Tom Dawkins, Co-Founder and CEO of StartSomeGood.com
Social Enterprises: Solving the Puzzle with Tom Dawkins
Tom Dawkins first embarked on the entrepreneurship roller coaster while he was still in High School. With a small business under his belt, he caught the entrepreneurship bug right away. Although he didn’t continue feeding his first business, as he moved forward for University, the experience of being an entrepreneur in High School gave him what he needed to continue down the entrepreneurial path.
Therefore, in between classes, study sessions and social University gatherings, Tom founded his other business, in 2000: Vibe Wire.
One of the benefits of being a young entrepreneur is your optimism. You don’t have as many responsibilities when you’re young, therefore you can commit 100% to your business and passion. The minute you step foot into the entrepreneurial roller coaster, especially at a young age, there’s no getting out. You’re in it for the long haul.
Vibe Wire was a nonprofit enterprise that gave youths under 30 the opportunity to be a part of the democracy in Australia. His goal was to help those who didn’t have a voice, to be heard, through scholarships, events and journalism opportunities. To truly connect with his target market, youngsters under 30, he made sure that the team at Vibe Wire was all under 30 years of age.
When choosing your team, make sure it’s in sync with who you want to target. If you want to help the younger generations, make sure you hire people who understand what people of that age are going through. This little detail can help a lot in creating a strong connection with your target market.
This staff rule, although different from the norm, was one of the reasons why Vibe Wire was put on the map. During the federal elections in Australia, the 18 year-old staff was allowed to follow both parties and document the campaigns and elections. It was a once in a lifetime opportunity, and it really helped the company increase in popularity in Australia.
Being loyal to his cause, Tom didn’t let himself be an exception to the staff rule. On his 29th birthday, in 2008, he resigned and allowed a younger individual to take over the business and manage it. Although a very hard decision, being that he brought the company forward throughout the years, it was the best move for the social enterprise.
After he left Vibe Wire, Tom moved to Washington, in the United States, and worked as a social technology manager for a large company. Even though he was committed to his new life and company in the U.S., Tom still wanted to make a change in the world all the while owning a business. He just couldn’t leave the entrepreneurial roller coaster just yet. He wanted to be a change maker again, but he wanted to be a profitable social enterprise.
“Everyone can be a change maker but in their own way.”
Profit-driven social enterprises weren’t popular back in the day, as big nonprofit organization were the leading social enterprises on the market. That’s when Tom realized that he needed to change the way people looked at social enterprises. His new mission was to help fund innovative businesses.
Therefore, while he was still in Washington, he partnered with Alex Boudak and founded Start Some Good, in 2010. The company, still under Tom’s management today, is a crowd funding platform helping entrepreneurs around the Country who need funding for their innovative ideas.
How is Start Some Good different from Vibe Wire?
Tom makes a living with Start Some Good.
Solving the Social Enterprise Puzzle
Puzzle Piece #1: Find a Mission
When you start a Social Enterprise, the most important puzzle piece to find your mission as a social Enterprise. How do you want to help your community?
Tom founded both social enterprises based on a need in his community and the World. Wibe Wire’s mission was to give a voice to the voiceless youths, by using the money the organization receives to fund scholarships, internships and opportunities for the younger generation.
Start Some Good was about giving startups and new companies the funding they need through an online platform, known today as crowd funding.
With Start Some Good, Tom wanted to show the work that they could be a change maker in the world without being a charity. After being paid very little for eight years, with Vibe Wire, Tom wanted to create something different, something that will allow him to “do good” all the while providing for his himself and children.
Find your mission and create your business plan around your mission. The business plan should always come second, after your mission. This will help you as you push through the days where the money isn’t stable yet.
Puzzle Piece #2: Research Strategically
Just like any business, it’s crucial to research your market strategically. Once you have your mission laid out, research as much as you can about your target market and your company’s niche. Tom knew that crowd funding was at its first stages, back when he co-founded Start Some Good, therefore he researched this niche thoroughly before launching the website. He went on a crowd funding website, that was already live and working, and tested the process by publishing his own crowd funding campaign.
“Many young entrepreneurs launch crowd funding platforms without knowing how a crowd funding campaign works,” but it’s vital to know the process, especially with crowd funding, in order to provide an improved service with your own platform.
Through his research, Tom realized that there were two types of Social Enterprises:
Redistributive – this is usually a nonprofit organization. The money received is directly redistributed immediately to those in need. Great example: Thank You Group, where all the money they received from selling their bottled water was used to give bottled water to communities in Africa.
Direct: this is usually a for-profit organization. This organization make an impact in the World simply by being. The money received, through donations or crowd funding, is used to provide a service to those in need. A great example is Straight, a Social Enterprise Cafe, where the money received is used to help young homeless individuals get off the streets by training them and getting them prepped for a job interview. If the organization doesn’t receive money, they can’t make an impact on the World.
Research your market as thoroughly as possible. Which bracket of social entrepreneurship do you want to work within? Research the bracket and get inspired by analyzing the competition.
Puzzle Piece #3: Be Creative With Marketing
Marketing for a nonprofit and social enterprise requires more hustle than a regular business, mostly because it’s sometimes harder to convince people to donate money. Tom’s favorite marketing tactic is doing in-person speaking engagements.
The more people you talk to about your mission and social enterprise, the more chances you have of being known. It’s that simple. A great way to target your audience directly is to speak at networking events or conferences, since your target market is already picked by the organizers of the event or conference. The hard work has been done for you, now you just have to wow them. You can find these events on Meetup groups online, simply by searching for your company’s niche in your area.
Partnership is also a great way to market your company, and it’s a key marketing tactic for Tom and his team. When you build a community with people, organization or Universities who share the same goal as your company, you can reach a larger audience more easily.
Now, with technology, you can reach out to your target market more easily, with webinars and social media promotions.
Puzzle Piece #4: Budget Within Your Means
Tom’s success as a social entrepreneur came from many things, but the key to his success was how he budgeted around his business. When he started Vibe Wire and Start Some Good, he asked himself one simple question: “What’s you’re minimal viable life?”
