Wednesday, March 23, 2011

Phone calls are dead

At least, according to this New York times article:
"NOBODY calls me anymore — and that’s just fine. With the exception of immediate family members, who mostly phone to discuss medical symptoms and arrange child care, and the Roundabout Theater fund-raising team, which takes a diabolical delight in phoning me every few weeks at precisely the moment I am tucking in my children, people just don’t call....
Whereas people once received and made calls with friends on a regular basis, we now coordinate such events via e-mail or text. When college roommates used to call (at least two reunions ago), I would welcome their vaguely familiar voices. Now, were one of them to call on a Tuesday evening, my first reaction would be alarm. Phone calls from anyone other than immediate family tend to signal bad news."
In some ways more interesting than the article are the comments, which include some agreement:
"I haven't used a phone for casual conversation since the late 90's. Anyone I really want to talk to for more than 5 minutes, I'll spend time with. Texting is efficient and cheap. What's not to love?"
 and some outrage:
"... there is nothing fashionable or stylish about what is a great indication of a society of persons who isolate from one another. This behavior has led to increasing prevalence and incidence of mental health disorders, which cost the country more than we can afford in costs related to treatment and loss of productivity."
The irony of this article for me was that I was monitoring Impact Dialing while reading it and watching as almost half of the dials we made were answered! Apparently more than just a few Luddites still answer their phones. Next post, I'm going to talk about multi-channel fundraising, so I'll leave with this final comment from the New York Times article:
"I think we make a mistake when we presume that our attachment to a particular method of communication is "right" and that others are "wrong" or somehow a dire reflection of societal ill. I work in an industry where I listen to people in person all day and use the phone to make confidential appointments. I text and email family, colleagues and friends. However my cousin works at home exclusively at the computer and in her spare time wants a phone or in person conversation because she has had enough of screens, keyboards and isolation. We have different lives and different needs to balance. That seems okay to me. And great to have the options."

Thursday, March 17, 2011

Impact Dialing's Lean Startup Model

[This post is part of the Lean Startup Challenge. Post a comment wishing us luck!]

I didn't want to start Impact Dialing at first. I had been looking for a predictive dialer to help Equality California call voters about same-sex marriage, and I couldn't find anything I liked. All the dialers were expensive, difficult-to-use, and not scalable. I once even suggested to the CEO of one of my now-competitors that he look into technologies like cloud computing, which provides computing power on demand, and voice over IP, which can be used to provide telephone lines on demand. He brushed me off. Finally, an acquaintance said to me, "There's a market out there. Why don't you just build it yourself?" 

I didn't have a lot of savings to invest, so I knew that Impact Dialing needed to make money as quickly as possible. I had heard of a company called Twilio that makes it simple to build web applications that interact with phone lines. This would help us build our dialer quickly. Twilio's pay-as-you-go pricing was appealing, too: we wouldn't have minimums or up-front costs, so Impact Dialing could cover its phone bills by requiring customers to pay in advance, and then using that money to pay Twilio. 

Likewise, we chose to run our software on Amazon Web Services. Amazon lets you "rent" virtual servers on-demand, so we could seamlessly grow our capacity as our volume increased. Services like Twilio and Amazon have made it possible for people like me to start companies with minimal funding. 

My business partner, Brian, who does our programming, decided that to program with Ruby on Rails, an application framework that makes it incredibly fast to build web applications. We also used a pre-built CSS template, which defines how a web page looks, so that we wouldn't have to spend time building our own look and feel (which can take a lot of time!). 

With the technologies picked out that would allow us to start quickly and at minimal cost, now I had to define our product. Once again, I was focused on getting to market as fast as possible. I made a list of all the features I would like to have, and then crossed out everything that wasn't absolutely necessary. We would build the minimum viable product, start selling it, and then build new features as we went and as our clients and leads requested them. 

In less than five weeks of writing our first line of code we launched Impact Dialing and started selling it to political campaigns. We released new features and bug fixes on an almost daily basis. A couple times, someone was interested in using our product but really needed a feature we didn't have, so we built the feature and released it within a day or two. And by the time the November elections were finished, we were already profitable!

We've continued to work hard improving Impact Dialing, building new features and making the system more robust. We've enjoyed keeping the company small - it's still just me and Brian - but we've started to think about bringing on investors to help us grow more quickly than we can on our own. I would love to go to more trade shows and events to promote Impact Dialing, but we've got a tight budget that forces us make hard choices (which can be a good thing, too!). And both Brian and I have other jobs that help us pay the bills, though we'd love to work on Impact Dialing full-time. 

Recently, I heard about a contest called the Lean Startup Challenge that offers funding to lean startups, and given how lean Impact Dialing is, I figured we'd be a pretty good fit. Wish us luck!

Monday, March 14, 2011

"Data Mining: How Companies Now Know Everything About You"

Turning this post over to Time magazine for a great article on data mining:
"Part of the problem people have with data mining is that it seems so creepy. Right after I e-mailed a friend in Texas that I might be coming to town, a suggestion for a restaurant in Houston popped up as a one-line all-text ad above my Gmail inbox. But it's not a barbecue-pit master stalking me, which would indeed be creepy; it's an algorithm designed to give me more useful, specific ads. And while that doesn't sound like all that good a deal in exchange for my private data, if it means that I get to learn when the next Paul Thomas Anderson movie is coming out, when Wilco is playing near my house and when Tom Colicchio is opening a restaurant close by, maybe that's not such a bad return."
 Check out the full piece at,8599,2058114,00.html.

Friday, March 4, 2011

Acquiring new donors

Acquiring new donors is difficult because acquisition campaigns usually cost more than they raise. The donors acquired, however, give enough in subsequent donations to make up for the price paid to acquire them, but acquisition presents a cash flow problem because of its upfront expense. Let's start with what a typical acquisition campaign looks like.

Most acquisition campaigns are through direct mail. A non-profit rents a list of names and addresses of potential donors from a direct marketing company or another non-profit, mails them, and a small percentage donate. For example, an organization might mail a list of 10,000 people. Each letter costs 60 cents to mail, for a total cost of $6,000. 50 people donate, or 0.5% of the list. The average gift is $40, raising a total $2,000. The net cost of the campaign is $4,000, and each donor costs $40 to acquire. To re-coup the cost of acquisition, the organization needs to raise one more gift of $40 from each donor.

There are three main elements I'm going to explore that influence the cost of acquisition: list source, channel (mail, phone, email, etc.), and amount asked for. Of course, there are many other important considerations, such as the framing of the ask (does getting a celebrity to sign your letter help?), timing (if your issue is in the news, people are probably more likely to donate), the wording of your letter or script, and so on. I'm going to focus on the first three elements, because there is more research on them and they are, in some cases, easier to test.

But I'm going to leave this post at here for now so that it doesn't get too long. Next time, I'll talk a little bit about some testing that's been done to lower the cost of acquisition. If you've ever done a fundraising experiment or test, I'd love to hear about it, either in the comments or directly.