Lessons From The IBA 2019 Accelerator - Part One
I’m one of the team running the Indigenous Business Australia 2019 Accelerator, travelling between four cities over four months to train the next round of top Indigenous social entrepreneurs.
We’ve had six full days together, and the culture amongst the teams is fantastic.
When you have a room full of kindred spirits who trust each other, walls come down and vulnerable conversations emerge.
Here are some of the pivotal moments and conversations from the program so far:
I have little patience for “Mission Envy”
Some people feel like their social mission isn’t as noble as others, leading them to feel ashamed, comparatively selfish or inadequate.
My gentler colleagues go for “soft reassurance” whereas I feel the need for “swift disagreement” – this kind of Mission Envy needs to be quickly hit on the head.
If we’ve selected you for the program, we clearly like what you’re doing.
Just because you only help a few people at a time doesn’t mean it’s not important work, and creating employment and stability for your family definitely counts towards your impact model.
If you can build a business with a strong foundation, you’ll be able to do more of the mission work that you feel is important.
Please don’t be jealous of someone else’s impact model, they’re probably jealous of your business model and laser focus.
Your Theory of Change is your recipe for success
I find the best way to think about a Theory of Change is like a recipe.
A recipe is a promise – anyone who takes these ingredients (inputs), combines them in the right order and cooks them for the right time (activities) will end up with a good cake (outputs).
That cake can then be used to celebrate a birthday or special event, creating happiness and fond memories (outcomes).
The recipe has to be good enough that it works for anyone who follows it properly, it doesn’t only work when cooked in your special kitchen.
Vice versa, anyone who deviates from the recipe (e.g. substituting chocolate for carob, or cooking at a higher temperature for a shorter time) probably won’t end up with a great result, because each step of the recipe is designed for a good reason.
That’s why you should be fascinated by your own Theory of Change; it’s a way of codifying a recipe you’ve seen work multiple times.
You’ll want to record all of the factors that are needed to succeed, as well as removing all of the extra flourishes that aren’t essential for the end result.
It also changes what you promise – you want to guarantee that the cake will rise (within your control), but not guarantee it will be the best birthday ever (out of your control).
The Resistance is very real
In the book The War of Art, Steven Pressfield describes the invisible-yet-very-real force within us that hinders our progress and development; he calls it “The Resistance”.
The Resistance is the voice in your head that second guesses your decisions, raising fears and doubts around your competence and your creative projects.
The Resistance is your inner critic, and the most dangerous thing about it is the “good reasons” it throws at you, encouraging you to take fewer risks.
When entrepreneurs tell me about their issues, it’s very rare that they’re stuck on four different fronts.
Instead, they’ve created a narrative around a bottleneck, and can’t proceed until it’s resolved:
“I can’t arrange that meeting because my business cards haven’t arrived, and they were slow because my niece took forever to finish the logo.”
“I can’t pitch at that event because I don’t know how to answer the questions the judges will ask.”
“I need feedback on my business plan and my advisor is being slow in responding to me so I can’t grow until they tell me what to do.”
Interestingly, The Resistance is easy to spot in others, especially when you know its name.
That’s why being in a cohort is so valuable; if you can name it for others, perhaps they can name it for you?
Nobody is naturally immune from The Resistance
Some entrepreneurs look incredibly confident, approaching each hurdle without fear.
We tell ourselves “That’s just them, they don’t have The Resistance but I sure do.”
This isn’t true – just ask them.
Confident entrepreneurs are not born fearless, they’ve just built more muscles for squashing The Resistance.
The first time you fight The Resistance is the hardest – every fight after that gets easier but it’s still a fight.
My suggestion; don’t ask these people how they are fearless, ask them what tricks they use to fight their fear – I bet they have an interesting answer.
Do you want the moral high ground, or do you want to grow your business?
A dirty trick of The Resistance is that it uses the moral high ground to slow you down.
