What do Airbnb, Instagram, Pinterest, and Angry Birds all have in common? They were all successful commercial startup ventures.
What do Community Advocates of Minneapolis, Association for Volunteer Administration, and Chicago’s Hull House have in common? Despite their best efforts, all of these nonprofits survived.
Commercial startups don’t always succeed, and many nonprofits exceed their organizers’ expectations, but nonprofits can learn from the success of their for-profit colleagues.
Focus on your vision. The most successful startups have a strong vision and a business plan. Nonprofits need the same. It begins with a mission and with a strategic plan. The plan will give you direction and a purpose. Amazon’s is “To be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.” It is not a limiting vision. It doesn’t mention selling books or cleaning products. But it provides direction.
Focus on the money. Some nonprofits expend most of their energy on reaching those they want to serve without keeping an eye on their finances. Nonprofits need accurate revenue forecasts and quarterly budgets. Unchecked growth will destroy any organization if there is insufficient revenue to support it. Denis Shafranik, a venture capitalist, cautions that in our current environment, “VCs and the wider investment community are becoming increasingly skeptical of outlandish forecasts and instead want to see founders who can show they have a good grasp of the fundamentals and what it takes to reach a certain trajectory. “. The board of your nonprofit and your founders should look at your financials the same way.
Keep your focus on your customers and the people you want to serve. Startups are always refining their products and services. They learn fast and adapt. The dream of YouTube’s founders was to create a dating app. Their original slogan was to be “Tune in, Hook up.” They offered to pay women $20 for uploading a video of themselves. But more people watched the videos and didn’t pursue dates. So, they changed. How many nonprofits would be willing to make such a shift?
Focus on your team. Startups succeed because the launch team is passionate and has different skills that can execute the mission. Nonprofits who do not hire the best will struggle. Don’t hire your friends. Hire those that have skills you don’t have. In this day of technology, don’t overlook the possibility of hiring amazing talent that will work remotely. Do you really need your CFO on-premises when you can work via teleconferencing and in the cloud?
Focus on failure. Not everything you try will be a success. As Thomas Edison said, “I have not failed, I’ve just found 10,000 ways that won’t work.” If you begin with an attitude that failure is ok, you can focus on improving your original idea or starting over with a new idea. That’s what Mark Cuban and Richard Branson had to do. Warren Buffett said that he would not invest in any business where the owner hasn’t failed at least twice. Are you willing to fail?
Whether you run a commercial startup or a nonprofit, you will face challenges. But never stop thinking, trying, and innovating.