12 Rules for Social Entrepreneurship | TFC Summer Fellow Reflection – Josiah Holland

12 Rules for Life Social Entrepreneurs

Starting a social enterprise is unlike anything I’ve done before.  Then again, I just turned 22, so I won’t pretend to have really done much with my life besides school at this point. In this post, I’ll reflect on the lessons I have been learning from building XPCulture, a social venture that is reinventing the way short-term mission teams engage in international volunteer work. Whether you’re a veteran in the space or simply intrigued by the concept of social enterprise, I hope you’ll get something from my musings.

  1. People care about your story not your business plan.

It sucks to recognize a glazed look coming over someone’s eyes when you’re trying to get them excited about what you’re doing.  I got it a lot starting out. Sure, intuitively I knew that a story is a lot more interesting than a business plan, but I was interested in figuring out the how, so that’s what I talked about. Starting with your what can bore people to death, beginning with how leads to confusion. What I eventually came to realize is that when you start with the why, people will ask the how and what.

My why began with growing up in Togo, Africa until I was 10.  (If you’re quoting “So, if you’re from Africa, why are you white?” from the movie “Mean Girls” to yourself right now, I guess it’s a valid question).

My parents were missionaries, and my childhood context shaped my worldview of poverty and purpose to land me in Honduras for the summer of 2016 and then back in Togo, Africa, for the summer of 2017.  I wanted to make a difference, but it was the difference between my two summer experiences that stuck with me.

Going to Honduras, I received little preparation and debriefing. In contrast, my Togo team spent a week doing team building, language learning, and cultural competency training before we left and dedicated three days to debriefing afterwards. These aspects of the Togo internship increased my personal development and mitigated the unintentional harms my team would have imposed on the Togolese had we shown up as arrogant Americans convinced that we were God’s gift to the poor.

Out of this personal experience came my vision for XPCulture. I want to make the preparation and debriefing aspects of my Togo experience possible for short-term volunteers at scale and a fraction of the cost, and XPCulture exists today as the embodiment of that vision.  

2. You still need a business plan.

I practiced telling my story, and it felt nice to hear people say what I was doing mattered and resonated with their experience.  Then, one night a mentor began asking me questions to which I didn’t have data supported answers. What is the market size? What does the sales cycle look like? How am I going to scale the business? What is my revenue model, and what are the profit margins?  How will I measure financial success and what metrics am I looking at to assess social impact?

My guesses and potentially good ideas didn’t matter. He wanted evidence and confident answers. I left dinner frazzled but also inspired.  I had figured out the why and what, but I was missing the how. I had to begin turning assumptions into facts and converting what I’d learned from conversations with potential customers into an actionable game plan.  

3. You don’t understand it until you can explain it.

You don’t know something until you can articulate it. The first time I met with Mario Avila, the TFC Director, he challenged me to develop an elevator pitch.  This is a basic exercise, but as I refined the purpose and vision for XPCulture over the last year, continuous tweaks to my elevator pitch helped me internalize the new vision while also enabling me to effectively communicate the vision to others.

Note how my pitch has changed since November (and expect it to continue evolving):

November 2017: “XPCulture helps church groups prepare for and debrief their short-term mission trips by providing content and trip management tools.”

August 2018: “XPCulture helps NGOs protect the communities they serve from the unintended harms of short-term mission teams while also investing in the growth and development of those who go on the trips.”

Functionally, our platform hasn’t dramatically changed, but we’ve shifted how we understand our customers and value proposition and learning to articulate those shifts in my pitch has proved invaluable.

4. Build it quickly so that it can fail quickly.

Being an entrepreneur consists of turning assumptions into facts, and the faster and cheaper you can test assumptions, the closer you’ll be to a profitable business model. Here is a great article exploring this topic in more depth. The Lean Startup, Growth Hacker, and Hacking Growth, are all great reads that hit on this concept and were recommended to me by Kyle McCollom, a serial social entrepreneur and founder of Everly. These books helped me recognize the practicality of building 80% of the functionality you want for 20% of the effort and expense.  

Here is an example of the concept in practice: I repeatedly got feedback saying we needed a mobile app associated with our platform.  We believe that having an app will increase participant engagement with our content and drive usage of our platform as a communication tool.  However, instead of building an app, we are testing the assumption by having some teams use Basecamp (a SAS tool for project management that has its own app and highly intuitive interface). By setting up teams as “projects” in Basecamp we can test our assumption for $99 a month before jumping to investing thousands of dollars in building an app with no guaranteed value add.

5. Social enterprise turns the patronized into the patrons.

Capitalism is by no means faultless. However, social enterprise leverages capitalism to empower those who are typically forgotten or patronized by governments and charity. Despite the great intentions of charity, it can easily become about serving the interests and ideas of the donors instead of the needs and realities of those at its mercy.  Bill Easterly elaborates on this in his book, The White Man’s Burden.  Developing market solutions to social ills empowers the recipients of social impact by turning them into customers or patrons.  Any company looking to survive in the long-term has to acknowledge its customers as the ultimate boss, and must therefore listen to the them instead of deciding things for them.

In the case of XPCulture, I learned that in order to create a positive impact on those going on short-term mission trips and those hosting the teams, I would have to listen to the needs and feedback of both groups.

6. Understand who makes decisions and how.

Starting with a niche customer in mind allows you to develop a highly sought after product or service that can then be spun off to serve other customer segments.  However, entrepreneurs often make the mistake of building a product without a specific audience in mind. This proves problematic when it comes to getting feedback on your product or service because the wide range of differences represented by your audience will leave you chasing an equally wide range of recommended changes. Social entrepreneurs may be less prone to make this mistake because they typically have a niche population for whom they are trying to create value.  If, however, you start with a product that is possibly desirable for several customer segments, learn as much as you can about the variety of segments and then focus on one. You may pivot from one to another as I have, but starting out with multiple target segments will make it difficult to build a coherent strategy when time and financial resources are typically limited in the beginning.

