Bootstrapping the non-profit organisation Rule 5: Own your Assets

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

Build and own an asset that’s difficult for other people to reproduce

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This is an interesting one in the non-profit world, because an attitude of generosity – of wanting to see problems solved more than we want to build empires – suggests that we should welcome others working in our ‘market’ as allies rather than competitors.

But there’s an important point about attitude here – we should always be building assets, and the most valuable ones we can build will always be those that are difficult for others to reproduce.

These assets might be products – in our case, curriculum and reading books. They might be services – delivering teacher training.
They might be processes – the ways that the pieces of what you do fit together to create value.
They might be things like reputation, trust, and relationships.

Investing in building any of these assets – from building a physical product to making a spec or howto for a process, to training your team – is always worth the time – a gift to your future self.

Here’s a thought experiment that links back to this post from a few weeks ago. Imagine that each central piece of your (charitable) business model was widely available at low cost (what if you open sourced it?). In the absence of each piece, what about your organisation means that people would still want to work with you? How would your clients answer this? How about your donors?

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.


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

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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.

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

This is the third-and-two-thirds 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 3)

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.

Eager to pay, donors, and two-sided markets

It’s often the case for non-profits that the people who pay for what you do aren’t the people who benefit directly from it. The client always pays, of course (see part 1), but someone else is also providing some of the cash you need to operate.

There are two risks here – the first is that you make an excellent product that your donors love, but that your clients aren’t willing to ‘buy’. This happens when you allow yourself to become accountable to donors wishes (and possibly whims) first, rather than being faithful to your clients’ needs, and what works for them. It’s easy to slip into this when you’re short of cash and start serving donors who are not-quite-eager to pay for what you do, but happy enough to pay for something different but similar – so you drift, and compromise, and end up being pulled in all directions, wasting time and money and pleasing no-one.  See also Rule 1: Real Work for Clients First.

The second risk is when donors are eager to pay for part of what you do – usually the last-mile, bit that happens on the ground part – the impact – but refuse to pay for overheads or administration – the delivery.

Yes, you are ‘selling’ your impact, and you want to be efficient – but you must sell your real work as it is, which probably involves an office. Educate potential donors about what it takes to do your work well, and to work for the long term towards significant and lasting change. Explain to donors who want cool-sounding statements about their impact (‘100% of my donation went towards food that appeared magically and for free in front of hungry children’) that of course you have administrative costs – including your crappy office – and that without them, there would be no program.

Be as clear and as real as you can about everything you do, and why, and find those donors who like you, and like your work, and trust you, and are eager to pay to be a part of it.

Bootstrapping the non-profit organisation Rule 3: Serve Clients Eager to Pay for what you do (part 2 of 4)

This is the third-and-a-half 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 2)

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.

Eager to pay and scaling the non-profit

This is where the bootstrapping mindset comes into its own in the world of non-profits and social programs. If you can find clients who are not only eager to “pay” time, attention and effort to user your product or service, but to actually pay money… you know you not only have a product that they think is valuable, but one that can cover some of its own costs – or better, cover all of its own costs. Or better, cover its own costs, with a little left over.

We’ve pretty much reached this point at the literacy non-profit I work for in Indonesia, and the potential is huge. Instead of looking at our bank balance and asking how many groups we can help, we’re looking at ourselves and asking how we can get better at what we do so that we can serve more groups – because the growth is paying for itself.

Our program is far from polished and perfect, but it seems to be working. In the old days we had a list of people waiting for our program – waiting for us to find the money to be able to train them. Now the people on the waiting list are finding their own money – and the wait is a lot shorter.

In fact, doing it this way has allowed us to serve more groups as a gift – not ‘for free’ but ‘at our expense, as a gift, because we love what you do’ – than we did back in the day when it was free.

Finding the clients who are eager to pay might well help you get your product or service to more of the people who are eager, but can’t.

Bootstrapping the non-profit organisation Rule 3: Serve Clients Eager to Pay for what you do (part 1 of 4)

This is the third 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

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.

Eager to ‘pay’ and non-profit work

At first glance, talk of clients ‘paying’ – and ignoring the rest – might seem like the antithesis of non-profit or community-based work. But it isn’t, and here’s why.

People always have to pay.

If they don’t pay money, they pay time, or effort, or attention – all of which they could have spent elsewhere. So even if your product is free, you have to find people who are eager to use it. And if it’s free and no-one wants to use it… well, it’s just not good enough yet.

Don’t get me wrong, you might have something technically great – but you need to think of your product or service not just as the thing itself, but as the thing plus the ‘wrapper‘ (of good communication and relationships and trust, for example) that’s necessary to get your people to buy.

I’ve seen this repeatedly at non-profits I’ve worked for: we’d make something valuable available for free – a highly qualified doctor giving free consultations, the free English lessons that everyone in a community said they wanted, a course for mothers-to-be in a poor community that exactly fit their needs and was far better than they could get anywhere else… and almost no-one came, or they came a couple of times and drifted off. There were lots of factors at work, but at the end of the day, we simply weren’t good enough, and couldn’t build an audience. Really – it’s possible to fail to build an audience for a doctor in a poor community with no healthcare. I wouldn’t believe it if I hadn’t done it.

As a wise man once said, 

If you know how to solve a problem but can’t communicate it to others in a way that actually results in it getting solved… you don’t actually have a full solution.

