Here are two examples from the charity I work for.
Scale and the right size
At the charity I work for, we produce graded reading books to support our literacy curriculum. These aren’t available elsewhere in Indonesia – especially not ones that can be tightly integrated with the curriculum – so we need to make them ourselves.
The catch is, that there’s an economy of scale to printing books. The cost-per-book of printing small runs of books costs more than three times as much as if you bulk print a thousand copies. In fact, a bulk-printed colour copy of a book costs less to print than a black and white photocopied version.
If we want to bring price down and quality up, we clearly need to print in bulk. The catch is, this takes a significant investment, and the only way to make it worth it is if we have thousands of teachers using our books – at which point they pay for themselves.
So a few years ago it became clear that if we wanted to serve more groups at a lower cost (which is a key factor in more groups being able to afford our program in the first place), we need to be big enough to make bulk-printing and storing thousands of reading books a realistic proposition.
Scale and the free prize
The best example of this that I’ve come across is how Amazon moved into web services and cloud computing with Amazon Web Services. In short, they built a huge amount of electronic infrastructure for their own use, then realise that they could share it with others.
Amazon gained a new revenue stream, and companies could run their online infrastructure on Amazon’s servers for a fraction of the cost of making their own. This created huge value for everyone (prizes all round!) – Amazon got richer, and a whole generation of companies (netflix, godaddy, airtable, hubspot, airbnb, coinbase,wetransfer, dropbox*) was able to offer services as if they were already big companies, and grow with their customer base, rather than needing a huge capital investment up front.
The free prize here came when at the same time as we were working out the above, we used the Business Model Canvas to study our (charitable) business model. It became clear that the books were an asset not just to us and our users, but to many other groups doing education work across Indonesia. They wanted books. We sorely needed an income stream.
By selling our books, our partners gained a useful resource to add value to their work, and we gained extra income for little additional effort. Prizes all round!
Scale, the free prize and the non-profit (2)
The other example of this is a work in process – we’re looking at sharing our curriculum and training materials online under a creative commons (open source) license.
This supports our core activity – equipping teachers to teach reading effectively – by allowing our users to review training sessions and check their technique. It might also come in handy for training future partners.
But it will also be a resource for anyone working in the same field as us – something that helps others that we can make available at no cost to ourselves. Free prize!
And of course, the free resources also help potential clients to hear about what we do, and perhaps makes them more likely to use or recommend our other services too.
Here’s a great case study in doing it now and starting small from Fast Company founder Alan Webber. It’s about how Muhammad Yunus founded Grameen Bank, and ended up helping millions of families to a more prosperous future. Weber Concludes:
Start small. Do what you can with something you care about so deeply that you simply can’t not do it. Stay focused, close to the ground, rooted in everyday reality. Trust your instincts and your eyes: do what needs doing any way you can, whether the experts agree or not. Put practice ahead of theory and results ahead of conventional wisdom.
Start small. If it works, keep doing it. If it doesn’t work, change what you’re doing until you find something that does work. Start small, start with whatever is close at hand, start with something you care deeply about. But as Muhammad Yunus told the KaosPilots, start.
Do it now. Not later, not next week, NOW. It’s better than later.
In the non-profit world:
Still do it now
Not much to add on this one. A bias to action is critical, and all things being equal, now is far better than later.
This blog is a great illustration – a month and a half ago I committed to shipping a blog post every day for 100 days. I would set the bar low if I had to, as long as I got something done. Every day. I’m at 60 posts as I write this, and it dawned on me that it would have taken me an entire year to get this far if I’d committed do a post a week.
In Lean Startup terms, doing it now is a key way of increasing your cycle speed. They might be small steps, but you get something done, you can review it, you can do it better next time as you build-measure-learn. See the next post for more on this.
I guess a caveat for the non-profit world is that you need to tread carefully if we’re dealing with vulnerable people.
But do it now doesn’t mean ‘be a bull in a China shop’ – it just means being commited to taking action, to doing the next thing now.
