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.
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. agenda
• For vs. Not for Profit
• For profit
• Non profit
• Get out of the building
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. 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. you no longer have to choose
Non profit
with sustainable revenues
For profit
out to change the world
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. both require money (and love) to sustain and grow
Non profit
with sustainable revenues
Fon profit
out to change the world
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. 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.
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.
http://www.ssireview.org/articles/entry/in_search_of_the_hybrid_ideal
20. non profit funding sources
Membership
Foundation Grants
Government Grants
Corporate Giving
Services Revenue
Donations
Crowdfunding
Bequests
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.
http://www.bridgespan.org/Publications-and-Tools/Funding-Strategy/Why-More-Nonprofits-Are-Getting-Bigger.aspx#.U6RblY1dU7s
!
“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. where the money comes from
http://grantspace.org/Tools/Knowledge-Base/Funding-Resources/General/How-are-nonprofits-funded
23. i still don’t know which way to go
what do I do first?
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