When Mario, the TFC Director, had me define XPCulture’s customer segments in May, I identified six potential decision maker personas. “Pastor Pete,” “Missionary Matt,” “Committee Kim” along with three others made it into the mix. Mario then set me upon learning for each segment factors like the sales cycle, customer lifetime value and cost of acquisition, perceived needs, and pricing sensitivity.  As I filled in this new framework, it quickly became apparent that I needed to strategically position XPCulture’s pricing and marketing to cater to NGOs run by “Missionary Matt” because of his influence as a decision maker for multiple teams and the greatest appreciation for our value proposition. My users continue to be church groups, but now NGOs have become my decision makers.

7. A poor craftsman blames his tools instead of becoming a process engineer.

Without strategic processes in place, you end up doing everything as if you’re doing it for the first time every time. This is terribly inefficient and often leads to shoddy work. My team was terribly inept at using Slack, Trello, and Hubspot when we got started.  We have by no means since maximized their utility, but by building and implementing processes to use with these tools, we’ve seen progress that would have otherwise not been feasible. We established a daily check-in through Slack based on the scrum principle from agile project management, we simplified our approach to project management by tweaking a kanban board layout to make the most of Trello. We also built a sales process to help us leverage Hubspot’s free CRM tools.  By building processes with my team, we found ourselves producing better work more quickly, with the only tradeoff being the time required to ideate and implement new processes.

8. Act on what you learn.

As a full-time undergraduate student for the first eight months of XPCulture’s existence, I didn’t have a whole lot of time to dive deep into the world of short-term missions.  Taking that dive this summer, I worked to better familiarize myself with the perspectives and objectives of the various stakeholders represented. I took great notes from my conversations but regularly failed to follow through on what I was learning.  What good was it to write down the name of a website resource or contact if I never made a point of looking up the resource or contacting the individual? Recognizing the stupidity of this, I began summarizing my notes from every conversation with at least 3 next-steps or takeaways, which helped me develop the skill of determining which input was actually worth implementing.

9. Creativity is not a license for trickery.

Cal Turner Jr. published his memoir, My Father’s Business, in mid-May. In addition to reading his book, I had the privilege this summer of tapping into his wisdom over a cup of tea at his office.  From his memoir and our conversation, I learned that your customers are deserving of your creativity but not your trickery.

Cal Sr. knew that the height and location of a display within the store could make all the difference in product sales, so he closely managed these details. He also took creative efforts to get people in his store. During harvest season, when farmers had more disposable income, Cal Sr. would drop off a work glove for each farmer with a note inviting them to his store to claim the glove’s mate for free. However, on the other hand, Cal Sr. also knew that many of his customers were illiterate. He refused to exploit their lack of education with psychological ploys like pricing something at $1.99 instead of a flat $2. He knew the line between creativity and trickery, and he committed to operating Dollar General ethically. The trust and respect of his customers was worth forfeiting cheap tricks.

So what did I do? I changed our pricing for a year of access to XPCulture from $29.99 to $30 per person.  I made sure that our website tells the story of the people and purpose behind it, and I committed to never selling a promise, product, or service to an organization without first possessing the confidence that I could deliver the value for which the the organization was willing to pay.

10. Entrepreneurship is a crash course in self-management.

I love the freedom of being the one to set the priorities and strategic direction of XPCulture.  However, underlying organizational management is a need for self-management. There were many times I wished for a boss to give me clear directions. The challenge of making customers your boss is that while they’ll fire you for failing to meet their expectations, they don’t step into your office to share those expectations or offer performance feedback. It’s on you to go get that input and make sense of it.

This summer I grew exponentially in my ability to receive and act on feedback, to manage my time effectively, to make strategic decisions in a timely manner, and to practice self-care so as to prevent burnout.  I’ve found ample opportunities to practice self-management as a social entrepreneur, and the job has fed my desire for personal development and meaningful work.

11. Make people tell you no.

“80% of non-routine sales occur only after at least five follow-ups.”- Marketingdonut.co.uk

I found following up with contacts to be exhausting but crucial this summer.  However, reframing how I thought about sales helped significantly. First, I stopped interpreting the lack of a response as a no and just assumed the person was simply busy.  Second, determined not to settle for someone being busy, I determined that if I truly believe in the value my company has to offer, then reaching out is worth the risk of becoming annoying.  By connecting everything I do back to my purpose, I have since found myself more confident in the face of rejection.

12. Humility goes a long way.

I derived this last rule from what I came to respect the most in the mentors and advisors I met this summer. I believe Cal Turner Jr. embodied it best.  Despite the tremendous business success he experienced during his tenure as CEO of Dollar General, in my limited interactions with Mr. Cal Turner Jr., his humility has stood out.  He does not shy away from acknowledging mistakes he has made and learned from. He honors and acknowledges the role others have played in his success and ultimately credits God for everything he has attained.  He is man truly about his Father’s business, and he exemplifies the leadership characteristics I hope to further develop.

The more I learned this summer, the more I realized there still is for me to figure out.  I cannot express sufficient gratitude for all the help and guidance I’ve received along the way, and I’m especially grateful for the folks at the TFC, the Social Enterprise Alliance, and the Turner Family for investing in social ventures like mine.  This summer has been truly transformational, and I can’t wait to learn more lessons to add to this list.

 

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