Interview with Jan Beranek of U+ on Persuading Businesses to go Green

Hello and welcome to this episode of Conscious Design. I'm Ian Peterman, your host and author of the Conscious Design book. I'm here with Jan Baranek, founder and CEO of Uplus. They work with Fortune 1000 companies with over 100 digital businesses with a combined valuation of $1 billion that they've launched. He also mentors with Google in the Bay Area, and we're here to talk about how to make an impact, startups, and making the world a better place. So welcome to the show. Good to have you.

Thanks, Ian. Good to be here.

Awesome. So starting with, you know, everybody loves a good backstory. So you work in the startup space and you work with a lot, having launched over 100. That is quite a few digital businesses to launch. How did you get to where you're at, where working with startups is now your life? You do that day in and day out now.

Yeah, so I started coding and designing when I was 14, and that started there. I founded Uplus when I was 20, while I was still at the university, and it was always a vessel for learning for me. That was also around that time when, you know, the marketing agencies were discovering that digital is a big portion of the mix, that You know, now is— that was a given, but back then nobody really understood it. So it was people like me very early on that had, you know, comparatively limited knowledge with the, with the rest of what was going on in the mix. But I was the one that could get things done, and that's how U+ originally started. But we wanted to move to sort of longer projects with more impact, and that's how we got to corporate innovation. And then I was the first one. And then, you know, 100 projects later, 100 businesses later, there's a big process, an international team, there's good results behind it. So it was a sort of path of discovery, I would say, and learning. And I always say that I started as a designer and developer and became a CEO by accident.

Well, it sounds like a happy accident though, cuz you're, you're able to do a lot more from where you're at than if you're, you know, just a developer. Um, along the way, you, you know, you've said this was a, a learning process, right? So what are some of the things that on your journey, you mentioned wanting to work with projects that have more impact, but what kind of, what started you along that journey? Cuz not everyone decides, oh, I wanna do more impact. Sometimes just, oh, we wanna do bigger projects cuz It's easier to do, you know, one project over a couple years than a bunch of tiny ones. So what, what really drove you towards that impact side?

Um, well, if we define impact as helping people, you know, positively, that's— I think that came a little bit later. The impact on seeing that the work that you're doing is a little bit more long-lasting, I think, just comes with experience and with the time that you do in a particular industry, right? with the marketing stuff that we did early on. It was, you know, it was the landing page here, there's a couple banners there, and then 3 months nobody knows what it was, right?

Right.

So it's good for learning, but it's not good for, you know, looking, uh, uh, looking, you know, behind at what you've done and seeing, okay, this is actually how I've improved here, this is what I've done. So I wanted to have— I want to see the impact of the work that we were doing on, you know, more capitalist things like bottom line and things like that and an improvement in efficiency, et cetera. And I knew that it could be done through software, right? It's only later, you know, in the past couple of years where, you know, we've achieved a lot. And I looked back and saw, you know, back then it was maybe 60, 70 businesses that we brought to market and the billion-dollar valuation that we sort of calculated. And I said, well, how are we helping the planet this way? And if we were— if I was frank with myself, I was like, I'm not sure. I'm not sure that we're helping in a super positive, long-lasting way. We're definitely helping our customers achieve their business goals, but how can we set up the environment so that the business goals are aligned more with where we need to be as a society?

Right. And as you, as you began to make that shift, right, you're already proving, oh, we can create things that make sense from a business standpoint. You're making profit, you know, obviously with a billion valuation, you're— it's measurable in success in that way. What were some of the things that you— what was the resistance to shifting, or how did you start to shift over and keep it making sense? For business to say, okay, yeah, let's make you profits and let's see how we can do something that improves the planet in some way.

Right, so I think it's an unanswered question still, what is the best model for it? There are many different organizations like the Grameen organizations or Unisocial Business, but for us it was really— right now we're starting to get more requests for things like that. But from my side, it was a discovery of when you say impact, impact is a super loaded word. You never know what it means, right?

Right.

