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3 June 2021
4 common mistakes techforgood startups make
Unsplash © Xavi Cabrera

4 common mistakes tech for good startups make

In the last year - as the world around us changed - a growing number of startups have been pitching themselves as offering “tech for good”. This means they provide a product or service that exists to fix a particular issue for the good of society: be it environmental, economic or humanitarian.

These startups are offering more than a CSR initiative: the entirety of their business is focused on improving lives and finding solutions to some of the most pressing problems affecting our planet today.

It sounds like it would be an easy win when it comes to securing customers and raising investment. But in my experience, there are a few common mistakes made by ‘tech for good’ founders that can end up holding them back. These are some of the errors I’ve seen since entering the sector with my circular economy app YoungPlanet in 2019. I hope being aware of these stumbling blocks can help other founders succeed in this exciting arena.

Thinking charitably

While the mission of your tech-for-good startup should remain at the heart of your strategy, it doesn’t mean commercial decision making should take a back seat. It can be tempting to let the social impact or altruistic elements of your identity dominate your day-to-day, but you should be careful not to start running your business like a charity as a result. Ultimately, it’s about not allowing the nobility of the cause to cloud your commercial or financial judgement.

If your startup is going to succeed, it will need to be commercially viable, attractive to investors, and appealing when it comes to a potential exit. Make sure you understand where the line is between these two forces and set strong boundaries when it comes to making strategic decisions and helping the people you’re trying to help. Achieving balance is critical, as without being a commercial business you won’t be able to help many people at all. The bigger the scale of your business, the bigger the impact.

Underestimating the power of marketing

Many startups often think that marketing is something that comes further down the line, but it should be a part of your business strategy from the very beginning. This is especially true for tech-for-good startups. Being a business with a purpose or a social impact mission is not enough on its own.

You need to create the stories and buzz around your mission that will draw in audiences and help them buy into what you’re doing.

Building a marketing strategy that delivers results can be challenging. Marketing isn’t about paying someone to write a few blogs or occasionally posting on social media. It requires a long-term strategy, creativity, and constant awareness of the ever-changing media landscape to generate results and reach the right audiences with your story.

This needn’t involve throwing extortionate amounts of money on an elaborate campaign, but it does mean ensuring you have the resources to reach the right people in the right way, over a sustained period of time. Make marketing in some capacity a core part of your plan from day one.

Focusing on ‘customers’ rather than ‘communities’

Tech-for-good startups have a considerable advantage over more overtly commercial competitors: the community they can build around a common cause.

If you can build a committed community of users who not only support your mission but love your product or service, they can become a huge source of word-of-mouth growth and act as an extension of your marketing team. These advocates are also the perfect potential investors for any crowdfunding campaigns or similar initiatives you might embark on. They’re the people who want to see the business succeed and share in that success.

The art of building and nurturing a community lies in creating a two-way conversation with your customers. Instead of talking at your customers, you’re discussing things with them. Simple ways of building your community include:

  • Having a dedicated Facebook group where you share discount codes or give customers within the community priority to particular new releases or products. This is a great way to get feedback on products, foster loyalty and have an honest two-way conversation with your biggest advocates.

  • Use your community to co-create products or services. Ask their opinion and take their advice on board. Seek out their feedback and action it to show them you’re listening.

  • Respond and engage with customers who comment on your social media posts or post about you on their social media. Show them that you care about what they have to say and that you hear them.

Showing your community that they are on this journey with you will encourage their long-term support and will foster a relationship that is about more than just sales, but a shared belief in a bigger vision.

Failing to adopt flexible strategies

For a startup, having a coherent strategy is essential. It needs to align with your company’s objectives, the type of business that your organisation engages in and the sector in which you plan to thrive. But when a startup becomes too rigid with its strategy, failing to recognise challenges or the need for flex or nuance, growth can stagnate.

In the face of a constantly changing external environment (as evidenced by the pandemic) startups that are flexible have an advantage over the ones that aren’t. Being attuned to changing trends, customer needs and the direction that the market is going will require you to adopt a flexible approach so that you can adapt when needed, without stretching beyond your capabilities or departing from your original mission. Long term missions that fizzle in the short term are afterall, not long term missions.

Being flexible will keep your business relevant and on track, as you gather new information, attract new customers and refresh your business model for continued success.

Jason Ash is cofounder at circular economy app YoungPlanet