Angie Stocklin: A revenue stream can help make the world a better place

After teaching more than 1,000 entrepreneurship students at Purdue University, I have spent quite a bit of time finding out what is important to them and how they view the world.

Each semester, I ask students to identify problems they want to solve now or in the future. While I get plenty of students who want to find a parking spot faster or wait in fewer lines, a large majority are passionate about making our world a better place. They are worried about the amount of trash we create and climate change and the mental health of our young people. The challenge in addressing these problems is, there often isn’t an easy answer for finding a true solution that will generate revenue—and a solution without a path to revenue is just an idea.

One of my current students is deeply concerned about the amount of plastic in our oceans and is brainstorming solutions to this worldwide problem. The Ocean Cleanup, based in the Netherlands, states that the plastic in our oceans impacts marine life and marine ecosystems and could be impacting human health by introducing toxic pollutants into our food chain. While nonprofits like The Ocean Cleanup rely on donations from individuals and companies to fund their mission, my student is determined to find a revenue-generating path forward.

How will he do this? I’m not exactly sure. This is a huge problem but one that’s easy to ignore when it isn’t obviously affecting you on a daily basis. He will need to find a specific market that is deeply affected by this problem and create a solution or product they are willing to pay for. It won’t be easy, but it doesn’t mean it is impossible. Both for-profit and nonprofit companies are working to solve this problem with innovative solutions like rewarding folks with cryptocurrency for removing waste from waterways or using the rescued plastics to create new items to sell back to the public.

Another persistent problem is the amount of food waste created by restaurants and dining halls. The USDA estimates the United States wastes 30% to 40% of our food supply annually, so food waste in the dining halls is an example of a problem that impacts all of us.

Students who eat in dining halls watch how much uneaten food ends up in the trash cans, and it makes them uncomfortable. When we brainstorm solutions, students often start with trying to figure out how to get this uneaten food into the hands of people who need it. It’s a noble idea that usually has a rocky path to revenue and is plagued with government rules and restrictions. Solutions that focus on using the food waste for compost or energy solve the problem of keeping this waste out of our landfills but are often expensive to build and run.

Software solutions to improve logistics and predictions before the food is made seem like a better solution on the surface. AI solutions are still in their infancy, and SaaS is a more traditionally funded business model. But success here assumes the customer (in this case, the university) cares enough about the problem to pay for a solution.

But there are real companies working to solve this problem. One company in my network started out using machine learning and AI to try to solve the problem of food waste in cafeterias and restaurants. However, after trials with different types of companies, they found more success using their technology to eliminate waste from food production facilities like beef-processing plants. This slight market pivot allowed them to continue working on their mission to reduce global greenhouse gas emissions while providing a clear path to cost savings for their customers. In other words, they were able to take a problem they were passionate about solving and find a customer that was experiencing a painful enough problem to pay them money to solve it.

Every semester, we talk about how the size of a problem does not equal the size of the opportunity. There are society-wide expensive problems, including the ones already highlighted, that do not have a similarly sized market opportunity. But that doesn’t mean there is no market opportunity. There are hundreds, if not thousands of smaller, better-defined problems with smaller, better-defined markets inside each overwhelming, expensive problem that impacts our world.

I am hopeful that our Generation Z will be better at spotting and creating for-profit businesses that can help solve some of our big societal problems to create a healthier planet and a healthier population.•

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Stocklin is an angel investor and exited founder who currently teaches entrepreneurship at Purdue University.