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Conscious capitalism: how your business can do more with the profit it generates
Business is about more than just profit. Here’s why conscious capitalism matters to us at Hotjar.
Last updated18 Aug 2022
If you could choose between a business that put communities and the planet on its payroll over one whose goal was to simply top up its shareholders’ pockets, which would you choose to purchase from or work for?
While, of course, most of us would prefer choice number one, traditional capitalism is still alive and kicking, and sometimes our choices of where to buy are limited. A prime example of this is when those large big-box stores come into small communities and displace the mom-and-pop shops, leaving no alternative.
So it’s not always an easy or clear-cut decision. But there’s a silver lining. More and more companies around the world are taking a stance on where their profits go to serve the greater good—and we are one of them.
So what does this look like in practice from a company’s perspective?
Enter conscious capitalism. A term that’s been around for more than a decade and one that we incorporate into our own business model. Here’s what it looks like at Hotjar and how you can think about it for your own business.
What is conscious capitalism?
The actual term ‘conscious capitalism’ was coined by Whole Foods CEO and co-founder John Mackey and professor Raj Sisodia, and there’s even a book about it: Conscious Capitalism: Liberating the Heroic Spirit of Business. However, similar concepts around using business to benefit society have been around since the beginning of the Industrial Revolution.
In a nutshell, conscious capitalism is divided into four pillars:
Higher purpose: establishing a deeper ‘why’ behind your business (beyond profit), which is a necessary means to your overall impact
Stakeholder orientation: creating equal value for an entire community of suppliers, vendors, employees, partners, and customers
Conscious leadership: championing your higher purpose and cultivating conscious culture through intentional, inspirational leadership
Conscious culture: developing a culture that revolves around your values and purpose
What conscious capitalism looks like at Hotjar
Since 2014, Hotjar has been intentional about building a people-first, self-funded, fully-distributed company. We’re dedicated to creating better online experiences, and we now have customers in more than 180 countries. We do this by asking ourselves, “What can we do that’s more impactful than being just a business?”
I joined the company in its early days, as employee number 14 and have spent the last few years cultivating our community-driven ethos.
For example, everything we do ties back to our company values:
Put our customers at the heart of everything
Be bold and move fast
Work with respect
Build trust with transparency
Challenge ourselves to grow
These values are our guiding principles. As a business, they help us choose what areas we want to impact beyond profit. They make up the building blocks for a more purpose-driven mission.
Based on our community ecosystem, we think about conscious capitalism in three parts.
1. Our team
We think deeply about how we build and support our team. This includes how we structure our perks, our processes, and even how we run meetings. We want our team to feel involved, empowered, and inspired to do their best work both in their personal and professional life. In order to foster this, we invest substantial time and money that might not be intuitive in the traditional capitalistic model, but doing this is critical to how we run Hotjar.
For example, we’re a 100% distributed company. There are many reasons for that, one being that it’s in line with our philosophy of addressing the negative impacts of climate change. In everything we do, we hope to be more sustainable and environmentally friendly. So why not remove lengthy commutes that put more vehicles on the road?
This doesn’t just help the environment. It also lowers our operating costs. We don’t have leases or maintenance costs associated with a traditional office. One might look at this as a way for Hotjar to make excess profits, but that’s not what we do with the savings. We use it to provide better perks to our team, fund amazing annual meetups, and even give back to causes we believe in. These motivate the entire Hotjar team, and in return, our customers get even more downstream value from the work they do as a result.
It also empowers every single team member to work wherever and whenever works best. (At the time this article was published, I was in a suburb outside Lisbon, Portugal, where I’ll be for the next few months before hopping somewhere else!)
2. Our customers
Hotjar serves more than 30,000 customers worldwide. For every customer, we want to make sure they not only get as much value as possible out of our products but also that they feel part of something bigger and not just a ‘customer’ paying for a service.
Here’s what I mean by this. When the global pandemic forced businesses to reduce expenses in March 2020, we extended our service for free to those customers that weren’t able to pay because their revenue stream had been negatively impacted. We didn’t take features away or downgrade them to a version of Hotjar that couldn’t meet their objectives. We knew they needed as much help as they could get to make it through such a difficult time. And when these customers were able to generate revenue again, we didn’t ask for it to be paid back.
It’s not something we had to do, but something we felt was the right thing to do. This is completely in line with our values as a business.
3. The world
Ultimately, our goal is to make an impact that goes well beyond profit. So in 2017, we began putting away 1% of our revenue into a separate account for ‘giving back.’ At the time, we didn’t have a solid plan on how we’d give, but we knew we wanted to do it in a meaningful way. So every month since that initial pledge, we’ve simply set aside 1% of the company’s revenue, which is then put towards initiatives such as donation matching and our wider program focused on these four pillars:
Stop fossil fuels—switch to renewable energy
Stop deforestation—protect trees
Restore and rebuild biodiversity
Create a zero-waste culture
As of May 25, 2022, our giving back account has reached just over €500k for various initiatives.
Here’s an overview of how our giving back contributions were allocated in 2021 and some of our plans for 2022:
Offsetting another 10,000 tonnes of CO2e, bringing the total for 2021 to 20,000 tonnes of CO2e offset. As usual, we’re matching the cost of this offset with a donation to 350.org.
Buying an acre of rainforest for every team member, for every year each individual has been at Hotjar, retroactively.
Having reached our goal of planting one million trees in 2021, we’re setting a new goal of 10 million trees and planting 350,000 trees.
Getting zero waste training for our business operations team and sponsoring up to €250 worth of training for any Hotjarian who is interested in learning about zero waste.
For a deeper dive into some of the organizations we support and what they stand for, have a look at how Hotjar is giving back.
Small steps ladder up to bigger results
If you’re looking to add more elements of conscious capitalism to your workplace, my recommendation is to think about how your business can do more with the profit it generates by making investments into things that might not be as traditional. Making a profit is very important to any business. I’m not anti-profit by any stretch. Nor am I advocating that profits should be spent or invested frivolously. Quite the opposite. When you invest your profits correctly from a conscious capitalism lens, everyone can benefit, including customers, employees, suppliers, investors, society, and the environment. What this looks like is nurturing a community much broader than your product or yourself as an individual. The more you give to your community, the more everyone benefits.
So my best advice to you is to simply start where you are and think a bit more unconventionally.
Want to be part of the Hotjar team? 🔥
We believe people from different backgrounds, with different identities and experiences, make our product and company better. We would love for you to check out our current roles and keep following our jobs—we’re growing fast!
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