In other words, how much do you need to make in order to pay for your current lifestyle? When you’re starting a business, especially a social enterprise, you can’t always live like a King. As your business grows, you grow with it, and so does your paycheck.
During the early days of his business, Tom had to rely on bootstrapping a lot. Tom was still in Washington when he and his partner, Alex, decided to start the business. Alex agreed to quit in job and give his full attention to growing the business, and Tom was sending him survival money from his secure paycheck.
As Alex was managing the business in Australia, he relied a lot on interns to keep the flow going. After a while, when the company started making some money, the staff was on a revenue-split or commission-based salary.
Don’t spend money you don’t have. Be creative with your money, and live within your means to let the company grow. As your company and revenue grows, you can start hiring staff for more technical jobs.
Start Some Good was in that startup phase for a few years, but the business skyrocketed when Tom came back to Australia and was fully committed to the social enterprise.
“Many people think that Sillicon Valley is the best place for a startup, but it’s a very noisy place. It’s hard to be a big fish there. Australia is different, because we were in a smaller pond so people were really interested in us.”
Puzzle Piece #5: Know When It’s Time to Walk Away
It’s never easy to walk away from something you launched, and it definitely wasn’t easy for Tom when he had to leave Vibe Wire.
“The exit strategy at some point is to walk away,” especially when you’re running a social enterprise.
He put as much energy and knowledge into the company as he could, and he didn’t have anything more to give. He had to forget the emotional attachment he had with Vibe Wire and make his decision based on what would be best for the enterprise. “It’s just part of the journey.”
It’s important not to mistake a bump in the road for a sign to give up, because there will be many bumps on the entrepreneurial roller coaster, but they’re not there to stop you – they’re there to motivate you. Tom’s secret is his passion; he is fuelled every day by his passion to do good in the World. Even when he didn’t know how to overcome the bump, especially financial, he kept going.
A bump is a small obstacles in the road and shouldn’t be used as an excuse to quit. “Resilience is often the secret to entrepreneurial success. Sometimes people give up too quickly.”
You only walk away when you know that there’s absolutely no other solution, and you tried everything in the book to fix the problem. If your company is stagnate at a certain level and you don’t have the resources, knowledge or backup to innovate, step back and let someone else fix it. Just like Tom, you can find another social enterprise to work on. Walking away from one project doesn’t mean walking away from your passion.
The Solved Social Enterprise Puzzle: “The way we make our money is the way we make an impact.”
- How to start your own social enterprise
- How to measure your impact and why
- The true definition of social entrepreneurship
- How find a problem that needs solving
- Budgeting 101 with a for profit social enterprise
Full Transcript of the Podcast with Tom Dawkins
Nathan: Good morning and good evening wherever you are in the world. My name is Nathan Chan and I am your host coming to you live from Melbourne Australia. Now I’m really excited about today’s guest. His name is Tom Dawkins and he’s the founder of StartSomeGood. And a lot of you guys, you know I get a lot of our community reach out to us. And one request that I’ve been getting a lot is to interview more social entrepreneurs. People that are doing some good. And Tom is the founder of StartSomeGood, and it’s a crowdfunding platform for non-profit social entrepreneurs and change makers. And you know, what Tom does and has done with his work as an entrepreneur is extremely admirable. And if you’re looking to start your own social enterprise or any sort of a social venture where your impact can be tracked and measured, and it’s doing good for the world which is you know, something that on this interview I originally found it difficult to wrap my head around.
But after speaking with Tom, he really, really unpacked things on what it means and how you can create your own social enterprise. Even if you are capitalist like me, there are some elements that you can add to your business that makes it, I guess, contributing to the world more and using your business as a force for good. And that’s something that I would like to focus on in the near future for Foundr.
So there’s a lot here to take away especially if you’re really, really interested in what it means to create a business that makes an impact and a serious impact that can be measured and tracked. You know, Tom is an absolute superstar and he unpacks everything from how to start a social enterprise, how to track your impact, ideas around that, how he started, and how he started StartSomeGood, which is an epic crowdfunding platform.
All right now that’s it from me, guys. If you’re enjoying these episodes please do take the time to leave us a review, it helps more than you can imagine. All right let’s jump in.
How did you get your job?
Tom: You know my answer is not as dissimilar from many of the other people you’ve spoken to. Which is that I kind of the only place I’ve ever really, where I felt I fitted was the things that I was doing for myself. I often do describe myself as many entrepreneurs do as borderline unemployable, although I have some great experiences in bigger organizations as well.
I just love starting things up, but I just, I got started on that relatively early. I actually founded my first non-profit when I was still in high school. And then two while I was at the University and the kind of second of those University era non-profits became what I do with my 20s. An organization called Vibe Wire that I led for eight years and grew it to have offices in three states. And we did a lot of work around empowering young people to express themselves on the issues and create the cultures that they cared about. And so Vibe Wire is 15 years old now, I left in 2008.
And I didn’t really know what I’d do after that you know, I had that kind of general bundle of skills that you get as a starter-upper of things. I’d done HR, marketing, and fundraising, and a whole bunch of different things. But I didn’t quite know where I’d fit and so I ended up traveling and moving to the US and spent a couple of years in Washington DC as the first social media director for the international NGO called Ashoka. And that was a really exciting time.
And Ashoka’s mission is to create in everyone a changemaker world. So I think a lot about how you can inspire everyone to get involved in you know, creating the changes that they feel are needed for their communities. And my job is to figure out how social technologies could help bring about in everyone a changemaker world. And so we thought a lot about you know, how is it that you inspire people to take on that identity or that role as a change maker? And that often starts from an act of self-commission you know, that you’ve gotta believe in yourself. The belief that you can create change in order to actually do so.
Then once you have that kind of confidence and you have a great idea then what? And what I observed over and over again, was that the social sector wasn’t very good at funding innovation. That it wasn’t very good at supporting the new. Quite different from, I guess, a lot of the bias and the kind of more commercial startup, particularly the tech start-up world, which has a real appetite for risk. In fact, you’re risking enough, if you’re not trying to get 1000X, they’re often not interested.
