Venture Concept #2

Original

Opportunity

It is often the case that nonprofit firms fall behind in technological and infrastructure needs.  This is due to the fact that these firms do not reinvest income in the same manner as for profit and government sector counterparts.  One issue that arises from this lack of investment is that nonprofit firms tend to fall behind technologically.  When these firms fall behind they fail to stay on the same competitive level as other nonprofits, for profits and governmental firms.  Currently nonprofit firms must use existing funding or grants to upgrade their technology.  Because these firms are designed to put as much funding as possible towards their missions they often times go without competitive technology.  I believe this will be a continuous opportunity as new technology is continuously emerging.  There currently are few firms that offer the services this idea wishes to execute.  Most of the few firms that do exist are for profit distributors.  As a nonprofit we would qualify to compete for government and private grants that may be able to drop our fees below market value.

Innovation

The service that this firm would provide would be vending computer science technology to nonprofits at, or below, wholesale pricing.  The first few steps to this would include solidifying relationships with wholesale distributors and securing 401(c)3 (nonprofit) status.  As with most nonprofits our income will be a researched mix of service fees, grants, and donations.  We will work with wholesale distributors to ensure the lowest pricing possible.  Our income that does not go to operating costs and salary will then be applied to the products we purchased, thus, lowering the pricing by that much to our clients.  Because our pricing is somewhat determined by competing for government grants our pricing model will be continuously fluctuating.  Service fees will be charged for consultation on technology purchases, however, this will vary firm to firm. 

Venture Concept

Because there are few similar services it may not be difficult to attract clientele.  This service will be new to these firms, which, may make them eager to participate.  The major source of direct competition will come from for profit firms that sell electronic goods wholesale.  A major weakness will be that once the organization is up and running, assuming success, there are few barriers to entry from competitors.  Another vulnerability may exist in that the few competitors that exist are major wholesale distributors.  If they have access to large amounts of capital they may be able to install barriers to entry of our firm. 

Packaging may not be an issue as we will be purchasing technology directly from manufacturing sources.  In the primary stages, our firms marketing does not need to appear on the packaging.  Theoretically, price points will be below market cost.  This is something this firm will rely on to attract clientele.  Depending on the size of order distribution will vary.  If the order is small, we will need to couple it with orders from other clients.  This will entail breaking up the shipment as it arrives and reshipping to multiple firms.  This may be an opportunity to brand packaging with our firm’s logo.  If the order from the client is sufficient to warrant a full wholesale order, then may be able to ship the order direct from the manufacture to the client.  Distribution will be in the form of shipping using an appropriate shipping company for each order.  It may be the case that the size of the order will determine who will receive the shipping contract on case by case basis.  Ideally customer support for products purchased will be handled by the manufacturer.  Because most orders will consist of computer related goods this is probably the most appropriate method.  These systems will likely come with limited, or extended warranties.  This firm would also like to be able to build shipping insurance into cost.  Thus, shipping firms would be the firms to address issues that arise from that.  The customer experience will include limited interaction with this firm’s staff. 

The firm would need to include at least one staff member to cultivate, and maintain, wholesale distribution network contacts.  It would also need at least one individual with tech experience who would be able to research, and recommend, appropriate purchases to clients.  The firm would also need someone, probably part time, who would handle accounting activities.  This individual would ideally be knowledgeable in nonprofit accounting.  Also, because this is a nonprofit venture legally a board of directors must be established.  This usually consists of local specialists strategically picked to offer advisory advice on business practices and mission statements.

The firms major advantage may be lack of completion.  With few firms, nonprofit or for profit, performing this specific service the barriers to entry dealing with completion will be few.  Also, because this is nonprofit startup costs will mainly be covered by grants and donations.  This makes the risk of entering the market much easier to handle.

In the future this firm may be able to offer other services to clients.  For example, social media marketing consultation.  This service may be a staff member who will spend x amount of hours helping a nonprofit firm establish, and maintain, social media as a marketing tool.  Other services that may be offered in the future may be software training, minor coding training, online accounting training, etc.

Beyond the initial launch of this venture, and following a few years as director, I would like to sit on the board of directors.  This would give me professional time to establish new ventures in the nonprofit sector.  My specialty lies in non-government organizations and their relationship to government organizations in post disaster scenarios.  So maybe something in that arena.

Reflection

I only received one piece of constructive criticism on my post.  I believe this was more of a misunderstanding than a critique.  The statement from one comment was wondering why non profit firms are restricted in their tech purchasing.  It is not that there are prohibitions on upgrading technology it is that nonprofits are reluctant to do so.  This is because legitimate nonprofits tend to put as much funding towards their causes as possible,often times sacrificing competitive advantages in the process.  For this I did not feel the need to amend my concept.

