Elemental Excelerator (Elemental) is a startup growth accelerator that finds and funds mission-driven companies to help improve systems that impact people’s lives in the sectors of energy, transportation, water, agriculture, and beyond. Elemental’s model is based on place-based innovation — looking at the challenges of a specific place and working with startups and the surrounding community to collaboratively solve these challenges in innovative ways. Through co-funding, co-designing, and co-developing projects and strategies that help startups improve infrastructure and sustainably enhance communities, Elemental has built an ecosystem of passionate people and companies working to change the world.

Elemental is funded by the U.S. Navy and a diverse coalition of utility partners, corporate partners, the U.S. Department of Energy, state government, and philanthropic organizations. Elemental typically works with companies in the later stages of the startup phase as they move from pilot to commercialization. Prime candidates are companies that have already gone through the research and development phase, and have at least one established customer. Elemental funds such candidates to develop and implement a go-to-market strategy or a demonstration project for their product. Either way, Elemental’s investment is meant to help transform the company in some meaningful way while also positively impacting the community in which it works.

Elemental Excelerator was first established in Hawaii as a place-based, clean energy accelerator. Its model is reflective of the fact that the organization’s founding roots were laid upon a set of islands, and was designed to help people on those islands reach their fullest potential. Accordingly, Elemental centers in its work an ethos of deep respect for relationships and for the land, which are essential for anyone living or doing business in a small place inhabited by a small community of people and surrounded by water.

Sara Chandler is Policy and Community Manager with Elemental Excelerator, where she focuses on bringing to life projects that support the growth of mission-driven startups while also creating positive and equitable outcomes in disadvantaged communities and communities of color, which routinely face environmental, economic, and social burdens in higher concentrations than whiter, more affluent communities. She explains how Elemental migrated its work from Hawaii to the continental US this way: “Two years ago, after seeing the continual need to address environmental degradation and disinvestment in low-income communities broadly, we began seeking ways to lend our support to even more startup companies so they could become part of the solution beyond the Hawaiian Islands. This desire to expand our impact followed a natural progression for Elemental’s leaders, who, in an embrace of the way they saw energy touching upon every single sector, had begun to integrate into the organization’s clean energy mission a focus on agriculture, water, and mobility about five years ago.”

 

 

Elemental’s search for a new place to apply its ethical accelerator model eventually brought it to California, where several major environmental equity policy victories have been realized in recent years. This is when Sara joined the Elemental Excelerator team. With more plentiful resources and people devoted to thinking about and solving equity and sustainability challenges in California, Elemental’s leaders saw a pivotal opportunity for helping new technology innovators in the Bay Area, who have an important role to play in creating equity-oriented solutions in the marketplace. Thus, Elemental kicked off its work in California, with an emphasis on offering technology startups a suite of best practices and expert guidance on addressing issues of equity through direct work with low-income consumers and community-based organizations.

Mission-driven work permeates all of Elemental’s programming, which features three tracks for making investments in startups operating in Hawaii, Asia-Pacific, or California:

1. The Go-to-Market Track – In this track, Elemental funds earlier-stage startups at the $100,000 level to explore their company’s product fit in the marketplace, offering these teams time, resources, and support in figuring out who their best customer is.
2. The Demonstration Track – In this track, Elemental co-funds and designs transformational projects that help companies scale, and involves an investment of up to $1 million, usually co-funded with another investor. This track is for companies that already have an innovative technology, customer traction, early results, and resources to grow.
3. The Equity & Access Track – In this track, Elemental supports companies that have an innovative technology, and a sales strategy that increases access to this technology in disadvantaged communities in California. Participation in this track happens within a cohort, and is guided by two principles: “equity in”, or integrating equity into a company through such internal practices as hiring, professional development, and responsible supply chain procurement; and “equity out”, referring to the incorporation of best outward-facing practices, typically direct engagement with a population or community historically under-represented in the marketplace and co-located with the company geographically.

