What is 33needs?
In 50 words or less, what significant unmet social need is your company addressing?
Social entrepreneurs need a disruptive financial innovation. They need a platform, a bridge to connect with the pool of seed capital in the hands of our friends, our family, and the growing number of people who believe a for-profit model allows for a deeper, more sustained impact than a traditional non-profit.
You can view a manifesto (of sorts) here: http://huff.to/9dBjjB
What innovative product, service, or business model are you developing to address this need?
We're flipping the standard funding model on its head.
33needs is a web application that connects the entrepreneurs solving our world's biggest needs to micro-investments. At our core, we're a deeply social experience to finance change. We know the desire to connect is so deep in who we are, and our platform is built around that truth.
We're kind of like the App Store for social ventures.
We're trying to increase the number of social impact investors just as we're increasing the number of social ventures. Think about how the Obama campaign flipped the standard campaign fundraising model on its head through harnessing small repeatable donations from the crowd.
33needs turns a 21-year-old college kid, the waitress at our Denny’s HQ, and our college and law school friends into social impact investors. We were frustrated with financing our ideas, and this emerges from our annoyance.
The rise of social entrepreneurship, the convening power of the internet, and the reduced costs of launching a startup in today's wired world are driving the opportunity. For-profit crowdfunding platforms exist in the music, film, and fashion industries. The internet shifts power from institutions to you; It's people-powered investing.
We believe people will see 33needs as a portal to an entirely new impact-based asset class. Here's how it works:
A 37-year-old man in Los Angeles, CA could invest as little as $10 (or 1 "Part") in Husk Power Systems, a venture providing low-cost energy services to rural India.
A 19-year-old woman in Mumbai could invest $20 (or 2 "Parts") in Voxiva, a venture using cell phone technology to improve health-care delivery in developing countries.
Who benefits?
The investor (called a "Backer") receives a % return based on venture revenue. The venture receives seed capital. 33needs receives 10% of the total funding target. The world gets just a little stronger.
Overview of the 7 "Big Need" Categories:
1. The Planet - How can we help promote a cleaner and more sustainable global ecosystem?
2. Education - How can we help more people get more access to better education?
3. Community - How can we help connect people, build communities and protect unique cultures?
4. Heath - How can we help individuals lead longer, healthier lives?
5. Opportunity - How can we help people better provide for themselves and their families?
6. Sustainable food - How can we provide for a growing population in a sustainable way?
7. Everything else - Sometimes the best ideas don't fit into any category at all.
How can your social objectives be sustained in a for-profit model?
In other words, how do we make money?
We've selected the initial 33 startups for a September 30th launch through a nomination and application process. Each social venture has 60 days to raise $5,000, for a total of $165,000 (33 x 5,000). 33needs collects 9% of the funding target as a platform fee.
We're doubling the number of ventures on the platform from months 6-12 and tripling the number of startups from months 12-16.
Back-of-the-napkin 12-month revenue projections:
$16,500 (months 1-2)
$16,500 (months 2-4)
$16,500 (months 4-6)
$33,000 (months 6-8)
$33,000 (months 8-10)
$33,000 (months 10-12)
= $148,500 for year one
Describe your business model. Who are your customers? Why will they pay?
1. Investors
Because of securities laws, particularly the accredited Investor rule (rule 501), the average person is locked out of the startup funding cycle.
There is a vast pool of small-scale investment capital in the hands of my brother, my friends – and your friends! Think about how the Obama campaign flipped the standard campaign fundraising model on its head through harnessing small repeatable donations from the crowd.
That's a financial innovation we can all be proud of.
Our target user:
A 21-year-old college student. She's purposeful, but pragmatic. She's not afraid to make mistakes. She's bored by blah websites and apathetic companies; she demands authenticity. Born between 1978 and 2000, she's a Millennial, which include 95 million young people up to 30 years of age -- the biggest, most diverse, and best-educated age group in the history of the nation.
How will they pay?
Through purchasing "parts" in social ventures on the site. Her purchase of one, $10 "part" in a particular social venture entitles her to a % of their revenue, but not equity, for a period of two years. Before her money is released in stages to the social venture, it accrues interest in a 33needs escrow account.
2. Entrepreneurs
More and more entrepreneurs view business as a powerful tool to solve social problems here and abroad. They believe adopting a for-profit model with an explicit social mission allows them to have a deeper, more sustained impact than a traditional non-profit.
They are crying out for an innovation; for a http://sellaband.com or http://fashionstake.com/ approach to raising startup capital. 33needs only works with disruptive, game-changing ventures. Many are web-based, but not all.
How will they pay?
9% of their funding target, which is typically $5,000, is assessed as a platform fee.
How is this legal?
If the investor's core motivation is not an expected financial return, but impact or consumption, the securities laws do not always apply. Additionally, the "Parts" do not share many of the common elements of stock.
We've been working with law professors at the University of Michigan, the University of Denver, Harvard Law, Pittsburgh Law, and others to create a structure that satisfies investor, startup, and regulatory interests.
How will you reach your customers?
1. Internal Viral Loop 33needs.com is powered by a viral expansion loop - just by using the site, it spreads.
A startup requesting funds has an incentive to invite friends, family, colleagues, and like-minded strangers to sign up, and each new member brings others with him. This pushes our viral coefficient up. We estimate a viral coefficient of 2.0: each person who signs up is worth, on average, two people.
33needs shares the common elements of viral companies: 1. We're web-based; 2. We're free; 3. We don't create content, just the platform; 4. We have an incredibly simple platform; and, as mentioned above; 5. Raw self-interest spreads our impact.
2. External marketing campaign
Reach out to the influential blogs. Some have 330,000+ followers on Twitter and hundreds of thousands of subscribers. A positive mention in one of the most influential (Social Edge, for example) creates a heard mentality of positive retweets, other blog mentions, and positive reviews. More mainstream sites and magazines, including Inc Magazine, Fast Company, and Entrepreneur Magazine frequently pick up stories from their content.
We've done this before: I targeted a few on Twitter, including Social Edge, which drove lots of traffic to a piece I wrote for the Huffington Post. The result? 1,296 retweets, 47 Facebook shares, and one of the most popular posts in March.
The community is larger and more interconnected than one would think.