But in the social sector, the bias is the opposite. They want they want small sensible plans that can be measured. They’d rather everyone just hit a single than try to hit a home run and risk being struck and risk striking out. So the sector doesn’t deal with failure very well. So while I was thinking about all these sorts of issues, I observed that a similar sort of a problem that was faced by my friends who were creative entrepreneurs and others was being overcome with the help of crowdfunding.
That people, who had previously really struggled to get fundings from the traditional sources were, in fact, finding that they could connect directly with an audience who really cared about their work and was prepared to fund them to continue to do that work. And it didn’t take long for the light bulb to go off that this is exactly what social entrepreneurs need as well. And so I ultimately founded StartSomeGood with a former colleague from Ashoka, Alex Budak and we started working on it late 2010, and the website launched almost exactly four years ago.
Nathan: Wow. And I’m curious. There’s a few things I would like to unpack there. Vibewire was it Vibewire or Vibe Wine?
Nathan: Vibewire, Vibewire, you founded that yourself, why did you leave?
Tom: I aged out, so I mean it’s a non-profit, so you know it’s a little bit different when you found a non-profit for a profit. There’s no such thing as kind of you know, your exit strategies is at some point you just walk away. That’s the only extra strategy for a non-profit. And Vibewire was built to empower young people which for us is 16 to 30. And one of the ways in which we did that was to ensure that the organization itself was entirely youth-led.
So while it’s a bit more blended now so the board is no longer youth only. But at the time I was running it, all our staff were under 30 and all our board members were under 30 as well. And so I left when I, on my 29th birthday. You know, we actually I would have aged out a year later and I thought I don’t actually wanna hit that deadline, and I kind of have to walk away as a result of a technicality. I wanna feel a greater sense of urgency over the timing. And I just felt like this is kind of what I’ve done with my 20s and I have to figure out what I’m gonna do next.
Nathan: I see, and how does that structure work, like if you have an NFP do you still own like equity, like I’m sure many of our audience have? Can you sort of give us a little bit of an insight of how a social enterprise or a non-for-profit is structured and have that side of the business works? Because I personally don’t know the answer either so I’m really curious.
Tom: Yeah, so, I mean social enterprise is a word that gets used to mean quite a few different things. But the way that I would generally use social enterprise is to say a for-profit company that’s mission-driven, that’s focused on creating a social outcome, as well as perhaps personal outcomes for the founders. And indeed if you succeed at the first you’ll almost certainly succeed at the second if it is a for-profit. So I do have you know, I have equity in StartSomeGood. I’m the major owner of StartSomeGood.
But with a non-profit it’s, we were an association so we were owned by our members you know, who had to pay that $10-a-year membership dues. And that gave them a vote at the AGM, and that elected the board each year, then the board ultimately was responsible for appointing the CEO and the other staff.
And so yeah, I just you know, I just walked away. I mean I didn’t own anything, I came back on to the board for a couple of years about eight months when I first came back to Australia. I was really excited to, I was obviously thrilled it had continued and was keen to re-engage when I got back to Sydney. But I had to step back off again when life just got just too hectic with StartSomeGood growing. And then my first child arrived a couple of years ago we have a second on the way now, so just life just became too full for that but I hope to get back involved again at some point.
Nathan: Yeah, wow. Like how does that feel to just walk away from something that you’ve created with your own two hands? Like you’ve created something from nothing and you’re passionate about this cause and to just walk away.
Tom: Yeah, it’s hard, it’s weird, it kind of feels like a break-up of a marriage perhaps. Not that I’ve actually experienced that exactly. But it’s something that’s just been you know, it had dominated my life for the previous 10 years almost. But I was also very burnt out you, I mean it’s running kind of we were a small non-profit. First three years no one earned a cent we were doing stuff that we thought was worth doing. We were a bunch of Uni students we didn’t really care much about money, we cared about the opportunity we had to do awesome stuff. And then slowly I was able to make a jump for myself out of it. And then I was able to bring in enough money to employ other staff.
And life gets a lot more stressful when you are employing other people. There’s a certain kind of I don’t know glorious, lightness to every doing it for nothing and just for the purity. You know there’s a purity to that. But after a little bit of time, I kind of found myself slightly unexpectedly sort of running this organization. Because it hadn’t really been our mindset. The way we thought of this sort of stuff at Uni it was as projects. We didn’t kind of, I didn’t think, I’d never heard the phrase, social entrepreneur, to be honest. And I didn’t even think of myself as founding an organization, as this thing that will be, that would have to continue, and have this longevity, and this sustainable model. You know I just did it there was a thing I wanted to do, there was a particular, we wanted to set up a website that would allow young people to talk about stuff that they cared about.
And so I got busy trying to find the people who had the skills that I didn’t have and building a team to create that. And then we had another idea we wanted to publish a magazine, and then we had another idea that we wanted to a film festival, then we had an idea that we wanted to send journalist out during Federal elections. And one thing led to another and it took about three years before I kind of woke up one morning and went, “Oh my goodness, I’m like this is an organization?” And I had to figure out how it’s gonna stick around.
It was actually after we did this Federal election project we did this fantastic project where we sent, you know there’s that group of journalists that travel with the prime minister and the opposition leader actually like on their plane, on their bus and they’re right there with them during their campaign. And they are generally the kind of elite journalists in Australia. We managed to convince both parties to let us put 18-year olds into that group of journalists to cover the election from a youth perspective. It’s the first time I ever wore a suit on behalf of Vibewire was when I went to Parliament House and met with the Liberal and the Labor Party. Told each of them that the other party had already agreed, that it wouldn’t have been a shame if we were just sharing the opposite, the other side’s perspective with young voters.
And so they both then did agree. And it was only after that project which put us on the map a little bit and we were very proud of but at the same time very dissatisfied with. Because you’re designing for the first time and you have a million ideas as to how you could do it better. So we really wanted the chance to do it again and do it better. And so for the first time, I suddenly went, I suddenly thought well that’s three years away. For the first time, I wasn’t just focusing on what we were doing right now, or what we might do next. I was focused on what would it mean to still be here in three years in order to do this better?
