As Jason Baptiste‘s recent article on “Why They Were Able to Raise Money” demonstrated, we tech blogs tend to “glamorize” (or at least “report frequently”) the various funding announcements that hit the wire. We are, of course, tasked with writing about the business of tech not just the tech itself. But this coverage can easily give a distorted view of how funding happens.
And arguably it also contributes to a particular view of what constitutes “success”: venture backing, an IPO, an acquisition, a Hollywood movie about your life.
Despite these startup myths of “build it and they will fund you,” we know that not all projects are venture-fundable (and not all our founder histories, arguably, are easily adapted to the big screen, but that’s a different story). But as I’ve been working with teachers and technology for several years – and working on several back-to-school tech stories over the last week – I’ve been reminded of the number of great projects and innovative entrepreneurs that operate outside the “traditional” investment circles.
Whether or not you believe these traditional circles are “dinosaurs,” some of the same forces that make it less expensive for revenue-driven web startups to launch are also making it less expensive for socially-oriented web startups to grow: lean startups for social innovation, perhaps.
If these startups are more interested in generating social change than investment dollars, how do we measure their success? How do we support their growth?
Assessing the “Mission” Alongside the “Money”
Funny Monkey, for example, is a small startup in Portland that builds open-source tools and resources for educators, students, and grassroots community organizations, including the Funny Monkey Commons, a collaborative, portfolio-based tool for schools and organizations, and the soon-to-be-released VoiceBox, a Drupal project to easily create a community-based website with aggregation and curation tools, discussion forums, and newsletter components. With support from a Knight Foundation grant, Funny Monkey recently helped build Voices on the Gulf, a site for teachers and students to share stories about the BP oil spill.
Funny Monkey co-founder Bill Fitzgerald says that entrepreneurs need to decide what their goals are – Have a business? Have a job? Have a salable asset? – and make decisions building their startup accordingly. Fitzgerald, a former teacher, doesn’t see himself as an “edupreneur.” Nonetheless he’s built a successful business developing practical and targeted community-oriented tech projects. Fitzgerald says Funny Monkey emphasizes a services-oriented rather than a product-oriented business. And he jokes, “We don’t need to sell a lot of widgets.” Keeping expenses low and creativity and agility high, the company has seen strong growth and has been able to double the number of staff.
Okay, so it may not be a venture-fundable idea. And nor, as it’s a for-profit company, is it eligible for much of the funding aimed at non-profit organizations working on these sorts of community-oriented projects, including the new $50 million Social Innovation Fund. But as Funny Monkey and many other companies demonstrate, making money and having a social mission, creating profits and social innovation, aren’t mutually exclusive.
So, how can we best assess and support successful socially innovative tech startups? (And I mean “we” as bloggers, investors, entrepreneurs, consumers, citizens, and more.)
