Start up: The Journey Part IV “What Numbers?!”

Oh… the many adventures of a “start-up.”

A “start-up” is commonly defined as a company or entrepreneurial venture in the form of a company, a partnership or temporary organization designed to search for a repeatable and scalable business model.

There can be several variations to this definition. Some attach a length or time in business, others impose a revenue variable. Whatever the case the next question is,

“So when does a start up begin to no longer a “start-up”?

As a young business, we at Pass the Plate wanted to address this question and see where we were at in our quest to make giving easy.

So for some perspective, let’s recap the Pass the Plate journey…

About 24 months ago, we validated the initial business model by listening to potential customers to finding out pain points. This took about 6 months… (about 5 months longer than we thought it would). Everyone was very “part time.”

Next, we built a limited working prototype, not a MVP and then completing the market research… Another 6 months.

This feedback confirmed our initial assumptions, but we encountered resistance in the part of friends who ran different non-profits. How will this help us? What about our current solutions?

Feedback on a whole was positive… donors did not think that non-profits were taking advantage of technology to raise funds some were even unhappy that non-profits sometimes made it difficult to give. On the other hand, friends who ran their own non-profit questioned why they would implement yet another way for their members to give money. “We already use Pay Pal”, or “We already take credit cards” even the “we just started to use text to give…. wait for it… and love it!”

Thus, we were encouraged to continue to focus on building the experience around the donor experience and not building a product to sell to non-profit business’.

Our theory is that by making the donation experience positive and as frictionless as possible for the donor, we will increase overall donations.

From this round of feedback, we removed several more obstacles to giving, and streamlined the entire process. This would later become our “full production” model.

“Full production” means all the security issues are addressed, issues of instant scalability addressed, error reporting etc, have been addressed and that the app overall works. (This took about 9 total months with 6 months of that dedicated to programming and back end database administration.)

With the minimum viable product up and running, we started conducting real world market research.

As an operations guy with Pass the Plate, I think of this part of our start up journey as priming the pump as we are getting ready to take our solution and scale.

For an illustration, when I think of starting something up, I think of starting a lawn mower. You know, you bend down, take a hold of the black handle that is attached to a chord. That chord is attached to a motor belt.

But what happens if you pull the chord and nothing happens? Did you forget to prime the pump? Did you know that you even had to prime the pump? Priming the pump puts gas into the carburetor so that that when the chord is pulled, the engine will start and you can proceed to cut your lawn.

In the start up world, specifically in the technology space, priming the pump helps determine whether the business idea works in the first place (is it the right kind of gas) and is venture scalable.

For Pass the Plate, priming the pump was accomplished by gathering feedback from early adopters, drilling down on user habits, and completing the sales cycles.

To this end, we began to answer a few key questions…

What is the cost to acquire a customer? What is the value of a customer? How often do they give? Do they refer others? What are other ways to add value to the customer experience? How do we use donor feedback? What types of customers are most attractive to the business?

Additionally, from an operational perspective in this the mid life cycle “start-up” we needed to complete several key tasks. Here are some…

We built a Pipeline management tool to manage the steps in the donation process.

For instance, when someone adds a non-profit that they could not find in the database, what does that look like?

Submission… Validation (make sure we validate) … Response (we may add, we may not add with reason, we will message the person that submitted the request.

Or

A donation is made, the money comes into the PTP account, we then cut the check to the non profit and mark it as pending. Once the check is cashed, we mark the donation as paid.

Going through interactions like these has allowed us to improve and automate. For instance, if someone wants to add a non profit and we are unable to find it, then there are several items we need to collect for compliance reasons. Among these are 2 documents and a signature. Initially we had to create the process… now it is done, more efficient, and scalable.

With the MVP product up and running we have also been able to gather data from the use of the app. How many people downloaded the app? Where did they come from? Did the users donate? If not why? How many repeat visitors? How much time in the application?

Wow, that’s a lot of stuff! Now what about the numbers!?

We have a certain number downloads and a certain number of donations, each donor that actually gives or donates 2.8 times per month. What can we do to make them donate more?

On Twitter, when we thank someone by a direct message or post, for following Pass the Plate we have a click through rate of only 10%. Not that good… however some of those people then share or favorite the “thank you for the follow.” We then get a 6x response rate. So the for every 1 out to 10 people that follow Pass the Plate, we get 6 click throughs to read the Pass the Plate blog. Now how do we convert these same people to Pass the Plate users who vive 2.8 times per month?

Other results that are good are sales. Users. Donations. With minimal effort, these are coming in… Now there is the B2B sales, the non-profits that want to start to use Pass the Plate in as part of their own donation experience. Well want started out as a steady trickle has turned into a steady stream. Over 20 non-profits are in the pipeline to use Pass the Plate several of which have already signed up.

So what is the next step?

Well, I believe we will continue to be aggressive in working with other non-profit groups. The immediate plan is to stick with our monthly goal for this month (March) and shoot for a 300% increase in April.

Additionally, for the month of April we are starting to put emphasis on strategic partnerships. These are partnerships or alliances that will give Pass the Plate access to thousands of potential donors at a time.

In conclusion…

For Pass the Plate priming the pump or the “start up” has meant more than 10 presentations in front of large audiences (more than 30 usually around 75 sometimes over 100), answering the questions, and building responses.

Priming the pump has meant asking friends and family to “Like” our Pass the Plate fan page, and if they really loved us to comment and like our posts every now and then.

For operations, priming the pump has meant learning the in’s and outs of how social medial should interact with a business before handing it off to a more seasoned veteran. It has meant building business systems that will make the machine work.

For compliance, priming the pump has meant talking to and working with attorneys and accountants.

For the Founders team, it has meant persistence and determination. I like to call it “Grit”.

Here is the the Pass the Plate team, who have pursued the dream. We have started, we are no longer a “start-up!” Let’s finish this race strong. Let’s make giving easy!