And that’s when we began to build a bit more sustainability. But it was such a, it was obviously such a grind. I mean a small non-profit is a constant hassle, everything is a constant hassle. But you know, writing grants and appealing to donors, and not really having an aim. I mean I really love social enterprise now that we have a business model we provide a service, people pay us for that service, we’re really proud of the work we do. And we can scale based on our success with that.Whereas in a way our funding for Vibewire was somewhat separated from our actual success, in engaging, in empowering, in building a community of young people to inspire them to engage in our democracy. It was based on our success in inspiring a group of donors, and foundations to fund that work.
And we regularly had less than three months you know runway. A couple of times it got down into the weeks, so I was once four days away from laying everyone off when a new grant arrived. It was such a roller coaster, but by the time I left I kind of had to leave because I didn’t have anything else left to give. I probably should have left a year earlier but I had to push it a little back further to get to where I felt I could hand it over.
Nathan: Wow, and what was that like paying yourself? Through Vibewire you would have had to pay yourself a wage right? Like a minimum?
Tom: Right, not a very good one, but yeah.
Nathan: Yeah, I can imagine like you know, what do you do with businesses I personally don’t know if I could ever do in a sense that I have a very strong mission, however. You could say I’m a bit of a capitalist in a sense that I, you know, money is what fuels our businesses, it’s what keeps it growing, it’s fun for me to get paid, I guess.
Tom: Yeah. Like getting paid is way more fun than not being paid.
Nathan: Yeah, and that is…
Tom: And being paid a bit better is more fun than being paid you know less well.
Nathan: That’s right and you know maybe one day when it all becomes I think, I think it gets to a point in time where you realize that you can make so much money and it doesn’t really matter that the mission outweighs the amount of money. And I think it’s so important that the mission that you have is a reflection of how much money you make. But my question to you is, has it always been like that where the mission just it didn’t matter how much money you were making it always has been the mission? And how, and what advice do you give to people that they wanna start a social enterprise or a non-for-profit or doing some form of good in the world and creating a business that you know, encourages change or substantial change. Like what advice would you give to somebody that is concerned about the money piece, and how to live, and all those kinds of things. Because me right now I could never do what you’re doing right now Tom and.
Tom: Well you could do what I’m doing right now. Because right now I’m leading a for-profit, which has a mission baked into our business model. And so that’s why I’m saying… you know in a way I’m a capitalist too I’m interested in how we actually tweak capitalism or you know give capitalism a hat. I think that social enterprise is really the way of the future. So this is kind of it’s an old-fashioned idea that businesses exist to only make money, charities are the only people responsible for you know of social wellbeing. I think that’s becoming a lot more blended and we have this whole…a fairly big movement now of what gets called social enterprise is what people debate exactly what that means. And their own kind of non-profit social enterprises and for-profit social enterprises.
But it generally means they exist by trading, in both cases you don’t rely on grants. You rely on providing a good or service that people are prepared to pay for. But baked into that is that you are creating a social impact as well. So you know, we make our money by helping world-changing projects raise their money and so our mission. I am very mission-driven, I mean I want to support myself well enough to be sustainable. I have a family now it’s you know there’s additional, the cost in my life is more than it once was. When I was in University I had a very, I have a friend Kim Longhurst who has this great concept of a minimum viable life. And I think often as an entrepreneur in terms of getting started you do have to think about, what’s your minimum viable life? What does that look like to you? How much do you need to earn in the initial stages? And often that’s the key to kind making the leap from a called for a well-paid corporate job into doing any type of entrepreneurship. Which is gonna be less sudden and less well-paid at least initially.
You know you need to kind of think what is your minimum viable life. My minimum viable life is a lot more expensive now than it was when it was just me at Uni and all I wanted to be able to buy beer some Thursday night and see the odd show. So, yeah. But I think social enterprise is really exciting that it can, it does allow you to combine those two things. You don’t have to live like a monk. You can do very well and people have become very very rich by creating social enterprises. You know the guys who created Ben and Jerry’s are very well off now. But there are you know, she’s no longer with us but Anita Roddick Body Shop you know, you can do extraordinarily well now while also doing extraordinary, extraordinary amounts of good for the world. I think that’s incredibly exciting.
And it’s one of the things that motivate us to set up StartSomeGood was we didn’t really feel like there’s a place for these new types of companies to go and raise money. Because all the existing fundraising infrastructure on the web was built for charities and almost all of it was exclusively for charities. You had to be a tax-deductible, if it was in America 501C3 registered organization, in Australia you needed DGR status which is a Deductible Gift Recipient status. And if you didn’t have those things you were just shut out.
We just thought that’s ridiculous, lots of people are inspired to help get social enterprises to get off the ground. People are even prepared to donate to social enterprises. Donate to a for-profit. Which not very long ago might have seemed to be a paradoxical thing to even think about. But if you are a potential you know philanthropist and you are inspired to create social impact in the world and you donate to someone who’s starting a not-for-profit, that is awesome.
But you know they are gonna be coming back to you twice a year for the rest of your life asking for more money, that’s the model. They’re gonna need future injections. Whereas if you can support a social enterprise to get off the ground and if that social enterprise does have a sustainable model that produces both social outcomes and economic outcomes, then that’s all you need to do. You need to get them going and then hopefully they can scale based on their own operations and do evermore, ever greater amounts of good in the world. And that’s the only way we’re trying to do.
Nathan: This is fantastic. You really answered my question well and you’ve given me more clarity because do you realize I don’t know much about this space. That’s why I want to come and have a chat with you and bring you on because you’re doing some amazing work. And we don’t really interview that many social entrepreneurs and quite a few of our community members have said, “I would like to see more social entrepreneurs featured.” And I think it’s important and we interviewed Dan Flynn from Thank You Group.
Nathan: And what was interesting is when he described what a social enterprise, like their business model as a social enterprise was that, they do not… Like he would, he would only forever get paid probably as much money as you would make working at coals. Like a supermarket stacking shelves. You happen to give more insight to that for our listeners and how that’s different to your… like you’re obviously for profit and he’s for profit. How does that work?
