Today I came across the Profit-with-purpose businesses: Subject paper of the Mission Alignment Working Group. This was written by the The Global Social Impact Investment Steering Group (GSG), which was established in August 2015 as the successor to the Social Impact Investment Taskforce, established by G8.
I was pleased to read that it featured Patients Know Best. PKB is certified as a B Corporation (part of the first group to be certified in the UK) and was previously recognised by Ashoka, the National Lottery and UnLtd as a social enterprise. UnLtd recognised and funded us as a social enterprise from our founding in 2008.
The report features PKB in the beginning as part of exploring profit-with-purpose businesses as a new sector:
To take an example, Patients Know Best (PKB) is a health informatics start-up which puts health data in the hands of the patients rather than selling it on, and which brings together all the data from different clinics and social care agencies to improve the lives of people with complex conditions. By not selling patients’ data, PKB restricts its revenue potential compared with its competitors, but it is confident that this commitment is socially valuable in protecting patients’ interests. PKB is the kind of venture than needs to move fast if it is not to be outrun by purely commercial competitors with no commitment to putting patients first. As a high-risk digital start-up, only equity investment can provide realistic risk-adjusted returns to investors. To offer equity, it needs a pro t-distributing legal structure – and to offer trust to its clients and investors, it needs to show it is fully committed to its social model. PKB is now a multiple award-winning growth venture, and an exemplar of the kind of pro t-with- purpose business which this report is all about. For more information on the way PKB embeds its social mission through its contracts, see Annex C.
Case Study 7 has more details
Theme: Attracting entrepreneurs; using market ‘lockstep’ to embed social mission; using contracts to embed social mission
Patients Know Best (PKB) offers a digital patient record sharing system, meaning that a patient’s records can be shared with their doctor, hospital, social workers and other professionals, enabling more ef cient and cost-effective care. PKB’s customers are primarily hospitals and pharmaceutical companies. The company is also starting to work with social workers, doctors and pharmacy chains.
The key element is that the patient him/herself decides who has access to their records, and all healthcare professionals need their permission to look at these – and that ownership of the data rests with the patients themselves, so it cannot be sold on or commercialised.
From the beginning, equity in the business was held closely among the founders and family who understood the social mission. To date, PKB has not felt it necessary to include references to its mission in its Articles of Association, but this may soon change – PKB is about to close an investment round, and two of the prospective social venture capital investors have asked for this inclusion. Aside from this, PKB embeds its social mission through contract with its customers. All of its contracts state that “The copy of data in a patient’s account is owned by the patient”. This contractual commitment is reinforced by a technical solution, which encrypts the data so that only the patient has the private key for decryption, and the patient decides who is allowed to use this.
This form of mission lock is market-facing rather than investor-facing. It works because the social mission is directly aligned with the customer offer and commercial success of the business – so called ‘lockstep’. PKB’s founder Mohammad Al-Ubaydli notes that this lockstep also aligns investors’ interests with the mission: “from a shareholder perspective, that’s why customers are buying from us and it’s why our investors want to invest”.
The report was published in September 2014. As part of our £3.5 million investment by Balderton Capital in December 2015 PKB did indeed include references to the mission in our Articles of Association.