Sara says that “entry into any of these three investment tracks requires a thorough application process, which is conducted by members of the Elemental team collaboratively,”. The iterative vetting process is an important way for the Elemental team to assess where it can make the greatest impact. Borrowing from a few Hawaiian analogies, Sara explains how her team seeks and cultivates its portfolio companies: “We do a lot of spearfishing, which of course involves nurturing the environment, nature, and the ecosystem the fish are in, in order to catch them.” The initial application is very short, and is meant to initiate a conversation that draws out additional details about the startup, its mission, its team, and its vision for impact. Elemental seeks businesses and leaders who demonstrate “good fit” in the following ways:

• They share Elemental’s culture and team values, especially including the notion of joyful work
• They are coachable
• They are trying to create a paradigm shift, or are open to creating one
• They have identified the potential trickle-down benefits of their work
• They are leading long-term projects, ideally ones involving infrastructure of some kind
• They care about the place associated with their business, not simply extraction of wealth or resources from that place

Sara describes some of the additional facets her team seeks in “good fit” startup candidates. “Those we select must be open to experimentation. Our typical investment engagement runs just eighteen months to two years, so a level of comfort with the concepts of testing ideas and ‘failing fast’ is especially important.” Sara says the startups she sees that are best positioned for investment are those willing to engage meaningfully in equity considerations, whether seasoned or new to the concept.

“Really, we see two company archetypes. First, we’ve got the companies that ‘live for equity’– these folks who are always thinking about the low-income customer. Then, we’ve got the later stage companies that may be further along in their growth, so they may have more resources, but this interest in equity and community impact is something new to them. So, with those companies, we’re working to find ways to hold them more accountable to equity outcomes, especially in terms of how their business plays out in the marketplace.”

Once a cohort of companies has been selected for investment in a given year, Elemental engages company representatives in the process of getting to know their fellow entrepreneurs, their mentors, and their coaches. Sara says, “We think of ourselves as entrepreneurs too. Working with people and businesses is how you make change and find success, and we work hard to create a program culture that reflects that reality.” The Elemental team designs events using a variety of formats that create a convivial atmosphere, thereby cultivating the informal peer learning program experience. Gatherings for program participants are held in Hawaii to immerse participants in the island culture, thereby deepening participants’ understanding and embrace of the land and relationship ethos, and their commitment to instigating meaningful changes both inside their respective companies, and in the broader ecosystem within which they exist.

Since its first cohort in 2013, Elemental Excelerator has invested over $30 million in 82 companies across its portfolio, and many of those companies are now generating revenue. In five years, the pipeline of applicants has grown from a few dozen to 800 in the latest round of applications.

 

Behavior Change Analysis

Elemental Excelerator’s model offers excellent lessons on how powerful an organizational culture and atmosphere can be in nudging entrepreneurs to change their behavior, and that of their team members.

The Elemental team makes their application process for funding EASY.

Although applying for funding from Elemental involves a thorough three-month process, Sara says her team is conscious of the continual need to keep barriers to entry low. “We iterate on this. Every year we make the application process less onerous on the entrepreneurs. We’ve landed on having everyone fill out this quick, five-minute application, and then our team does the work from there to ensure those applicants are ready for the next round. We make everything we use intuitive, involving as few clicks as possible. We also prepare our questions for applicants in advance to make the vetting process go more smoothly.”

Elemental makes its offerings ATTRACTIVE.

Elemental’s cohort model is attractive by design. Although the issues with which winning Elemental entrepreneurs will wrestle are complex and not for the faint of heart, $1 million in funding is a good bit of investment for a startup enterprise looking to scale. Startup funding that affords an entrepreneur time, space, and support to address issues of equity and sustainability in their business model can otherwise be difficult to come by. Sara says Elemental’s cohort model is especially alluring for entrepreneurs. “We are affiliated with great partners from around the world, both in and well beyond Hawaii and California, many of them representing familiar brand names. We have talented people who are mission-aligned mentoring across our cohorts, and that’s valuable to our clients.”

Elemental makes its program SOCIAL.

Sara and her team at Elemental use a variety of rich formats to engage their clients with and alongside one another. For example, their CEO Summit offers safe space for executives to learn about different topics from one another. There’s ample time for listening to seasoned and inspiring speakers, as well as for engaging in intimate, off-the-record conversations with fellow entrepreneurs and mentors. Elemental’s Interactive is an event designed to showcase all the companies in a given cohort, providing a unique opportunity for introductory, semi-structured conversations between CEOs and potential investors. “We developed this way because we know people thrive on peer-to-peer learning. We learn best from the folks who are going through something just like we are,” says Sara.