Final Reflection

At first I was a bit intimidated by having to go and speak to strangers about my concept.  However, this fit well with changes I was trying to make in my life.  I have been trying to make a conscious effort to remove myself from my comfort zone.  The exercises that required me to speak to strangers really helped me with my own personal goals. 

I enjoy the fact that I have developed a somewhat viable idea.  It is something that I can continue to tinker with over the years.  If in the coming years I find myself with a few free hours every week it may be something to pursue.  I have checked around and there does not seem to be many other firms in the market so I am not too concerned with anyone starting this up prior to me.  If so, I would be more than happy to help them in a consulting capacity.

I do believe that I have embraced the entrepreneur mindset.  I find myself thinking more about how I can initiate change.  If I run into a wall I still do my usual thing of finding a way around it, however, I now go back and try to think of a way to streamline the process. 

I would recommend to future students that they skip no assignments, especially the ones that are uncomfortable.  Be sure to at least try all of them.  By at least trying all the assignments the grade will follow.  In my opinion this is the best way to succeed and get the most out of this course. 

My Exit Strategy

1.   I selected this course so I would be free to pursue other ventures, however, I would still be involved in this one.  By sitting on the board of directors for however long is appropriate, I will have the time to pursue other opportunities as well.
2.   Because my venture is in nonprofit there is no sale to make in regards to the firm.  What I would like to see happen though is to pass off leadership.  I would like to begin as the director of the firm, see through the formation of my idea, and than hire a new director.  At this point I would seek to be on the board of directors as to help with the guidance of the firm.
3. I don't feel as though my exit had any bearing on the formation of my idea.  I think that the only way my exit has influenced the decision is to design things in such a way that they may be taken over by someone equally as qualified.

Making It Real

https://1drv.ms/w/s!ApDgFTME6CKQhVqtAih0h8Kex3F9

What's next?

Existing Market

What's next?

I believe the next step for my venture to be software training for clients

Interviews

The people I interviewed seemed to think that software, and technical, support should follow.  This is similar to my idea in that I would offer training post purchase.  This would hopefully alleviate some of the technical questions.  When asked if they thought tech support from the manufacturer was more appropriate they agreed.  This has left me concerned about what future product growth could be.

Future Market

I decided to speak to owners of for profit firms about what their needs are regarding technological infrastructure improvements.  They all stated that if a firm offered them below wholesale cost technology they would be greatly interested in investigating that option.  The viability of this is suspect though as I am not sure the firm would receive as much government funding as it would if it solely worked with nonprofit firms. I believe that service costs and donations would still be attainable just not as much, and, with a reduction in grants this may be undo-able. 

This exercise left me in question regarding what could come next.  In the nonprofit sector growth is measured by reaching new clientele and markets, not necessarily offering new services.  To reach out to for profit clients may put funding at risk.  I think that looking into the logistics of offering services to non local clients may be the best shot at growth.  Because not much of this venture requires face to face business I think that internet marketing may be the solution to this.

By offering services on a more national level would probably open the firm up to new grant reception possibilities.  By doing this more funding may be available giving the firm the option to greatly reduce pricing.  Because the purpose of this project is to reduce pricing for our clients, and not make a profit, this may be a viable discussion.

Celebrating Failure

Up until recently I would avoid things that I had a high probability of failing at.  I would dismiss opportunities that had less than an almost guaranteed outcome of success.  I had played it safe for so long, and, had been fairly fortunate things had come out as well as they had.  I realized they could be better though.  Recently, however, I have decided to try to change that.  I have tried to increase my calculated risk taking behavior.  I am not speaking about damaging risk taking behavior, more the "step out of your comfort zone" risk taking behavior.  This semester I have been starting conversations with almost anyone that will let me.  I was not introverted in the first place, but, if conversation seemed like it may be the least bit uncomfortable I would bail immediately.

So here is where I felt as though I was failing.  I would start a conversation with a stranger and realized that I was limiting my conversations to things I knew about or small talk.  This leaves a random stranger without things to say.  So a lot of awkward silences, stares, and "get away from me weirdo" looks.  I was so frustrated with how this was going.  I was so sure I could do this.

Than I saw a picture of a guy at one of the California state universities.  He had a table set up in a heavily trafficked space on campus with a sign that said "I will talk to you about anything you want". I thought to myself "How is he doing that?  I bet there are subjects he knows nothing about".  Than after a little thought it dawned on me, and I felt really dumb. The answer is so easy.  He asks questions.  So easy to talk to someone when they ask questions about them.

