Social entrepreneurship may be the buzz word these days. Recently when we won Inc5000’s Fastest Growing Companies award, we were asked how we did it. So this is an article about how we created a company that does well financially by doing good for others.
First of all – what do we do? It’s simple: we help senior care providers collect feedback from their employees and customers (read: survey software) – and use it to help build their brand from the inside out.
It wasn’t easy. Often we swung too far to the “doing good” or too far to the “doing well” – getting the balance right was key.
Here are the 5 principles that we kept in mind.
Principle 1
Start with a big vision – and put a business strategy behind it. Ours is to transform the lives of 10 million people across aging services by 2030. We repeat this mission so often that everyone in our company can probably recite it in our sleep. It’s important to keep a north star. We then created a long term strategy around how we can achieve this mission – both by expanding to serve more customers and to serve each customers more deeply.
Principle 2
Create a business model that is sustainable-and measure it. Having started several companies, I feel like this one is not talked about enough. To avoid being a nonprofit that must fundraise to cover costs (sound like many Silicon Valley startups too, right?), we wanted to build a business that is profitable and grows by investing our profits. Our space is saturated with competitors so competing is very difficult. And so, we created an innovative demand generation model with a customer lifetime value to customer acquisition cost (CAC) ratio of over 25 – meaning for every $1 invested in sales and marketing, we get $25 in revenues. Getting the CAC right relative to our topline revenues was key to being self-sustaining. This enabled us to get to cash flow profitability so we could chart our own growth course.
Principle 3
Create a business model that is scalable-and measure it. Scaling in a vertical saas market like we are in can be tricky. To make sure we were set up to succeed, we measured everything, including implementation hours and resources as well as our product’s backend itself. That way, we could work with any customer big or small as well as a respectable pace of new customers – and know that we could serve them while covering costs.
Principle 4
Hire, evaluate, and fire people based on core behaviors. Critical to any business – and especially one that is socially minded to do good – is hiring and retaining the right team members. We look for individuals who are mission-minded AND work effectively together and with our customers. It’s unbelievably hard to achieve this balance, believe it or not. We cannot and do not pay the top dollar yet the work we deliver is so richly rewarding in other ways. Nobody’s ego should be in the way of our team. What we did was work the first year without stated values, then we met in person in Chicago and created a set of core values (that are verbs so we can see these behaviors). Everyone on the team got one vote, nobody got more than one vote. And from there, we had four values or behaviors – innovating, delivering, empathizing, and being authentic (IDEA for short) – that has guided us on who to hire, how we evaluate ourselves and each other, and when to let someone go. I believe everything thinks this way is fair and transparent.
Principle 5
Have fun – and make sure to see your lived vision! This last principle primarily applies to businesses that do good for others. Sometimes times were so tight that we forgot to celebrate wins – it’s important to have fun. So we invest $50-100 per quarter in a team event, such as chocolate making, segway rides, and other activities. As with many things in life, some of the most meaningful things we do don’t require money. We invite customers and guests from our industry to come share how “staring at computer screens” (ie what most of us do every day) translates into our lived vision out in real people’s lives.
Ok, that’s it. We are still learning and evolving, so if you think we’ve missed something, please leave a comment!
