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

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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