Welcome to our new series, Launch Plan, featuring deep dives into the founding stories, journeys, and decisions behind the organizations, collectives, projects, and people changing the world of doing good. We’re kicking off the series with Andrew O’Brien, the founder and CEO of GoodBox.
GoodBox is a fast-growing social impact start-up that was founded in Manchester, England and is aiming to land in North America by early 2020. GoodBox builds technology solutions that bring donors closer to their favourite causes, with the goal of streamlining giving for nonprofits and the causes they champion.
From Idea to Company
We launched back in 2016. My background was investment banking, and while that was a wonderful career, I think a desire for self-actualization and doing something more meaningful drove me to keep my eyes open for other opportunities.
This was around the time when Uber was disrupting the taxi space and Airbnb was disrupting the hotel space. Elon Musk was making rockets; Paypal was disrupting payments. You had these companies coming in and disrupting conservative industries which otherwise wouldn’t have been assumed to be a focus of innovation.
What really sparked this all for me was one report by House of Lords that found that charities are lagging behind other sectors by five years when it comes to digital technology. In the ‘80s or ‘90s that may have been manageable, but given the rate of change of technology today — coupled with the demise of cash, a staple of charities’ revenue generation — that lag is borderline catastrophic.
So it stuck with me. Was this something that perhaps I could help with? I have no background in payments. I struggled to turn on computers. But maybe that layman approach gave me more perspective as to our target customer — I was applying the same set of rules and expectations onto myself as I’m sure they would on us. I started to think about it more and flesh it out.
It’s a very unique sector, the charity sector. It often struggles to inwardly innovate due to the scrutiny of overheads, because we measure the efficiency of a charity not in how much it raises but in the percentage of that which is spent on overheads. The result of this is that everything is about managing costs, making it very difficult for charities to really step up and do things differently.
This triggered the thought: “Wait a minute, what if we stepped up and tried to create these solutions that charities are struggling to build themselves? What if we could be the external innovator that solves a lot of their problems?” And thus GoodBox was born.
Growing As You Validate Ideas
The failure rate is incredibly high in the startup space. You see a lot of founders and entrepreneurs that come in so motivated, having watched videos and listened to motivational speeches that say, “Pursue your dream, go for it, you only live once — take a leap of faith and you’ll be rewarded in the end.” Quite often, I just don’t see it as being that way. People take an excessive risk — they really step up and go for it, when what should have been done is to be careful: understand the market, verify that there’s the potential of this, source some potential investment, close a small round.
When we first started GoodBox, it was about creating a minimum viable product — a product with just enough features to get the job done in a meaningful way — that we could trial at a few locations, and consuming as much data as possible. Thankfully there was an early trial conducted by another company in 2016 — very much as an offshoot project, with a donation unit in a coffee shop — that we could look at. They found that nearly one in five people that paid for their coffee with contactless went on to donate when prompted to do so by the barista. We reviewed the numbers and said, “Wait a minute, there’s a really nice opportunity here.”
We began exploring the idea more in depth. We had a couple of early trial partners, one being Teenage Cancer Trust, which is a wonderful charity in the United Kingdom. We 3D-printed some nice-looking boxes, which concealed Samsung phones and traditional payment terminals connected via Bluetooth. From the donor’s point of view, they only saw an HD screen featuring charity messaging, but underneath, it was quite a complex set-up.
Our first trial location was in a spectacular venue in central London, the Royal Albert Hall. And we raised over $9,000 with these five prototype units. Given that the cost of each unit was $320, the return on investment was incredible.
Now, these units weren’t built to last, and they were certainly falling apart by the end of the five-day set of events. But what we did demonstrate was that there was a keenness both from the charity sector to try these things and from a donor base to adopt new methods of fundraising. So we leveraged that trial data to build an evidenced business case, then set out to close a much larger round of funding, with a goal of fundraising close to $4.5 million.
Challenges Are Just Barriers to Entry for New Competitors
In that first trial with Teenage Cancer Trust, we identified a lot of inefficiencies, which we felt would be solved by creating a bespoke solution and would effectively allow us to build barriers to entry for current and future competitors.
It’s so important as a business to figure out what your barriers to entry are and how you can differentiate by identifying them. Identify not just what your barriers are now, but where the evolving landscape is going, because there will be a lot of very successful companies looking at what you’re doing. You need to create a fantastic product which is just a bit out of reach in terms of their roadmap and current capabilities, and just not worth their time pursuing given the head start you’ve achieved.
My chairman once told me every company, before it succeeds, stares down the barrel of a gun three times. I feel like we’ve done it twice so far, so I’m going to be very vigilant as to where the next existential crisis will come from.
