Funding a start-up is my number one frustration. It is particularly difficult because in the early stages, when things are still in a formative stage, it is not clear what one needs funding for! I now have a track record in start-ups so I can demonstrate that I have the skills to lead things through the process of discovery – but this skill counts for nothing. In 20 years, I have never been asked once by a funder what my track record is in start-up.
The ideal funding for a not-for-profit start-up is a small flow of funding over a long period provided by a funder that understands the lean start-up process and is willing to put more money in if the process starts to expand. This has to include funding for one’s salary.
I have only ever experienced this ideal once – in fact, it is happening right now. It’s a great little project to set up a better connection between academic research in the child and family sector and the mainstream media. It is backed by and will be branded by two universities, Cambridge (UK) and Princeton (US). The funder is the Jacob Foundation in Switzerland. We are proceeding with it step by little step, adjusting as we go, always building on success and steering away from things that do not work. Recently, it was decided it should appear in four languages, not just two, and the Foundation quickly secured the extra money. We don’t yet know what the long-term funding model will be but we do know that institutions with money have an interest in continuing something if it is working well, so we are confident we will find the mechanism once the project is more mature; indeed, there is no other way we will find the mechanism.
Another approach is the crowd-funding approach, though the idea of having to raise everything by an artificial deadline seems daft to me, and disconnected from the reality of a start-up. Having a big slug of money all at once is a very precarious position to be in – the worst cock-up I ever managed was when that happened to me. I am in the middle of my first crowdfunding project, albeit a continual one without a deadline. I am mobilising teenagers and family lawyers all over the country to raise money for a new website for children whose parents are separating, KidsintheMiddle.org.uk. This is creating a stream of funding that is allowing the gradual building of a service; it is nicely suited to the incremental start-up process and all the fundraisers rather like the pioneering feel of discovering the project together. Everything about the project – both the fundraising mechanism and the thing we are building – has completely changed as we have proceeded along the way; we have made a whole series of completely unexpected discoveries, which we could only have made by starting.
The worst kind of money is grant funding. This kind of funding is fundamentally incompatible with start-up. Grant funders worship business plans; they have the idea that a business plan is what stands between success and failure. This is a fantasy and funders should know better (after all, they can afford to learn!) but I will restrain the rant for now! If you have to build an entire business plan, most of which is pure fantasy, and then faithfully follow it, you are simply carefully following a pathway to failure. No start-up ever ended up in the place where it was originally headed. A good lean start-up plan looks like anarchy to a grant funder.
But in the desperate uncertainty of the early start-up, it is difficult not trying to get a funder to believe in the cause and share the risk. But I have found that following this temptation – which I always do! – is destructive. First, it distracts attention from the real work. Second, it creates a feeling of dependency on a white knight who is not there at a time when one is already feeling particularly vulnerable. Third, when the refusal comes it can be difficult to read. My latest refusal from Children in Need for one of my projects was a catalogue of put-downs, delivered from the lofty position of people who understand nothing of start-up but think they understand everything. And because I am addressing a new need (that’s what start-ups tend to do), the fund advisers denied there was any such need at all. I had the same experience years ago when I put an application to the Big Lottery for what is now the flourishing Travel Foundation. Then the Big Lottery Fund advised us that sustainable tourism was not an issue. But at least these big funds reply; most funders don’t event get back, which is the equivalent of begging on the pavement and have people walk straight past. Perhaps one day I will gain the confidence not even to dream about being saved by grant funding!
I reckon 20% of the success of a start-up is the idea; 80% of the success is the tenacity to keep on going long enough to get the resources.
For Maternity Assist, a project to bring digital communication into maternity care and engage the whole family rather than just the mother, I have run the whole course with another person, Mary Steen. And its been a long course – two years just to get the funding to develop a prototype, and this was preceded by several more years trying to find a formula that we could raise money for in the first place. But having company through the journey has been wonderful.
But for every other project I have brought into being, I have been on my own for the first stages. For me, this is the most difficult aspect of start-up.
No person who starts anything has all the skills needed for the job and right at the start, there is no money to buy these skills in. So I have to do without the skills and become very good at learning new things the whole time. This means mistakes and a less than optimal approach; but if there is no alternative, then it’s that or giving up. I also hate being alone – it’s lonely and when I encounter roadblocks and make mistakes, there is no-one to commiserate with. I am lucky to have a supportive family, but there needs to be some separation of home and work.
For me, building the first team is the best thing about a start-up. There comes a point when the project idea is clear enough to attract other people on an unpaid basis, or when the first money is raised and it is possible to employ other people.
