The Round Table

Fred Smith

Fred Smith


October 25, 2023


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Entrepreneurs are often described (mistakenly) as heroic risk-takers not calculating before acting. Nothing could be further from the truth. They work hard reducing as much risk as possible but having done that they are willing to launch. This is why I love watching the process of true entrepreneurs eliminating risk to give themselves the best chance of succeeding. Being a part of their identifying an opportunity is good work. 

Two friends having built a successful company are now turning their attention to a complex, important issue in our community: access to healthcare. They want to do something impactful with their wealth and are working hard defining what that means.

After our first conversation I emailed some thoughts about our own experience in creating access to college for students who would be first in their family to attend. Maybe those thoughts would be helpful to others.

Learn enough to get started. Learning too much will produce “paralysis by analysis,” while learning too little will cost a much higher “dumb tax” and in the end get few results. Everyone initially thinks they are the only or one of very few funders working in the field. With a little research you will discover there are not only overlapping nonprofits but overlapping funders unaware of each other. Once you think you know enough, go back and clarify again what you want to accomplish. To put it another way, be ruthless. Mission drift begins before you take the first step if you are not absolutely clear about what you will not do. 

Only work with those who are receptive.  In our case, we originally thought guidance counselors and school administrators would be allies, wanting to help more “first in their family” students get into college. We were wrong. Some were more interested in protecting the system than changing it. As well, the few supporters were already overwhelmed with other responsibilities we did not have the authority to change. Upton Sinclair said, “It is difficult to get a man to understand something when his salary depends on his not understanding it.” Don’t assume people working in your field of interest are open to changing or challenging the system. Funders large and small – including Gates, Zuckerberg, and Annenberg – have all made expensive discoveries about how little influence they have as outsiders.

Find monomaniacs and back them. Don’t try to add what you want to accomplish to the mission of an existing organization unless they are as committed as you are – and likely they are not or they would already be doing it.

Make small bets at first. This is what we called “low-cost probes” or tuition for learning. See what works. Try a little more and see if it grows. Yes, it is tempting to go “big” from the outset. Don’t do it. Making a splash is appealing to the ego but deadly to the project. 

Find other investors. Unless you want to own and be the main supporter for it financially over the long term begin as soon as possible to bring on other investors. Otherwise, everyone will expect you to fully fund it forever. It’s a trade-off. You will likely give over some control but the long-term health of the program will be better.

There is no one point of leverage. Think in decades or in the same way you think about bond investments instead of short term certificates of deposit. You cannot “fix” the system but you can make changes that will have a ripple effect. The temptation is finding the one point of leverage that will change the game. In a complex system, there is no one point of leverage. Often, what seems to be inconsequential turns out to be key. What appears to be salient is insignificant. Focus on a piece of the puzzle and be prepared for staying invested.

Measure carefully. Measure honestly. Find a few essential things to measure – not many. When we started our local Habitat for Humanity, we decided to measure four things: How many houses. How many volunteers. How many volunteer hours. How much money raised other than ours. This was enough to indicate how we were doing.

Our first in their family to attend college initiative lasted a decade and put thousands of students into college. It was well worth the risk. It was well worth ten years. 

Art by Albert Anker

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