Startup for Charities?

The Unintended Revelation

So I sat down at a local charity breakfast/funding pitch recently. It was a packed room for a great charity (Doorways for Women & Families) and there was brief small talk and coffee before the presentation began. When it started I quickly became engrossed in the work they were doing (help for those suffering domestic abuse). They went over the tragic need for their services, how they differentiate themselves by providing a range of help, and then highlighted their success rate. It was a perfect pitch and if you take out the tearful, emotional moments, it was just a damn good business investment pitch:

  • There is a market need (sadly)
  • They have a service that addresses the market with demand exceeding their ability to meet it (even sadder) 
  • And they have success metrics and testimonials. 

As an entrepreneur and investor this all seemed eerily familiar. That's when it hit me. We can do a lot of good by looking at charities and social programs with the same energy, methodologies and discipline that we do when funding the latest "revolutionary, game-changing, paradigm-shifting TwitterBook app."  (homage to Guy Kawasaki)

Lean Startup (The Hyper Abridged Version)

Anyone in the startup or new venture space cannot help but notice that the last couple years have seen a significant rise in activity, funding, interest and general 'buzz'. Some of this can be attributed to economic and market factors, but I think the bulk of it has been driven by the widespread adoption of Lean Startup methodologies. Regardless of the root cause(s), there is a ton of money, intellectual firepower, and innovation being thrown at growing ideas into businesses.

Lean Startup has been most popularized by Eric Ries in relation to Silicon Valley type companies, but its tenets are being applied all over the world and in many business settings. Some of the key mantras are:

  •  Get out of the office. You don't build a business sitting behind a desk making PowerPoint presentations or coding a new app. Businesses are built by getting customers and customers are NOT in your office. 
  • Fail fast. Whatever you're thinking of doing, find out what the key assumptions are and go figure out how test whether your assumptions are right quickly. Don't spend months building an app you think people might use. Instead, distill down your core assumptions about the problem you're trying to address and find out how to test if your right cheaply and quickly. If you think there is a market for lemonade, don't go build a factory -- how about just setting up a lemonade stand on your corner and see if anyone buys any. 
  • Test your assumptions. Don't just guess or take one anecdote and run with it. Look at your idea and find all the assumptions that make or break the business and test. It's just like science and you should be expecting at least some of your tests to fail so you learn something. Remember the old engineering adage, "if you succeed you learn one thing, if you fail you learn many." 
  • Build-Measure-Learn. Follow this loop as quickly and using as little investment as possible each time around the loop. Products to launch like a ship anymore. Expect to go live with something minimal and keep improving it quickly for its whole life. (kinda like a kid I guess)

A Different Slant on Charities and Charitable Giving

These lean methodologies work and they are very powerful. Even more compelling is they don't just work for "revolutionary, game-changing, paradigm-shifting TwitterBook apps". These same filters can both help us rethink how we start charitable organizations and how we individually shape our donations. I can say personally that I am much more likely to donate to a charity that has followed, in some way, these ideas. I have no doubt that virtually every charity out there is addressing a real, human need, but have they tested whether their solution really helps the problem? Have they tested the assumptions. If you're going to donate your money or more valuable time to a charitable effort ask:

  • Is this service something that real people in need have shown they value?
  • Does this organization show that they have or will accept that they may fail initially and have to change and adapt as they go?  
  • What are the core assumptions the charity is based upon, and has anyone actually tested their validity?  
  • Do they measure what they do and learn from what they measure? 

Charity is a wonderful part of being human. If we think more about how and what we support, and help those organizations learn to work smarter not just harder, we can gain so much more. 

(And if you're wondering, yes, Doorways had great answers for all the above and our family is now a long-term donor.) 

Peeking Out Our Cosmic Window

Peeking Out Our Cosmic Window

Stirring Up a Hive of Trouble

Stirring Up a Hive of Trouble