Tom: Yeah, I’m pretty sure Thank You Group is a not-for-profit technically. But, and they’re also kind of, I think there’s I think of social enterprises as kind of falling into two broad brackets. There’s the redistributed social enterprises. So that’s selling something over here and then investing the money over there to make good things happen. Thank You Group in a way is a classic example of that because they are an original product. I love their new ranges now with the soaps and their museleys. But I could never get excited about them when they were a bottled water company. Because I’m like fundamentally what we need is to buy less bottled water. Like bottled water cannot be a social good. Even if the money is then getting sent to Africa to help people who don’t have access to water, that’s great and I totally understand.
I’ve heard them both talk about it, I totally understand we all buy bottled water anyway. So it would be better to buy a social you know, it would be better to buy bottled water that does some good through the profits than not. But it would be better than either of those to not buy bottled water at all. So I couldn’t get very excited about it,I love their new range of products though and I love that they are expanding in that direction. So they’re that kind of redistributed model which you see a lot.
There’s a lot of cafes in Melbourne for instance that are like that King Flow Cafe and so on that take their profits send them somewhere else. And then you have, I need to come up with a better phrase for this. But kind of, the social enterprise that has its social impact baked in, so the example in Melbourne might be Straight which is a social… which looks almost slightly the same as King Flow because it’s a social enterprise cafe. But they don’t send their money anywhere. They just invest their money in training homeless young people in order to make them employable in the hospitality industry. So the whole cafe in a way is a front for this employment scale, for this employment training you know and getting your shit together type of, excuse me.
Nathan: You’re all right.
Tom: Program that really helps you know, struggling young people. And so it doesn’t matter if they never send a dollar to anyone else. That is the social impact. And as they open, I think they’ve got three cafes now. Every new cafe they open allows them to train more people and change more lives. And so we’re that kind of social enterprise, we’re not sending our money to someone else. We’re gonna invest it in growing and we’re gonna try and provide the best Crowdfunding platform possible for mission-driven projects both social enterprises and non-profits. And if we do a great job of that, we will hopefully be you know, at quite a significant scale and profitable ourselves. But we will only get there by helping other people raise 20 times, you know we pay 5%. So for every dollar we earn we’ve helped the sector raise $20.
And so those two things kind of what makes us make me feel very comfortable about it is that they’re variant. That they are exactly the same thing. The way we make our money is the way we make our impact. So there’s no trade-off required between those. We just try and be the best we can be and scale a successful global platform. And part of that is that we have to pay competitive salaries. I mean we’re a bit below that now because we’re still early and a lot of our early team, are kind of equity invested and have made sacrifices certainly in terms of salary. And have particularly in the early stages a bunch of us worked for very little.
But now we are paying, not good salaries but salaries and that will grow over time. And particularly as we scale we’re gonna have to get great technical talent. And we’re gonna have to pay for that. And that’s when we’re truly gonna need really awesome business development talent and we’re gonna have to pay for that. We’re gonna be paying commercial salaries to get people we need to grow while also hopefully making an amazing difference in the world.
Nathan: Yeah, yeah, I know. This famous quote. I don’t even know if it’s a quote but this thing that always comes back to me constantly is the amount of money you make and I’ve mentioned it before is in proportion to how well you serve your community.
Tom: Yeah, exactly. So, well I said there’s no trade-offs, I mean they might be in the future. You know there might be a time when we are faced with a choice where could maximize profit in one direction or make a greater impact in the other and I think that we would choose impact. That’s really what we’re focused on. But we can’t make impact if we’re not profitable you know because we’ll just, we’ll go out of business we won’t exist and if we don’t exist we’re not doing any good in the world. So we’re running it as a business that’s the way we think about it. But what motivates us to put in the hard yards that are inevitably involved in getting any entrepreneurial venture off the ground is because we care very deeply about helping people make a difference for their communities.
Nathan: You know, this is awesome. So take me back to the early days, Tom, when you first started, did you have to raise capital, was it bootstrap, did you start something bootstrap? You know, take us back to that.
Tom: We have been bootstrapped yeah, so we’re four years in and we’ve just raised capital for the first time. So it’s always been bootstrapped. Alex and I we actually run a small Crowdfunding campaign before we launched on a different platform at the time. We do use StartSomeGood but we didn’t exist then. That was not so much about the money but more about having experience, we figured we should run a Crowdfunding campaign before we launched a crowdfunding platform. That sounds obvious but you’d be surprised by how few people do that. Because gee you learn a lot are actually doing it not just by watching other people or helping other people do it. So we run a small campaign ourselves, we raised less than $10,000 not a huge amount of money.
And then we got going, and it was just kind of yeah, grit and grind really. So I was on a sponsored working biz in the US so I didn’t have a lot of flexibility I had to work full time and I had to work for the specific employer that had sponsored me. So Alex my co-founder who’s American quit his job and went full time on it and I actually directed I think 15% of my salary straight to him each month to help keep him afloat while he did that. He put a lot more hours into it, I put more money into it. Because I had the full-time job and a pretty decent paying full-time job it was over in Silicon Valley. By now working for a non-profit, but a non-profit, just coming back touching on that conversation again. They paid really competitive salaries because they had to in Silicon Valley or no one would work for them. Not the people they wanted anyway.
So we did that for I guess the first year and really have relied for the first couple of years on interns and volunteers, and people pay I guess kind of like a commission type structure. So we shared revenue, we had revenue splits with a lot of our staff. So we’re happy to share the revenue that comes but we can’t spend more than the revenue that comes in. So we had all these kind of revenue split arrangements with our various staff. Everyone was I guess really connected to the actual success of the company and also that we weren’t spending money we didn’t have. We had no cash reserves in the bank really we were just kind of mouth to mouth for a really long time.