So trying to really understand, I spent 9 months with 2 partners trying to understand what the space even looks like. Spoke with impact investors here in the Bay Area, in Sweden, pretty much all around the world, and trying to define what is impact, right? What is what is impact for them? And for each one, it was something very different. But I think we found a good definition that I liked, which was, as a social impact business that an impact investor would invest in is such that for every unit of profit generates a unit of impact, and the CEO cannot decide to make a trade-off between those, right? Because as long as they can, That's— it's not, you know, in tough times it's going to be profit because that's what, you know, keeps you afloat. Right. So, and I've started thinking about, okay, so how can, how can we infuse the business models that, that we're trying to build with these large organizations with this sort of a thinking so that automatically when it becomes successful, it automatically becomes impactful, right. So we've ultimately written about a 50-page report on how startups, how tech startups can be scalable, profitable, but also impactful and contribute to solving not only the SDGs, the Sustainable Development Goals, that we now know that are not going to be met by 2030. So we'll need new ones. So we also took a stab at what are the grand challenges of the 21st century that need to be solved, and how can startups do it. So that was published, I think, a year and a half ago. And since then, One of my partners founded a venture fund. With the other one, we created a platform called Moonshot Platform that helps exactly these types of startups with connections to either mentors, investors, other, you know, hiring, things like that. And in terms of U+, starting to implement it into the methodology that we use to achieve, sort of find and achieve product-market fit. And scale for these businesses that we bring to markets.

Got it. And so you like what you pointed out, right? It's not— you don't have to have the trade-off. And that's something when I talk to companies and startups, there's still a pretty strong belief that it's somewhat of an either-or process, right? You have to somehow trade off. In what you've been doing and what you've been seeing and how you communicate with people, What are the things that you use or can show people to say that, you know, basically prove the whole, you don't have to have the trade-off, we can actually have a positive impact and still be profitable? How do you navigate that kind of conversation of helping people get on board and understand that?

Right. So I think there are 3, 2 or 3 aspects to it. One aspect that certainly pushed this forward is I think the top 100 companies in the US or globally signed a pledge that business of business is no longer only business. That was, I think, 2018 or 2019. Apple and such companies signed that business of business is, yes, to be profitable, but also to positively impact the communities that you're a part of and global society in general. So that's a massive shift because for the longest time, it's been just more money, right? And that's no longer the case, right? And the biggest companies are already subscribed to it. So that's that part. And the, just let's say top-down. And the bottom-up part of that is, well, you have millennials. I'm a millennial. You have people who come to the workforce and they want to see purpose in what they're doing, right? And they want to see that what the effort that they put into the work has some sort of a positive outcome apart from making money. So it's demand bottom up. And I think the third portion is also people are now realizing there's enough— we no longer can be complacent with the climate change. And people see that there are secondary or secondhand effects to just focusing on making money. and not taking into account either the other humans around or just the planet in general. So there are factors that independent of what I want to do, I think are happening in the world and making the path easier for everyone.

Yeah. So you mentioned too, both the environmental impact, but also the social impact. Do you, in those conversations, do you usually find that it's both? So it's, it's really approaching and looking at both kind of impacts, be it your fellow humans and the environment, or is there more, more focus or leaning one way or the other in the conversations you've been having?

Everybody has their own view from, from their own business model, right? So if you ask, if you ask the impact investors here in the Bay Area, at least the ones that I spoke with, I said, well, what does it mean for you? And they said, well, it means half an FDE that we need to add, that sort of hits our bottom line, but that's the person who helps the startups with setting the right metrics, that sort of does the reporting for us and for them, so that we know that actually they're sticking to their mission. Because a lot of these impact investors also have mission drift clauses that, like, if we invest into you, Mm-hmm. because you're focusing on solar panels. If you're going to focus on some nonsense like clean coal or something, we're not going to invest in you. And we're going to pull the money. So there's an impact from their side. That's how they see the impact. And for them, it's relatively, I would say, irrelevant if they're general enough, if it's social or environmental. It's big pick a couple of metrics, one or a couple of metrics that you can measure, that you can show that you have impact. So it could be local community job generation. It could be tons of CO2 not in the atmosphere. It could be things like that, but things that you can report against. Because if you're trying to— there are multiple different ways of calculating the abstract impact, but those are very academic.

