How crowdfunding is helping this social business promote ethical shopping
Social enterprise, social business and 'conscious capitalism' have come from nowhere 5 years ago to now be considered a key way tackle to social and environmental problems.
But the resources needed to get new ideas off the ground, test their financial viability and assess their true social impact are still hard to find.
Good On You is a new social business that leverages mainstream consumer shopping to pressure businesses to avoid environmental impacts, create better jobs for their millions of employees and stop causing harm to animals.
Consumers spend $82 billion per day! 40%-50% of consumers not only think they should make better shopping choices, but feel bad when they don't align their choices with their values (which unfortunately is most of the time). What we need are simple tools to make it massively easier for consumers take their ethical preferences into account when making shopping choices.
At Good On You we want to make it as easy to know how a product or brand impacts on other people, the Earth or animals as it is to know the price or features of the product.
Good On You has been nearly two years in the making. We've been in touch with a lot of support networks and potential impact investment funders – below I have listed some support organisations and sources of key ideas – but it's clear the social impact and social business ecosystem in Australia is missing key elements. This is particularly true for seed stage funding, older entrepreneurs and digital as opposed to real world businesses.
Crowdfunding - issues to consider for social enterprises
So we turned to crowd funding to raise resources to take the next step in proving our social business model.
With just 5 days to go, Good On You's crowd funding campaign is on track to meet it's initial goal; if we get our marketing right in the next few days we may get close to our ultimate goal of $30,000.
Here's a few things we have learnt so far about crowdfunding for social start ups .
1. Crowd funding is about leveraging your community and their networks. The people most likely to support you are those who are already part of your community. You have to be so passionate about your project that you are prepared to ask everyone you know to support the campaign –and then ask them to ask their friends. Oh that reminds me: Hi there dear reader - if I haven't hit you up directly yet, please check out the Good On You Campaign - great cause, great rewards for you!
Perhaps more importantly, your project needs a community first! Spend time identifying and networking with the people who care about the problem you are solving. Create the Facebook page, start a newsletter, run events, run an advocacy campaign or even a competition.
2. Choose a crowdfunding platform that sends the right message to your audience. We considered five platforms.
Start Some Good - designed for "change makers like you"
Chuffed - charity and social enterprise projects
Kickstarter - even though Kickstarter is more famous for products and musicians/artists, some social good projects do choose it. The platform itself is so much better, and Kickstarter is a registered B Corporation.
We ruled out Indigogo early on, its poor fit with our community was one of the reasons. We didn't consider Pozible for reason 4 below.
3. You should try out each platform as if you were a potential backer to your site. What does it feel like? If you send a member of your community to your pitch page or rewards page, what will happen? Once you've narrowed the platform choices down it's a good idea to actually back a campaign on each platform to understand the user experience [cheeky hint: feel free to run the ruler over the great rewards on the Good On You campaign :-) ]
4. Decide whether you want a model where you get to keep "all the funds you raise" or only keep them if you reach your minimum goal. If you are serious about asking your crowd to fund a project you believe in, and that project can only happen if you get a certain amount of money, then the platforms where you commit to reaching a goal are more authentic and thus more likely to persuade your audience that you have a plan that will work. That was one of two reasons we decided against Chuffed.
5. As everyone will tell you, you need to create a good video that tells your story. Ours is here. We choose to pay a modest amount of money to another great social enterprise - Digital Storytellers - in part because of their crowdfunding expertise, and they did a great job. But there's no reason you can't succeed with a home made video that tells your story authentically. People want to connect with you as the people behind the business.
6. Build a great reward list at price points from $5 or $10 to the largest amount you think someone will give if things go well. While asking people to give money in return for a thank you or a credit works for your most passionate supporters, the advice was that many other people will support you but will want something more tangible, and that is definitely try for many higher donation amounts. Our experience supports this. It makes sense for the tangible rewards to be closely connected with your campaign. The first version of Good On You focusses on ethical clothing and fashion choices. Our rewards include products from social enterprises like Conscious Step Socks and ethical fashion designers like Alas Sleepwear, and events like screenings of the True Cost film and the Undress Runway ethical fashion shows.
6. You need to get off to a good start. It's commonly recommended to have 30% of your money already committed before you launch. We managed 22% on day 1 - I feel we could have done better here. Campaigns which start slowly don't attract more money quickly if at all. So you need to not only build your community but warm them up to the crowdfunding well in advance. Ask your community for feedback on your rewards well before your start. Ask those who respond to commit to taking up a reward on the first day of the campaign.
7. Don't underestimate the time it will take to get the message out both to your community and through PR if that is part of your promotion strategy. While there's a lot of advice to keep the campaign short, and a lot to be said for shorter campaigns in terms of keeping up the team's energy along the way, we've found that many blogs and magazines have written about Good On You only in the last few days, just a week before the campaign will end. Our campaign was set to 25 days - I would suggest 28-30 days might be better unless you have all your backers and potential promoters lined up from the get go.
8. Identify potential sources of matching funds for your campaign. ING Dreamstarter will match up to 50% of your 'Tipping Point' on Start Some Good - it's a competitive application twice a year.
9. Some other key features you should look for in a platform:
1) Minimum friction for users to back the campaign - every extra click or decision that the user has to make is one less reason to give (this was another reason we didn't use Chuffed).
2) Great user experience. Is it really clear to the user what's going on? Can they find the short version of the story easily? Understand the rewards on offer? Get more information if they need it? Does the site look good on mobile.
Right now Start Some Good is well behind the others on this score and it completely sucks on mobile. But the good news for you and other social good projects (but not us) is that SSG have obtained investment that will allow them to release a brand new platform later this year. Kickstarter wins hands down here, although Indigogo, Pozible and Chuffed all do well.
3) Does the platform allow the kinds of rewards you want to provide your backers? On Kickstarter for example you can only give backers stuff made by you and your (social) business - not rewards donated or given to you at a discount by third parties.
4) Analytics You need the ability to track what's happening. You need to market your campaign like crazy, and so you need to know which marketing efforts are paying off. Ideally you would have full access to the analytics behind the campaign page(s). You'll need to ask each platform in advance what they provide.
It takes longer than you think to prepare a campaign. Building a community will take you months. But even the practical parts of the campaign take longer than you think. With the benefit of hindsight I suggest you aim to have the video, campaign copy and rewards completely ready to go at least a month early, and then spend those weeks on pre-marketing the campaign, getting pre campaign pledges and getting on with PR.
Social Impact Businesses: Where to look for help
Depending on what stage you are at with the development of your social enterprise or social business each of the following is worth a look.
Social Traders - The Crunch an other programs
The Difference Incubator
Centre for Social Impact - the foundation unit in the Graduate Certificate is a great overview
School for Social Entrepreneurs
Lean Start Up is an approach to new business creation focussed on avoiding wasting time and money by ensuring your focus on the riskiest parts of your idea first - e.g. if you assume paying customers, is your assumption what they will pay for correct?
These tools are frequently applied to social enterprise/social business. Here are some sources
The Business Model Canvas by Alex Osterwalder
The Lean Cavnas by Ash Maurya
Using the Business Model Canvas for Social Enterprise Design
Your tips
What are your tips for getting great new social enterprises and social businesses funded? Do you agree there is an early stage funding gap?