StartSomeGood Business Model
Crowdfunding for a cause
If you missed the first part of StartSomeGood case study, click here 👈
Social Impact Mission
StartSomeGood is all about empowering social entrepreneurs and supporting them to raise funds. As we said at the beginning of this article, the platform was launched at a time during which crowdfunding was mainly conceived for profit-oriented initiatives and philanthropists were barely giving money to radically new social projects. Given that, StartSomeGood’s goal was (and still is) to allow changemakers to raise funds, while building and growing communities able to support them along their journeys.
StartSomeGood business model is basically a multi-party arrangement. So, there are at least three main parties here involved: StartSomeGood, donors and social entrepreneurs. Since the platform was created to support the latter ones raising funds, we could say that social entrepreneurs were at the core of the whole initiative.
Nevertheless, we actually believe that StartSomeGood’s reach of impact doesn’t really stop there. In fact, every social project funded through the platform has its own beneficiaries. Kids, migrants, unprivileged communities.. just to name a few. Due to that, those targets should be considered as StartSomeGood’s beneficiaries too. They are the ones ultimately benefiting from every social project that gets funded, aren’t they?
Core interventions + Channels
StartSomeGood’s core intervention is, obviously, the crowdfunding platform itself. The way a crowdfunding platform usually works is actually quite easy to explain.
First, the entrepreneur submits an application about a project or idea that he/she wants to raise funds for. Secondly, the platform processes the proposal, in order to understand if it fits certain requirements or not. In this specific case, StartSomeGood’s criteria strictly relate to social impact and social change. Finally, if the project gets approved, then it’s time to set up a crowdfunding campaign and post it on the platform, in order to attract backers and donors. StartSomeGood does exactly the same.
Other nice interventions promoted by the company certainly are educational contents and services. As a matter of fact, StartSomeGood launched several online courses (i.e. Crowdfunding Academy) and coaching programs (i.e. Good Hustle) to support changemakers in their entrepreneurial journeys. Some of these contents are provided for free, some don’t, but they all contribute to fulfill the company’s overall mission.
Finally, the platform, together with social media and offline events represent StartSomeGood’s main channels.
StartSomeGood charges a 5% service fee each time a social entrepreneur achieves his fundraising goals through the platform. So, at a first glance, one might consider entrepreneurs as the customer segment. Nevertheless, money initially “flows” from donors and supporters. Without them, no initiative gets funded. Because of that, donors are the ones that should be considered as SSG’s real customers.
Value for Beneficiaries + Value for Customers
On one hand, social entrepreneurs mainly receive two types of benefits: financial benefits (namely, receiving funds) and social benefits (such as connecting with supportive communities). Besides, visibility and technical support are secondary key components of StartSomeGood’s offer, since they allow entrepreneurs to reach out to potential supporters and partners quickly and effectively.
On the other hand, donors connect with changemakers in order to contribute to the greater good. In fact, whether they have a direct relationship with the entrepreneur’s cause or not, donating makes them feel good. That’s why they give money in the first place: to feel empowered and help achieve positive social impact.
Key Activities + Key Resources
In order to run a successful online business as such, StartSomeGood clearly has to constantly focus on maintaining and optimizing its platform. Additionally, other key activities to take into account are: coaching and supporting entrepreneurs, as well as business development tasks (i.e. marketing, corporate partnership management, etc.).
And what about the company’s key resources? Well, once again, platform and website surely come first, since StartSomeGood business model revolves just around them. Secondly, team skills and expertise are fundamental components contributing to the company’s overall success. CEO and founder Tom Dawkins is in fact one of the leading experts on the topic of social entrepreneurship, whereas its team strongly posses crowdfunding, business development and IT skills to keep the project up and (smoothly) running. Lastly, StartSomeGood brand is an extremely valuable resource in itself. With over $13ML dollars raised, 1000+ projects funded and an astonishing 95% satisfaction rate, this enterprise offers one of the best performing crowdfunding platforms around the world.
Key Partners & Stakeholders
StartSomeGood’s list of partners could get quite long, especially because of its widely-extended network. Yet, some of them are more relevant than others. For instance, Stripe is definitely one of them. Stripe is indeed the main technical partner that makes every pledge and economic transaction possible, in exchange for a 2.9% charge (applied only on successful campaigns). Also, foundations and corporate partners such as ING, The Ian Potter Foundation and English Family Foundation often match the funds raised through the platform and support grassroots innovation by doing so.
Cost Structure + Revenue Engines + Surplus
In the previous paragraphs we already mentioned how StartSomeGood captures value from its interventions. The company uses a crowdfunding model called “all-or-nothing“, which consists in processing pledges only if and once the campaign hits its fundraising targets. Campaigns that manage to successfully achieve their funding goals get then charged 5% service fees by StartSomeGood: these fees represent the company’s primary revenue engine. At the same time, the company leverages its expertise in crowdfunding to craft and sell online courses and coaching programs that ensure additional revenues.
All these income streams help StartSomeGood cover its costs, mainly consisting in staff and technology, as well as Stripe’s payment processing fees.
Over the course of its first decade, StartSomeGood successfully raised more than $13ML and got more than 1000 projects funded. With offices based in Australia and USA, the company had a tremendous reach of impact, as its beneficiaries come from both developed and developing countries.
With the highest success rate (> 50%) in the crowdfunding industry, StartSomeGood provides not just funding opportunities to changemakers of all kinds, but also counseling, capacity-building and coaching services. In conclusion, after having turned into a landmark for the fundraising/crowdfunding sector, now this company is on its way to foster worldwide positive change, doing this while remaining bold and financially sustainable.
About the Author
I’m Marco, an Italian business practitioner with previous study and work experiences across Australia, Netherlands, Spain and Vietnam. Having a background in economics and business management, since 2018 I’m happy to support social entrepreneurs and impact startuppers refine their businesses and scale social impact.
At Social Business Design, I mostly write about business design, financial modeling and growth hacking, sharing useful tools and insights gathered during 5+ years of on-field experiences.
Apart from talking about social business, I love hiking, reading, eating Asian food and taking pictures while I’m traveling. If interested, feel free to get in touch with me through my channels! 🙂
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