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How Nonprofit Companies Are Breeding the New Entrepreneurs

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Today's Nonprofit Leaders Are Tomorrow's Billionaires

Why you should care

Because the nonprofit sector is emerging as a prime training ground for successful entrepreneurs.

The startup engine is revving again, which has everyone asking: In a world where Snapchat and Nest are worth billions, what’s the best way to get in on the action? Enroll at Stanford? Get certified in front-end developing? Join the Israeli Army? Go on a Mormon mission? Nab a degree in design? Yes. All of the above. Anything else? Launch your career as the leader of a nonprofit.

Take a look at the current startup landscape, and you’ll find a surprising overlap between former nonprofit types and today’s rising entrepreneurs. It wasn’t long ago that President Obama was mocked when he said his experience as a community organizer would be valuable in managing both a campaign and the federal government. But the new band of nonprofiteers turned startup execs are living proof that do-gooding can help you clean up.

Warby Parker

Google’s motto may be “Don’t Be Evil,” but Warby Parker’s is more straight up: “Do Good.” The pioneering eyeglass company follows the TOMS model: Buy a pair, give a pair. Neil Blumenthal — the ex-voluntourist who logged time with a nonprofit that distributed eyeglasses to the poor in South Asia and Latin America — traded his experience for a biz idea. That, and tapping into the collective outrage that paying $700 for glasses can trigger, resulted in a laser-focused enterprise.

And don’t dismiss startups like Warby Parker as companies that merely spew lofty, charitable language. Blumenthal and his three co-founders are among those championing a new kind of corporation — the B Corp, or Benefit Corporation — and they’re proving that it can actually succeed. Since its founding, the company has raised over $100 million in venture funding, including $60 million from a recent Series C round in December.

Ed-Tech

Education technology companies are perhaps the most obvious place for a nonprofit turned startup boom. That’s thanks in part to Teach for America (TFA), which could essentially be seen as a two-year education incubator. Take Clever, a startup that provides better tech infrastructure for school systems by trying to upgrade old student information systems (SIS). It’s a clean, important, basic idea — the same approach that’s created billion-dollar companies in the health care field (think Epic Systems).

Standing up in front of 120 eighth-graders every day, Carroll says, made him ready for even the toughest audience in the world.

And even though the three co-founders have Harvard math, biology or computer science degrees, a stellar education on its own doesn’t guarantee a great idea. Dan Carroll, one of Clever’s founders, worked for TFA before running a Denver school’s IT system — experiences that got him up close and personal with the problems he’s now trying to solve.

“Even now, I still can draw back from my experiences as [a school] tech director,” said Carroll, now the company’s COO. “I know the problem intimately, and it’s really given me a clear vision and clear purpose about where Clever needs to go.”

Even a skill like public speaking translates well from the nonprofit world. Standing up in front of 120 eighth-graders every day, Carroll says, made him ready for even the toughest audience in the world. Companies like Clever are bound to set an example (they already are) and set the wheels turning for current TFA teachers who may not know what this whole “making change” thing is that they signed on for.

The lesson? Sink deep into the roots of what you’re trying to accomplish — and you might pull out a big idea. The list of TFA alumni making their mark on or founding new organizations seems endless these days. Take 2006 alum Jesse Olsen, for example: He was frustrated with trying to accurately track student attendance — a big, if unsexy, problem — and founded JumpRope, a system that does just that, and more.

Upworthy

Upworthy, called the “fastest-growing media site of all time,” is the brainchild of Peter Koechley, former managing editor at the joke rag The Onion, and Eli Pariser, who ran MoveOn.org. Put these two together and you get “meaningful” viral content. MoveOn, arguably one of the most successful online mobilizing tools for progressives, understood “viral” before the concept went mainstream. It started with email petitions in the Clinton days, and today, Upworthy gets millions of daily unique pageviews — a primer on how to MoveOn, indeed.

The reception to Upworthy’s unique formula for content curation is impressive: The site has more than 50 million visitors monthly. And in addition to its lighter viral content, Upworthy has partnered with leaders like the Bill & Melinda Gates Foundation to take on global health and poverty issues.

Upworthy even polled its readers and found there’s hunger surrounding some pretty heavy topics: (1) climate change and clean energy, (2) income inequality and poverty and (3) human rights.That’s why the site has also teamed up with Human Rights Watch, ProPublica and Climate Nexus to help provide content for these socially concious topics. Some have called it “clickbait with a mission,” but Upworthy has attracted $12 million in investment.

The (Double) Bottom Line

This isn’t the first time people have cross-trained between fields. In the past, we’ve seen military folks and lawyers cross over into politics or business, and journalists use storytelling chops in marketing and public relations roles. Jeff Winter, co-founder of San Francisco technology recruiting firm GravityPeople, says people who make the transition from nonprofits want to not only share the knowledge they’ve accumulated in a new domain, but also — let’s be real — make more money in the for-profit world. But that transition is not for everyone: Some nonprofits might operate at a slower, more deliberate pace, and jumping to a flying-by-the-seat-of-your-pants startup might be a shock to the system.

It would be easy to argue that these successful crossover entrepreneurs have the advantages of being upper-middle-class and well-educated, with plenty of confidence, social capital and connections. But the startup sphere has never drawn from a single pool or training ground: Steve Jobs, Michael Dell, Ray Kroc and many others did not have conventional business careers before launching their hugely successful enterprises. What matters most is crafting an idea that responds to a need and figuring out what you’ll need to make that idea fly — and stand out from the pack.

What nonprofiteers bring to the party is passion and conviction, an appetite for risk and an ability to live on less — and even make big things happen with less. Not to mention they’ve likely been handed greater responsibility at a nonprofit than they might have earned elsewhere. So in addition to presentation skills, managerial chops, fund-raising finesse and more, they’ve got the confidence and chutzpah that comes with getting the job done.

Hear that, 2014 grads? Taking the nonprofit route might be the most profitable move you could make.

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