EIEIO...Boom, Bust, Boom
“You dance love. You dance joy. You dance dreams.” - Gene Kelly
“The brands that will thrive in the coming years are the ones that have a purpose beyond profit.” - Richard Branson
“You can’t build a reputation on what you are going to do.” - Henry Ford
It was not long ago that Environmental, Social, and Governance (ESG) was the talk of the town for operators and investors alike. The ESG movement became ESG mania, and every sector, from Oil & Gas to Retail to Technology, was involved. Global sustainable investment now tops $30 trillion—up 68% since 2014 and 10x since 2004.
Everyone was jumping on the bandwagon and didn’t want to be left out. Ergo, Hellman’s Mayonnaise declared that their purpose was fighting food waste instead of making sandwiches tastier.
While 2021 was named the year of ESG investing, 2023 has been all about ESG divesting.
A nasty Bear Market and a recession has a way of showing who’s real and who’s a pretender. As Warren Buffett likes to say, Only when the tide goes out do you discover who’s been swimming naked.
Just like nobody’s against puppies and ice cream, everybody wants a cleaner planet, a fairer society, and responsible governance. But acknowledging it and embracing it are two different things.
Even if ESG is in the “bust” stage of the hype cycle, it’s clear there’s a difference between Boomers and Zoomers. Boomers’ business heroes were the likes of Gordon Gecko and “Chainsaw Al” Dunlap – individuals who wanted to win at all costs.
Zoomers want to do well and do good. They idolize the Elon Musks and Yvon Chouinards of the World. They’re not just running some of the coolest companies on the planet…they’re leading with a purpose and trying to leave their community, company, and country better than they found it.
The data backs this up. According to one Stanford GSB poll, investors in their twenties or thirties are willing to lose between 6% and 10% of their investments to see companies improve their environmental practices, while the average Baby Boomer was unwilling to lose anything.
While it might sound smart today to be a cynic and write off ESG as a fad, the reality is that the intersection between impact and investing is the future. In fact, we think it’s transformative and bigger than what even optimists expect.
Why? If you want to see the future, look at young people. While Maslow’s Hierarchy of Needs hasn’t changed, the motivations have. How Zoomers think about the World has changed. There’s a rewiring that’s taken place…in large part from the turbulence of the past 20 years.
Since they were born, Zoomers have been faced with an onslaught of turmoil, destruction and instability unprecedented in modern history. 9/11. The war on terror. Hurricane Katrina. The 2008 GFC. The housing crisis. The opioid epidemic. Mass shootings. Global warming. The Trump presidency (for him or against him, it was chaotic). COVID-19.
And it shows: they are more stressed, anxious, and depressed than previous generations. The most popular class at Yale in over 300 years is The Science of Well Being…aka the “Happiness Course.” Students spend the first 15 years of their life dreaming of getting into a school like Yale, only to realize that they need a sense of purpose beyond a 4.0 GPA and a perfect SAT score.
While young people are more stressed than ever, they’re also more motivated than past generations to tackle these problems head on. Zoomers and the generation below them (Baby Zoomers) are already envisioning a different kind of future.
Just look at how a group of 3rd graders design their “perfect playground”…even 10 year olds realize that being glued to your phone isn’t healthy. But the ethos of young people is that there’s a solution for all problems.
When you see huge heat and things get ahead of themselves and then cool off, they often become bigger than people imagined…and being too early is the same as being wrong. Webvan was the Dotcom Bubble’s biggest bust, while Instacart is one of the hottest companies in the World.
We think the same trend will play out with the Mission Movement. The phony, virtue-signaling companies will be replaced with the authentic founders creating real impact (and real returns).
GSV Mission 100
This week at the SMU campus in Dallas, we’re hosting the inaugural SMU + GSV Mission Summit, which sold out with over 700 people attending.
We’re pleased to announce the inaugural GSV Mission 100, a list of the 100 fastest-growing and most transformative mission corporations in the World.
These businesses span different sectors and stages (public companies are marked with an *), but the common thread is that they embody what it means to be a Mission Corporation: combining purpose and profits to become a truly transformative, sustainable business that optimizes returns by optimizing impact.
