Believe it or not, it’s been one year since we launched The Changer, now tbd*. It’s been a wild ride, but we’re still standing. And man, have we learnt some stuff. So now we we’d like to share some of those things with you, since so many of you of have kindly shared your learnings with us.
Summary of our key learnings:
- Do start as early as possible
- Do your research
- Don't let anyone discourage you
- Do network, network, network
- Don't assume to get funding
- Don't expect that you might be running more than one business
- Don't exploit yourself or others
- Do enter competitions
- Don't underestimate a strong team
- Do enjoy the ride
1. DO Start as Early as Possible
We originally had a LOT more planned for our site than what we ended up launching with. It was supposed to be an all-singing, all-dancing ruby-on-rails community platform with login, open-source database, web crawler, etc., etc. When our co-founder developer decided to leave us after two short weeks (money was an issue but we’ll come to that later), we switched to Wordpress and scaled back our vision because we realised we would now have to pay freelance wages. We were gutted. But in hindsight it was actually one of the best things that ever happened to us. It actually meant we were much quicker and more agile. Without much invest, were able to establish a proof of concept and gain momentum that we definitely wouldn’t have had if we had waited another 6 months to get a site, which might have turned out buggy and probably wouldn’t have been what we wanted anyway.
(Having said that, although we were in love with Wordpress for most of this year at some point we had a major falling out - when things started to get complicated between us - and we are probably breaking up pretty soon. Wordpress isn’t marriage material, especially if you want some more advanced functionalities, but it does make for a great passionate and carefree fling).
2. DO Your Research
Especially if you are building up a social enterprise, you should absolutely know your market, understand their needs and not make assumptions. It can be easy for people from the business sector to assume that they have all of the answers and to want to plan and execute social businesses in the same way that they have done other forms of business, but that is a mistake. Social businesses are for the most part considerably more complex than regular businesses due to their need to balance financial gain and social gain. There are usually a lot more stakeholders and you often can’t “trial and error” in the same way you might in another type of business. There are a lot of people who have been working for “traditional” NGOs for a long time and who are experts in their field. Do not ignore them, try to include them as much as possible.
3. Don’t be Put Off
Don’t expect all smiles and encouragement. We are not in the USA and we are not in the start-up sector. Just because you have a good idea doesn’t mean you can expect to hear, “Great, wonderful, how can I help you”. (Unfortunate, but true.) People working in the social sector seem to have become a bit jaded by lots of startups promising great results, thinking they know everything and then not staying the course. So they tend to be skeptical rather than encouraging. When faced with repeated skepticism, it’s hard not to feel put off (and sometimes downright pissed). But don’t be! Listen to what they have to say and find out why. Others might have already failed where you think you can succeed, learn from those mistakes. If you still think you can do it, then prove those naysayers wrong. Once you have something to show, people will be very encouraging. But the established changers out there can be a tough crowd to start with.
4. DO Network
Don’t assume that help will come from your closest friends or people directly involved in the topic. Some of the best connections or ideas have come from people we barely know. Widen your circle.
Actually none of us are real “networkers” but if there is one thing we have learned this year, it is the value of stepping over your shadow and getting out there. That is the reason we have events on our website to encourage more exchange between people.
5. DON’T Assume You Will Get Funding
We secured a basic scholarship-model funding in order to allow us to take the plunge and do it full time. However we always knew we would need a proper lump sum at some point (sooner rather than later) to fund real website development and scaling. We didn’t have the MOST promising business model, and we weren’t DIRECTLY helping children with a migrant background get a better education, so that pretty much knocked us out of the ballpark for 99% of business angels AND foundations. But we were kind of in denial about it. For the first 6 months we were absolutely convinced that it was just a matter of time before a foundation or social business angel came knocking on our door, desperate for the opportunity to invest in us. They didn’t. We did not plan for that. We ended up, as a result, making some serious compromises on stuff we shouldn’t have. Like development and staffing. Rather than realising that funding probably wasn’t going to happen for us and so making a change to our business model or introducing fundable projects, we stubbornly stuck to our guns and decided we would just keep bootstrapping. Actually, it looks like now - after a year - that might work out for us. But it was a big risk and around Christmas time, when the outlook was bleak and our funding was running out, we almost chucked in the towel.
6. DO Realise That You Might End up Running Two (or more) Businesses
As a result of this funding issue, much to our surprise we discovered that a lot of socially motivated start-ups end up running a for-profit entity in addition to their original business. WTF but true. For example, Marcell from Hero Society does hip hop workshops in schools to engage those children who otherwise haven’t really found their place in society. He realised that these workshops had a huge impact but that schools and youth clubs he needed to be going to had only limited ability to pay for it. So he ALSO founded a consultancy, which runs similar workshops for companies to help with team-building and employee confidence. This is the way a lot of social enterprises are structured, with a for-profit and non-profit entity. It’s a road we are now exploring which we probably never would have considered at the beginning.
7. DON’T Exploit Yourself or Others
Well, you inevitably will to a certain extent but know what your limit is. We agreed at the beginning that we would live off a very small amount of money for maximum one year but that was it. We all agreed that if we weren’t in a position to earn more by that stage we would look for other jobs to finance ourselves.
There is also no need to build a social enterprise on slave labour. Do not use your charitable status as an excuse for not paying (sometimes multiple) interns.
Take advantage of programmes available for funding yourself and employees:
3. Erasmus Plus
8. DO Enter Competitions and Apply for Stuff
Don’t assume you can, or should, do it alone. Getting involved in the Beuth Gründerwerkstatt, Act for Impact and IT4Change have definitely given us the hugest leaps forward in terms of access to funds and networks. Filling out those forms can be a pain but we have never regretted it. Even when you don’t win (which we usually didn’t) it is a way of building your network, getting great feedback and some much needed publicity.
Here are some of the top competitions and programmes globally and nationally:
Act for Impact: 40.000 €
Advocate Europe: 50.000 €
ASHOKA PEP Scholarship: 1 Year of Funding
Bist Du der Nächste Ben & Jerry’s: 10.000 € plus Crowdfunding
9. Don’t Underestimate the Value of a Strong Team
In the beginning, everyone told us we were crazy to be starting a business with friends. When they found out we also lived together, they nearly lost it. One year down the line, we’re still living together, drinking together and working together.
But it wasn’t always easy.
We had to leave our egos at the door (who could have guessed that we are all such control freaks?!). We had to get to know each other in a completely new light (often seriously under pressure in a way we hadn’t experienced before). We had to find ways to communicate with one another where everyone felt comfortable. We discovered that sitting in an office all day, even with great friends, can actually be pretty boring when you all have a lot of work to do. We figured out through a lot of trial and error that although we all have similar educational backgrounds and skill sets (that’s a nice way of saying that we are all generalists) actually we do have particular strengths and weaknesses. Then we taught ourselves to structure our workload accordingly and not all try to do everything. We had to learn that negative feedback wasn’t personal.
We stuck to the rule (almost always!) that we were friends first and co-founders second, which pushed us to treat each other with more empathy, respect and sensitivity.
The first year of a social startup is anything but stable, investing in a team that can help you withstand the ups and downs is invaluable - personally and professionally.
10. DO Enjoy the Ride
Nobody said it was going to be easy. And it won’t be. It might not work out. That’s OK. But what we have realised over the last year is that it is an absolute privilege to be in a position to at least try and create something new, which might even make a difference - however small - to people’s lives. And it is a privilege to be able to make your own mistakes. So make them, learn from them and move on.
Originally published April 4, 2015