GD Test Assignment Log

Fri Mar 22, 2013

Fundraising Continued

The most important step is to have a vision, a good company should find the proper grant for the vision, not bend the vision to the grant. What is the overall goal of what OSE should evolve into? Will a $1 million yearly budget be able to provide the funding needed to be considered successful? Will $50 million create a more successful vision of the future of OSE, or are the ideals related to more of research based on time where money is needed yet isn't the overall goal? If OSE had equipment, a facility to build and an operational budget to to meet the research goals yearly, what would that budget have to be? Prior to diving into a specific plan these are questions that need to be addressed as it is impossible to create a map if the destination is unknown.

Typically non-profits are more complicated than a similar size for profit business. In a business the only need is to identify the need of the customer or recipient of the product. In a non-profit there is a need to identify the value given to the donor, as well as the value given to the recipient of the vision or the "end user". In the case of OSE this actually can overlap and be one in the same, donors by way of funding, can help others as well as create something that could inevitably help themselves or others they know in the future. This however is an important aspect to not overlook, concentrating on one more than the other alienate 50% of the business model needed to succeed.

Primarily we should be looking at placing, initially, an individual into a roll of fundraiser that will take on the responsibility of all that has been written so far. That individual will provide more value to the company than just a grant writer as they would be responsible for all aspects of fundraising, not just grants. The ability to utilize an individual in this position will free up the executives to provide that needed charisma and special expertise in their individual areas. This would enable the professional face of the company to sell the dream if you will, excite people and be able to explain to them on a personal level what OSE brings to the world, what it can do and how they can change the world. This can further be followed up by the technical officers ability to get into the proverbial weeds and provide that detail that many investors will want to see prior to making that investment into OSE. The executive team must work as just that, a team to utilize each others strengths and step in when that strength is needed. One individual doesn't need to have all the answers, but the team itself should be able to field any questions or concerns at anytime to anyone, this is paramount.

There seem to be numerous ways to raise $1 million a year, as OSE grows it will become more difficult to raise funds as the amount needed grows, so does the difficulty and effort and man hours required. An interesting find on non-profits, since 1970 out of 144 non-profits studied, those that have grown to over $50 million in size, each grew by pursuing specific sourcing functions. This leads into the previous example of OSE's need to constantly evolve within the fundraising arena to ensure the fundraising is constantly shifting with the needs of the company. Each also had highly professionally developed internal fundraising sources within the company, i.e a section devoted to fund raising utilizing a successful fundraising model. Those most successful also tried to utilize a somewhat predictable funding option such as a government program to try to at least have an idea of an expense versus revenue on a yearly bases. To utilize the fundraising scheme of "Raising more this year than last year" would be a mistake as it is very generalized and does not coincide with a specific goal and is a business model that may work for a very small non-profit.

There are membership based programs that will do some grant researching for you. The proof is in the pudding, don't write about it, prove it. Show the entity that we will be successful regardless, this places OSE in a very fortuitous position of being able to show previous grants awarded to future donors. This needs to be an ongoing evolving process to include initially a position, later a group. We do not want to create situations where OSE is forced into a chaotic fund raising mode. Funding should be a full time venture where the fundraiser works and collaborates with executives constantly to seek advice, elicit help and create new processes that evolve with the vision of OSE.

OSE can look to utilize events that resonate with multiple donors, for instance utilizing a cross country race or marathon type run where individuals participate and pay an entry fee knowing that entry fee directly provides funding for research into a better environment. This requires a large cross section of people and must resonate on a personal level with many people to be successful. However, environmental issues are at the forefront of many world issues and international discussions, in the current political climate it is a good topic to pursue as many people show a desire to correct issue in the environment. The race could involve teams of individuals creating camaraderie in an area that people share a common goal. Imagination is the limit as to what can be done. Red bull has a race where participants create vehicles, the stranger the better. A similar "fun" style could be utilized thought a region, utilizing volunteers to help organize the event.

Also think about utilizing those that are helped directly by a product, this can take much longer to come to fruition however. Example would be Hurricane Katrina, sending a small team in with the knowledge and ability to utilize tools and help rebuild with OSE low cost tractors to clean up areas. After the clean up is complete, many peoples lives will have benefited from the direct interaction of an OSE product. This can lead to both large and small donations from individuals that were helped, as well as governments/ cities/ counties that acknowledge the aid that was received once the rebuilding process is complete. By those individuals and communities being directly aided by a non-profit, you are able to show the intrinsic value of the product that further enables those helped to ensure that help is available for others as well.

