STRATEGY 3 Evolutionary Investing: Transformative Solutions

Evolution. The word conjures up images of strange creatures on the Galapagos Islands or perhaps of fundamentalists in Kansas trying to ban the study of Darwin's ideas. But our choice of this word to describe our most visionary strategy transcends biology. In Evolutionaries: Unlocking the Spiritual and Cultural Potential of Science's Greatest Idea, Carter Phipps defines evolution as “a broad set of principles and patterns that generate novelty, change, and development over time.” Since the nineteenth century, practitioners from many fields of study have found that an evolutionary framework helps explain the directional trajectory of knowledge—and that direction is ever forward!

Evolutionary investors are fueled by a conviction that “the principles of evolution are at work in our world today, helping to shape a future that will be better than the past.” The irrepressible human urge to experiment, make progress, and, yes, evolve is as strong today as it was in the twentieth century, a time when many science-fiction dreams became reality. At this very moment, people are working on breakthrough innovations that could address our most intractable problems: poverty, energy, the state of our planet, how to make our governments function better—in short, how we can live happy, fulfilled lives within a stronger, more resilient civilization.

Putting at least a slice of our pie into evolutionary directions is, in part, simply a wise, forward-looking approach to investing. It prepares us to take advantage of opportunities that others might miss, and it positions us to prosper in a world where humanity's higher aspirations begin manifesting. Today's most visionary investors are looking for exponential breakthroughs that may take a decade or more to come to fruition.

But let's not pretend that the only reason to invest with an evolutionary eye is self-interest. Its brightest allure is that it offers us ways to actively participate in the progression of culture, science, politics, economics, and, perhaps most challenging, ourselves. Here we can satisfy our yearning to create a legacy for future generations, to “place our own hands on the levers of [evolutionary] processes and make a positive impact.” Thanks to the access that we now have to information, and to crowdfunding tools like Kickstarter, we can learn about and fund projects that spark our imagination; likewise, online collaborations are opening ever more opportunities to design our own livelihoods.

This strategy goes well beyond the sustainable global economy strategy, in which we focus on ways to incrementally improve the effectiveness of today's existing structures. With evolutionary investing, we are working with a fresh palette. The invitation is to create a new vision of the world we wish to see, and then to invest our time or money into creating that world. David Korten calls for “a deep cultural and institutional transformation grounded in a story of unrealized human possibility.” Charles Eisenstein guides his audience to reach for “the more beautiful world our heart tells us is possible.”

Be alert for the little synchronicities of life that might be showing you the way. Perhaps you will meet someone whose wisdom and insight stop you in your tracks. Maybe it's an article you read or someone who touches you directly with their inspired actions. By having your evolutionary antenna up, you’ll be ready for those moments.

This does not mean leaving pragmatism out of the picture, but it does ask us to stretch into our most imaginative and innovative selves. Remember, what may seem impractical right now may prove to be viable, and profitable, if it truly meets the needs of our times. Who would have thought that we would see someone like Elon Musk set two companies—a car manufacturer and a solar installer—on a disruptive course aimed at enabling people not only to avoid gas stations but also to unplug from the electric grid? Or that two young design graduates would found Airbnb, which now books more rooms than most hotel chains? Less well known but perhaps even more remarkable is the leaderless, bottom-up emergence of over a million organizations working to advance human society, as documented by Paul Hawken in Blessed Unrest.

Broadly speaking, there are two major tributaries feeding the evolutionary river, and both are swelling with fresh ideas. The evolutionaries riding these currents are engaged in the core activities of this strategy: the redesign of existing social and technological systems and the creation of brand-new ones.

On one stream you will find the “new economy advocates.” Paddling hard through treacherous rapids, these pioneers sense that the only way we’ll achieve long-term, shared prosperity is by making structural changes to the economic system. People like Marjorie Kelly of the Tellus Institute, Hazel Henderson of Ethical Markets, Gar Alperovitz of the New Economy Coalition, and John Fullerton of Capital Institute, to name a few, point out that the current system skews toward those who control vast amounts of the world's wealth and, if left unchecked, will take us over a waterfall. They cite real-life initiatives aimed at meeting human needs and creating the conditions that will allow life to thrive for generations to come.

Sailing along the second branch is a flotilla of elegant, traditional craft and futuristic vessels. They are ferrying the planet's “research and development team” into uncharted territory, tackling the dysfunctions of government, education, healthcare, and virtually all the systems on which we depend. Running this stretch of river can provide some real thrills! Finding it can be as simple as following a new tech site or viewing a TED talk, which can open your mind to ideas and innovations that you never imagined. Perhaps you will catch someone like Amory Lovins, who for decades has been reinventing our energy and transportation systems, showing us how to wean off oil and coal and revitalize our economy. Or Peter Diamandis, who says that “abundance for all is within our grasp” and maps out plausible steps to get there. But today's leaders are following in some big footsteps. Buckminster Fuller's books and inventions have inspired generations of innovators. He summed up the evolutionary mindset in this way: “You never change things by fighting the existing reality; [instead] build a new model that makes the existing model obsolete.”

At the confluence of these branches is the capacity for inward reflection, the ability to view not only the outer world but also our interior qualities as a system that is capable of evolving. Albert Einstein, who would certainly qualify as an evolutionary, said it best: “We can’t solve problems by using the same kind of thinking that we used when we created them.” People who embrace this path take time to unplug from daily distractions so that they can consider a bigger perspective, have the courage to see their own strengths and weaknesses, invest some time into practices that can help them grow, and, last but not least, take action. It is all well and good to learn about cutting-edge projects, but when you come across something that compels you, it's time to stop naval gazing, grab your paddle, and get into the flow. (Extra credit if you caught that pun!)

As we have emphasized throughout, this strategy does not depend on having the world move decisively toward its related breakthrough scenario. If muddling through remains the dominant scenario, or if we slip into a version of breakdown, you may still reap tremendous value by allocating a portion of your resources using this strategy. Just as, for example, there have been many successful investments in renewable energy, even while the energy system is dominated by fossil fuels, there is plenty of room for innovative, effective ideas to flourish within less-than-ideal circumstances. And as we will see, investments of your personal and tangible assets using this strategy make sense regardless of how things unfold in the near future.

In the investment world, the earliest investors in startups are known as “angel investors”; they are willing to take a chance on someone's new idea because they believe in the person and want to help the innovation succeed. Evolutionary investing is where each of us, to subsume a term that is generally reserved for wealthy investors, can become angel investors for the future, helping foster novelty, change, and development. We hope you see this as a delightful prospect! But it's also our duty to remind you that investments using this strategy often entail a high degree of risk. Whether you are personally trying new things or investing in people doing something that has not been tried before, you will want to keep your feet on the ground even as you aim for the stars.