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Big apps am i for or non profit


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NYC BigApps Big Build Mentor Session - Is my civic app for profit or non profit?

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Big apps am i for or non profit

  1. 1. NYC BIGAPPS! what am i?! for profit, non profit, or something else?! ! ! ! ! ! ! ! jen van der Meer! @jenvandermeer!
  2. 2. @jenvandermeer
  3. 3. BIGAPPS 2014 • Choose your own adventure: solve a civic challenge, improve the lives of New Yorkers. • Solve a Big Idea challenge: how tech can make NYC a better place to Live, Work, Learn, or Play. • AKA, do good.
  4. 4. Idea Team App Money
  5. 5. questions for hackfest/competition entrants: • Is my app a business? • Am I a for-profit or non-profit? • Am I a consultancy or a product company? • How do I start a business but keep my vision intact? • Am I scalable or is scalability going to kill my dreams? • What am I? Do I quit my day job? How many months till I can pay rent?
  6. 6. agenda • For vs. Not for Profit • For profit • Non profit • Get out of the building
  7. 7. for profit, non profit, or something else?
  8. 8. you used to have to pick a lane Non profit Do good For profit Make money “The social responsibility of corporations is to increase profits.” - Milton Friedman, 1970
  9. 9. now it’s a paradox of choice S Corp LLC C Corp B Corp Coop Social Enterprise Social Impact 501 (c) 3 501 (c) 4 501 (c) 7 501 (c) 9 Social Business
  10. 10. you no longer have to choose Non profit with sustainable revenues For profit out to change the world
  11. 11. key differences Non profit • Defined to fulfill a mission • Tax exempt • Does not retain profits • Does not distribute ownership • Assets belong to organization • *Cannot use funds other than for the mission for which it was formed For profit • Pays taxes on profit • Can distribute ownership to employees and investors • Assets belong to the owners • *Can have a capital exit, benefitting the owners of the company ! !
  12. 12. both require money (and love) to sustain and grow Non profit with sustainable revenues Fon profit out to change the world
  13. 13. for profit
  14. 14. for profit funding sources SBIR Grant Growth Capital Friends+Family Angel Seed Series B, C, D… Public Company Bootstrapped Self Sustained Acquisition Corp VC Acquihire Government Grants Crowdfunded IPO
  15. 15. are you a startup, or a scalable startup? • “A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.” – Eric Ries • “A startup is a company designed to grow fast.” –Paul Graham. Y Combinator. • For a company to grow big, it has to make something a lot of people want. To reach and serve all of those people. • “A startup is a temporary organization designed formed to search for a scalable repeatable business model.” – Steve Blank. ! • Most startups change their business model multiple times. • A scalable startup is a special class of startup – world class team, large vision, large target market, passionate belief and a reality distortion field.
  16. 16. stages of investment capital requirements
  17. 17. Consulting 29% Services: Other 17% Technology: Internet 14% Real Estate 14% Service: Business Service 13% Retail Store 13% Source: Kauffman Foundation Legal Zoom Startup Environment Index 2012 not all new companies are growth startups Types of new companies formed 2012!
  18. 18. for profit hybrids • Social enterprise: social or environmental purpose, may be willing to limit scale opportunities to meet more local goals, or directly serve the need. • B-corps are a type of social enterprise that also agrees to transparently share financial results. • Social businesses (Yunnus): for profits that re-invest to meet a social need. • Social impact growth: aiming for scale and for social/ environmental outcomes, and high growth returns to investors.
  19. 19. non profit
  20. 20. non profit funding sources Membership Foundation Grants Government Grants Corporate Giving Services Revenue Donations Crowdfunding Bequests
  21. 21. scale is all the rage in non profits The average founding year of the 10 largest U.S. nonprofits is 1903. Not for profits are one of the US’s fastest growing sector, which grew 60 % to more than 1 MM organizations from 1999 to 2011. How more recent organizations got big: 1. Developed funding in one concentrated source rather than across diverse sources 2. Found a funding source that was a natural match to their mission and beneficiaries 3. Built a professional organization and structure around this funding model. ! “The jury is out on whether scaling organizations will translate into scaling impact. There is an emerging set of questions about how such scale links to local community engagement, which may be the linchpin of lasting social change.” ! -Bridgespan Group
  22. 22. where the money comes from
  23. 23. i still don’t know which way to go what do I do first?
  24. 24. where to start: customer discovery • Lean startup, lean launchpad • Form a hypothesis about how you will grow • Define your total addressable market, or the size of your total addressable beneficiaries • Business model canvas • Validate your early hypotheses • Test and learn
  25. 25. get out of the building
  26. 26. Get out of the buildinglisten
  27. 27. Get out of the buildingobserve
  28. 28. Get out of the buildingSolveask what they need
  29. 29. Thanks! ! @jenvandermeer
  30. 30. further questions • To add to resources and tools, contact Jen van der Meer: @jenvandermeer • • jd1159 at nyu dot edu