Posted on

What if it was free?

What if your the thing you do could be free? If the cost of all your inputs dropped to nothing – what would you charge?

If someone down the street started giving it away – why would people still come to get yours?

The answer is probably, because they want to buy it from you. They like you, the way you do your thing, the story you tell about what you do – and the way these things make them feel.

They feel good about you because you’re: more reliable / cutting edge / traditional / safe / fun / surprising / caring / professional / energetic / calm and collected / place a higher value on X / more educative / a long-term solution / like them.

Better than free

In a world of abundant free – or nearly free – copies, what makes something worth paying for?

In The Inevitable Kevin Kelly suggests eight “generatives”: attributes of goods or services that add value:

  • Immediacy (I can have it now – before the crowd)
  • Personalisation (it’s special to me)
  • Interpretation (how to understand or use the free thing)
  • Authenticity and trust (it’s the real deal, not an imitation. Quality)
  • Accessibility and convenience (so that it’s easier to access the free thing any time)
  • Embodiment (e.g. the luxury of a physical book, or of doing something in person)
  • The feeling and status of paying for it (patronage)
  • Findability and curation (“a work has no value unless it’s seen”)

…these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can’t be replicated with a click of the mouse.

In short, the money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits.

Kevin Kelly – Better than Free
Posted on

The acid test

If my potential…

customer / employer / client / donor / partner / supplier

knew what I know about my…

product / last job / service / organisation / attitude / manners

would they still…

buy it / hire me / use it / give / join me / want my business ?

Better still…

Would they be eager to do so?

Hat tip: SG

Posted on

In their hands

Make something people can use.

Put it in their hands.

See what happens.

If they’re eager to pay – attention, time, money – you’re onto something.

Watch them. Listen to them. Tweak it. Make more of it. See what they think.

If they tell their friends – and if their friends tell their friends – then you’ve got it.

What change do you seek in the world? Who are the people you seek to serve?

You’ve got it when they’ve got it.

You’ll know you’ve got it when you meet someone for the first time, and the thing you made is already in their hands.

Posted on

Team Performance (1)

I’ve just been listening to Richard Hackman on teams and team performance. His first lens for evaluating team performance is straight forward:

Delivering the goods

Did you get the job done? How well did you do it?

Who is the legitimate receiver, user, reviewer of this performance and what to they think of it? Did you serve the client first?

At a non-profit leader you might have several ‘customers’: the people you serve, donors, the team itself. If you can’t keep everyone happy, where do your priorities lie?

I listened to Andy Kaufman interviewing Richard Hackman on the People and Projects Podcast.

Posted on

Bootstrapping the non-profit organisation Rule 7 (part 4)

This is the seventh-and-a-quarter post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 7: Charge a lot (but be worth more than you charge)

A last argument for applying this rule in non-profit context is that if your clients pay, your resources go further, and you can serve a lot more people. We covered this principle in Rule 3 (see ‘Eager to pay and scaling the non-profit), but it’s worth repeating here.

I’ve just been listening to an interview with One Acre Fund‘s Andrew Youn on Rob Reid’s After On podcast where Andrew spoke about the importance of a revenue model in their work, where the farmers they serve receive credit, but ultimately pay for the services they receive:

Rob Reid: Some people might say that these folks are extremely poor, why don’t you deliver these services for free? Part of it is that there’s only so much money in your organisation, and that 98.5% payback means that you’ve got a lot more dollars put to work. What percentage of One Acre Fund’s annual budget comes back to it through repayments?

Andrew Youn: Most of One Acre Fund is core program delivering all these services… Within that core program, about 70% of our budget is covered by farmer payments, and 30% from donors.

RR: You’re literally serving three times as more as many people as you could if you were a purely charitable organisation.

…

AY: It makes us so much more cost effective… we can serve three, four times as many people by charging for our services. I think it also makes us a little more beholden, as an organisation, to the customer that we serve. So we use, for example, repayment as a customer service quality metric. [see Rule 1 for more on this idea]

After On Podcast, Episode 35

.

So here’s the final reformulation of Rule 7:

Rule 7 of bootstrapping the non-profit organisation: Find the right price (and be worth more than you charge)

Posted on

Bootstrapping the non-profit organisation Rule 7 (part 3)

This is the seventh-and-a-third post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 7: Charge a lot (but be worth more than you charge)

How does this rule apply to what a charity charges its clients? Is it ethical to charge your clients a lot?

Shakespeare’s Prospero said it best:

This swift business

I must uneasy make lest too light winning

Make the prize light.

The Tempest, Act 1 Scene 2

I’m not a subscriber to the argument that free things are always un- or underappreciated, but there’s truth in the sorcerer’s words: we value what is dear.

Or perhaps we should say, we value things that cost a lot as long as long as they’re worth more than we paid.

Think about the times you’ve felt frustrated by a cheap purchase that wasn’t worth it. Or the more costly, high-quality item that brought you satisfaction each and every time you used it. Rule 7 follows this logic – just as it’s possible to be cheap and still rip people off, it’s possible to charge a lot and still be generous.

In fact, charging a lot might be what gives you the space to be generous. It’s hard to give people the time and attention they require if you’re cutting corners and pinching pennies. Rule 7 asserts that it’s fine for a charity to charge its clients for its services – even to charge ‘a lot’ – as long as the client makes the most profit from the transaction.

And the fact is, even if the service that you provide to your clients costs them nothing in financial terms, they always pay something – time, attention, the effort of showing up.

