Building Project Sustainability into your DNA: Business models, hybrid corporate structures and feedback loops

Goals

• Understanding lifecycle
• Paying more attention to supporting developers and the reality that marketing IS code
• Understanding better how to take a product from self-funded to sustainable -- open source?
• Better ways to structure your business or projects to be sustainable

Discussion

• Corporate culture was so process heavy that it put the project we were working on went very late
• Knowledge sharing site (ideaencore.com)
  • B-corporation to get investors
  • Revenue model is transaction fees
  • Subscription service for the library
  • Self-funding for four years
  • Some have to ask board to spend $500
  • If they would need to develop their library it would cost several thousands
• We've done a lot of market research, but we learned a lot of stuff that didn't pan out
• Self-sustaining model is really important. How lean can it run?
  • I've come from a venture model where there will be investors if we build something awesome
• Went to a conference (SoCap), but hype is way beyond reality
• Problem with social investment is that small projects aren't big enough (with those people funding 1m and up)
  • "When you're ready to go global, come back to us"
• Kickstarter is at the bottom
• I have friends who have raised $70,000 on kickstarter -- they had a recognizable product
• With smaller projects, investors aren't getting "big social" or "big financial" returns.
• Foundation funding is also too siloed -- "we fund health and human services, your project is to broad"
• Three things are really jumping out
  • Because of the expert nature of founders -- they have strong opinions -- you should focus on an emotional pitch for your investors (story, emotional connection)
  • Really go for being as impactful as possible rather than as conformant as possible
  • There's a learning curve. We're too big / we're too small. Work on strategically getting information about the funding sources -- you can really accelerate the process. Work with good people who understand how the funding sources work.
  • Get informal relationships with others who have been funded, then build relationships up.
• For foundations, come at it: "You have a problem, and I can solve it." and work on capturing the program officer
• There's a donut hole with a big gap in the middle -- the money is flowing easily when it's small
• What I'm hearing is that I need to listen to the funder and think about how my project can solve their problem.
• Gathering stories and problems for the community before presenting a pitch and distilling that -- creating a community of learning and practice
• Think about how you can tell your investors how they are already wasting their money by not using your capacity-building tool
• How did your organization build itself up? Global Integrity (indaba)
  • We needed to get reporting and data out of a ton of people
  • We went through a lot of iterations solving narrow, short-term problems with whatever problem we needed to solve -- so important to be aware of the problem
  • We did some validation of the problems with their current technology -- watching people use their tech
• Here's a strategy
  • Find a larger organization with a similar problem, build it for them, but say we'll take most of what's built and develop it into a general project
• Amidia (grant organization)
• One thing that is important is "how crowded is the room" -- if you're pitching in a less crowded room (fewer competitors), you have a better chance
• Transition into discussing persistence vs stubbornness
  • Sometimes people just have a really bad idea and quit their day jobs -- first, test the shit out of it. Come up with experiments -- a site that says what you want to do and people start emailing it -- maybe you have a good idea. Think about the cheapest way to test it out -- paper, prototypes, etc.
  • Get people paying for it early. The paying clients are asking for the right stuff.
• Who's the user? Is it an institution or a person?
• Maybe we could create a "truth-telling squad"
  • A group of people who aren't invested and can call bullshit on ideas
  • An honesty booth

Themes

• Self-sustaining is an important model, but when your growth outstrips your ability to fund it, you need outside funding
• There's a gap between small funding and big funding
• When dealing with funders, think about how you can solve their problem
• Work on developing back-channels and informal relationships with your organizational investors
• It's important to change expectations of how much funding you can get and think about how you can run more lean
• Focusing always on the shortest, cheapest way to solve a problem right in front of you that is really sucking for you helps you learn quickly
• Paying customers are the people you should listen to
• Institutionalizing your relationships can help maintain sustainability
• A record of strong credible work can help
• Find a truth squad to call bullshit on your ideas