If you’re a founder focused on sustainability, trading conditions are even more challenging. Global trade tariffs, regulation and the UK cost of living crisis means the consumer marketplace is price sensitive with goods in the premium price sector (where many sustainable startups operate) facing a downturn.
At the other end of the audience spectrum, attracting investors and securing funding for your sustainable startup is littered with challenges.
Founders face misguided bias that “good” companies are not scalable or profitable and new technologies are risky or nascent. Equally, complex supply chains means sustainable solutions can be more expensive, thus less attractive. And what’s more, the growth timeline for a sustainable startup can be slower too - which doesn’t fit the conventional investor playbook.
And yet…… sustainable startups in the UK and across Europe are scaling and attracting investors.
According to PWC, investment into UK-based climate tech companies surged 24% in 2024, totalling £4.5B. UK-based AI climate tech firms saw a 128% increase in investment - reaching £1.01B in 2024. What’s more, 22% of all investment globally into AI-related climate tech startups goes into UK-based companies.
So how are these businesses thriving despite market challenges, prevailing headwinds and perception bias? What are the unique attributes that make startups fit to survive and thrive?. Well, hopefully I can share some insights.
For the past three years, Growth Studio has been working hand-in-glove with sustainable startups on the Amazon Sustainable Accelerator, This bi-annual programme helps drive forward high potential emerging businesses with a commitment to a better global environment, counting the likes of SURI, Seep, Omni Petfoods Asa Cup and Nimbi amongst their alumni.
Our team help the founders validate their business models and solutions, fast track investor readiness, and get-to-market effectively and impactfully through operating as Fractional Heads of Growth for each participating startup.
We’re now preparing to meet this year’s cohort. It's a good time to reflect on the success stories of the past, looking at all the factors that have helped planet positive founders overcome barriers and economic challenges.
Here’s five unique attributes I’ve identified that make growth more attainable and investment more achievable for any sustainable startup.
1. Product Market Fit
We know investors are overly sceptical of sustainably-focused startups (despite all the noise they make to the contrary!).
In general terms, investors want to see a solid, scalable business model, with data rich evidence and importantly, a clear road to having Product Market Fit (PMF). In effect this means demonstrating that your business has identified a market need and built a product (and brand) that customers not only want but are willing to pay for.
My advice is to be laser focused on what your PMF looks like now and in the future. Think like an investor and ask yourself those tough questions.
When considering your fit for market, zone into these 5 areas:
- Identify a Clear Problem or Opportunity – What’s the problem you’re solving? Is there longevity in your identified opportunity?
- Right Audience – Focus on a specific group with a pressing need (or desire). Target and talk to your potential customers. Drill down on who they are, what they want and what they will pay.
- Test the Market - You may be able to test your market with a Minimum Viable Product (MVP). It's about creating a basic version of your product or service to put into the hands of potential customers and collate feedback.
- Cost Vigilance - from materials to operational costs, team talent to cost of sales - investors will interrogate all of your financials from business running costs to profit margins. Be realistic, transparent and ready.
- Measure Success Metrics – Can you demonstrate a meaningful rise in customer retention, repeat orders and engagement? Show your growth metrics or even those of competitors in a similar space.
2. Get Customer Obsessed!
From identifying exactly who your customers are to understanding their unique motivations. You cannot speak to your customers enough!
The successful sustainable startups I have supported are customer-obsessed. They build strong relationships and they value feedback. Not only at the outset of the business but all the way through.
Some startups set up a loyal community of target customers right at the beginning of their business journey. They invite customers, willing to test prototype products and feedback on ideas. It's not a one way street though! You can motivate and reward them with product discount codes, secret reveals and VIP experiences - as and when your business goes live.
Importantly, if treated well, these early customers will become advocates and ambassadors for your business. This is highly valuable when your initial growth marketing tactics may need to rely on organic (free) digital and social media marketing (rather than paid).
Here’s 5 things to put on your customer profiling list:
- Persona profiles - from age and demographics to location & behaviour, dive into those detailed characteristics across your customer base.