But we’ve managed to you know, the first couple of years we were woeful really in terms of the amount raised on the platform. If I had been more business focused, I probably would have pivoted or quit and done something different. We kept pushing and part of it I think was coming back to Australia that really helped move us into a more of a growth space. Because it was kind of easy to break through here. I think people often fantasize that San Francisco, the Bay Area is the best place in the world to launch any type of start-up and that’s obviously true for a lot of start-ups. Particularly as they’re looking to be venture funded on that scale pretty early.
But it was actually the Bay Area in particular and America, in general, was an incredibly noisy market as well. And as a very small player very hard to try and get your head above the parapet, which is whereas Australia is a much smaller you know, it was easier to become a medium sized fish in this smaller pond. And by becoming a medium sized fish good things start to happen, people started inviting us to conference, corporates start approaching us about partnering, obviously just generally just great projects that we wanna work with come to us without us having to kinda phone them and sell ourselves to them one by one.
So things just started to move in the right direction, maybe about 18 months ago or about two years ago now probably? Started 2013, we actually began to move upwards on the grid it didn’t exactly hockey stick, but it was a nice upward slope, you know like a good hill. And we’ve been kind of growing you know really consistently ever since then. And thanks to that growth we’re able to raise money, last year and I say enabled us, we’ve done with our teams since the end of last year. Not in terms of hours worked because we were seven and they were 14 all the new people were part-timers. So the total out of the 14 there are three full-timers and 11 part-timers and everyone is spread out around the world. We’re a virtual team so we’re in five countries, nine cities, out of the 14 team members.
But yeah, it’s exciting I have to say it’s as you were talking before, it’s a lot more fun. Just as it’s more fun to pay yourself than to be completely impoverished, it’s more fun to have like a professional team and to be reliant on interns or just to be you know working 20 hours a day yourself.
Nathan: Yeah. Because that’s just the feeling I get. Like you just have to keep going for so long and it’s, I could never do it. But the way you, like after our conversation I feel quite comfortable with that fact. Like you know, maybe one day I find something.
Tom: Yeah, sometimes the winners are just the ones who stick with it the longest. Sorry man didn’t mean to interrupt. But I can remember Paul Graham said these ones, but just that resilience is often the secret to entrepreneurial success. That people often, I think people pivot too quick.
Nathan: I agree.
Tom: And there’s a lot of breakthrough success you know, it’s like a band that tours for five years and then bang and suddenly have a song that hits the radio and they are “overnight success”. But that overnight success was built on five years of perfecting their music by playing to live audiences and jamming you know, writing music and getting really good, getting worthy of that success. And I think kind of entrepreneurialism and entrepreneurial venture it’s often the same. And there are some amazing factories like Pinterest.
Pinterest went nowhere for like two or three years. No one had heard of it. And now people think of Pinterest as being this like launched, bang, scaled. But actually, there’s like three years that no one even knows about because by definition no one was using it. It hadn’t broken through. The founder was told to pivot or shut it down a heap of different times, no one to support him. And then suddenly there’s a breakout. And you hear that story over and over again. And I guess you know, I hope that we will one day be a great example of that as well. Where we are at greatest scale and we’ll be able to point back to those years and say, ‘It’s just part of the journey.”
Nathan: Yeah, I know that’s right. So how do you gauge though when to pivot, when to give up, or you just never give up?
Tom: Yeah, I’m probably on the never-give-up side of things if there’s no result and also not the best necessarily.
Nathan: I’m the same.
Tom: That’s just my bad, I’m just really stubborn you know. I think kind of I’m naive plus stubborn which I think is often true for entre… I’m not the one who kind of studies the market really carefully. What is the size of the market etc. etc. I’m just, I’m pulled around by my passions to a certain extent. I’ve tried to figure out how to make a life out of those passions and you know, how to build a business out of supporting the kind of things that I wanna see in the world. And my tendency is to yeah stick with it until I fall in a heap I guess. Which is probably not always the right thing.
I think there’s definitely a time to quit. We did actually last year, we really felt like even though we were growing strongly through all of last year, we felt like we couldn’t raise money, we might have to quit. Because we just needed to invest in that technology. And while we were at breakeven in terms of our very you know, super lean costs, underpaid staff, including ourselves and all the rest. But you know we were covering the costs every month. So, on one hand, we weren’t going anywhere but on the other hand, the road to actually being able to put aside the kind of amount that we needed to really rebuild the platform and invest in that technology. You know to actually have that kind of a surplus or profit just felt so far away that we felt like we couldn’t actually get there with the current site.
Which created kind of a paradox of even though we’re growing we felt like it was a kind of, there was a ticking kind of time bomb in terms of we need to actually kind of really make some serious investments in our site, in our platform in order to scale. But we need to scale in order to actually you know, make enough money to invest in it and so the only solution to this problem was investment. This is exactly when investment is, in fact, most needed and when you can raise investment in a way is when you’re on a growth trajectory but there’s clearly a hump that you need to overcome and the investment required to accelerate or come back.
So we were then able to raise those funds. But I had thought to myself whether I would have followed through is another thing. But I had had some serious chats with myself about, “If you can’t raise this money. This is kind of you know, you don’t wanna cling to this to the bitter end. It’s kind of a go big or go home moment.” But we’re going big that is my preferred option.
Nathan: Yeah, that’s it. I’m curious. Did you ever consider going and raising the funding on your own platform?
Tom: Yeah, we did but we didn’t just feel like it was the right move, to be honest. It’s, so Crowdfunding is not the best method for every different, for every type of project in the world. And one of the types of projects that are harder to raise money on Crowdfunding for is infrastructure. And so StartSomeGood itself is infrastructure for making change right? But it doesn’t make change on its own.
We could build the world’s best Crowdfunding platform but if no one ever used it nothing happens. And so all the changes created by the things that happen after. You know, what happens once the infrastructure is put in place? But it’s hard to actually quantify or describe those things in a way that kind of pulls at heartstrings and inspires people to the extent that they wanna put their own money in. Kind of the best stories for Crowdfunding goes something along the lines of, “I need your help to raise this particular amount of money. We are then gonna spend this money doing these actions, and then these actions will produce these changes in the world. Like, don’t let that. That’s simple luck.