Finding partners is not plain sailing, however. A good new idea can generate great enthusiasm on the part of other individuals, but they may not have the appetite for the uncertainty of start-up. I had a particularly painful experience on one project where someone joined me with huge enthusiasm and we got on like a house on fire. But when something went wrong, the person panicked and in the space of 24 hours I was alone again. It was a bad moment for the project, but with hindsight not a particularly significant one, and the project continues to thrive. But it upset me – I felt betrayed.
When the project has a team and the team is genuinely feeling a shared responsibility, then the first stage of start-up is thoroughly over. For me, that’s when the fun really starts to kick in. It makes the preceding months or years feel worth the wait.
I am a social entrepreneur. I start new not-for-profit projects and organisations to meet particular needs. That is all I do – I don’t have a ‘proper job’ that keeps me going while I get new things off the ground. I don’t provide consultancy on how to do it. I don’t stay for ever with the projects I have successfully started. I do this work full time and earn a living from it.
There are things about this way of working that I love, but there are things about it that I dislike, so much so that I spent a significant period trying to get out of start-up work after a string of set-backs. But I fared even worse in these other things, so I came back to start-ups, less idealistic and more accepting the downsides.
In a series of posts I want to describe my experiences, and I will try to be honest about both the good and the bad things. I am doing this because the act of writing this and putting it in a place where someone might see it (even if almost no-one does!) represents for me a significant step. Writing this forces me to process many thoughts and feelings. The key strength that I bring to start-up is not infallibility or invincible positivity – it is a long-term dogged determination to achieve a thing well beyond what many others would consider “reasonable”, and a selection of skills that is never enough to do everything, but just enough to get through till I can afford to create a team.
Having good ideas is the easy bit of the job. The difficult bits are working out how to make an idea viable, and sticking around long enough to turn it into reality, particularly when when you start with a zero budget and zero income, funders who do not like or understand start-ups and no chance of borrowing money against future profits!
The first step: seeing the need (just)
When I was travelling around the world in the late 1980s, I could see the difference between sustainable tourism and unsustainable tourism and it occurred to me that more needed to be done to promote the former. When I became a father, I felt many conflicts between my experience and what was expected of me from all the stuff we read and heard in the media. When I saw a child suffering the separation of her parents, I could see she needed more help. But in all these cases, my understanding of the problem at the time was limited. It was obvious something was wrong, but what exactly remained clouded in a fog.
We are taught not to make mistakes, which means we feel we should not do anything till we understand it completely. But if I applied that principle, I could never start anything. If you don’t understand something and cannot afford to do a PhD first, then engaging with it and being prepared to get things wrong is the only way forward. The early years of any project are really slow, groping about not seeing the way ahead, and full of false-starts. I have found no other way of finding the right way forward than making a best guess and quickly switching direction if it’s wrong. And I have found that the problem gets worse as I understand it more – there is usually a reason why no-one else is doing anything about the problem. I often think “if I had known it would be this complicated, I would never have started!” Over a period of years I began to understand just why sustainable tourism was not well promoted, why fatherhood was not supported, why children in separating families get overlooked.
I actually find stepping out onto a pathway with only the next few steps visible (if that) to be very unnerving. I am of a rather nervous disposition and so I spend a lot of time worrying about not knowing – am I about to step into a big hole? This is not an irrational fear, because I have stepped into a good many holes along the way and some of them have been horrid! As each project porgresses, things do get better, particularly as other people become involved – the topic of my next post.
Over the Christmas holiday, I watched the whole series of Call the Midwife with the family. I love midwives and what they do, working at the extremity of human life; it is one of the great privileges of my life to work with them. When the narrator in Call the Midwife said . . . → Read More: In praise of midwives
Asda declared in its controversial Christmas ad (191 complaints to the Advertising Standards Authority about sexist stereotyping, according to the BBC) that behind every Christmas there is a mum and behind every mum is Asda.
It was encouraging to see a chorus of disapproval in response to a depiction of fathers doing . . . → Read More: Behind every unsupported mother is commerce
We failed. We thought there was an opportunity under this Government to get a leave system that would actually work in enabling mothers and fathers to share care more, as has been achieved in other countries. We got it wrong.
A business lobby, keen to ensure men do not bow to domestic . . . → Read More: The Government’s leave entitlement system will not work
As I set about setting up more new projects than I have ever done before, and with less money than ever before, I am studying the art of start-up, and have been smitten by the work of Eric Ries, in The Lean Startup, recommended to me by social enterprise champion, Paul Cheng, . . . → Read More: The technique of start-up