Our Business Model
We are a Social Enterprise, and we believe that when people understand why we do things, they are more motivated to become a part of this movement. So we want to share our business model principles with you, so you might be motivated to join our movement. Here’s how we are supporting the movement, paying for things, and using our resources.
Some History. Many of you know that our team started out together at the university. We came there from different nonprofit and public sector jobs – nonprofit assistant directors and other staff, policy scientists, university professor, events coordinators, evaluators, and just about all of us have served multiple times in AmeriCorps programs. We worked together at the Center on Network Science (at the University of CO’s School of Public Affairs) for years. We created multiple technologies in partnerships with communities, we did research to inform their development, and we tried to meet our users’ needs to help them build their capacity to use the data and information they get from our technologies to strengthen social connectedness. All of this was funded through grants, contracts, and some fee-for-service. Then we worked with the university to sort out an Intellectual Property agreement, and the rights to all the Technology and related IP was released and we started Visible Network Labs.
Why a For-Profit Entity? We are a social enterprise, which means we are a for-profit entity that has at its core, a social mission (see Our Call to Action). We are applying for a BCorp Certification – so we can have 3rd party oversight on that designation. We brainstormed a lot about how to incorporate. The truth is, we had partners waiting to sign up to work with us, and we needed an entity fast. So we did the easiest thing we could - we created a business. This gave us a lot of freedom to be flexible and adaptive for communities we work with, and frankly, we feel good about paying taxes so did not feel like it was urgent to develop a nonprofit status. However, what we do is ultimately for the public good, so we are working on what part of our work should live in a nonprofit and what should stay in the for-profit entity. Nonprofits take A LONG time to stand-up and the fees to do so are high (and we understand that, because they are tax-exempt, so need to be put to a lot of scrutiny – the high fees, well, that’s harder to understand!). We are working on our nonprofit application and we think that our Learning Lab work may fit into that, as well as our evaluation and research. But we are still working out the details, getting input from stakeholders and advisors, and building out a strategy for greatest impact. We will keep the technology in the for-profit social enterprise because we are exploring all the ways we can resource it. Believe us – it’s expensive, but we are unstoppable in making it happen, so we are working on the most diverse funding portfolio we can to build it all out.
Being a social enterprise has opened a few options for us (like seeking out angel investments) that we could not do otherwise. We have our equity to leverage, and we are carefully and thoughtfully strategizing how we can use that to resource this movement, to reach more people, to strengthen an entire society’s social connectedness. So far, only Boomtown Accelerators have equity in our company (6%), which was in exchange for the enormous support they gave us to launch our enterprise. And our employees (only some who are paid right now) have equity, which we know makes us work harder.
Where the Money Comes From & Where it Goes
So here is how we pay for things and what we are planning next…
We have a bootstrapping model. That means we are trying hard to fundraise in different ways to pay all of our bills as they show up. And anything extra, we are investing back into technology, for now.
Who We Pay: Only 3 VNL employees currently get paid for that work (we are hoping to update that number over time!), and we have a handful of trusted contractors that we pay to fill in the gaps. Our paid employees are our Director of Engineering, our Chief Program Officer, and our part-time Social Marketing and Communications Manager. Our CEO, Chief Product Officer and Director of Partnerships and Training all do not get paid for the VNL work (yet). We do all have second jobs which help us support our families. In the last year, we paid a small amount ($2000) to each of our Network Science Fellows, and we have paid contractors to help us with strategy, marketing (Jonathan Mischke at Door 4 who created our beautiful website!), data cleaning, and some evaluation/research work. Most of them work for rates way under what they are worth. And we pay for an accountant and legal support. Right now, we are using every extra dime to pay for additional development support with our awesome partners at CK Digital. And we have a bunch of advisors who help us, in exchange for the amazing relationships we are creating. And I think everyone listed here believe is us. We are so lucky to have this system of support, whether we can pay them or not.
How We Price Things: So, our goal right now is to bring in enough money to keep the lights on and to pay all our employees. If we can do that now, we believe we can scale and build out this social connectedness platform, and grow, and make it even more awesome and capacity building for other people and communities. So, we price things to see how far we can push it, so that it is still valuable for our users, but enough so we can pay the people who create and support it. This has been a balance, as you can imagine. But our users are our biggest fans, and they are helping us understand the value of our tools, work, and expertise for them. Since we support mostly nonprofits and public agencies, access and equity are our first layer of concern, and we completely understand that budgets are limited and inflexible, so we work hard to figure out how what we offer is actually going to save an organization money, than if they opted to use another (often cheaper tool) that will increase their staff time and overall cost to implement and become useful for their work.
