Old idea with a twist
I can’t help but by cynical sometimes…perhaps it is just my nature. In the past few months, I have noticed a slew of start-ups replicating companies that either already exists and are well funded or the same ecommerce platform with a new twist. The twist happens to be giving a large part of their profits to non-profit organizations.
For instance, we are a company that cares about women so we are going to give a percentage of our profits to organizations that work with women under the demise of being a software company. Really? Try building a software company first.
I am well aware that millennials, particularly women, are interested in supporting companies that give back but that is not how a company is going to succeed.
My advice to anyone else giving this a try is that the give-back portion of your business is not the hook, it could actually be the sinker.
Comments (Archived):
My only pushback is that cause based social good, in some cases, is a market builder.People use Kickstarter as much for building an early market as for the funds in some cases.So if give back is a gimme, I agree, wrong foot forward. If give back is really an integrated piece of the puzzle, sometimes it can work
Socially responsible companies are good but building with the demise of being socially good makes zero sense
nicely said and i agree. (we actually agree more than not.)
Yes we do
Yes! One caveat on old ideas. Sometimes the world or structure wasn’t there to support them so they failed. If you invested in e-books in 1995, you got crushed for sure!
For instance, we are a company that cares about women so we are going to give a percentage of our profits to organizations that work with women under the demise of being a software company.Agree simply a well meaning ‘hook’ to get someone to pay attention to a company or to give a customer a reason to make a choice or tip a sale over an alternative ‘all things equal’.In a way it’s distantly related to what Paul Newman did with salad dressing. Was it really so spectacular? No. But just putting his name on it drew enough attention to make it stand out and get shelf space over another brand. It’s part of the story. And this now happens with all sorts of celebrity goods.That said I often wonder if companies that are doing this do it because when they make purchase decisions (either personally or for companies) they change their own behavior or simply because they are mimicking what they see others do blindly. You find a great deal of mimicking in people who are new in business is what I have found over the years.
Actually I just thought of what I think is a better way for companies to do this and also to limit the downside potential as well as the cost.Instead of donating a % of their profits (with no cap) they simply say they will match up to $x dollars of any contribution someone makes (customer or otherwise) to a list of organizations pre specified on, say, crowdrise.com “Here is how we give back”. “Here is how we support women’s causes”So again it doesn’t matter if the money is given by a customer or not. In fact if not a customer that means their name is passed along and more people know about them in the end. No purchase necessary.Also if done monthly and with changing points of donation allows the company to not be locked into doing it forever and to stop at anytime.To me this would potentially have a greater impact.