp, I still get questions from people asking me if we are a nonprofit. I enjoy answering those questions and educating others, and explaining why it’s superior to C-Corp structure. I always tell people that, 10 to 15 years from now, I think more people will be asking why are you not a B Corp versus asking why are you a B Corp. You don’t have to follow what everyone else has done — you don’t have to be a part of the herd. I think the question is why wouldn’t you do it, not why would you.
It has worked out much better than I thought it would. I thought it would be a moderate benefit, but it’s been a huge benefit.
In what ways?
Let me give you an example. I was at SXSW last year, before we launched. I was with Megan Smith the Chief Technology Officer for the Unites States at the time. I was explaining to her what data.world does, and she was interested because she had helped pioneer some open-data initiatives within the federal government, including launching data.gov. But when I told her we were a benefit corp, she stopped in her tracks, pointed at me and said, “I have been waiting for someone like you to come along.”
We now have amazing partnerships with the federal government, including our work with the Opportunity Project. We are an NTIS joint venture partner alongside Accenture, Deloitte, HP and Palantir. Here we are, a 33-person company, working alongside these giants.
I just didn’t expect that strong reaction. I thought people would think it was cool, but I didn’t know it would stop people in their tracks and have them immediately want to work with us. Being a benefit corp has also been amazing in our work with universities. And it hasn’t just been the mission-driven millennial generation. People from older generations have been embracing it as well and wanting to work with us.
Our decision as co-founders to become a benefit corp took, without exaggerating, 10 minutes. We knew it was the right thing to do. The other big decision we made was to give a large chunk of equity to the Entrepreneurs Foundation, which we also did at Bazaarvoice. That has gotten us involved, along the way, with lots of nonprofits as well as in providing money for future entrepreneurs.
How, then, was the conversation, with your board and more than a dozen investors, on becoming a benefit corporation?
For the board meeting, I was pretty nervous actually. I’ve known our main investor for 17 years and consider him a close friend, and he was initially nervous about what this different structure means. I had sent him materials prior to the board meeting, and I had Rick Alexander join me at the board meeting. Thirty minutes in, our lead investor stopped the conversation, and said that it made perfect sense, and we should do it.
Then, I went to our other investors . One hundred percent of them signed off on becoming a benefit corporation. Fast-forward to the Conscious Capitalism summit last year, and John Mackey [CEO and co-founder of Whole Foods and an investor in data.world], was the keynote. John said, “If I started a company today, it would be a B Corporation.” And I know we had an influence on this conversation, because he and I had debates about it. It’s like ripples in a pond, you never know how a decision is going to influence others.
It is a superior method of incorporation. I don’t see why people wouldn’t want to do it, I just think people haven’t learned about it.