Going back to some of those earlier examples, maybe you have every right to be annoyed at your niece or your advisor for not doing what they said they would do.
That gives you the moral high ground.
Do you want to prove a point and establish your “rightness”, or do you want progress?
Maybe you needed a different logo designer, maybe you need a different advisor.
Maybe making this change is annoying, but perhaps it allows you to keep making improvements to your business and chase good opportunities.
What if the decision to defend the moral high ground prohibits you from pursuing clients?
Are you happy to forfeit a fight you know you can win, in order to pursue a fight that genuinely matters?
Loans are not a prize
Pitching for investment sounds like a competition, and there are certainly benefits to being able to impress an investor.
However, unlike a competition investment is not a prize – it is very expensive money.
I’m glad you were able to satisfy their criteria, but that loan isn’t necessarily a victory.
If the business works, the loan won’t be an issue.
If the business doesn’t work, that loan becomes a very real issue.
Either way, my focus is on making the business work, rather than focusing on attracting investment.
Your pitch might need three photos
During pitch practice, I had three entrepreneurs describe their businesses verbally.
“We sell skincare products that…”
“I sell bedsheets with indigenous prints which…”
“I harvest the seed of the Boab tree and create…”
Each of these ideas becomes 300% more interesting with three quick photos.
e.g. show us a photo of the Boab tree, someone harvesting the seeds and a photo of the final product.
Show us the sheets in their package, in a nice bedroom, and a close-up of the luxurious threads.
Show us the skincare products, the branding and packaging, and someone applying them on their skin.
This adds so much to your credibility, and will make the audience pay attention, and there are surprisingly few scenarios in which you can’t show someone three quick photos (especially if you save them on your phone).
No I will not send you the recording of your pitch
I had a funny exchange with one entrepreneur, who was not keen on me filming her first pitch.
I recorded it anyway, and she did reasonably well.
Surprised at herself, she asked me to send her the video so she could memorise what she’d said.
Absolutely not.
Why would I want you to lock in the worst version of your pitch?
Yes it was good, but by trying a few variations of the pitch you’ll find new gems that make people nod, laugh or make them excited to buy.
If you memorise today’s version, those gems won’t emerge.
What are/aren’t Revenue Streams
I’ve changed the way in which I teach financial modelling, now beginning with a session on designing revenue streams.
This requires a clarification on what are/aren’t revenue streams.
Obviously: selling a product, selling a service, selling access to a shared resource, membership to a club, etc.
Less obvious: selling advertising to your audience, licensing your intellectual property,
agent/broker fees, etc.
Not revenue streams: one-off donations, winning a pitch contest, grants, taking on debt, selling equity, finding money in the street, winning second place in a beauty content and collecting $10
Yes, some of those are sources of cash, but they’re not what we’re talking about when it comes to sustainable revenue streams.
e.g. a grant can start your business, but very few businesses are able to consistently rely on grants.
Creating rules of thumb around pricing might ease some guilt
There’s a common guilt amongst social entrepreneurs when it comes to pricing strategies.
On one hand, they want to be accessible to everybody.
On the other hand, they want to take advantage of the top part of the market.
The temptation is to set a compromise price somewhere in the middle, but perhaps a better solution is to have two price points.
This is essentially a sticker price and a discount price, and you can adjust the discount as you see fit.
Tim Ferriss talks about his approach being “Free or Full Price”, allowing him to charge without apology and to do pro-bono work without this being a source of conflict.
I like Marc Andreesen’s advice: raise prices.
You may as well charge properly in the early days, it won’t put off your true customers, and it buys you some breathing room as you evolve the business.
Would you feel better if you had a credible and high price point, with the ability to offer discounts up your sleeve?
This allows you to charge when the opportunities arise, and lower the bar for those with a lower budget as you see fit.
I’m really enjoying working with this cohort, the culture amongst the group makes each day a delight.
It’s great to see their businesses take shape, and to see our ugly questions prompt beautiful ideas.