Elemental’s Town Square Event, which is held after companies are selected, brings an ecosystem of project partners that broaden the palette of thought partners available to entrepreneurs in the program. “We bring together different folks from different industries. We get them all talking together, discussing how a given project can be the best it can be, learning about the policies and partners they should know about, starting to build relationships that will support the startup over the long haul,” Sara explains. Design sprints, world cafes, and un-conferences are additional conference formats that Elemental uses to turn the concept of a more traditional conference on its head, thereby democratizing the process of learning.

Event design considerations heavily factor in the more social aspects of investing. Sara says: “We work hard to create warmth in our settings. Our speakers are mission-aligned, and they help us convey ‘this is why we’re doing this; this is the desired impact we’re aiming for’.” Elemental events emphasize comfort. “Hawaiian sensibility is very casual. We place strong emphasis on making people feel at ease, and feel seen for who they really are.” What’s more, the skill of holding space for fruitful conversations to unfold is something Elemental invests in among its staff. “All of our team members have gone through facilitation training, so we know how to create and sustain group conversations that will be generative.”

Elemental makes its offerings TIMELY.

The Elemental team thinks a good deal about timeliness in their work. Sara says: “We organize and align ourselves with how and when companies are raising funds, and support companies at the riskiest points of a typical company’s growth toward maturity. We are intentional about managing the timeline of our application process. Our events happen cyclically, progressing from application, to due diligence, to Interactive, to CEO Summit.” Elemental cultivates a pipeline of applicants, and works over time to develop relationships with people representing those applicant companies from which they’ll choose future cohorts, too.

 

Conclusion

Elemental Excelerator’s startup business accelerator model is an effective behavior change agent in the ways it invests strategically in companies, their people, and projects that create both local and global impact. As an investment and philanthropic platform, Elemental is focusing on strengthening the relationship between humanity and nature through supporting scalable, equitable, and innovative solutions to some of our nation’s most intractable challenges. In explicitly supporting the growth of mission-driven companies from pilot phase to commercialization, the Elemental team is changing both the behaviors and expectations of businesspeople and investors alike. Visit www.elementalexcelerator.com to learn more about this exciting model for instigating market-based social change. There you can also explore their 2018 impact report, which highlights a summary of the many positive ripple effects the organization and its investments are making around the world.

 

Special thanks goes to Sara Chandler of Elemental Excelerator for her willingness to be interviewed for and participate in this project.

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The theoretical basis for the Behavior Change Blog Series is informed by two mnemonic frameworks shown in detail below. The MINDSPACE framework is a list of the elements that inform cognitive biases and human behaviors, while the EAST framework is a list of directives that are derived from MINDSPACE and help inform strategies for influencing behavior change in humans. These two frameworks were established by the Behavioural Insights Team (BIT), a social enterprise based in the United Kingdom.

 

MINDSPACE Framework	EAST Framework
Messenger – We are heavily influenced by who communicates information to us.	Make it Easy – Harness the power of defaults, reduce the ‘hassle factor’, simplify messages.
Incentives – Our response to incentives is shaped by predictable mental shortcuts such as reference points, aversion to losses, and overweighting of small probabilities.	Make it Attractive – Draw people toward preferred behaviors, design rewards and sanctions to maximize effect.
Norms – We are strongly influenced by what others do.	Make it Social – Show people the norm, use the power of networks to encourage and support, encourage people to make a commitment.
Defaults – We “go with the flow” of pre-set options.	Make it Timely – Prompt people when they are most likely to be receptive, consider immediate costs and benefits, help people plan their response.
Salience – Our attention is drawn to what is novel and also to what seems relevant to us.
Priming – We are often influenced by subconscious cues.
Affect – Our emotional associations can powerfully shape our actions.
Commitments – We seek to be consistent with our public promises, and to reciprocate acts.
Ego – We act in ways that make us feel better about ourselves.