Right.

So everybody's just trying to focus on something that they can measure, that's tangible, where you can see the difference. But if you look at, for example, human health, and you look at clean air as one of the aspects, well, there's gonna be an environmental piece to it, but also social impact, right?

Mm-hmm.

Because if I was born in the most polluted, part of Central Europe because we're downwind in a ditch from a massive ironworks. I got it good, but now the kids that were born after me, 99% of them have asthma. So what is the efficiency toll for these people later in their life? There's multiple different aspects. So you have somebody polluting here. You don't have clean air. Maybe these people could have been athletes. They aren't. They could have performed other feats of even put their brain into work and they can't for various reasons. Right. So I think rarely it is just one dimension that you look at.

Yeah. And that's been my— when you actually start to think about impact, you can't really pull apart. At least I don't think you can really pull apart those 2 impacts, environmental and social and things like that, because it's so— once you dive in, you realize it's all just dominoes. And messing with one, always there's something else that gets triggered when you start positively or negatively impacting them.

So I think— so I agree. And I think that then just picking a couple of metrics that are tangible that you can report against and can be the North Star for your team and decision that you make internally, like for example, B Corps have to. I think that's a good start. And then you have companies, I forgot, I apologize, forgot the name. There's a company that does a large property management in Manhattan. It's a tech platform that switches on and off lights and heating in areas where people aren't during the night, et cetera. and you have a couple massive skyscrapers that are in the system, suddenly there's a peaker plant in New Jersey that doesn't have to turn on. So it's a positive outcome of implementing this technology that you're saving CO2 that doesn't have to go into the atmosphere. So there are things like that you wouldn't think that have positive impact, but if they're part of the mission of that company, then you're going to make decisions and you're going to reach out to those people, et cetera. And I think in this example, Again, apologize, what the— I forgot what the name of the company is. The Peeper Plant actually reached out to them because they saw a difference.

Hey, it's Ian here. So glad you're enjoying this episode of Conscious Design. If you want the full scoop on conscious design, what it is, how we do it, how you can do it, then check out our book. We wrote it so creative entrepreneurs like you can code social and environmental responsibility right into your brand's DNA. You can download the first chapter for free Link is in the description. Enjoy the rest of the episode. Don't forget to like, subscribe, and share. Wow. Yeah. And I think, I think that's an interesting— I talked to a couple of people recently and the idea of efficiency is also usually tied with sustainability in one way or another. There's a lot of like, like that example, you're being more efficient with your building management. You're, you're not paying for lighting and heating and cooling and those things. If no one's there, which is financially efficient, it's energy efficient, and thereby it's also actually being environmentally efficient if you're not kicking on an extra, extra little plant to pump out energy for it. When you're looking at software, because software is your realm, what are the things— what are the top things that you can look at? as a software company in terms of being more sustainable, improving your impact? What are the things that if you were to look at a new startup, what are the top things you'd say these are the areas that software can really, really have this impact? And I ask this because in the tangible world that I live in, it's really easy. Well, don't use plastic, use bamboo. We can material swap out. is kind of a really easy thing for people to grasp. But on the software side, it's a little bit more etheric for some people. So how do you ground that into what real impact can be with software?

I think the motivations of a startup in terms of the immediate sustainability, or let's say if you connect it to climate change, that would be the thing like, Things like you keep your servers running all the time, right? But the motivation of them is already connected because everything is now in the cloud, right? So, and you pay per use, right? So you're trying to minimize the use while maximizing the output that you're getting out of it, right? So that's a good lever that those startups have. I'm not sure if there's anything else, like from a software perspective, that's a good question. Maybe I'm just ignorant on this. But the way we're looking at that piece is more— we have a global workforce, we have 23, maybe now more nationalities in about a 100-person team, and we're generating profit in many different parts of the world through their work. So how can we stay true to being a good global citizen and reinvesting into those areas, right? So we're looking at internally It's from an accounting and financial perspective, it's relatively complicated. So we've been talking about it for a year and we still haven't implemented it, but the model is still the same. How can we redistribute parts of the profit that are generated from those areas into local communities in those areas and have the people that are from there have a say in where it goes, but also so it's aligned with the company ideals, right?