The value OSE holds to those donating large amounts is that OSE's vision can be completed with a large influx of money. The ability to research and build the tools necessary is limited in part by the funding to be able to complete this step in the final vision of the program. OSE can create a tangible lasting solution to an issue / problem, this should appeal to large donors as it gives them a goal to work towards completion. OSE already is well established and is able to clearly articulate how large scale funding can complete our goals. Having a "Goal" with funding in mind would be beneficial. The reach that environment issues have and the multiple aspects OSE tools can solve and or areas in society that can benefit from each tool is extensive.

OSE can appeal to many donors on multiple levels. Those that are passionate about the environment will sympathize with the vision of OSE and share the belief that the completion of the 50 tools will help aide in their quest to better the environment. The same could be said for a donor that is passionate about humanitarian aid. The ability to provide a low cost, self sustaining society with simple machinery would appeal to almost anyone. That ability to envision a better life for people that is actually attainable and can be physically seen and the presence felt as the society builds itself would be contagious to others. Yet again, those in agriculture could be see the vast benefit of a tractor that is very low cost, low maintenance and readily repairable by someone with limited funds and knowledge. A low cost or government housing project that is overrun with clutter and trash could have a system that disposes of all waste from residence, while creating an alternate power source and reducing the cost of living for the residence.

The effects from what OSE will build can and will be felt on multiple platforms that could have far reaching implications throughout the world. The unique opportunity that OSE has is the wide range of investors and donors that OSE can appeal to. However in order to best utilize the vast expanse of what OSE can provide, we first must plot a course and as that course deviates, we can then change our goals and processes while always being lead by the overall vision.

Tue Mar 19, 2013

Fundraising 101

To go forward with the fundraising portion we need to take a few things into account when it comes to fundraising. First is the amount you are looking for, ideas for large sums dealing with grants from state and federal typically run from 100k up to over 7 figures depending upon the grant. What isn’t readily apparently is how OSE will fall into certain categories. The Great thing about OSE is we have such a large abundance of tools that need to be created, the individual research required for each tool could be considered for a grant in and of itself. Most grants for start ups and Non-profits seem to come in phases, with the first being a research grant and or proof of concept. This is typically much less than the next phase which would be full on production, or putting your “plan” into action. Some areas that I have investigated are any and everything dealing with humanitarian aid. The OSE project falls nicely into this area as a large portion of the tools created could be utilized for clean up and rebuilding efforts. Another large seller here is the cost of production and the ability to build the machines/tools with almost no technical background. This also fits in very well as most areas requiring large amounts of aid are typically developing nations whose technology and or ability to create similar machines on a massive scale is limited.

Some lessons learned from others from my research have been aside from government and state grants, another avenue to look at would be private donors. Private donors fall into multiple categories, to keep it simplistic I’ll deal with major donors, and everyone else. Major donors would be contributing a significant amount of fund comparatively to what is required for operational sustainment. Dealing with major donors is going to take time as they like to get involved slowly, learning about the organization, getting involved with programs events and providing advice and guidance with the program. Taking all these factors into account, the first step should be to increase the digital footprint of OSE, create and or disseminate information about the project in an easy to research way. Easy access and the transparency that OSE already provides in an intuitive layout would help in providing that constant information to future donors, major donors or anyone else. Typically whether you are going to contribute a significant amount of funds to a cause or just a small portion, sometimes it is relative. One Hundred dollars for someone may be a significant percentage of their overall net worth or ability to give, where as $100,000 for another individual may not, to them, be as a significant. These individuals should not be treated any different with the amount of information given and or available to them, especially when OSE is considered open source technology. That ability to disseminate information is paramount to keep initial interest for the donor. I believe this is an area that we can vastly improve upon, and should immediately as we don’t want any donors not having enough information at their disposal to make a decision to donate to OSE.

