Success comes from being creative and overcoming constraints
There are a lot of little lessons in Chapter One, a book about the founding of Thankyou by Daniel Flynn. After all, it’s the story of three twenty-year olds with little experience in business or philanthropy, creating one of Australia’s most successful social enterprises – selling water, food and hygiene products to fund projects in developing countries. The ups and downs are half the fun.
But my favourite section comes right at the end, as Flynn reflects on this, the first chapter of his story.
“with less financial restrictions comes the temptation to pump money into things simply because you’ve got the budget for it. In doing so, you run the very high risk of spending on something that’s an average idea.”
A running theme throughout Flynn’s story are the odds in the way – his organisation, often buoyed only by belief and passionate supporters, facing off against entrenched interests and disbelieving middlemen. The story of Thankyou becomes the story of finding workarounds, of skipping the first step and coming back to it later.
As someone who writes a lot about startups, steeped in press releases about seed funding and the necessity of more capital, this is refreshing. Thankyou is a brand selling physical products, unlike someone purveying digital goods, the barriers to entry for Thankyou have been very high, but they always found a way. Thankyou was constantly validating, having to prove themselves. They are a far better organisation for it.
It also makes me think of older aid organisations, how mountains of cash and a place in the establishment can slowly rot away an institution with even the best of intentions. Incentives become misaligned, becoming more about perpetuation than the original goal. Cash is so bountiful that strategy and an emphasis on ROI melts away. Just think of Pro Publica’s stunning 2015 investigation into the Red Cross – how they raised half a billion dollars to build just six homes in Haiti.
Anyway, back to Flynn, and he comes up with a great image for the Thankyou method of getting started: letting the cart pull the horse. In this case, referring to the first ever product they launched, where they received an order for 50,000 bottles of water, and a donation of 30,000 bottles, before they had even setup the business or really sorted out a supplier. They then had to go find some money to make it all work. It might not have ever happened had they tried to do it the conventional way – have a great idea and go find someone to fund it.
“An example of the horse pulling the car would be: find your $20,000 start-up capital, then register the business, and then try and get a distribution deal. But the cart pulling the horse scenario is: land the 50,000 bottle order, then figure out a way to find the $20,000 you need to register and set up the business.”
Thankyou are currently selling Chapter One with a ‘pay what you want’ model on their website. Another example of constraints leading to creativity – they are raising money to fund an expansion into New Zealand.