Yeah.

So when you have 23 nationalities, we have Canadians, Americans, we have all sorts of Europeans, we have people from Africa, from the Middle East, we have people in Russia. So how do you align on a set of similar causes that you can apply across, so that you're a force for good? So that's what we're thinking about, basically a profit redistribution scheme into local communities. where people have a say in where it goes, but it's part of one direction for the whole company. So that's how we're thinking about it. So more social engineering rather than software engineering in this case.

I love that idea because that's— so many companies these days aren't just one, you know, the kind of the day where you have an office in one city and you just— that's your company, that's kind of dead. And in a lot of ways. So I think that's a great— that's a great idea to be able to help it be local while, while still being such a distributed— in 23 nationalities, that's a lot of countries and places, places to be touching, but to impact.

And there's anecdotal financial sense to this, right? So it's not like you cut, let's say, 10% of your profit away The financial sense behind it is if you look at the most performing companies, those are the ones that have the most engaged employees. There's something like a 17% difference against peers if you have higher, like the highest engaged employees, like 99th percentile engaged employees versus not. So if it's 17% higher shareholder return, Because more engaged employees. So what, let's, then the question should be, so, well, how do you engage employees? Well, engaged employees are the ones that find purpose in the work that they do, right? And show up and wanna do it, right? So, and one of the best ways to have them engaged and have them connected to the purpose of what they do is to have positive impact on the communities that they live in, right? So it can be that force of good there, right?

Yeah.

So if you follow the chain of logic, I don't know, there's probably some ratios there that maybe doesn't work out, but there's financial logic as well that from a very capitalist perspective, yes, you cut away maybe 10% of your profit, but you have— there's an investment that you're making that can return 17%. So that's how I turn capitalists on this idea.

It's like— I mean, anybody that— if you spend $10 and get $17 back, that's a pretty good deal. So people do spend $10 and get $11 back and call that winning. Better returns than a lot of other things. That makes a lot of sense. And yeah, the whole efficiency part, it's a huge thing, right? The engaged, and like you said, especially with millennials and the workforce, the workforce age is shifting. The generation is moving.

Yep.

So most of the workforce, you know, there's a lot of retiring, there's even more retiring through pandemic, and now we have a larger workforce that really does care about these things and votes by word.

It's starting to. It's starting to. Well, I've done research on this, on the makeup of companies, and I've found that there's literally a quote from me now in a book about— I don't know if it's already published or not. from people who— from professors at Berkeley, because I spoke with them and I told them this, like, our society is mentally ill people leading people who don't want to be there, which is based on a couple stats. And one of them is 75% of top executives and founders have mental health issues. Like, they just do. I had a panic attack 3 years ago, a relatively strong one. And then I started talking to my friends who are exactly the sort of people and they're like, oh, you need these pills or I'm going to give you another. Like, what the hell? Like, that shouldn't be a standard, right? And then you have over 50% of your workforce is disengaged at work. That's US numbers, right? So again, you have—

That's a lot.

3/4 of the people who lead others have mental health issues. And then half of the other ones don't want to be there. So that's not a great society to live in, right? So how can you fix that? And how can you— like, that's my motivation, right? How can you fix this? How can you create a model that works better and is positive and turns this into some somewhat more manageable ratios than 3/4 and 50%? Of course, the topic is executives. There's some self-selection and proclivity to psychological problems as well. As the research suggests.

Yeah. I'd be curious to see how much of it is that you start with it, or if you get it from being an executive for too long, it just turns it, it gives you so much stress. That would be an interesting study.

I think the research that I've seen shows that it's, that's a type of people that are driven for various reasons. Right. But also that drive, that's it has to be counterbalanced somewhere else, right? So typically more sensitive for various other reasons, right? So that's, I mean, that's a given and people should talk about it a little bit more, that that's what it is.

Yeah. We don't really talk about that too much. We just look at the numbers and move on rather than looking at it. Well, maybe that'll be another Startup that can help that issue.