Our first barrel-of-a-gun moment was funding — we had 10 days of funding left early on in our journey. We had a couple of people working for us at the time and we were obviously concerned for their wellbeing, and we just had to get over that line.
The second moment came when our key payment partners had to pull out — we were basing our entire build on this relationship. But what I’ve found in hindsight is that the best progress is achieved when facing the greatest challenges. It’s those moments where you get that feeling in your stomach, when you’re thinking, “Oh my god, what have I done?” that you’re forced to think outside the box. What you often find is that the solution that you’ve come up with has actually created another barrier to entry, because inevitably, other potential competitors will face the same problems.
Democratizing Access to Technology in Philanthropy
GoodBox aims to democratize technology access for charities. We do know that many very successful charities — wonderful charities — can find the resources to try and fix a lot of these problems themselves. But many smaller charities that champion equally wonderful causes are left behind. There is no direct correlation between the size of the charity and the importance of the cause, but there’s a divergence in the success rates of charities.
So when it comes to the democratization of charities’ access to technology, agility is required. We allow charities to choose different payment plans based on their needs: if you’re a large charity and have a good volume of transactions going through, you can choose to pay a monthly fee to reduce transaction costs. If you’re a small charity, you can pay zero monthly fees and instead pay with a small portion of each transaction. We’re also very modular, so charities can pick only the features they need. You don’t pay monthly service charges for our hardware, and you’re never tied to a contract. We try to make sure access to our products is as agile and nimble as possible for our clients.
On Choosing to Launch as an Enterprise
In terms of the pricing and the models that we try to deploy, and to get the attention of some of the supply chain that we’d been working with, we found the path of least resistance was to exist as a for-profit. We spent a long time questioning whether we should be not-for-profit or for-profit, but in the end we concluded:
“Well, look, if the founders don’t care about the ownership themselves, then there’s this ability to be generous within the context of a for-profit company to drive change and perhaps do things more quickly than otherwise would have been possible.”
Otherwise we would have been subject to many of the challenges that charities already face themselves, like handling overheads.
We also feel that impact investment is a growing space, and many different funds are looking for opportunities that make the world a better place, yet still drive a return. We were very keen to offer them a structure in which they could do that by investing in GoodBox. And we’re very fortunate: we have over 700 investors who are now GoodBox ambassadors — from tennis player Andy Murray to insiders at Visa. We feel like we have the right people surrounding us to help us drive progress, both big and smaller players, and who we’re very proud to count as ambassadors.
Ultimately our ambassadors act as an extended salesforce for us at GoodBox: they attend events, share our vision, and introduce us to new potential clients. The result of this is less spent on sales and marketing, and more investment into new and exciting fundraising tools.
Another reason we launched as an enterprise: I was always very keen to hire people who would otherwise be going to work for some of these major Silicon Valley companies, and incentivization does help. It was never about trying to make as much money as possible. I own very little of the company: I’ve given most of it away either to the team to make sure that they feel like owners of their work and show up excited every day to make a difference.
On the Future of Philanthropic Tech
If we deal in the flow of the transfer of funds from a donor to the destination cause or charity, then none of those things — cryptocurrencies, crowdfunding — can be ruled out. However, there are some very capable players out there right now, so in some instances, it makes sense to partner up and consolidate into one place, rather than having charities endure multiple sources of permissions, sign-up processes, and documents, and it benefits everyone involved.
When it comes to the future of philanthropic tech, though, the real focus for us is on the psychology of the donor. At the end of the day, a dollar earned at the expense of a frustrated donor is not a dollar that benefits the charity sector as a whole. We’re running a project internally at GoodBox called Good Newton, based on one of Isaac Newton’s three laws of motion: for every action, there’s an equal and opposite reaction.
We applied that to charity — what if for every dollar donated the feel-good factor that’s bestowed reciprocally is equally as important? By balancing this experience of giving, you can raise the bar for everyone. You need philanthropists to be equally as excited as the charity champion. With technology, we can do that. With some of the fantastic things we’re planning to launch, you can give people experiences, so that when they make a donation, something happens around you.
It’s really about finding new ways to unlock the potential of giving in this world. We all want to be good and we all are good, so why do so many of us feel frustrated when we give, when that dollar very often goes to people who are desperately in need or to causes to treatments or to research? That’s the knot we’re trying to untangle with technology.
Advice on Starting a Social Enterprise
What would I tell anyone just starting out? Well, one, you need to be determined. Two, play it safe to start. Don’t go gung-ho. And three, find yourself some great people with which to surround yourself when it comes to realizing these ideas and creating the business — find people who are open to evolving, because the right sort of leader for each stage of the company is actually a very different person. And finally, embrace challenges, because they typically make you better at what you do.