Now I almost always skip the small talk and ask a question.  And let me tell you I am learning a lot about people.  The other day I asked a barista "how much do you like making coffee?".  I barely said four sentences during our conversation and by the end I knew a lot of hopes and dreams of hers that many of her friends may not know.  This socialization has become one of the most powerful ways of obtaining information that I have.  I cringe when I think that I almost gave up on it.

Venture Concept No. 1

Opportunity

It is often the case that nonprofit firms fall behind in technological and infrastructure needs.  This is due to the fact that these firms do not reinvest income in the same manner as for profit and government sector counterparts.  One issue that arises from this lack of investment is that nonprofit firms tend to fall behind technologically.  When these firms fall behind they fail to stay on the same competitive level as other nonprofits, for profits and governmental firms.  Currently nonprofit firms must use existing funding or grants to upgrade their technology.  Because these firms are designed to put as much funding as possible towards their missions they often times go without competitive technology.  I believe this will be a continuous opportunity as new technology is continuously emerging.  There currently are few firms that offer the services this idea wishes to execute.  Most of the few firms that do exist are for profit distributors.  As a nonprofit we would qualify to compete for government and private grants that may be able to drop our fees below market value.

Innovation

The service that this firm would provide would be vending computer science technology to nonprofits at, or below, wholesale pricing.  The first few steps to this would include solidifying relationships with wholesale distributors and securing 401(c)3 (nonprofit) status.  As with most nonprofits our income will be a researched mix of service fees, grants, and donations.  We will work with wholesale distributors to ensure the lowest pricing possible.  Our income that does not go to operating costs and salary will then be applied to the products we purchased, thus, lowering the pricing by that much to our clients.  Because our pricing is somewhat determined by competing for government grants our pricing model will be continuously fluctuating.  Service fees will be charged for consultation on technology purchases, however, this will vary firm to firm. 

Venture Concept

Because there are few similar services it may not be difficult to attract clientele.  This service will be new to these firms, which, may make them eager to participate.  The major source of direct competition will come from for profit firms that sell electronic goods wholesale.  A major weakness will be that once the organization is up and running, assuming success, there are few barriers to entry from competitors.  Another vulnerability may exist in that the few competitors that exist are major wholesale distributors.  If they have access to large amounts of capital they may be able to install barriers to entry of our firm. 

Packaging may not be an issue as we will be purchasing technology directly from manufacturing sources.  In the primary stages, our firms marketing does not need to appear on the packaging.  Theoretically, price points will be below market cost.  This is something this firm will rely on to attract clientele.  Depending on the size of order distribution will vary.  If the order is small, we will need to couple it with orders from other clients.  This will entail breaking up the shipment as it arrives and reshipping to multiple firms.  This may be an opportunity to brand packaging with our firm’s logo.  If the order from the client is sufficient to warrant a full wholesale order, then may be able to ship the order direct from the manufacture to the client.  Distribution will be in the form of shipping using an appropriate shipping company for each order.  It may be the case that the size of the order will determine who will receive the shipping contract on case by case basis.  Ideally customer support for products purchased will be handled by the manufacturer.  Because most orders will consist of computer related goods this is probably the most appropriate method.  These systems will likely come with limited, or extended warranties.  This firm would also like to be able to build shipping insurance into cost.  Thus, shipping firms would be the firms to address issues that arise from that.  The customer experience will include limited interaction with this firm’s staff. 

The firm would need to include at least one staff member to cultivate, and maintain, wholesale distribution network contacts.  It would also need at least one individual with tech experience who would be able to research, and recommend, appropriate purchases to clients.  The firm would also need someone, probably part time, who would handle accounting activities.  This individual would ideally be knowledgeable in nonprofit accounting.  Also, because this is a nonprofit venture legally a board of directors must be established.  This usually consists of local specialists strategically picked to offer advisory advice on business practices and mission statements.

The firms major advantage may be lack of completion.  With few firms, nonprofit or for profit, performing this specific service the barriers to entry dealing with completion will be few.  Also, because this is nonprofit startup costs will mainly be covered by grants and donations.  This makes the risk of entering the market much easier to handle.

In the future this firm may be able to offer other services to clients.  For example, social media marketing consultation.  This service may be a staff member who will spend x amount of hours helping a nonprofit firm establish, and maintain, social media as a marketing tool.  Other services that may be offered in the future may be software training, minor coding training, online accounting training, etc.

Beyond the initial launch of this venture, and following a few years as director, I would like to sit on the board of directors.  This would give me professional time to establish new ventures in the nonprofit sector.  My specialty lies in non-government organizations and their relationship to government organizations in post disaster scenarios.  So maybe something in that arena.