My mid-year leadership offsite framework (copy this):

The most important decision we ever made at Classy was the result of a leadership offsite.

12-months prior we had gone through a startup accelerator in San Diego.

When we entered the program we wanted to build fundraising software for nonprofits…

But when we exited the program, we had become a technology Frankenstein, trying to do both B2B and B2C at the same time.

Why? Because Facebook and Twitter were taking off. And investor dollars were flowing to social media companies.

Our advisors pushed us towards the money. It made logical sense. And we were broke! They even called us the “Facebook for Charities”. We thought that was cool.

Until Sean Parker (and some guy named Joe Green) actually launched the “Facebook for Charities”. They called it Causes.

We were crushed. Hardly anyone invested in us. But we pushed forward with the company anyways.

Fast forward to the leadership offsite. Our product roadmap was totally F’d coming in. Our limited resources were competing for B2C features (making Classy an Internet destination) vs B2B features (making Classy a SaaS platform).

We were failing at both.

By the time we got to the strategy section everyone knew we had to decide. We had to pick a lane. Using Jim Collins’ line: what could we become best in the world at (for real)?

We went through this Core Bet exercise and the answer became obvious.

We didn’t know a ton about the nonprofit market yet, but we knew more than most startups because we spent the last four years planning fundraisers around San Diego!

What we had no idea how to do was build a consumer internet site with tens of millions of visitors.

We needed to bet on our core strengths.

We spent the rest of the offsite upgrading our company’s *Northstar with a newfound focus on being the best software partner to nonprofits on the planet.

Instead of Facebook as a direct competitor, our arch rival became Blackbaud, a 30-year-old legacy software provider to nonprofits. This was a fight we felt we could win. And over time we did.

To be fair, Blackbaud is still a multi billion dollar company. The space was big enough for both of us! But without this one strategic choice, we would have gotten crushed by Blackbaud on the B2B side, and crushed by Facebook Causes (and others) on the B2C side!

This exact thing happened to several of our earlier competitors: Rally, Fundly, others. Every one of them failed or became a zombie because they didn’t have the strategic discipline to make the hard choice. They wanted to be everything to everyone.

Many years later, when GoFundMe was at super scale, they decided they wanted to enter the B2B space and came knocking. We eventually accepted a deal in 2022 and the combined company is now the largest giving platform in the world.

Ironically, GoFundMe (B2C) + Classy (B2B) is the same vision we had back in 2011. It wasn’t a bad idea in theory, it just wasn’t a good strategy at the time.

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Today I’m sharing the exact mid-year leadership offsite structure that led to this pivotal decision.

So you can make the tough choices too. Everything flows from there.

Till next time,

Never say die 🏴‍☠️

Scot

→ scotchisholm.com
→ highlandacademy.com

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