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Pollinate without dissolving

A pioneer startup in the Social and Solidarity Economy (SSE) that has become an emblematic player in Tech for Good, Phenix is an example of a company that combines commitment and business.

15 million in turnover in 2019, 44 million meals saved in 2020, 1,500 partner associations and 10,000 partner companies/wholesalers; in 7 years of existence, the start-up Phenix is now present in 5 countries and can boast of being recognized as the reference in terms of anti-waste.

For RaiseLab, Jean Moreau, co-founder and CEO of Phenix, discusses the genesis of the project, his experience in business relationships with large groups and the large permanent gap between value, commitment and business.

Could you come back to the launch of Phenix. How did you approach the start of this adventure?

“When Phenix was launched, neither my partner at the time nor I had any experience in the retail sector or in the food business. Despite this lack of personal legitimacy, we believe in a company that would connect large groups and charities. For many months, we focused on discovering and understanding this market and the value we could bring with our fresh eyes.

During the start-up phase, we mainly focused on having our first concept because we knew that this first pilot would legitimize our project.”

How did you launch this first concept (POC)? What were the challenges?

“In the distribution sector, two types of players are evolving: large, highly integrated and vertical groups such as Auchan or the Casino group; and, on the other hand, networks of franchises and independents.

Our objective was to quickly have our first store in order to gather a before-and-after example, numerical evidence and tangible benefits. We moved forward at two speeds, starting with franchisees because we knew that aligning the planets with large groups would take time.

For freelancers, the contact person is the department manager. We need to motivate and engage them, prove that our solution can save them time and money. The first structure that trusted us was an E.Leclerc store in Rueil-Malmaison whose young owner was sensitive to the anti-waste cause. Once convinced by Phenix, freelancers become real ambassadors and open a lot of doors. Convincing this first store initiated a virtuous circle: new partners, greater visibility, corporate interest, fundraising... We were thus able to contact the regional purchasing centers of E.Leclerc stores and initiated contacts with Carrefour and the Casino group, this time using more conventional processes.”

Doesn't a collaboration with a large company in France facilitate the startup's expansion abroad?

“Unfortunately no, having a good contract with Carrefour in France and numerous internal entry points does not mean that contact with Carrefour in Spain will be easier, for example. Operational teams know little or nothing about each other. Certainly it is not a start from scratch but the bridges are limited. Until now, we have never set up an international framework partnership that takes place within several countries at the same time, even if that may happen one day...

Achieving top management is one of the keys to large-scale partnerships, but they are also the most exposed and sensitive positions to changes in governance. So we can quickly go from the best case scenario to the worst case scenario, losing our sponsors, even in a group that seems very stable.”

Could you explain the main obstacles Phenix faces in its collaborations with large retail groups?

“One of the most important challenges we have encountered is the tendency of large groups to internalize. To avoid this, the startup must be several steps ahead, agree to make concessions or develop other products as we did with Phenix by offering sales to individuals or a service for detecting expired items on the shelves, while our historical job is to donate to associations.

Startups must also manage to position themselves as a partner and not as a service provider. To do this, relying on communication to get out of the customer/supplier relationship and have a more peaceful relationship with the large group seems essential to me.

Moreover, we did not take stock of it at Phenix at the beginning of the adventure.

Tell us more?

We were in B2B and B2A (Business to Associations) and thought that brand perception was not that important. We relied on word of mouth and the positioning of Phenix as a service provider for unsold items. For 3 years, we underinvested in the brand, without taking an agency or planning a media budget. That changed when we started B2C by launching our mobile application.

Looking back, I realize that a strong brand is what can save us. Today, stores perceive us more as a zero waste/anti-waste label than as a service provider. We are a prescriber for the consumer who chooses this store over another because he works with Phenix, because he manages his waste and valorizes his unsold products. For stores, it is more interesting to go through a service provider who has a strong brand, than to claim to be exemplary when it comes to anti-waste issues because self-reporting is less impacting. Having a strong brand means positioning yourself as a label, a trusted third party and therefore avoiding internationalization.”

By moving from B2B and B2A to B2C, the face of Phenix has changed a lot in 7 years. Did this have an impact on talent management and recruitment?

“At the beginning of an entrepreneurial adventure, the startup is not well known and has an unattractive salary scale. With Phenix, we also had the particularity of being part of the SSE sector. At that time, we attracted profiles that were rather activist, committed, often justifying previous experience in NGOs, for example.

Then we left the SSE sector to join the Tech For Good sector and attracted more qualified talent who have a more generic career.

For 18 months we have been living an exciting but sometimes complicated period because we have to reconfigure 100% of our COMEX. More resources, more ambition leads to a change in recruitment and the team and we now need to have specialized, expert profiles to set up procedures and professionalize our operation. The talents we recruited when Phenix was born, “Swiss knives” profiles who build the whole company and change hats from one hour to the next no longer correspond to our needs today.

In this context, the challenge is then not to lose the company's DNA and my role here, as a conductor, is to change the teams without breaking the culture and to ensure the perfect integration of new recruits.”

How will you balance business opportunities and Phenix values? In some situations, are you torn between these two dimensions?

I deeply believe that large-scale change happens when you manage to interfere in the classical economy. In fact, our official motto is “pollinate without dissolving”. We are among the pioneers, demanding players but by staying in this position we lock ourselves in a small microcosm and remain assimilated to brands such as Biocoop, Naturalia or Castalie. I do not believe that this positioning will make it possible to change the way things work in a systematic way. We have to work with large groups that are sometimes divisive to change them from within, without losing our soul.

We are also attentive to greenwashing and to large groups that ask us to do communication tricks. We should not discredit ourselves while recognizing that this is a visibility and great business opportunities for Phenix. In this case, we offer our services to transform a promotional operation into a more lasting contract but we refuse the urgency of the situation. We also focus on associations: do they need these products? If yes, then I don't see why we shouldn't.”

What is the worst advice you've ever been given?

“There are two, one pro and one personal!

The first was in 2013 when I was working at Merrill Lynch and I chose to focus on impact entrepreneurship. At that time, many people did not understand my decision, which was considered to be a delayed adolescent crisis. Many of them told me not to leave my comfort, my position in this company recognized for an entrepreneurial adventure.

On the personal life side, I was also advised not to have children during the initial phase of Phenix. Combining the two hats of dad and entrepreneur was seen as incompatible but it brought me a lot and I am very happy and would do the same thing if I had to do it again!”

What is the failure you are most proud of?

“Initially, I co-founded Phenix with 2 other people but from our first year, we had to face a profound governance crisis with legal complexities and incompatible personalities. We quickly went to 2 co-founders and, with Baptiste my partner, we knew how to continue and become more united. It could have been fatal for Phenix but it was a failure that we were able to bounce back from.”