Startups can tackle difficult social problems.
Not so long ago, companies decided to comment on important social issues. When they wanted to make a difference, they usually did so through separate philanthropic organizations. The idea was to stay as neutral as possible so as not to alienate potential customers.
That is no longer possible today.
In a world where social media connects brands and consumers, it is untenable to remain silent on issues such as climate change, racial injustice or gender equality. Consumers now want to know that the brands they are loyal to share their values. According to a recent survey, 75% of people would buy from a company that positions itself on the same side of an issue that is important to them.
The employees are similar. Repeated research shows that they want to work for companies with a social conscience. When they are in tune with their employers, today’s employees work harder, stay more engaged, and have less revenue. Businesses therefore have a vested interest in getting important issues on the right side and working with their communities to make a difference.
For startups, there is no shortage of topics that could form a solid foundation for a new business. Alex Hagan, the CEO of The Property Block, a socially conscious startup that is turning the UK’s affordable housing market upside down, is an example of how you can make a difference and make a profit at the same time.
A problem that resisted solutions
As the second largest economy in Europe, Great Britain is a popular place to live. However, it is not easy to find an affordable place to stay in much of the country. Experts trace the history of the UK’s affordable housing crisis through a century of chronic underinvestment.
The private sector could not solve this problem. Development companies prefer to develop virgin land, but there are restrictions on redevelopment, typically in areas around large cities to prevent sprawl. This limits development opportunities and drives prices for land that has already been developed to an unusually high level due to the scarcity of land.
So far, the government has responded to give developers better access to these protected areas. However, these efforts have not worked very well on some developments with only 10% new affordable housing units. It is a persistent problem that calls for a new approach and an innovative solution.
A startup with a purpose
The Property Block is a real estate technology company founded with the aim of solving the affordable housing crisis in the UK. Under Alex’s guidance, they found that most real estate developers found it easier to build a new development and attract people to it than to create affordable homes where there was an existing demand. They found that the easiest solution to the affordable housing crisis is to find underused existing properties and convert them to higher density affordable housing.
To this end, The Property Block has developed a proprietary data-driven algorithm that identifies areas with high demand for affordable housing and finds properties within the location that are well suited for redevelopment. They then turn to the owners to see if they are willing to sell at an above market price. In fact, The Property Block can often tempt owners with takeover bids that are up to 35% above market prices. Knowing that every renovation brings a profit, there is little risk.
Rehabilitation of communities, not just buildings
The Property Block has also structured its business to address additional inequalities in the UK. At the heart of this effort is an anti-discrimination stance in all attitudes.
According to Alex, that alone wasn’t enough. He also works with NGOs to make The Property Block a leading employer for former members of the armed forces and people re-entering society after incarceration.
Both are topics that are close to Alex. On the subject, he says: “I come from an impoverished area in the north east of England with a family of ex-soldiers, some of whom suffered from mental health problems and struggled to integrate into the community, and they found themselves in jail over and over again again and again. ”
By making his startup a place where disadvantaged people can work to reintegrate into society, Alex is helping the very people who most urgently need the affordable housing that he is helping to build.
A startup worth copying
The Property Block is a great example of a startup that lives its values, solves a social problem and makes a profit. In addition, they show that many systemic problems that were considered unsolvable can actually be addressed through innovation.