2U*:Eliminating the back row in education and helping universities thrive in the digital age: Lanham, MD
Abridge: Bring more understanding and follow-through to every medical conversation: Pittsburgh, PA
Aidaly: Promoting family care by supporting, training, and compensating family caregivers: New York, NY
Alloy Therapeutics: Empowering scientists by democratizing access to foundational tools, technologies, services, and company creation capabilities: Waltham, MA
Alto: Providing the safest, cleanest, and highest quality passenger experience in the World: Dallas, TX
Anduril: Transforming defense capabilities with advanced technology: Irvine, CA
Angel Studios: Building a home for stories that amplify light: Provo, UT
Apeel Sciences: Make exceptional quality, longer-lasting produce that helps to prevent food waste a reality—creating value throughout the supply chain, and a more abundant future for us all: Santa Barbara, CA
Archive: Enabling brands to take control of their secondhand markets, build circularity into their business models, and limit waste through technology: San Francisco, CA
Athletic Brewing: Crafting delicious non-alcoholic beer you can enjoy anytime and anywhere, with no worries and no hangovers: Stratford, CT
Axon*: Cut gun-related deaths between police and the public by 50% in 10 years: Scottsdale, AZ
Benchling: Unlock the power of biotechnology by helping customers get their breakthrough products to milestone and market faster. : San Francisco, CA
Bitwise Industries: Building tech economies in underestimated cities: Fresno, CA
BioFire: Building the first smart gun with facial and fingerprint recognition to have an incremental positive impact on sort of the uniquely American challenge of gun deaths: Broomfield, CO
Bowery Farming: Secure the future of food by growing smart produce that’s more reliable and less harmful—wherever it’s needed: New York, NY
Black Buffalo: The World's only smokeless chewing tobacco alternative that delivers the same experience as traditional dip pouches and long cut: Chicago, IL
Black Rifle Coffee: A veteran-founded and operated company striving to help other service-members successfully transition from the military into entrepreneurship: Salt Lake City, UT
BlocPower: A one-stop-shop for making America smarter, greener, and healthier: Brooklyn, NY
Bumble*: Create empowering connections in love, life, and work: Austin, TX
Calm: Make the World happier and healthier : San Francisco, CA
Candidly: Make trusted, intelligent and comprehensive solutions that enable Americans to reap the rewards of that investment so they can build financial wellness and wealth: New York, NY
Cariloop: Help relieve the stress and anxiety felt by all caregivers: Dallas, TX
Cityblock Health: Radically improve the health of marginalized communities at scale: Brooklyn, NY
Chick Fil-A: Glorify God by being a faithful steward of all that is entrusted to us and have a positive influence on all who come in contact with Chick Fil-A: Atlanta, GA
ClassDojo: Accelerate humanity’s progress by giving every child on Earth an education they love: San Francisco, CA
Cost Plus Drugs: Providing safe, affordable medicine or medication with transparent low prices: Dallas, TX
Coursera*: Creating a World where anyone, anywhere has the power to transform their lives: Mountain View, CA
Degreed: Empowering growth and innovation through lifelong learning: Salt Lake City, UT
DoNotPay: Level the playing field and make legal information and self-help accessible to everyone: San Francisco, CA
Duolingo*: Develop the best education in the World and make it universally available: Pittsburgh, PA
Ellevest: Get more money in the hands of women: New York, NY
Farmers Business Network: Helping family farmers maximize their farm's profit potential by leveraging technology to reduce the cost of production and maximize the value of crops: San Carlos, CA
Faire: Empowering entrepreneurs to chase their dreams with its platform that connects independent retailers with small and medium-sized makers and brands: San Francisco, CA
FatBrain*: Become the World's leading provider of AI solutions for emerging business stars of tomorrow: New York, NY
Flock Safety: Developing a public safety operating system that helps cities, businesses, schools, and law enforcement in thousands of communities work together to stop crime, protect privacy, and mitigate bias: Atlanta, GA
Free Water: An innovative advertising platform that utilizes premium spring water as a new type of advertising medium while prioritizing philanthropy and sustainability : Austin, TX
Ghost: Building the World’s most powerful marketplace that transforms how inventory is bought and sold: Los Angeles, CA
Gloo: Serve Champions, help them scale, and support their purposes with great platform infrastructures: Boulder, CO
Good Ranchers: Helping local farmers and ranchers thrive by by providing a wide range of beef, chicken, and pork direct to customers through their e-commerce store: Overland Park, KS
Gothams: Forging solutions to the nation’s most challenging crises to strengthen our homeland security and make progressive community impact: Austin, TX
Guild: Unlocking opportunity for America’s workforce by helping millions of Americans gain the skills and support they need to grow in their careers: Denver, CO
Learneo: Help people learn and do more, faster, better, and more affordably: Redwood City, CA
