This piece, contributed by Eloise Malone FRSA, Executive Creative Director from Effervescent, explores the role of lived experience and how to be ready for social investment when investment is a whole new world for you.
Effervescent: the what and how
Effervescent began as a sole-trader brand. It was only after 6 years that we formed as a company; later still as a registered charity. We operate in the advertising/marketing sector: ethical brands with children and young people as a major share of their customer or beneficiary base commission Effervescent to create ‘purpose’ campaigns.
Our process of co-creating branding and cause campaigns with young people helps develop confidence, transferable workplace skills, self-belief, team working skills and crucial networks of new friends and professional contacts to help them overcome some of the effects of disadvantage and early trauma. On the flip side, our clients who are ethical brands get deep, authentic product and audience insight, innovative and creative ideas, beautiful original campaigns and great, long term relationships with young people.
The why behind it all
According to The School for Social Entrepreneurs, two-thirds of people who learn with SSE have direct lived experience of the social issues they are addressing: social entrepreneurs are often developing completely new, radical solutions for wicked problems based on their deep knowledge and expertise.
This is how I got my start.
My ‘why’ is simple. I do this because I grew up in a violent household and nobody ever asked me about it, so I never told anyone what I went home to. Those around me in positions of authority seemingly looked the other way or just failed to notice. Protecting my siblings from my parents' problems and resulting anger hardwired me with a very fine-tuned antennae for moods and environments.
I was a whimsical creative child, and also quite entrepreneurial: I set up a charity shop in my bedroom when I was seven, and sold all my sisters’ toys to the other kids on the estate to raise money for Guide Dogs. As I got older I combined this weird skillset and early experience with an ethical framework and a lot of training and, voila! now I run a social enterprise that nurtures children and young people with training and a platform to say the things they need to say in a way audiences can understand, value, and relate to.
So you can see that my approach to this work didn’t start with looking for a gap in the market, although I’m lucky that I’ve crafted a ‘product’ which responds to charities, NGOs, ethical commercial brands and government agencies' needs to generate marketing which is authentic, innovative and audience-focused.
Doing it differently
This has caused some problems for Effervescent. We didn’t set out to create a minimum viable product or to turn any kind of operating profit. In the early days we just spent every single penny we had (and then some…) on generating life-changing creative processes for young people which turned into beautiful and innovative campaigns and audience experiences.
I paid almost no attention to working on the organisation, because I was too busy working in the organisation – leading all the face-to-face work with children, attracting new customers, keeping our heads above water with grant applications, and producing work on film sets including lying in dirty ditches operating sock puppets and drowning to camera in a swimming pool.
So, if I had to start over, what would I do differently to be more easily investment-ready?
1. Build a Business Model
I’d start thinking much sooner about a robust business model that can generate an operating surplus and therefore stability, rather than focusing simply on how to get enough funding each time to do the work children need.
2. Test Minimum Viable Products
I’d play more with minimum viable products in my testing phase. This is hard as it can make you feel vulnerable and – worse – run the risk that you don’t give your customers and beneficiaries the experience you want to give them. It’s particularly difficult for founders, who often pin their sense of self-worth to their business's success. Over the Covid lockdown, though, we were forced to do this to some extent by delivering solely through zoom. After lockdown, young people have been exhausted and less able to spend so much time on creative projects out of school, so we have adapted again. These new experimental ways of working have opened up global markets and national campaign opportunities for us and streamlined our pricing to make us more competitive.
3. Ascertain How Ready The Market Is
I’d spend more time talking with future clients about their needs and trying to ascertain how ready the market is for my product. One of the big challenges for Effervescent is that we’re pitching a new concept (co-creation with children in advertising) and in our sales strategy, we’re often spending lots of time selling the mere idea of that to clients before we can sell ourselves as a solution.
4. Don't be scared of pitching for investment
I’d be less scared of pitching for investment. My only real knowledge of pitching came from tv programmes like Dragons Den and The Apprentice, so I didn’t expect the kind, thoughtful, encouraging experiences I received with social investors. Social investors want founders to succeed and they care about founders’ causes. Know your numbers, your impact, and your ‘why’, and you can treat it more like a conversation than a terrifying gladiatorial experience.
5. Remember that Investors Invest in the Founder
On which note, next time I’ll be more confident about who I am. Investors invest in the founder as much as the enterprise. A good match is a wonderful, nurturing experience and you don’t have to pretend to be what you’re not. A great investor will be able to advise on what you’re going to need (in addition to money) to scale up. In our case I was advised to take on a mentor to support me, and a Chief Financial Officer to help get the most from our money and keep the finances tight.
6. Choose Investors With the Right Organisational Fit
On the flip side, research your potential investors and find the right ones for you. We chose to accept investment from Resonance and from Nesta, for example, because of the organisations’ values and connections which promised to add a little extra beyond the cold hard cash bit of the deal.
7. Gather a Network of Masterminds
I’d try to find time to gather a peer mastermind network around me. Scaling is very hard, it can destabilise the business as you try to bring new people, grow the team, develop systems, have one-to-one relationships and attract enough sales to balance out the monthly expenditure whilst running low on time. You’re going to make mistakes and you’ll need to try to forgive yourself. Having people around you who are going through the same thing can be reassuring and help you avoid some of the errors.
8. Get your Board Balanced and Functioning
Ensure your board is in the right place in its development and has people with sufficient experience to guide and support you. This can mean asking people to step aside to make space, or asking people to step up to support you. When you’re a founder it can feel hard to tell your board when you’re not getting enough support, because you feel you should be grateful for any support. But if they don’t get immersed, life can get very tough and the organisation is endangered. It takes a lot of effort to get your board balanced and functioning. Start early.
9. Invest in Your Own Wellbeing
Finally, I’m not sure how, but if I did it again I would make more time, much sooner, to invest in my own wellbeing. Founders can pride themselves on their resilience and passion, and so many people positively reinforce you for that and it feels very validating, which in turn can encourage you to keep going stronger, harder and faster. But everyone has their limit. By the time we got to the point of getting the investment funds into our accounts I was burning out with the strain of the investment processes, whilst leading business as usual, and preparing for growth. Be aware of your own fragility and how key your wellbeing is to the organisation, and make that one of your priorities.
I hope this very personal account and these tips on how to be investment-ready are helpful.
I see a big part of my role as supporting other founders, especially in the creative and cultural sectors. Feel free to reach out to me via my twitter handle @EloiseMalone @EffervescentUK if you’d like a chat.