If I have the money I can do this stuff and if I do this stuff, this will change, this will happen. Our story instead is, “If we raise this amount of money we’re gonna build this platform, then other people, who we can’t exactly tell you who they are, but trust me they’ll be good people will use the platform to raise money to run great projects, can’t tell you exactly what these projects are, but they’ll be good projects. And those projects will then change the world.” So it’s kind of like a couple of extra steps with big question marks over them.
So those sorts of stories like building that sort of infrastructure is actually… it’s a hard sell for Crowdfunding, and particularly the kinds of amounts we needed which was in the solid $700,000 amount would be a huge reach through Crowdfunding. And certainly, we couldn’t try and then fail on our own platform so it was just too risky. It just felt like a classic example of what we actually just needed was equity investment. And we needed somebody just to come on board to you know, essentially buy a chunk of the company and to be a partner with us. And also you know we felt like we wanted smart money, not just the cash but a partner who would help us grow and that’s what we were able to find with amalgam. They were experts at scaling entrepreneurial ventures and they provide a lot of additional support in terms of back office. Which is really great for us.
Nathan Okay. Awesome. So let’s like also rewind back to I wanna talk about the early days. I want you to take me back to that moment when you had your first campaign like listed on the platform that was funded. Can you take me back to that moment and what it was like and can you describe that to our audience? Because I think there are a lot of people that are starting Crowdfunding platforms now for all sorts of different I guess communities.
Nathan: And it’s not easy.
Tom: No, it’s really hard actually. I can tell you
Nathan: I can imagine how hard it is.
Tom: The ultimate bill that they know won’t come.
Tom: Fundraising infrastructure in general, I met so many young entrepreneurs who are building various types of fundraising mechanics, apps, and crowdfunding platforms and so on. And they hardly have ever given thought to why would someone use theirs versus someone else’s. They know kind of, they know charities always say they need more money. We’ve built a way for them to make more money. Therefore they will use our thing to raise money. And actually no, charities they need more money but it’s not that they have a lack of options for approaches to fundraising. They have a lack of capacity. They are actually relatively slow movers in terms of trying new things etc. etc.
So you see like new company platforms launch every day and mostly they fail to actually achieve any traction in terms of projects. Because they haven’t really thought very much about where those projects are gonna come from and why they would choose them rather than someone else. And so we spent, you know we actually I guess it was four or five months just to recruit the first 10 projects and platforms. We couldn’t cope, you can’t open a Crowdfunding platform and then wait to see who turns up. You have to launch with projects or else the whole place looks like a ghost town.
Nathan: Yeah, that’s right.
Tom: So it took us a while to get that first group to kinda sign on to something that didn’t exist yet and then to launch with us. I can’t really say, it was at least 10, we felt like it had to be double figures it might have been 12 actually in the end. And yeah then that first day, I had agreed to a webinar, a classic, the website wasn’t finished, I had agreed to give a webinar presenting this new website on March 1. The night before it’s still not white up like working through the night. It went live within an hour before I appeared on that webinar.
And yeah watching the very first donations come through was really amazing, watching the project reach its goal. Which was, you know a small project. I think I raised like a $1000 but it was amazing, we’re like you know, that project is now happening in the world. They’re now out there, I think it was, I’m trying to remember what it was, I think it was some community gardening initiative in the Bay Area.
Well, I was like, this is amazing this is now a community garden that’s gonna be built and opened you know. Nutritious community capital that has just been built locally, great food, the people they’re just gonna have that access to real things in the real world that are happening thanks to our website. That felt really amazing.
Nathan: Yeah, I’m sure it would have. Yeah, are you able to give an insight, surmounting tactics, strategies around you guys, how you guys got your first 1000 customers? I always like to hear what’s working out there for some businesses and online businesses or models. What’s been working good for you guys that might be of interest?
Tom: A lot of the stuff that has worked best for us in these early stages is possible stuff that is not completely scalable. I think that is often true you know, in the early stages. So it’s a lot of in-person, I do a lot of speaking engagements. I think of events that are incredibly useful because they put the hard work into gathering those 1000 people in a room. And if it’s the right you know, in the kind of social enterprise and social chain sector, conferences in some or most sectors there are conferences. And if it’s the right kind of conference they are doing the hassle to bring the people you wanna talk to into the room for you.
So I find conferences an incredibly focused and effective way to like get in front of you know, provided you picked the right conferences they can also be a waste of time just flying all over the place to speak to staff that’s fully aligned. But that’s been really big for us. And as I said that was part of what allowed us to kind really grow particularly here in Australia very strongly. It’s that, it’s is only so big a sector in Australia so it didn’t take long. And I was pretty well connected in the sector before I left. When I got back and reintroduced myself and started showing up to a few things and very quickly started getting invitations to talk to venues and of course those lead to more invitation and things. It doesn’t take long but you know, in a market size of Australia you’re at all the key events. You can actually be in all the key events without you know, there’s few enough of them you can turn up to all of them or some.
And so I’ve probably given 100+ talks, public speeches in Australia, ranging from you know workshops which sometimes we run up to three hours teaching our craft and the master class to being on a panel to giving a key night. So I’ve probably spoken in front of tens of thousands of very well, very market appropriate people for that. That has been really good for us. We also have… our partnerships have been kind of starting when we were bootstrapped we knew it wasn’t going to paid acquisition. What was it gonna pay it, I would figure that partnership has always been the key, so we thought who else is doing the work of building community with the kind of people that we wanna reach?
So for us particularly all our own our passion was really how do you help new people get started? How do you help your listeners who are sitting and they have a passion to make a difference and they have an idea how to how they might be able to do that. But they don’t know how to get started. How do we help those people to take that leap from idea to action?
Because it’s only once you take that leap that you can actually create impact of course. And so we’re very focused doing that. Now we’re you know, we put a lot of effort into trying to bring establishment non-profits to the platform as well, established social enterprises. But particularly when we’re very focused on the kind of way of collecting the emerging social entrepreneurs. And we feel where do we find them and it turns out there’s a bunch of University courses incubators, various types of support programs that actually are already building community with these people, that are already helping people make that leap.