If you know what you need to do next, then it’s easy – do that, or at least do the smallest next part of that that you can.
If you don’t have clarity about what to do next, the next thing to do is to find out. Do some research. Find the name of three papers. Get hold of them. Make notes on one. Email the person who wrote it to thank them. Each one is a tiny push of the boat (or flywheel, if you’re a Jim Collins fan), giving you a little bit more momentum and making it easier tomorrow.
Rule 2 says “I will not go to bed tonight until I have done X.”
“Planning and coordination are fine, but not if they don’t lead to real work. Don’t spend time trying to please [middleman-funder-etc] – the real work is figuring out how to engage with and serve your customer.
In the non-profit world:
The real work
Vision and mission statements, organisational structure, a shiny website, gala dinners are fine – but they are not your purpose, and they are not your real work.
The real work is getting in front of the people you are aiming to serve – first your clients (or ‘beneficiaries’) and secondarily potential donors. If you’re not getting to know and making a difference for your clients, you’re wasting your time. Your project is almost certainly a waste of money, and quite possibly the worst kind of vanity exercise.
In my experience this kind of work is often messy and quite often slightly unsatisfactory – because you’re working with real people, who quite often have those traits…
Two types of customer
In a non-profit, it’s quite possible that your services are paid for people people other than your clients – most charities are working in two-sided markets – donor pays, client receives benefit (incidentally, most news and magazine companies, and Google and Facebook, among others, operate this model).
The question is… what are your ‘donors’ buying? It might be:
The knowledge that they’ve done some good in the world
The ability to show off to their friends that they’ve done something good in the world
A fulfilled CSR requirement, and a pleased boss
The confidence that their money has been used responsibly and effectively
It’s really easy to exaggerate the work that you do. It’s easy to make grand claims, tell only the best stories, and play to every donor’s particular foibles, telling them what they want to hear so that they’ll give you money, and keep on giving you money.
At the end of the day, the product that your donors and supporters are buying (or should be buying) is the work that you do for your clients. Everything else is (relatively speaking), fluff.
And at all costs resist the temptation to let the ‘needs’ of your donors shape what you do for your clients. Don’t lose sight of the reason you’re doing this in the first place. Listen to your supporters, but always be clear that you seek to serve your clients first, to focus on their needs and make a real difference to them in a way that they value.
Be accountable to your clients and their needs first of all, and everything else will be (relatively) easy.
Rule 1 of bootstrapping the non-profit
Ship real work for your clients [beneficiaries] first. Be real with your supporters.
* More on being real with your supporters in Rule 3
I don’t just mean all the ideas you’ve had that you never did anything about – you lost those too, but many of them probably weren’t that good anyway.
Doing something with an idea is often the fastest way to check if it’s important. You might do a bit of research and write down what you do, or seek out the right person for a conversation, or see if you can make something happen. If it turns out not to be important, or if it isn’t for you, that’s fine – you’ve cleared the decks for a new idea which might be a keeper. A stagnant pool of vague ideas costs you new ideas.
But the ideas you really lose, the good ones, are the ones you find down the rabbit hole once you’ve taken action on an idea and confirmed that there’s something to it. Things get more specific on contact with reality (or the customer!), and vague ideas begin to take concrete form, and new vistas of questions and actions open up.
This is what I mean by being prolific: making fast, small, low-cost decisions; taking action; trying things out. I don’t mean mindlessly, throwing proverbial mud on the wall. And of course there’s an equal and opposite principle of focusing and going deep. But you only go deep by diving in.
So if you think you’ve got good idea – why not take it for a test drive?
Here’s a small thing that might be useful: a link (or better, if I can manage it, an embedded video) from Derek Sivers about getting on with making small things that might be useful to someone and that they’ll actually pay for for, as opposed to waiting for the chance (i.e. money) to build something huge and tremendous.
This blog post falls into this category – it’s small, but it’s what I can do. It’s very useful, and it isn’t free – you’re paying attention. Hope you like it.
Okay, I can’t embed the video (issues with new wordpress editor?) It’s here.