According to a recent Reason Digital CSR Survey from 2017, 96% of consumers agree that it is important for companies to have good social and environmental policies. And the majority of these consumers are practicing what they preach, with 64% buying fair trade products in the last year, indicating that there is significant consumer demand to buy goods and services from companies that align with their values.

Moreover, there is a reported $27.5 billion annual U.S. online spending on ethical products with a 10% YOY increase in this area of spending (MRI Partners with Natural Marketing Institute and U.S. Census Bureau, Retail E-Commerce Sales).

 Many other companies are catching on to this as well, attempting to meet consumer expectations when it comes to sustainability and making pushes to create organization that value doing the right thing, especially knowing that 66% of customers would be willing to pay more for ethically sourced goods and services (Nielsen Report 2016).

 In the past year, companies like Adidas, H&M, and countless others have tried to push sustainable practices, making it more challenging for individual products and brands to stand out in the sea of aggressive competitors and even more challenging for consumers to find goods that are actually having an impact.

While so many brands have made efforts to move into this market of green retail, it is unlikely that they have a huge focus or commitment to sustainability across all dimensions of the business.

 Companies like H&M have set sustainability targets and adopted many positive policies, but still have products that are designed to be disposable – having a huge negative and unsustainable impact on the environment. Cutting through all the market noise and finding businesses with real sustainability at their core is incredibly hard for consumers to do.

DoneGood is breaking out of the cookie cutter mold that most retail companies are adopting by offering a unique, convenient, and affordable method to find ethical and sustainable products. 

Unlike competitor offerings like Buycott, BuyPartisan, and GoodGuide, DoneGood allows consumers to explore and shop for products directly through their extensive e-commerce platform or directly within customer’s current purchase behavior with their easy to use plug-in.

Buycott allows consumers to scan barcodes on products, informing purchase decisions by providing information regarding the product’s sourcing and supply chain. Similar to Buycott, BuyPartisan also utilizes the scanning of barcodes to display to consumers the political donations made by the CEO, board of directors, and other employees of the company – enabling consumers to buy products that align with their own beliefs.

GoodGuide’s website allows customers to access evaluations of health, environmental, and social impact of products. While all three competitors strive to educate conscious consumers like DoneGood, they lack the convenience and ease, instead forcing customers to change their shopping behaviors and adapt to their platforms rather than simply providing a plug-in or link to e-commerce like DoneGood has.

DoneGood has formed paid partnerships with over 140 companies (including Causegear, MPowered, and Starfish Project) already committed to sourcing sustainable goods and services and promotes these mission-driven brands all in one place – either on their website or through their browser plug-in.

DoneGood has managed to create a platform that allows conscious consumers to continue to shop at their preferred online and brick-and-mortar stores with no real behavioral change. This platform is positioning themselves, and succeeding, as a leader in the space of sustainable online shopping.

1. Frictionless purchase experience: In many ways, DoneGood is becoming the stamp of approval for consumers looking to purchase from brands they trust are doing the right things. Between the DoneGood e-commerce platform and its plug-in that seamlessly integrates into your purchase process with notifications that the brand or product is approved regardless of what website you are on, DoneGood makes it easy to shop in alignment with your values.
2. Integrating into current consumers purchase behavior will help drive more adoption of DoneGood and help the organization to become synonymous with best-in-class value driven brands.
3. Strong network effects: All the products listed on DoneGood’s platform are offerings from partner brands, of which over 140 pay to promote their name and individual missions on DoneGood’s website, plug-in, and email newsletter. Some of the partners include big name sustainable companies like Patagonia and Warby Parker, limiting the threat of competitors since DoneGood is now working with their potential rivals rather than against them.
4. This partnership not only works in favor of DoneGood, with companies announcing to their customers when they have been selected to join the DoneGood community and providing free exposure, but also works in favor of the companies featured, converting customers to their main websites at higher rates than normal web visitors.
5. Targeting millennials: Whether consciously or not, DoneGood’s platform and offering seems to be targeting millennials – from their interactive website and entire mission that attracts the 81% of millennials that expect companies to be good corporate citizens (Horizon Media Survey 2017).
6. This demographic comprises about 30% of the population and are in their prime spending years, with a predicted spending power of $1.4 trillion by 2020 (Buxton). The real opportunity for growth, however, lies in the fact that roughly 58% of millennials love to shop online and spend an average of $18 more online than in-store.
7. Consumer traction: DoneGood’s current business model and revenue stream relies on a 10%-20% commission on products purchased through their platform as well as partners who pay for featured placements and promotions (*How much are they making from paid partners?).
8. DoneGood has already shown great potential in traction with a cost of only about $1.60 per customer acquired and a lifetime value of about $3.60 per user. They have also shown they are incredibly capable of growing a large base of customers in a short amount of time as seen with their “Shop for Good Sunday” campaign that resulted in 270 million organic online impressions. There is no doubt that revenue will steadily increase as they obtain more paid partners and grow their user base.
9. Potential for acquisition: DoneGood has mentioned that it sees fulfilling bulk purchases for businesses as a source of future revenue streams, positioning them more as an Amazon rather than a platform that simply directs customers to individual marketplaces online.
10. If DoneGood does grow to adopt this form of fulfillment with their partners, there is a huge possibility for acquisition by Amazon, especially with the awareness that more consumers are looking for ethical and sustainable options when it comes to online shopping.

Co-founders of DoneGood, Cullen Schwarz and Scott Jacobsen both have passions and experience in addressing issues of social justice, inequality, environmental impact, and other CSR focused roles. Schwarz is a public relations and marketing expert, previously having served as a senior communications advisor in the Obama Administration including the role of Press Secretary for the U.S. Department of Agriculture.

Jacobsen is a fellow of the Harvard Ash Center for Democratic Governance and Innovation and has served as Deputy Director of Communications and Outreach for the Children’s Defense Fund, well versed as a spokesperson and driver of change. Together, they believed that the idea of conscious consumerism could alter buying behavior and begin a new movement in the 21st Century – and DoneGood is the result of their passion and hard work.

Schwarz and Jacobsen both quit their careers to work on DoneGood, and while they may not have the exact skills expected to have a startup flourish, their conviction and drive to realize change in the world of online shopping and consumerism makes them the perfect team.

Recommendation: Deal to Watch

DoneGood is a startup fueled by heart and impactful change. They have invested significantly in building their tech and are now ready to enter the go-to-market phase of their business. DoneGood is a company that strives to solve real life problems and taps into a consumer concern that is driving real economic change through corporate reaction to consumer demand for a more sustainable form of doing business.

Growing a startup takes time, but already DoneGood has managed to partner with hundreds of companies, of which 140 are paid partners, and has grown to a consumer base of over 100,000 users. These are really strong signs of traction, product market fit and execution on the part of the founding team.

The fact that they have partnered with companies like Prana and Patagonia shows potential and the market for ethical and sustainable shopping, as well as online shopping, is constantly growing. There is a huge target market out there for DoneGood and many opportunities for revenue in the future.

The opportunity to be a market leader in this category and potentially see a large acquisition in the next five to seven years is very much in front of the DoneGood team. As the network effect of their business grows they will benefit. The challenge will be whether or not they can continue to build a large enough network of paid partners and if Amazon does decide to just do this outright that could also create significant headwinds for the team.

Overall, we are bullish despite these concerns to keep in mind as you invest.