When your clients pay a bit more of those things for what you provide, they think more about whether they really want it, and take it a bit more seriously. And just as if you’d charged more money for something, when people have bought in to what you’re doing, there’s a lot more that you can do, so you open up a lot of extra ways to create value for and with them.

As another poet put it,

Where your treasure is, there your heart will be also.

Posted on

Bootstrapping the non-profit organisation Rule 7 (part 2)

This is the seventh-and-a-half post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 7: Charge a lot (but be worth more than you charge)

The point here is that your organisation’s selling point – we’re still looking at things from the perspective of donors and supporters – should never be how cheap you are (your price), but how much value you create for your clients.

It doesn’t matter what your price is, as long as you’re worth it – or Seth would say, worth as long as you’re worth more.

This might be about how many people you serve and how many things you do.

Or it might just as well be about how you do what you do – the values that you bring to the table that make you special. The things that would:

Make people – miss you – if you were gone.

Posted on

Bootstrapping the non-profit organisation Rule 6: Scale is not a Reward

This is the sixth post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Seth says:

Scale is not its own reward. Grow when it helps you serve the people you seek to serve. That’s the only time you should grow.

.

This is another rule that follows from Rule 1: Real Work for Clients First.

Work out who you seek to serve, and serve them as well as you can in an impactful and sustainable way. In any business or non-profit, the word “sustainable” here carries a lot of baggage.

Depending on your business model, there is likely to be a sweet spot that allows you to serve enough clients (decide early how many is enough, and always start small) and to generate the income you need to be around and keep on having an impact for the long haul.

In a small business this might simply mean having enough clients to earn what you need to earn once you’ve paid yourself and covered all your costs (see, for example Profit First – this episode of Read to Lead is a good introduction – or if you’re a freelancer, this excellent podcast on the bare minimum you should be charging clients).

In a non-profit, finding the right scale can be more complicated. All other things being equal, you probably want to serve as many clients as possible, but you’ll need to grow carefully to make sure that you continue to serve your clients well.

Another complication is that your clients may pay for themselves in the same way that they should in a business. You likely depend on other income streams, and particularly donation income, and finding the right size for your organisation with respect to your donors (two-sided markets again) will depend on your particular circumstances.

If your charity implements for a particular trust or company, they may largely dictate your budget and the scale of operations.

But if you’re funded by general donations, you need to demonstrate sufficient impact in terms of both quality and quantity for people to think you’re worth supporting. You might need to reach a certain size to justify overheads and capital investment – that is, you need to spread your overheads over enough clients to be seen as good value for money. Or it might be that you need to serve clients nation-wide in order to access particular funding opportunities.

Rule 6 of bootstrapping the non-profit

Scale carefully and find the right size for you.

Posted on

Bootstrapping the non-profit organisation Rule 4: Resist the urge to do average work for average people

This is the fourth post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Be a “meaningful specific” rather than a “wandering generality” – it’s the principle of concentration of force and energy to get work done.

Rule 4 ties into Rules 1 and 3 – “real work for real clients” who are “eager to pay” – and if you work at a non-profit organisation it has implications for how you work with both clients and donors.

Rule 4 and clients

For your clients, it means your service is for them. Not for people in general, and it might help your clients… but a specific product or service for their specific needs.

Take education in Indonesia as an example. There’s a huge need for teacher training and resourcing. This is true across the age-range (from pre-school to university level), across different types of school (private and government-run schools), across the whole archipelago, and in any subject area. Within each of these ranges are groups of people with different needs, and trying to serve them all will get you no-where. Trying to produce something for the “average” teacher will dilute your energy and make it impossible to make something meaningful for any individual – and your clients are individuals.

Far, far better to concentrate on the needs of a specific group (helping pre-school teachers at small charity schools to teach reading more effectively) and do it well. If you’re good, you might end up with something that grows and can be made more widely applicable.

Rule 4 and donors

The same principle applies to your donors. It’s hard to go to the world and persuade them that your cause is important, and that they should give you money. It’s much easier to find people who already think what you do is important, and convince them that you do it well enough to be worth supporting.

Again, be specific – who are you helping? Why those people? Why this service? What difference is it making? Tell stories of change in the lives of specific people to explain the work that you do.


Posted on

Bootstrapping the non-profit organisation Rule 3: Serve Clients Eager to Pay for what you do (part 4 of 4)

This is the third-and-three-quarters post in a series applying Seth Godin’s rules of bootstrapping (see also here) to building a non-profit organisation.

Rule 3: Serve Clients Eager to Pay for what you do (part 4)

In a nutshell, Seth says that if someone isn’t eager to pay, they’re not your client. You get to pick. So work for people eager to pay.

Seth Godin on non-profits and two-sided markets… part 1

While it’s tempting to believe that non-profits are generally funded by large numbers of philanthropists giving small amounts of money, in general it’s not the case… A non-profit is almost always bootstrapped because the founder goes to two or three or four passionate individuals and says, “If we could work to solve problem X, is that the sort of thing that you’d like to support?”

And so it begins with one side of the market, which is the donor and the founder deciding to take on a problem.

Seth Godin,  Akimbo, “Thrash Now (and ship early)” Q&A@22mins

.

Seth’s Q&A answer offers a different way to look at Rule 3. I’d been thinking of the non-profit organisation as the link in a two sided market, with clients on one side, donor on the other, and the organisation in the middle, which is more or less accurate…

But you have to start by looking for those donors who are eager to pay for what you do – so eager to pay, in fact, that they’re prepared to join you, so that whatever you’re doing becomes a problem that you take on together.