Recently someone pitched to me an idea for new organisation they want to establish in Australia, which highlighted what I have seen time and again as a perennial problem in the social space. This new initiative strangely shared the same mission, target group, and even name of an existing and well-known charity in the same city. The striking thing however was that the ‘entrepreneur’ claimed he had researched the market and that there were no other existing initiatives of its kind.
You wouldn’t believe how often this happens. Either the entrepreneur had not done their research, or if they did, the research was not of a quality that unearthed some very obvious results. A good place to start is to put your new initiative’s proposed name and key words into a google search. If you get no search hits, please let me know as you will be amongst the first ever. The only other scenario could be that research was conducted and did indeed uncover other initiatives, but the entrepreneur was legitimately convinced that their thing was indeed unique.
In the commercial world we are quite prepared to accept that a coffee shop can exist on every corner. We see them pop up all the time and get excited about the additional options available to us. Small business owners don’t shy away from acknowledging that they have competition, and know that part of their mission is to position themselves in relationship to other players in the market. The Government loves small business too (theoretically) as we know that more small businesses create more jobs, generates tax revenue and keeps money cycling through the economy.
Why is it that we deny the presence and importance of a marketplace in the social arena? To pitch an organisation to a philanthropist claiming your idea is unique is not only false, it’s also disingenuous. Now granted, many new non-profits are established for legitimate reasons to focus on target groups with needs that are not met by existing charities. In other cases the existing charities have failed to innovate, and the new idea seeks to find a more effective and efficient way of creating change. This is not what I am talking about. Meeting the unmet needs of our community and finding new and innovative ways to do it are important.
Part of effective market research is to uncover all of the organisations that exist and be able to see how you relate to each other. An important part of market research is market development. There is a downside to pure competition, and collaboration with existing entities is vital in the social arena. This is not just to decrease duplication and increase efficiency, but also because it highlights that you are actually interested in achieving impact. Otherwise it would beg the question of whether you are in it primarily to establish a new organisation versus actually achieving an impact. If it was the latter, you may come to the conclusion that working with an existing entity in collaboration could be a more advantageous approach.
Now I don’t want to just dump on entrepreneurs. Many do very good quality market research and development, and place attention on the values and processes highlighted here. For this to work there also requires an openness from existing entities and non-profit leaders for new players to enter the market. This may mean to open up about research, markets, target groups and financials. In order to do this the whole sector needs to get focused on impact, rather than the individual entity focus that pervades the marketplace currently.
I am sure that this is super frustrating for the philanthropic sector, who see this happen time and again. I know of a number of leading philanthropic organisations who are keen to see greater market cohesiveness and collaboration. Finding the balance between encouraging new innovation and bringing the existing system to account in a new era of collaboration is tricky and important. We do need to continually see entrepreneurs pushing the envelope and finding new ways to do things.
Your idea is not unique though, so get over it! Be honest with yourself, the market and the philanthropic community. Take your time and do your homework. I know of one entrepreneur who spent three years doing market research and business planning before going live. Having an exciting meeting with a potential beneficiary is not market research.
Work with existing entities and find ways to collaborate, partner or differentiate. Letting ‘a thousand flowers bloom’ is also a legitimate approach – it can work to have multiple organisations working alongside each other. Philanthropists and investors are intelligent people and can see the importance of a thriving and diverse marketplace in creating social impact.
Importantly, investors are not backing your idea, they are backing their confidence in you. Integrity is important in building that confidence. After all, philanthropy wants what you want – a greater impact through the most effective and efficient means possible.