- Market Research. Gathering data through customer surveys will help signpost business direction and provide credible data for investors too.
- Competitor Analysis. Know who your competitors are. Learn how they engage and leverage customers. What they do well and poorly!
- Engage Directly. Network and meet your customers. This is particularly key in the B2B sector where sales pipelines can take longer. You need to establish a network of useful relationships as soon as possible.
- Keep Refining. Customer appetites do change and external forces will impact trading conditions. Be open and agile to continuously adapt your customer strategy.
3. It Takes A Village
The entrepreneurial sustainable ecosystem is a more collaborative, supportive, and dare I say it, kinder one, than other sectors.
However it's also true that not enough founders take full advantage of this collective generosity.
There are many sustainable startups trying to solve big challenges. Just like you, they may have insights and networks that you can co-share.
Reach out, ask for advice, share contacts and create an open channel of mutual support. We know from our own accelerator programmes at Growth Studio that when aligned founders work together, sharing challenges and solutions, good outcomes and results are always mutual and multiplied.
There is also a vibrant ecosystem of community networks and business groups to become part of. These are so useful for insights, data sharing and learning from founder success stories and case studies. It’s also great to know you are not alone in some of the challenges and struggles you face.
For example Climate Connection, People, Planet, Pint Women in Sustainability and Green Angel Syndicate run plenty of events connecting like-minded founders and investors.
4. StoryTell Well
I’ve witnessed the most successful founders, builders and entrepreneurs are those who are - or at least have learned - to become masterful storytellers. They’ve built a compelling brand. Not just a product or service.
One of the biggest barriers to conversions - whether sales, investment or growth - is an inability to articulate the vision and value of a solution.
From media to investors (Dragons Den is a great example), humans are naturally drawn to stories, narratives and tales with a meaningful, interesting or topical thread.
Start with a clear (and succinct) identification of the planetary problem you are trying to solve - or the opportunity gap you have realised. If your solution has been inspired by a personal experience, event or insight - share that too.
Present your pitch in a way that will resonate with human emotions. Work on a compelling brand identity backed up with solid, robust data.
Founders with a background in engineering or technology need to understand that customers and investors won’t value the clever intricacies of your technology. They care about the impact your startup could have on the world, why it will sell and whatever makes it unique, memorable and disruptive.
Practice and improve your pitch to the most cynical audience until you see it landing well.
5. Stay Curious
Whilst on your all-encompassing startup journey, it's so easy to become tunnel visioned, getting trapped in your own business universe. But find time to do the opposite!
Embrace your entrepreneurial curiosity and make it a super power.
Whatever growth stage your startup is at, there are always opportunities to learn, improve and iterate. I always rate founders with an open mindset.
In fact some of the most famous entrepreneurs are some of the most curious people. Richard Branson. Jamie Oliver and Debra Meaden to name a few. They know a wealth of exciting ideas are out there - waiting to be picked up, leaned into and adapted.
Sometimes, the most impactful and lucrative solutions come from the conversations you have with customers or suppliers. People are always keen to share honest thoughts and creative ideas - and what’s more they’re absolutely free!
Beyond customers themselves, monitor what other brands are doing in your own and other sectors. Creative industries do this well. For example, when on the search for new advertising or PR campaign ideas, agencies brainstorm ‘displacement’. The application of borrowed approaches from one completely unrelated sector to your own. It’s a great tactic to keep thinking fresh and inspiration high.
Curiosity is king but balance this with the rigour and hyper focus required to build and focus on your own business. It’s beneficial to set time aside to brainstorm ideas. Bring in your whole team so everyone feels valued, sharing new thoughts and tackling challenges.
The Amazon Sustainability Accelerator is an equity-free programme supporting startups who are driving sustainable innovation. The programme helps entrepreneurs grow their skills and scale their businesses so they can maximise their climate impact. More information here.
Paul Finch is the cofounder of Breathable Cities and Growth Studio.