There are, you know, there are many startups that do like SaaS platforms that offer therapy, like video call therapy right now. And they skyrocketed during COVID right? Because people started— stopped having, you know, social interactions and it's in a way democratizing the You know, performance— part of the performance coaching that the top people could afford, right? So I think it's a good thing.

Yeah, yeah, that's a really good point. And during the pandemic, we actually got a puppy and went to go get some training for it, and they were booked out because they were only dealing with high-stress dogs. They were only accepting high-need dogs and And so talking to other people like, well, the dogs are stressed out. Imagine how, imagine how the people are doing right now.

Right.

So it's, uh, that was a whole level of stress, but I think that's a good— what you mentioned is coming out of it is democratizing and, and helping have those resources that weren't really available en masse, uh, that now, you know, nothing like forcing everyone to stay at home. Now we figure out how to do it through Zoom, lots of Zoom calls, which is great. So looking forward, right, you've done 100 companies, you've launched them, valuation over $1 billion. What are you looking forward to? What areas are you looking to make a really big impact in? There's a long list, but what's your—

Mm-hmm.

What are the areas that you are really wanting to focus in? And work on?

Yeah, 2, 2, 2 of them. Uh, one, the model that we have right now, which is super high-quality niche offering that brings new businesses to market for larger organizations that typically have operators, not innovators. There's mismatch in skill set, there's mismatch in experience, um, and there's, uh, and there's lack of sort of framework of how to do this. But it's one of those— COVID again accelerated So there's a need to launch things like this. There's a mismatch of the teams that you have internally. So scaling that, I think that's a relatively straightforward thing for us to focus on and do it as quickly as possible, because the need is only growing. And the other thing is just launching this impact model that I described. And I would be— the reason why I'm mentioning it even here is happy to work with anybody who who wants to implement it in their company. I was even considering doing it as a PhD, sort of to understand what are all the levers in the model, right? So how do you get the biggest impact? How do you get the biggest engagement of the people internally? Is there a measurable financial gain for the company, or what is the financial impact on the company, right? Those, you know, the 17 minus 10 numbers. So I think we're a couple of months from launching that once we figure out all the financial aspects of it. And then trying to scale that, right? Because there's so many positives if you're— we're in a service industry, right? Or service agency business, right? So we can— like, there's a good feeling to be able to say, well, this person in this particular country invested in gender equality or mental health. through the money that they help make. And that's good for them, but it's also good for the customer that works with us because then we can come to them and say, hey, because you work with us, this is what happens, right? So there's great PR for them. So there should be a positive wave of this across—

Right.

Where in these, in the places that we can touch. So it makes sense to scale that impact by scaling the company, right? So that's sort of my way of connecting our profit to the impact that we can make, which is relatively hard in an agency model, right? So I take it as a first step and we'll see what we learn once it's running.

Yeah, we'll have to talk because we have a couple teams and Yeah, it's a complicated— the accountants don't like it when you try to do something like that, but I don't know any easier way to spread out, you know, what profits you make, especially when you're in such a distributed team and you're in way more countries than we are. But still, it's an interesting problem. I look forward to seeing how you guys implement it. Love to—

Let's do it.

Love to, love to see how that goes and, and, uh, how you convince the accountants to be okay with it other than just paying them more hours. So that—

I guess that should be a big part of the efficiency calculation as well.

Yeah, let's see how to do it with less accounting hours. That would be— yes, that would be ideal for sure. Awesome. Well, I really appreciate you taking your time to Talk about what you're doing, what you're able to do, and if anybody wants to reach out and they are wanting to launch another startup that is going to have positive impact, what's the best way to get a hold of you and U+ and start that conversation and making a difference?

Just reach out on LinkedIn or reach out on email. My email is jan@udaplus. Literally letter U dot PLUS, and that's, that's the web address as well, u.plus. I can— you can get in touch there, and happy to work either on a project of getting a business out with you or focusing on the impact piece as well, now to implement it in your organization, something that I'm focused on.

Fantastic. Well, I will make sure there's links in the description for anybody who wants to just click on something. And yeah, really appreciate you taking your time. It was great chatting with you.

Thank you as well. Thank you for inviting me.