As Rachel Delacour returns to entrepreneurship with her carbon management software Sweep, she leverages the wealth of experience she gained from her previous startup. Here, she shares the key principles for launching a company in the tech-impact industry.
On January 5, 2023, the European Union’s Corporate Sustainability Reporting Directive came into effect. This groundbreaking 66-page legislation outlines how EU companies will need to report their environmental impact over a thousand distinct metrics, ranging from carbon emissions and water usage to their effects on local communities.
While the significance of extra financial reporting had been growing, the new legislation prompted a rush among multinational companies either to enhance their reporting practices or find someone who could. For Rachel Delacour, the co-founder of the carbon tracking and management platform Sweep, this moment had been years in the making.
Delacour came from a background in entrepreneurship and data analytics. Having previously founded BIME Analytics, a data analysis and visualization tool for marketing and customer service, Delacour sold the company to Zendesk in 2015 and was returning to entrepreneurship for the second time to create a tool that would drive cross-sector decarbonization.
For Delacour, the answer to mitigating climate change and global warming is about interconnecting global carbon emissions through data. “If you are not able to interconnect the whole world of carbon, you will never be able to understand what is really at stake and where,” Delacour emphasizes. Her mission led to the creation of a tool enabling large businesses to track their scope 1, 2, and 3 emissions at an exceptionally granular level, picking apart supply chains for precise supplier comparisons.
However, Delacour was not the only one who set about doing this. Many companies began to emerge around the same time to meet the demand. Salesforce spawned its Net Zero Cloud service, while Microsoft launched its Sustainability Cloud. Persefoni and Watershed raised $50 million and $70 million in their latest funding rounds respectively, solidifying their positions as key startups in the bespoke carbon emission tracking space.
Despite fierce competition from tech giants and the continuous founding of new startups in the US, an undeterred Sweep rose to the top. Hailing not from London, Paris, or Berlin, Sweep was founded in France’s seventh largest city, Montpellier by Delacour and her former partner Nicolas Raspal, along with former Zendesk colleagues Raphael Güller and Yannick Chaze and the founder of the Net Zero Initiative, Renaud Bettin.
The European software which gave companies a tree diagram of their emissions – as well as the emissions of their suppliers – quickly attracted the attention of European VCs including Pia d’Iribarne’s New Wave, Jeannette zu Fürstenberg’s La Famiglia, and Marie Ekeland’s 2050.
In April 2021, the company raised $5.96 million in their seed round. A few months later, in December, Sweep announced their Series A funding round of $22 million. Just four months after that, they secured $80.3 million in their Series B round.
So the question lies, what sets Sweep apart? Rachel Delacour, with the help of some business experts, outlines the ways she believes one startup will succeed over another.
Pain plus reflection equals progress
The first and most crucial step is to always be innovating – especially in the early stages. Delacour says that in the early days of launching a startup, one should always be looking to question everything they do; question their understanding of the market, question their marketing strategy, question their customer base, question the way their product is done, and most importantly question themselves.
Although this is painful progress, “pain plus reflection equals progress,” Delacour says quoting the cornerstone of Bridgewater hedge fund Ray Dalio’s philosophy.
Dedicate yourself in the early days
Pain plus reflection equals progress in practice has resulted in Delacour spending a lot of time at work. “I work all day long,” Delacour says. She says in the early days of a company, it is crucial to dedicate a lot of hours to work, understand that you making a sacrifice, and remember to over-celebrate the little things to find satisfaction early on.
“I would love to tell you that you can have a life balance during the early days of the company. Maybe I don’t have the recipe to do it well, but I don’t really believe in the fact that it’s possible,” Delacour says.
Hire people who are smarter than you
Delacour says it’s cliché to say it but the key to building a good company is hiring people who are smarter than her. She sees that oftentimes egos get in the way, but if people are willing to surround themselves with people who are smarter or better than them, they can put their trust in someone else and feel at ease when delegating customer presentations, investor talks, operations, or any other business demands. “I have recruited VPS far, far, far smarter than me,” Delacour says.
Hiring people smarter than you is the cardinal rule of the book, Startupland: How Three Guys Risked Everything to Turn an Idea into a Global Business, the bestselling book about the founding of Zendesk, written by Delacour’s former colleague and Zendesk founder Mikkel Svane. StartupLand asserts that hiring people someone smarter than them is difficult but it’s something that has to be learned. Once achieved, the authors write, “One of the great things about building a smart team is that it forces you to grow yourself.”
Trust by default
Hiring smart people allows the company to scale without the direct supervision of managers, which is only possible through trust.
“I have one policy, it’s a trust by default,” Delacour notes, adding that she is always thinking about setting up an organization to put others in a position of success. Adding the right amount of people and being able to trust them leads to a lean and efficient business structure.
In his book Bowling Alone, Robert D. Putnam asserts that when leaders can trust by default, they assume that a team member can learn, grow, and accomplish the desired outcomes by themselves. This trust in turn builds social capital that encourages creativity, calculated risk-taking, psychological safety, and eventually increased efficiency.
Grow slowly and thoughtfully
A crucial aspect of building out a company and hiring a new team is efficiency. Delacour says that when launching, it is easy to think that if you haven’t managed to do something it is because you don’t have enough people to do it, not because the process isn’t optimized.
“At Sweep, we are always trying to find the right efficiency, before starting to add more people,” Delacour says. Not only is hiring too many people difficult to integrate into the business, but it can also lead to the wrong people joining the organization.
By doing so, you avoid what Guy Kawasaki, when he was still at Apple, called “the bozo explosion.” A bias for speed, combined with a pressure for high growth drives many leaders to be quick to hire, dealing with the slow and painstaking process to remove underperforming employees later. Steve Jobs while he was running Apple adamantly believed that hiring poor talent too quickly slowly degraded the entire talent of organizations.
Seek granularity for growth
Delacour expressed dismay at the prevalence of companies using all the right buzzwords but falling short when it comes to delving deep into the intricacies of their operations. She highlighted a common practice where companies rely on estimates to consolidate data, without actually examining the inflows and outflows of their unique business.
According to Delacour, a comprehensive approach involves embarking on a long-term data project and establishing channels that consistently feed data into a centralized platform. According to Delacour, granularity empowers decision-makers. By taking a deeper dive into data, companies will be able to compare parts of their supply chain ‘apples to apples’ to be able to drive carbon emission cutting. “The more companies understand what’s happening in their system, in their carbon, the more they figure out how they can actually act on it,” Delacour says. She says that for her, success materializes when clients are willing to have that conversation to embark on a data project.
Zero to One
Delacour sees that the world is heading in the direction of more granularity, arguing that extra financial data will only become more relevant as we transition to a low-carbon economy.
She said over the last 30 years, almost everything in the financial world has become comparable at a level of granularity that was not available before. Delacour believes with the rise of mandatory reports and directives from governments for greater transparency of their supply chains, this auditable granularity will naturally transfer to carbon emission tracking. And Delacour feels confident that her data reporting company will be there to meet this ever-growing demand.
“And now for me, the world is mine,” Delacour says with resounding confidence.
