At CNaught, we're building the easiest place for companies and other parties to access carbon credits and begin to take climate action. But why are we building CNaught the way we are? And why do we think that is the right way to make effective carbon credits more accessible to more companies? The answer comes not from the climate world but from the world of online marketplaces more generally, where our cofounders Mark, Dan, and Steve have decades of experience from at companies like Rev, Uber, and Thumbtack thinking about how to build in the best way to serve customers. That is our northstar–we want to make it as easy as possible for our users to drive real climate impact.
An online marketplace like CNaught functions by using software to bring together disparate buyers and sellers who often may have struggled to find each other without the marketplace. The sellers may be offering goods, services, or both; the buyers may be businesses or individuals. Marketplaces can be simple, like Craigslist, or among the most sophisticated businesses in the world, like Uber or Amazon. But they all operate by matching buyers and sellers.
The core function of a marketplace is to match buyers and sellers, so how they conduct this matching is critical. For a marketplace to succeed, it must consistently drive matches that benefit both buyer and seller. Nearly a decade ago, Josh Breinlinger, now of Turtle Ventures, wrote a blog post that continues to be helpful in categorizing the different matching mechanisms that support different kinds of marketplaces. It all comes down to who chooses to make a match:
Existing marketplaces for carbon credits are buyer-choose, with a buying experience that feels a lot like Airbnb. Buyers scroll a list of projects, compare them across various axes, and choose which projects to support. The marketplaces see their role as empowering buyer choice because they believe that their buyers both care which projects they are supporting and can intelligibly choose between them. There is good reason for making a carbon credit marketplace buyer-choose: as we have previously discussed, carbon credits are not all created equal. While all carbon credits nominally represent a ton of carbon, they can vary widely on both effectiveness and price. In a buyer-choose marketplace, the marketplace does not need to grapple with the “right” way to address that variation, they only need to make information available to their customers so that their customers can choose what is right for them.
At CNaught, we are building something fundamentally different–a marketplace-choose model for carbon credits. Here’s why. Rather than starting with the existing supply, we started by asking existing buyers of carbon credits what they think and what they want. While they all were seeking projects that were effective in driving climate impact, they generally didn’t know how to choose projects that maximize that goal. Instead, they chose projects in highly idiosyncratic ways: some always chose the most affordable projects to save money; some always chose the most expensive projects to avoid being accused of greenwashing; others chose projects that met some non-climate-related goal like impact on a community near company headquarters; still others simply admitted that no one really knew what they were doing; a final group hesitated to use carbon credits at all.
The consistency in this feedback was clear: buyers all want to drive climate impact with their carbon credit purchases, but many or even most do not know how to do so. There is only one kind of marketplace that makes sense when buyers do not know how to choose what to buy: a marketplace-choose model. And that is what we are building at CNaught. We go deep on which carbon credits maximize climate impact for your dollars so that you don’t have to, and we make it easy to use them right away. In many ways this is harder than the buyer-choose model because we are responsible for choosing effective projects at a reasonable price. But we believe that we have to build this way to meet customer need, unlock adoption, and drive climate impact.
Picking effective carbon credits for you is just one way that CNaught is the easiest way to take climate action. Here are a few more ways we make carbon offsets easy: