600 Seconds With: Kent Costello, Founder of VendorX
How VendorX Powers Sustainability Ecosystem Sales to Drive a Business's ROI
My name is Ed Thomas, and I'm with The Climate Innovator. I'm joined by Kent Costello, who is the founder of multiple organizations, including VendorX.
Kent, just to start, tell me a little bit about VendorX and what it is that you and your team are working on.
Kent: We had started building VendorX with the intention of helping organizations identify technology, data, and other types of solutions for their sustainability, impact and ESG goals. The solution vendor marketplace has grown increasingly global and fragmented, and it is quite dynamic.
It's oftentimes challenging for organizations to identify the right vendor for their unique needs. We have now built a platform that allows for collaboration and partnership engagement across different technology vendors to identify ways to bring their solutions together or refer opportunities to respective vendors in the ecosystem.
E: That's really exciting. So more than just search and discovery for a specific vendor for a specific need, it sounds like you guys are focusing on taking that to the next level through increased collaboration and really trying to develop an ecosystem. Is that the right way to think about it?
K: Exactly, that's exactly right. There's a growing concept of ecosystem sales, and that's what we are looking to foster. Oftentimes vendors, particularly early stage vendors, they're all utilizing the same go-to-market techniques to try to get in front of decision makers to ultimately sell their solution.
So these decision makers are inundated with vendor outreach, and we think there's a more collaborative way to foster ecosystem go-to-market efforts.
E: That absolutely makes a ton of sense. So what is the biggest climate challenge that you're seeing today, either from the folks that are on your platform looking for vendor partners and solutions or just more generally? And is there a role for innovation to help address that challenge?
K: Yeah, I think so.
I think the biggest challenge can probably just be boiled down to uncertainty. Uncertainty of where regulations are going, uncertainty around what stakeholders will care about in six months, a year from now. And therefore organizations, big and small alike, actually are sitting on the sidelines, not sure what action to take as it relates to their corporate sustainability efforts.
I think the reason for that is that regulations have been the driving force. The expectation had been that regulations would start to become implemented by now, but that continues to be an uncertain future.
I think innovation where there are solutions that create alignment between sustainability and economic opportunities that impact a corporation's or organization's bottom line. In that scenario, any need for regulations to be the driving force becomes reduced, right? I mean, there's just a clear business case for integrating solutions that impact the bottom line.
These aren’t always the most exciting or the sexiest innovations. You know, a lot of the exciting climate tech companies that get the attention are carbon removal solutions and capturing CO2 and sinking it to the bottom of the ocean. But oftentimes it could just be something as simple as energy efficiency solutions that are impacting the climate by reducing emissions while at the same time saving companies money.
E: Yeah, it's the blocking and tackling that matters at some point, right?
K: Yep, yep.
E: Are you seeing in the companies that you're working with a shift in their mindset to focus more on ROI and the business case? Or is this market still one where regulations and regulatory concerns are driving the evaluation of new technologies?
K:Yeah, I think, so. We oftentimes see the motivations through the lens of the vendors selling their solutions. So I would say yes, a vendor that may have played up the sustainability value proposition to their end customers are now making that secondary to the business opportunity value proposition.
In other words, if I'm serving real estate investors, no longer am I just highlighting the fact that this can make their operations or portfolios more sustainable. I’m focusing on the impact on the bottom line and oh, guess what? Sustainability is then a positive externality of that activity.
Vendors who are doing a lot of research on their markets and know what the motivations of their buyers are believe that that's the narrative to put forth now. So I do think that means that there is a shift towards thinking about it from a business standpoint, rather than just waiting for regulation to take place.
E: That's exciting, right? Greed's a powerful motivator.
K: Right, right, exactly. Let's face it, it's a capitalistic economic model that we have and if we can operate within the paradigm of that model, we should see climate action accelerated. Absolutely.
E: You work with a number of small and fast growing firms. On the vendor side, you mentioned some of the sexy stuff going on in capture technology and carbon sinking in the ocean. What's the most exciting innovation that you've seen recently?
K: So one really interesting vendor in our network has created what they call a climate savings account.
It operates sort of like a health savings account for companies to offer to employees as a benefit. It allows the employee to save, and the company will match their savings to some level, similar to the way they would match a 401k plan. The employee can then use those dollars for things like their own energy efficiency in their homes or implementing renewables, solar panels on their house, improvements like that.
I think that's really interesting because it addresses the Scope 3 emissions of the company, which we know companies are looking at today, but it does it in a way that also offers their employees an option to take action on these things. It empowers them.
E: And over the long-term the investments those savings fund save those employees money. That's really cool. I love that.
K: Yeah, company's called Scope Zero. Love it.
E: Final question for you, Kent. And again, I appreciate your spending time with us. What is either a book or a podcast that you would recommend to our audience?
K: Yeah, so I've recommended this book a number of times. I've read it several times myself. It's called Bold New World: The Essential Guide to Surviving and Prospering in the Twenty-First Century.
It was written by William Knoke and it was first published in the ‘90s. He is a futurist, and he looks at what's going to take place and shape our world over the next 20, 30 years.
And reading it years after it was published, he gained credibility in just how prescient he was about those changes taking place and looking into the future for what is in store for us. It's a really good book to just think broadly about the global trends that will continue shaping business, society, politics, et cetera.
E: That’s really interesting. I'm always looking to add onto my reading list and now I’ve got a new one. Much appreciated.
K: Absolutely.
E: Excellent. Kent, thank you so much for your time. I appreciate it!