Piggybacking upon the first step would be making an effort to reach out to prospective donors. Whether this is through social media, phone calls or events, everyone should be given an opportunity to contribute and or interact and take part in OSE. If OSE truly wants to change perceptions and thinking of the general population, knowledge is power and that knowledge should be passed on to as many people as possible. This works in multiple ways, six degrees of separation for one as word of mouth is a great way to attract potential donors. Making people feel as if they are not only a part of the change, but creating an atmosphere of change through participation. Now what options for participation would yield the greatest benefit to reach out to individuals? Social media is used throughout the world, if Gangnam Style can receive 1.4 billion hits, OSE should be able to increase our online presence and digital footprint from where it is at. The Technical Community Manager will play a vital role in creating a “community” that enables easy access in a more user friendly style. Although OSE utilizes open source, we must also realize that the vast majority (99%+) of potential donors utilize mainstream systems such as, I-phones, Apple computers, Windows systems, android systems and tablets. Our web based community should be focused more on the user. So far OSE has done a great job, the Community manager should focus more on ease of access and organization. Another aspect the Community manager should expand on is the success of the prototypes this far. OSE has a significant amount of success so far, yet more emphasis is placed on small do it yourself informational videos and less on the application of the product. Both should exist is separate areas. Once the individual arrives at OSE’s digital home they should be presented with the option of first seeing what the tools are capable of, not just a 30 second video, but a significant write up and picture library as well as video’s to showcase the enormous amount of success OSE has had thus far. So far OSE has received one of Times best inventions, yet you can find more information, pictures, videos and how to guides on the latest video game. People that are interested in OSE are at the very essence a customer, whether that customer is going to utilize OSE’s open source technologies to build their own tractor, or perhaps they are researching a great non-profit to invest in. Everyone that walks through the digital door should be “sold” on what OSE is trying to accomplish. That starts with the Idea, and what better way to sell the idea than with concrete evidence of its ability to succeed with working prototypes. Again, new material constantly as well as updating where and how media is accessed at OSE. An area that I feel has been neglected that could be utilized much more is the work shop. OSE has fully functional building created from clay that should be detailed in every way on the site. This not only appeals to investors as individuals, but to communities, cities, countries Worldwide that otherwise may write the building off as a temporary structure. When given extreme detail of the process and the end state, it could be a very large selling point for the tools OSE builds for disaster relief, or even a revitalization projects in areas globally. Investors, donors are not only interested in the idea, or the tools, but more importantly WHAT the tools can do. Show them!

As stated above, the first step to not only reaching out to the largest audience possible, but to grab and keep their attention is to utilize OSE’s website to a much greater extent. This allows us to touch the largest amount of people with the smallest investment. Having the utmost confidence in OSE’s website is also huge plus when answering questions to prospective donors. After you have spoken with them, they will inevitable find their way to the website, and knowing that a vast majority of their questions could be answered in a quick and easy fashion will keep that interest level high.

As most donors will not make an on the spot decision, it is important to give people the opportunity to get involved slowly, or as quickly as they like. Creating events in multiple areas such as Kansas City, enabling people to see first had what OSE has built. Other areas of interest should be importing tools, or prototypes to the New York facility, this would enable easier access for a more affluent crowd of investors to see first had up close and personal what OSE is capable of. Events should be utilized, and of course at first the will be small, however patience should be utilized as the more OSE has, the word will spread and more and more will come. Utilizing a huge population in such a small area as NYC should be utilized to a greater extent. Having prototypes in house will enable those interested, but perhaps not ready for an “onsite” visit yet, to become more involved and have a physical aspect to what OSE is accomplishing. Event ideas that should be incorporated would utilize OSE’s tractor and place it against another typical front loader of a similar size and shows the differences in complexity. The ease of repair as well as the ability to add other tools making it multi-use similar to other tractors will show the diversity of what OSE has built. These comparisons will show how open source technology can give people a similar product, at a fraction f the cost. This can provide that “wow factor” if you will to potential donors. And example would be to place the OSE tractor against a rented S130 Bobcat, show the OSE tractor is similar in size, power and ability to work. This couple with the fact OSE’s tractor has many of the same add on’s as the bobcat however at nearly 1/8th of the price. If you were an investor and saw two similar tractors performing nearly the same work in the same amount of time, yet one was easier to repair, you could built it yourself in a day or two, it costs nearly 1/8th the price, what would you invest in. Ideas, videos and pictures are wonderful; however events that provide proof and evidence of what OSE has accomplished will be paramount in securing larger donations.

Sat Mar 16, 2013

As I don't know much of the in and outs of fund raising I'll start from the beginning as when this is handed down, someone in the same position may know as little as myself. Some common financing option for a new or recent start up business along with the pro's and con's are:

Personal Savings:

Self explanatory, utilizing what money you can generate yourself from working or savings.

Research - over 50% of small business and non-profits are financed this way. Doesn't work when initial operating expenses are very high. Approx 50% of small businesses don't survive the first two years of operation.

Advantages - Total ownership, ownership of profit and complete control

Disadvantages - Significant liability as what you bring in will make or break, also limited to your earning potential. Very slow process to raise capital.

Thoughts - As this company is already far beyond what a single personal savings could accomplish (unless you have a very large savings account of 9 figures), I will move onto other ideas.

Boostrapping:

Start with a small investment, start the business, which OSE already has, then utilize revenues to grow business.

Advantages - same as Personal savings however this would take significantly less time to raise capital.

Disadvantages - This works in limited scenarios, although we may be able to work utilize prototypes to help in this area.

Thoughts - We would need something to create revenue with such as marketing and selling kits, such as having a crate with Blueprints and DVD instructions included with all of the necessary parts to build a tractor or some other prototype that is far along. Then market the "kit" to areas and ship the kit for revenue to put back into the business, keeping the "non-profit" in place. As of now I don't think this is in place, although it could be taken from idea to reality fairly quickly, the amount of revenue or capital raised would be difficult to estimate. Could have large earning potential.

