Why ‘Impossible’ Problems Drive 400% Higher Returns, According to Sara Simmonds

In a recent LinkedIn post, Sara Simmonds discusses a counterintuitive trend in business: companies tackling seemingly “impossible” problems are achieving significantly higher financial returns than those focused on quick wins or marginal improvements. Simmonds argues that this overlooked strategy is the key to unlocking substantial value, challenging conventional business wisdom.

The Overlooked Advantage of ‘Impossible’ Problems

Sara Simmonds highlights that while 99% of businesses are chasing readily achievable goals, the 1% that dares to address insurmountable challenges are reaping disproportionate rewards. According to Simmonds, these purpose-driven companies are not just making a societal impact but are also demonstrating superior financial performance.

“Companies that tackle ‘impossible’ problems are achieving 400% higher returns.”

This striking statistic, as presented by Simmonds, suggests a fundamental misunderstanding of value creation in the market. She points out that conventional investors often deem these ambitious challenges as “unprofitable,” a perception Simmonds contests with data.

Purpose-Driven Companies Outperform the Market

Simmonds provides evidence that brands focused on enhancing quality of life and solving complex issues significantly outperform market averages. She states that purpose-driven companies recorded 400% greater returns on the stock market compared to the S&P 500, and brands enhancing quality of life outperform the market by 120%. This indicates a strong correlation between tackling significant societal or global issues and financial success.

Revenue and Profitability Gains

Further substantiating her argument, Sara Simmonds notes the tangible financial benefits associated with purpose alignment. “Companies that align purpose with business report 25% higher revenue and 22% higher pre-tax profit,” she writes. This contrasts sharply with companies lacking such alignment, where purpose-aligned companies saw a 31% profit increase, while others saw only 3%.

“Purpose-aligned companies: 31% profit increase. Others: 3%.”

Pioneering New Categories, Not Competing

A core tenet of Simmonds’ analysis is the distinction between competing and pioneering. She argues that companies addressing easy problems often become commodities, locked in fierce competition over minor advantages. In contrast, those tackling difficult or impossible problems face less competition and have the opportunity to become monopolies or even build movements.

“Because impossible problems face no competition. While everyone competes over marginal improvements, purpose-led companies forge new categories. They are not competing; they are pioneering.”

This strategic advantage, according to Simmonds, is why such ventures generate more value. By focusing on challenges others avoid, these companies create unique market positions and command greater attention and investment over time.

The Market Rewards Courage

Sara Simmonds concludes by emphasizing that the market ultimately rewards the courage to pursue ambitious goals that others dismiss. She observes that many of these opportunities are overlooked in boardrooms and on spreadsheets because they don’t fit traditional ROI models.

“The market rewards the courage to tackle what others avoid.”

Simmonds suggests that this very dismissal is what makes these ventures so powerful. The lack of perceived immediate profitability or the sheer scale of the challenge deters competitors, allowing pioneering companies to establish dominance and achieve extraordinary growth, evidenced by her claim that purpose enterprises grew by 1,681% while the S&P 500 averaged 118%.