Hadrian: Shoring up American manufacturing for the aerospace and defense industries with its automated factories: Hawthorne, CA
Handshake: Enabling students and recent graduates to find their next opportunity via its college career network: San Francisco, CA
Helion Energy: Developing a clean and abundant source of energy through its nuclear fusion technology: Everett, WA
Hi Solutions: Harness the power of human-centered technology to strengthen your connection to what matters most to you: Newtown, PA
Hobby Lobby: Provide a return on the family’s investment, sharing the Lord’s blessings with our employees, and investing in our community: Oklahoma City, OK
HundredX: Sourcing honest feedback from everyday consumers to help companies make key competitive decisions and support cause-based organizations: Dallas, TX
iLearningEngines: Drive mission-critical business and learning outcomes at scale: Bethesda, Maryland
Imperfect Foods: Delivering groceries with a mission to eliminate food waste and build a better food system for everyone: San Francisco, CA
In-N-Out Burger: Providing the freshest, highest quality foods and services for a profit, and a spotless, sparkling environment whereby the customer is our most important asset: Irvine, CA
Kate Farms: Offering healthy plant-based shakes and formulas for children and adults with chronic health conditions: Santa Barbara, CA
Keen Technologies: Developing human-like AGI: Dallas, TX
Liquid Death: Making people laugh and get more of them to drink more water more often, all while helping to kill plastic pollution: Los Angeles, CA
Luminar*: Save 100 million lives and 100 trillion hours over the next 100 years: Orlando, FL
Monarch Tractor: Revolutionizing agriculture by developing electric, autonomous, and data-driven farming technology: Livermore, CA
Multiverse: Transforming employers and individuals through professional apprenticeships: London, UK
Nextdoor*: Cultivating a kinder World where everyone has a neighborhood they can rely on: San Francisco, CA
NewLimit: Treating age-related disease to extend human healthspan: Redwood City, CA
Noom: Helping as many people as possible live healthier lives through behavior change: New York, NY
NoTraffic: Making roads intelligent and safe by bridging the innovation gap with its next-generation technology: Tel Aviv, Israel
Ophelia: Provide the best opioid addiction treatment without the baggage of rehab: New York, NY
Oura: Improving health and wellness with its wearable rings that track and improve sleep and performance. : Oulu, Finland
Papa: Create a new kind of care, built on human connection: Miami, FL
Patagonia: Build the best product, provide the best service and constantly improve everything we do: Ventura, CA
PhysicsWallah: Providing accessible education and quality content to every child for free with its live classes, video lectures, and test series: Noida, India
ProducePay: Helping growers gain more access to capital with services that help them connect and trade with buyers in a more transparent way: Los Angeles, CA
PublicSq: Helping consumers shop their values and put purpose behind their purchases with its values-aligned marketplace. : Encinitas, CA
Rivian*: Developing products and services to advance the shift to sustainable mobility: Irvine, CA
Replit: Bringing the next billion software creators online with its powerful, simple tools and platforms for learners, educators, and developers: San Francisco, CA
Retro Biosciences: Adding 10 years to healthy human lifespan: San Francisco, CA
Revolution Foods: Transforming citywide wellness by providing healthy, culturally relevant, and affordable meals for school and community feeding programs nationwide: Oakland, CA
Saildrone: Using autonomous vehicles to collect ocean data at scale for conservation, mapping, and maritime security applications: Alameda, CA
Shared-X: Lifting thousands of farmers out of poverty by deploying advanced farming techniques on highly productive land to close the agricultural yield gap: Lima, Peru
Shef: Rebuilding the food system from scratch, redefining who can participate in the food economy, and returning personal connection to the making, eating, and sharing of food: San Francisco, CA
Shield AI: Aiming to protect service members and civilians with intelligent systems: San Diego, CA
Shift: Help current and former members of the US Military discover and prepare for successful new career paths: San Diego, CA
SkySafe: Allowing governments, law enforcement, airports, cities, and more to manage their airspace with real-time drone data and analytics: San Diego, CA
Slice: Keep local thriving by empowering independent pizzerias with the tech and services that power the big chains,: New York, NY
Sofar Ocean: Building accessible ocean sensing and exploration tools for ocean enthusiasts, industry, and conservation: San Francisco, CA
Solugen: Using a carbon-negative molecule factory to replace petroleum-based products with plant-derived substitutes: Houston, TX
SpaceX: Building a next generation of fully reusable launch vehicles that will be the most powerful ever built, capable of carrying humans to Mars and other destinations in the solar system: Hawthorne, CA
Stride Funding: Creating a better, more equitable World by building financial journeys that open doors and give power to learners: Dallas, TX
Substack: Allow writers and creators to run their own personal media empire: San Francisco, CA
Supergut: Providing people better energy, mental clarity, sleep, and metabolic function by balancing the gut microbiome: Los Angeles, CA
Sweetgreen*: Building healthier communities by connecting people to real food (and reimagining fast food for a new era): Culver City, CA
Training All People (TAP): Helping people in low-wage jobs move into the middle class with next-generation technical training: Dallas, TX
Tesla*: Accelerating the World's Transition to Sustainable Energy: Austin, TX
The Rounds: Building the World’s first fully closed loop, two-way last mile logistics network to cut unnecessary packaging waste: Philadelphia, PA
Thrive Market: Make healthy living easy and affordable for everyone: Marina Del Rey, CA
Trader Joe's: Transform grocery shopping into a welcoming journey full of discovery and fun : Monrovia, CA
TreeCard: Providing a debit card that reforests the planet, with 80% of profits going to reforestation. : London, UK
UpSmith: Building the next generation of skilled workers while training them 4-6x faster than traditional methods: Dallas, TX
Vatom: Enable companies and individuals to easily engage directly with the emerging Web3 to help unleash unlimited creative and financial opportunities for every person on the planet: Santa Monica, CA
Verishop: Bring Joy back to online shopping by building a tech-driven platform that both brands and customers deserve: Dallas, TX
Whoop: Improving human health and performance through its wearable technology and data analytics platform: Boston, MA
Workrise: Make it easier, faster, and safer to do business in energy by breaking down barriers: Austin, TX
YETI*: Ensure that each YETI product delivers exceptional performance and durability in any environment, whether in the remote wilderness, at the beach, or anywhere else life takes our customers: Austin, TX
Zipline: Using drone technology to facilitate deliveries of medical supplies, food, and goods at 7x the speed of traditional automobile delivery: San Francisco, CA
Zum: Building the World's largest and most trusted platform for transportation and care for children: Redwood City, CA
Market Performance
The Market continued to brush off negatives and accentuated the positive with NASDAQ having the best week since March. NASDAQ was up 3%, the S & P 500 advanced 1.6% and the Dow increased .4%.
In tech news, in what was both stunning and at the same time not, Montana Governor Greg Gianforte became the first state to ban the mega popular TikTok. Activision got approved by the European Union for its $69 billion sale to Microsoft. The CEO of OpenAI Sam Altman testified to Congress about how dangerous what he was creating was.
With the Market Cap of Apple being greater than the entire Russell 2000, the movements of large tech companies is what moves the Indices. We remain cautiously optimistic about the risk return relationship with many of the smaller high growth companies and a view that if negative news doesn’t drive a stock down, it’s going up.
Need to Know
READ: Mukesh Ambani returns to the spotlight
LISTEN: Aaron Levie's AI Takes and Advice for First Time Founders
WATCH: Nasdaq: Mission Driven
READ: Silicon Valley’s Civil War - Tablet Magazine
LISTEN: Sam Zell – A Tribute to a Legend (REPLAY – EP.253)
READ: Apple’s Key Decision-Makers Behind the New Mixed-Reality Headset
GSV’s Four I’s of Investor Sentiment
GSV tracks four primary indicators of investor sentiment: inflows and outflows of mutual funds and ETFs, IPO activity, interest rates, and inflation. Here’s how these four signals performed last week:
#1: Inflows and Outflows for Mutual Funds & ETFs
Source: Yardeni
#2: IPO Market
Mediterranean fast casual chain Cava filed for an IPO on Friday. Cava’s revenue rose 13% last year to $564 million, with same store sales up 30% in Q1. Cava’s comp (and competitor) Chipotle has been a top-performing growth name this year, up 54%.
Source: Renaissance Capital
#3: Interest Rates
Markets predict the Fed will lower rates by November and give 30% odds that it will make a move in September. Joe LaVorgna shared that since the 1950s, the median lag between the last rate hike and the first cut is just two months.
Source: Statista
#4: Inflation
VanEck and Invesco shared this week that they see inflation remaining stuck between 3% to 5% for many years, even if the US falls into a recession. Since 1960, it has taken 12 years for inflation to slow to 2% or lower once the US CPI has breached 5%.
Source: Bloomberg
Charts of the Week
Chuckle of the Week
EIEIO…Fast Facts
Entrepreneurship: $25 billion – VC investment in San Francisco in Q1 2023, 2x more than the next nine US metro areas (Source)
Innovation: 71% – Americans that would be interested in buying or leasing an electric vehicle (Source)
Education: 89% – college students that have used ChatGPT for Homework (Source)
Impact: 64% – people that struggle with having the time and energy to do their job (Source)
Opportunity: 20.4% – China’s record-high youth unemployment rate (Source)
Connecting the Dots & EIEIO…
Old MacDonald had a farm, EIEIO. New MacDonald has a Startup…. EIEIO: Entrepreneurship, Innovation, Education, Impact and Opportunity. Accordingly, we focus on these key areas of the future.
One of the core goals of GSV is to connect the dots around EIEIO and provide perspective on where things are going and why. If you like this, please forward to your friends. Onward!
Make Your Dash Count!
-MM