Loans:

Borrow money from a bank, individuals etc.

Advantages - Similar to self financing, however, Loans are based on the ability to pay back, and as of now I don't see any revenue coming into OSE, this could be utilized if necessary if the above idea with kits were utilized.

Disadvantages - Perfect credit to financing something risky, I believe Banks would view OSE as a risk in regards to rate of return for the Bank. Interest rates would also be very high due to high risk aspect.

Thoughts - Could be utilized to create a new branch, or if a quick influx of money was needed for something, but probably not a legitimate source of funds for anything else. Also creates collateral issues, if something were to happen the land/ business would be seized and sold.

Venture Capital:

Comes from a group of investors that aggregate a pool of money to be used by a Venture Capital Firm to fund starting companies. The start up company then would give equity and or stock in the company in order to receive money. the investors are basically getting in on the "ground floor' making their money on an "exit strategy" which would be the sale of their stock once the company is offer public, or once the company is large enough that the stock prices are worth substantially more.

Advantage - Large amounts of money quickly

Disadvantage - Need to have a solid business plan to convenience VC, as well as giving up equal capital so the VC own part of the business.

Thoughts - Most new technology ventures are financed by Venture Capital due to having a higher "risk". Banks are much more likely to invest in "safe" ventures that have the ability to be paid back or something tangible to recoup losses if necessary. Although new ventures are unpredictable they can produce a very significant profits if successful.

Grants: Free money from Agencies, "investors" that believe in your cause, foreign governments that may want to utilize the technology.

Advantage - Money doesn't have to be paid back, great way to expand a non-profit with zero risk.

Disadvantage - Extremely time consuming process for each grant, many companies specialize in grant proposals to increase the likelihood of receiving a grant. Would need to hire someone to work full time on grant research and grant proposals.

Thoughts - Another route I believe would be a positive way to proceed with. It would take additional manpower, however the first grant or two should more than pay for the cost of the man power needed. Also, no risk involved other than the funds needed for the manpower.

ICrowd / True Fans:

Although not officially operational yet, it is a community of investors and inspired entrepreneurs that want to help small businesses and non-profits succeed. It works similar to a social media site in where investors can sear the site and or be grouped up with businesses that match their criteria for investment.

Advantages - Seems like a good way to reach a vast amount of people, although individual contributions would be small, the overall sum of the whole could be significant.

Disadvantages - Site is still in a developmental stage

Thoughts - although not up and running it is a similar idea to the Tru Fans concept in where the individual contribution is small but the over all contribution is significant. Like with the Tru Fans, it would HAVE to be marketed and someone would constantly need to scour the Internet for areas to make OSE known. Ideas such as this thrive on quantity of individuals reached. People want to constant information, how what they are contributing is helping and what exactly is transpiring on a daily basis. This I believe would have to be the domain of the Community Manager, constant updates to make each individual contribute feel as if their 5$, 10$ or 20$ a month was extremely important or significant. Emails, updates, constant new video streams etc would be mandatory.

Overall Conclusion

Bootstrapping, followed by Grants and an Icrowd / Tru Fans concept, would best utilized for the well being and protection of the company. Other options are viable, however I would only consider them after the previous are exhausted.

Why I placed Bootstrapping first? Bootstrapping would be something we could control with very low capital needed to begin the process. Prototypes are already built, along with instructions (blue prints, DVD's) being constructed presently. The kit's would be on an as ordered basis. Once an order comes in the customer would be given a lead time depending upon the amount of orders processed before them. All materials would then be able to be purchased/constructed with the order, boxed and shipped at buyers expense. Obviously there would be a large learning curve, the first lot of kits sent out would probably net close to zero profit until the process is fie tuned. However, once the process is in place, the ability to generate funds for OSE would be limited to the customer base we could reach. This could also be the basis in later stages for a "for profit" section. This would also have the added benefit of creating a working laboratory where technicians would be able to perfect instructions to decrease build time as all kits should be assembled and disassembled to ensure fit and function prior to shipping.

Grants would be a close second as it involves zero risk and only requires the investment of employing an individual. An added benefit is due to OSE being considered a "Green Company" there are numerous grants from not only companies but governments all over the world. Utilizing the non-profit as well, this should be a major source of income considered OSE is in the area sustainability, and more and more companies want to be seen as environmentally friendly and adding to society in a positive way.

Tru Fans/I-crowd is a great idea, would need a community manager to utilize this aspect. OSE would HAVE to have a significant online presence all over the world. Constant updates would be needed to contend with today's growing thirst for knowledge. People want transparency (which OSE has) as well as constant information about everything. Webpages and social media would have to be very professional and polished, as well as containing update material almost daily. Very important position to fill for OSE regardless of what route is chosen. In today's business environment, social media can be a make or break avenue.