From you know in Australia, for instance, there’s a school for social entrepreneurs. There’s the Center for Sustainability Leadership. There are these courses that are helping people take their ideas and take action with them. So we can just access those people. And so we’ve taken, we’ve always taken a strong partnership approach and originally that was very manual you know we would try and connect with them, or we’d go and talk at their events, and we’d send special office as students.
But increasingly particularly when a new platform launches it’s gonna be much more digital and scalable. We’re actually, the new platform is being built around a whole set of APIs, that will allow actually enable us to plug in to a bunch of other platforms that will allow hopefully our projects to slow. You know as people who are using a volunteer platform to then be invited you know, “Do you need more than just volunteers? Do you need funding as well?” To then come across to our platform and raise those funds and the same offer occurring in reverse.
So partnerships continue to be really important to us but the kind of partnership we are now pursuing is evolving into being something that is a bit lower touch and saleable through technology.
Nathan: Well this is great. Two last questions, Tom. One, how do you define a changemaker? Because there’s a lot of people who throw that word around, they say they wanna change the world, it’s thrown around a lot.
Tom: Yeah, and I think that’s good. It’s a word that people should throw around. I mean I think change maker has emerged as a word which is an attempt to be a catch-all word, for all the different ways in which you might try and be involved in creating change. So even a social entrepreneurship is an approach maker essentially. Which is around building businesses, I would say or building organizations capable of creating scalable change in the long term.
Activism is another methodology to create change. Going into politics might be another. Journalism for some people. A lot of journalists are very driven around you know revealing the truth, and creating change that way. Philanthropy, giving money to other people and causes is another way of creating change. So change maker as a concept is an attempt to kind of put an umbrella over all of those and say, “Well you can be pursuing making a difference in all these different ways you’re all change makers.” And this is kind of I guess comes from a shocker which is their whole language around everyone a change maker? So everyone can be a change maker but in their own way. It may be volunteering for an afternoon. It may be how you help out with the neighbor’s kids even. You know when you take a meal to an elderly person on your street.
People can really make a difference in their own lives and for their communities in a wide variety of different ways and that’s I guess what we want in Ben and Jerry’s. People could about how to do so, you might be that you want to create a one-off event which is a cleanup of your local park. And you wanna rally your neighbors to get together and do that. That’s another type of project that we are really driven to support because previously if you’d wanted to get your neighbors together and do a park clean-up and you felt like you needed $1000 to hire the BEAM and get a bunch gloves you’d have to set up park cleanup inc in order to go and actually fundraise that money. And we say that’s ridiculous you should just be able to put that appeal out to your neighbor after your has appointed traditional and profits nd social enterprise at our platform. We also split unincorporated groups. So just for citizens who want to do something together and need a few dollars to make that happen.
Nathan: Awesome. This is a great definition. Now, my last question, Tom and we have to wrap up is. If somebody has an idea they wanna spark change, have something they wanna do. They wanna make an impact, besides using StartSomeGood as your platform of choice to get that funding to get that initial capital to get off the ground. How else can people get started?
Tom: I think the place to start is usually by meeting other people and talking to them about your idea. You know there’s some great meet-ups in almost every city and if you’ve got make a common search for change makers, social change, social enterprise, a few phrases like that, you’ll certainly find I think local meet up groups in your local area. And I think that process of bouncing ideas around is really really important. Getting feedback and also finding out what else is out there. Because it might be better to actually go and ally with someone else or to be involved in their project and not necessarily start your own.
If the thing you want to do is already out there then we need people to ally with one another to make things happen. So I think that’s really important and I think part of that is the listening and the learning, but part of that is also the telling Talking about the passions and getting that out there. Because I think that’s kind of making that courageous step of saying this is something I really care about, that I wanna be serious about. And you put yourself out there like that, incredible things can happen.
And Crowdfunding is a great example of that because it’s a real act of putting yourself out there. If you launch a Crowdfunding campaign you’re risking public failure in order to hopefully achieve public success. But because you’re doing that in public rather than let’s say just writing a grant application, applying for a bank loan, or even pitching to a VC, all of which are private successes and failure. Because you’re doing it in public it’s amazing the other types of just dollars. Of course, dollars are what you’re thinking about and what you want to achieve if you’re Crowdfunding and all.
We have so many stories of people who their biggest success wasn’t just the dollars, it was what else happened thanks to their Crowdfunding. For instance, we had a stationary social enterprise launched last year and they did well they raised like $20,000 on the platform to launch their first range of stationery. They distribute all their profits to women’s girl’s education in the developing world. But they also got a call from a buyer from at a major national stationery retail chain which they’re now in.
So like only a couple of months after a launch they are now rolling out nationally into a couple hundred stores, scaling incredibly fast as a result of that. And that was thanks to the fact that it happened in public. If they had just done a grant application and got that same money, well that’s great but now you are starting from scratch, you have cash but nothing else. Whereas they exited their campaign with cash plus customers, plus a major retail partner which is pretty extraordinary.
But I think while that’s a big example of that, I think a lot of incredible things can happen when you actually begin to put yourself out there and express your passion and share your passion with the world. You’ll find people who wanna help you, you’ll find people who’ll connect you to other opportunities. And if the next step for you is that you need to raise a bit of fund probably we would like to work with you. And we have a lot of resources on our side as well. Our whole model is to be really high touch, we’re very coaching oriented because that’s kind of where our mission meets the road. It’s the extra assistance, and the extra care we take in helping people set up their campaigns and give themselves the best chance of success. We can’t guarantee success because people have to hassle for that themselves. But we do have the highest success rate of any major platform and that’s because we try harder, there’s no magic to that. But you’ll also find there’s a free email course, there’s heaps of materials on our websites. So that might be the best place to start reading about what’s involved and even getting a sense of what are the steps that you need to undertake if you are gonna launch a fundraising campaign.
Nathan: Awesome. Well look, Tom, we’ll wrap that. Thank you so much for taking the time to speak to me.
Tom: Thank you for having me, Nathan.
Nathan: Absolute pleasure. I really enjoyed our conversation.
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