For example, the PARTNER tool was created with support of a grant from the Robert Wood Johnson Foundation. They supported this tool for 7 years, and then told us we needed to develop a sustainability plan (until then, PARTNER was free and every grant or project we had was how we built features and supported our users). So, we started charging and have slowly raised the rates. Our users give us constant feedback and input and that’s how we make decisions. With that support, we have been testing different valuations for our products. For example, one user did a whole analysis on what it would cost her to do the work by hand that the PARTNER tool provides. She estimated that we could charge $1600 per report, and it would still save a ton of money and time. So we decided to try to charge $675 per report. That’s our latest experiment.
The reality is – firms all over the place are charging organizations for customized versions of what we do, and charging them A LOT more to do it. A firm will buy the PARTNER tool for $950 and then charge a client between $6-40K to implement it. We hope to circumvent that and save that organization a lot more money, by making the tools and data they need super accessible, at a rate far below what they would pay others. And we are providing support through our Learning Lab and Connected Community Forum.
So, yes, we charge for things. Yes, some of what we offer has a pay wall, because we want to ensure that what we are building is sustainable and from multiple sources. We are building our financial resiliency!
Where the Money Comes From:
Grants and Contracts: Historically and now, our primary way to keep the lights on is through our grants and contracts that we take in for evaluation and consulting work. All of our projects use our own technology, so we have been able to develop an amazing funnel of ways to build features and technology for projects that we turn around and put into the technology available for the public. So when we get a $100K grant for a project that asks us to build a feature into the tool, we ensure that we have permission to push that new feature out to everyone (or when we can’t!). That is literally how we built the PARTNER tool – one project at a time, one user’s feedback at a time, and one dollar at a time.
Partnerships: What we are most excited about right now are the partnerships we are building. We are focused on finding organizational partners and investors who are intentionally asking us to do work that 1) enhances the data quality and quantity in Aspen, 2) has a focus on how that data will translate into practice and capacity building in communities, and 3) has an interest in making that information public facing (when possible). We are happy to say that we have developed two sold partnerships that are supporting the future of Aspen. Our hope is that the future of Aspen is in partnerships with others who want to join this movement, support out missing, and collectively build a platform that is going to strengthen social connectedness.
Technology Licenses: We charge for our tools. The PARTNER tool has a user license fee, and the Person-Centered Network app will be available soon. We charge because 1) we need a way to pay for what we are building and 2) when we offered these for free, we found that people didn’t value them as much as they do when they pay. When we don’t charge, we are signaling that they were worth, well nothing/free. We know these tools are amazing, and so supportive for the people who use them. We know they are valuable and we believe people agree and will pay to use them. When our dashboards are running, some will be free, and then we will charge for certain features (like building a report out of them) or advanced searches. For the same reasons. But we will also offer the public facing version for free, in the commons, for people to use to strengthen their work. That’s the big dream.
Trainings and Workshop: People need support in how to use data, build networks, and use the technology. We invest a lot of time and money into supporting the capacity of people in communities. Because we know everyone can’t pay us an hourly rate for customized support and coaching, we crowdsource peer-learning and knowledge sharing at our Network Leadership Training Academy, workshops, and demos. Some are free and some we charge for. We cover our costs on these and have yet to make a profit. We are ok with that because this is building community, supporting the movement, and we all get a high from being connected on this journey. Our Connected Community Forum is the place people stay connected – and this will always be free.
Consulting, Evaluation, and Data Science: Our team are rock solid in our analysis and network science skills. We are pretty much like no other team out there in terms of experience, thinking, and knowledge about networks. People value that, and they hire us to work with them either at a strategy level, or boots on the ground (working in their organizations with their partners to brainstorm, motivate, and make a social impact). We charge for this and hope that we can make this service even more valuable over time.
Public Speaking: Our team is giving small talks, webinars, and keynote addresses weekly. When we can, we try to make some income on these, but most are done in-kind. When our CEO, Dr. Danielle Varda speaks, people pay more for her to show up and connect with an audience, and spread the message that social connectedness cannot be an afterthought and needs visibility. We hope that we can grow our public speaking work, because we believe we have a message and learning to share, and we want to spread the word.
Investments: We have not opened any rounds for investments and do not have a plan to at this point. We might in the future, but first we are pursuing our partnership strategy. If we find a great match with a potential investor, who shares our mission and believes that we are the team to do it, we walk to talk. If that’s you - we want to know.
If you are still reading– much gratitude to you for being so engaged! Our team is fiery, deeply committed to this work, and the fact that you are a part of it in any way is what brings us joy. You keep us going, you give us hope, and you help us get up when we fall. Thank you.