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How do you create social impact and run a viable business?

There is a dark side of the diamond trade, for people who mine the gems, for the countries in which they are mined, and for societies impacted by the criminal activities of those who wish to hide where their wealth comes from, and where it is spent. This is the problem that Leanne Kemp identified and decided to tackle with her tech startup, Everledger.

“For generations, we’ve had this affinity with diamonds. It’s one of those objects that becomes the mark in time of the important events in one’s life. Whilst we have an absolute romance with diamonds, in the backdrop there are the atrocities associated with mining diamonds.”

Kemp also saw a business opportunity. The global diamond industry is worth $81 billion dollars. But its credibility – and hence its viability – is under threat as long as conscious buyers can not reliably determine the ethical status of the rocks they are purchasing.

Building a business with a core focus on social outcomes and that delivers economic value and replicable business models is possible. Indeed, according to Richard McGill Murphy and Denielle Sachs of McKinsey & Company, “Social entrepreneurs are part of a broader conversation about the relationship between business and society that has been gathering steam since the Great Recession.”

When times are tough you want to be able to get up in the morning and be driven by a purpose.

To Leanne, it’s core to what Everledger do, and why they are doing it: “When times are tough you want to be able to get up in the morning and be driven by a purpose,” she says.

The challenge for Everledger has been to build a trusted and transparent platform that captured and tracked diamonds for their whole life (which, since diamonds are forever, is a long time.)

The solution they have found is blockchain. Talking technically blockchain is the open platform that enables digital currencies, like Bitcoin, to be tracked and managed without the need for third party management, such as a central bank.

Let’s translate it into the binary world. Blockchain is a ledger, like the ledgers that businesses have used for centuries to record business transaction. But of course, these ledgers were only secure as long as they were safe and reliable and as long as the person making the entries was honest. Entries could be crossed out, written over and of course, once white-out was invented, then copy and paste, things got complicated.

Blockchain is a ledger that cannot be changed, written over or deleted. It cannot be lost, hidden, owned or kept in the company safe. It is immutable and open to all, to view and to add to.

Kemp saw the potential of the digital ledger that is blockchain as the basis of a truly trusted, transparent platform for recording and tracking diamonds.

Since information stored in the blockchain ledger can’t be altered, counterfeiting diamonds is harder and theft less profitable.

Twelve months after taking part in FinTech incubator, Barclay’s TechStars Accelerator in London, Kemp has found both her solution and herself catapulted onto the global stage alongside tech entrepreneurs, the likes of CEO and founder of Uber, Travis Kalanick.

But doing good, while doing well needs a business plan. As an entrepreneur with a track record of startups sold to public companies, Kemp has structured Everledger’s activities around the enormous business opportunity that ‘provenance’ represents.

Kemp explained in her incubator presentation, “when provenance is lost, a new word emerges: risk, and risk is the foundation of our two biggest black markets: theft and fraud, that cost insurers 50 billion annually.”

And Provenance pays, she says. “Combatting counterfeit is a $1.7 trillion dollar problem.” It’s a problem that the fine art market and the luxury goods industry are keen to work with Everledger to resolve.

Kemp is a Queenslander. Until 2013, her entrepreneurial career had been in based Australia. While Everledger has been forged in the financial and diamond centre of London, the technology base and brains trust behind the company continue to be sourced from Australia. “What has been happening in Queensland in the past 8 – 10 months has been truly transformative,” she says. “In Australia our work culture and ability to get things done is unique. I recognise where Australia can add significant value and benefit with Everledger and across all of the entrepreneur landscape globally.”

Everledger’s company mantra, doing good while doing well, is extended to her ongoing relationship with the startup community in Australia. “It’s a very proud moment for me to be able to sponsor some of the hackathons that come out of QUT and enable us to take the early talents and provide them not only with a great framework for innovation but to enable them to come to our offices in New York and London, and create pathways for career advancement.”

Doing good while doing well is a shared value approach, that as Michael Porter proposed, reconnects company success with social progress. Companies like Everledger are leading Australia’s landscape in social entrepreneurship and sharing the benefits.

Listen to the full interview with Leanne Kemp on Insight Edge. Subscribe on itunes, or listen via the web.

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