My biggest mistake: Daniel Flynn, co-founder of Thankyou
What happens when your biggest mistake is also one of your biggest successes?
What happens when your biggest mistake is also one of your biggest successes? That was the situation facing the team at social enterprise Thankyou. Founded in 2008, Thankyou’s mission is to fund projects which address poverty using the profits of its consumer products. To date, it has raised more than $17 million for such projects.
The mistake
The Thankyou team is passionate about its mission. The organisation is constantly thinking about the impact it is having on the world, co-founder and managing director Daniel Flynn explains. But doing good, and measuring your impact, is not straightforward.
“At Thankyou we’re always trying to think about — whether it’s product, campaigns and marketing, culture and impact — what is best in class, and how can we get there?” he said.
After about 10 years of operation, a mistake slowly began to reveal itself to the team. It centred on the way Thankyou sought to do good by funding targeted development initiatives around the world.
“It became quite clear that in development, best in class was actually quite a jump from where we were,” Flynn said.
As Thankyou became aware of a common problem in the philanthropic world — donor dysfunction — it started to realise it was also a contributor to it.
The context
The value proposition for socially-minded consumers is that when they buy a Thankyou product, that purchase will be helping fund projects that address global poverty.
What Flynn describes as one of Thankyou’s biggest successes was the Track Your Impact feature.
When a customer bought a product, they also received a unique code that could be used to track exactly which development project that purchase would support. Consumers also had the option to get a report once that project had been completed.
“What we were really proud of was it was the same level of reporting a high net worth donor would get, and we had brought it to the micro-giver,” Flynn said.
The impact
However, there was a problem. The implementation of that feature also introduced a bias in the types of projects Thankyou would fund.
“We found ourselves funding cheaper projects because they met that claim, which is the exact opposite of what we were trying to do,” Flynn said.
“It puts a focus on the activity, and it also puts extra pressure on our partners.”
When these kinds of incentives get introduced in philanthropy, they can lead to some strange outcomes. Flynn notes a visit the team made to Cambodia, where Thankyou had funded a well and some water filters. Walking through the village they noticed three other wells already existed there. The partners who delivered the project explained all three wells, funded through charitable partners, each had been ill-thought-out and failed to meet the needs of the community.
The fix
Those pumps speak to the problems that arise when charitable funders try to help without taking the time to understand and listen to the expertise of the communities they are helping.
With this in mind, Flynn and the Thankyou team made the difficult decision to adopt an unrestricted funding model that better supports organisations tackling complex systems change. But in doing so they had to sacrifice the Track Your Impact feature. Flynn says Thankyou knew it was the right call, but it was still a decision it laboured over.
“If customers can’t track their impact, they lose that tangibility. It’s a consumer brand, what happens if sales tank? What happens if people don’t believe in it and stop buying it?” he said.
“But we knew if you’re a mission-led, not marketing-led organisation, then without a shadow of a doubt you have to fast track that path and deal with the consequences and flow on effects in terms of how you sell your product.”
The lesson
Flynn doesn’t think it would have been possible for Thankyou to be where it is today without Track Your Impact. But he does believe the experience offers some lessons to other entrepreneurs, namely to think carefully about every strategic decision you make in your business.
“I’d say to any leader or co-founder that every decision we make, every strategic decision is almost like building a new tower, and that’s all good unless you’re building the wrong one,” he said.
“So during that foundation phase, and that planning phase, you’ve got to think deeply, get your theory of change right, get the strategy right.
“It’s that classic thing — when you’re constructing a building for two-thirds of the time, all the work is below ground, and then it pops up. That’s the great challenge to entrepreneurs because we want it to pop up on day two.
“That’s how we found ourselves in this mistake. We built the wrong tower then we had to unbuild it and build the next one. That took a lot of time, a lot of resources and a lot of work.”