Driverlesscroc – rehashing an old Seth Godin blog post

And the times when we succeeded in building programs that got traction, were popular and impactful and in a couple of cases, became self-sustaining, we managed to find something small that stuck, and to grow a program that worked from there.

Start with the minimum viable product – the smallest and simplest thing you can offer that works – for the smallest possible audience, and build from there. Because if that group of people – the group most eager to pay – won’t pay, you need to go back to the drawing board.

If they will pay – then maybe you’re onto something. Now you’ve got clients, hopefully clients grateful enough and gracious enough to be patient as you work through all the implications of what you do, smooth off the rough edges and start learning to do it better. If and when it’s ready, your clients will tell their friends, and you’re off to the races.

Vectors of value

What if all of the value you created could be understood along one of three axes: time, energy (including matter, which includes information), and space.

Time

We create value by changing the amount of time something takes.

This could be saving time, by making something happen faster. All other things being equal (an important caveat), people will pay more:

  • To get from A to B faster
  • To learn faster
  • To receive something they’ve ordered faster
  • For their computer to boot faster
  • To build things faster
  • To improve things faster
  • To have access to something – machinery, capital – faster 

It can also be by making things last longer:

  • Making machines, engines, clothes, houses wear out less quickly
  • More holiday for the same money
  • Helping people live longer lives
  • Making the same amount of something go further is a way of making it last longer – fuel, sweets, food.

Energy

Energy covers a lot, and I’ve fudged a bit by including matter and information in this section – but I think matter technically is energy, and seeing as information can be embodied in matter, my guess is that in some sense, information is energy too.

Adding value by saving physical energy:

  • The obvious – making energy efficient appliances and machines (which incidentally make the same amount of energy last longer
  • By bringing things closer to people, we save the energy they spend accessing them (see ‘space’)

Adding value by adding or reducing matter

  • Making something lighter – this can be a way of helping other things go further
  • Or heavier. I find myself wondering if. say, pegging down a tent is using a few materials (pegs, string) as a lever to add the weight of the world to stop your tent blowing away
  • Or by restructuring matter so that it goes further, is more useful, saves people time…

Adding value by improving the quality of information available, saving attention and emotional effort:

  • This can be done by adding, removing or re-structuring information
  • Good communication makes the most relevant and easy information easy to find.
  • Indexing and search do the same
  • Signposts add value by making it take less effort (time and energy) to find things in the real world
  • Brands and review systems save energy by making it easier to know who to trust – so you can spend less time checking things out by yourself.

Space

Adding value by moving things through space, or by ‘creating’ more space

*Quotation marks because we can’t actually make more space, in the deep sense. Can we?

  • Transporting something something that you want to you
  • Taking something undesirable (rubbish, pollution) away from you
  • Smaller TVs are a way of buying floor space in your house
  • Smaller computers (laptops, phones) are more easily moved, creating new possibilities in new spaces (e.g. a fully functioning office in a coffee shop)
  • Clearing land to make it easier to move through, build on
  • Enclosing land so that things can’t move through it
  • By bringing people together at the right place, at the right time, so that something happens

Are these all the same thing?

It isn’t just time that costs money – energy and space are money.

And having written this, it’s clear that many of these things are overlapping:

  • A package delivery service saves me time and energy by bringing the package through space
  • The internet does the same by bringing data into my house – and google makes it take less effort.
  • A well written text book saves me time, energy and attention in learning

The fourth dimension

Those are all pretty straight forward, and useful angles for thinking through how a product or service creates value. But what about quality – the thing that makes a tool a pleasure to use, or that makes prolonging an experience like a movie – or life itself – worth it.

Is ‘goodness’ is a species of information, or its own dimension?

Do it now, and start small

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.

Alan Webber, Rule #38 from his Rules of Thumb

Read the whole piece at TimFerris.com.

Build, measure, learn

This post is a leap from Rule 2 of bootstrapping the non-profit: Do it Now.

This is such a key idea, and so interesting and relevant to Do it Now, that I thought I’d do something about it like, write now.

The idea is that when you’re developing a new business or organisation, there is so much that you don’t know that planning has less value – it will inevitably change when you know more.

Because of this, your focus needs to be on trying things out, working with what you do know – and your best guesses – and testing them out in the real world.

So we get the lean startup cycle:

The Lean Cycle
From Open Classrooms: The Learn Startup (this is supposed to be an embed but it isn’t working for me!)

The relationship between this and Do it Now is that the fastest way make progress – even if it’s only progress in knowing what not to do – is to go through this cycle quickly. One of the best ways of increasing your cycle speed is to take action – now!

Counter-intuitively, the more uncertain a situation it is, the more useful this approach – and cycle speed – can be:

When a project can be approached with a high degree of certainty, the best activity is to plan. As we have high confidence that the plan is likely to succeed, the best strategy is to execute what we know will work well. The focus can therefore be on executing the plan and monitoring progress.


When a project carries a high degree of uncertainty, the best activity is to learn. As any plan would make too many assumptions that would be hard to justify. The best strategy is to increase the speed at which we learn until we have discovered which plan would work the best. The focus must be on learning and discovery and checking any assumptions that we have.

Open Classrooms: The Learn Startup

Bootstrapping the non-profit organisation Rule 2: Do it Now

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

Rule 2: Do it Now


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.”

Rule 2 of bootstrapping the non-profit

Do it now.

Thanks Seth.