By Laura Gossman 

Editor’s Note: Fieldnotes has profiled many of the Fellows at Praxis and highlighted their basic start-up stories and initial challenges. In order to explore these start-up challenges more deeply for future articles, we are examining five tensions identified in the book From Concept to Scale by Praxis’s Steve Graves, Dave Blanchard and Josh Kwan. In a recent interview with Jon Hart, the Praxis Program and Community Manager, he shares how Praxis discovered and identified these tensions as well as how the team at Praxis helps Fellows negotiate them.

The team at Praxis identified five tensions that entrepreneurs face: launch quickly vs. develop the idea; take profits vs. give back; take risk vs. mitigate it; scale now vs. have patience; grow the team vs. stay lean.  This sampling was created to be representative and not comprehensive. The number of tensions is innumerable! They used the collective experience of the authors of From Concept to Scale, along with anecdotal feedback from Praxis Fellows and mentors to list some of the most common challenges. They then narrowed the list based on some of the most important strategic decisions an early-stage entrepreneur faces.

As Jon reflected on some tangible examples of enterprises living through these tensions, many stories came to mind. Some of these stories he was able to share with us publicly.

Launch Quickly OR Develop the Idea

When Praxis was still in the ‘Concept’ stage, the founders (Dave Blanchard and Josh Kwan) conducted research that led them down the path of developing the idea further before launching. The competitive landscape and nature of the business model led them to believe that developing the idea was better than a quick launch. From a competitive standpoint, there were several accelerators, incubators, and leadership fellowship programs, but none with a faith component. Praxis needed to carve out its niche and have its identity firmly planted before launching. Their impact model led them to develop the idea further before launching. Praxis landed on an iterative mentorship program: twelve Fellow organizations would participate in three events, each in a different city, over nine months, with mentors. Before launching, it was crucial to ensure a critical mass of entrepreneurs, mentors, and donors to support the project.

From the first ever Praxis Gathering in November 2011 - Mentors Gabe Lyons and Stephen R. Graves dropping some wisdom with Fellows Chris & Will Haughey of Tegu and Scott Taing of Rare Genomics Institute.

From the first ever Praxis Gathering in November 2011 – Mentors Gabe Lyons and Stephen R. Graves, dropping some wisdom with Fellows Chris and Will Haughey of Tegu, and Scott Taing of Rare Genomics Institute.

Take Profits OR Give Back

There is an extraordinary amount of tension when it comes to money. Almost every company that fails ultimately does so because they run out of money. Consciously forgoing profit to give back can be seen as poor stewardship, just as much as keeping all of the profits can be.

Praxis 2012 Fellows from Tegu, a for-profit toy company, found a way to live right in the middle of this tension. They chose to manufacture their unique wooden toys using sustainable practices in Honduras. This was far more expensive than outsourcing to, say, China. The higher cost of manufacturing meant they couldn’t give back as much directly, but the overall economic impact was far higher. This was in alignment with their goal of contributing to the GDP of Honduras in a meaningful way.

Scale Now OR Have Patience

Co-author and seasoned Executive Coach Steve Graves says that a leader’s role is to define two things: clarity and sequence. These two things are aimed at the scale conversation. Clarity is where we are going. Sequence is what steps we are going to take to get there. Scale too soon and you may have been ahead of the market, and run out of money before customers have a chance to adopt your product. Wait too long and you may lose your competitive advantage.

Sajan George at Matchbook Learning is a great example of this tension. Their model showed a near immediate impact on their pilot school in Detroit, and as the story of this school spread, many others across the country showed interest. However, Sajan was committed to refining the model to fully understand its impact before scaling, and thus deferred the option to scale quickly.

Grow the Team OR Stay Lean

The prevailing attitude in start-ups today is epitomized by “The Lean Start-Up” movement. Making the first few hires are especially crucial for a young organization, and a wrong hire here could be devastating. At the same time, you have to take risks to hire in order to grow.

Praxis Fellow Justin Zoradi at These Numbers Have Faces (TNHF) had initially adopted a very lean, bootstrap mentality where he learned to do everything. During Praxis, it became clear he had two options: continue in the bootstrap mentality, and always be a small- to mid-size organization, or take the risk to build the team, and go for a big impact. Through mentorship and peer conversations, Justin gained clarity on the organizational structure needed to make his first big hire of a Chief Operating Officer. Further, he went into the hiring process with a vision for the role, and the exact type of leader he was looking for. He found what he called a ‘perfect fit’ – so much so that just a few months after hiring a COO, they had grown enough to make two more hires.

While there are many ways in which the Praxis program helps Fellows navigate these tensions, there are no cookie-cutter answers or set formulas to walk through. They start by acknowledging there is no silver bullet; if you’re not living in tension, you’re not facing reality. Throughout the program, they equip Fellows with the knowledge and network to be successful. The knowledge helps to bring clarity while the network provides insight and expertise from differing points of view. They use four mindsets – embody the gospel, seek empathy, prototype everything, and multiply your impact – to advise Fellows with regard to big strategic decisions. Further, they find that being part of a good peer group where it’s okay to admit they don’t have all of the right answers is extremely helpful.

A mutual respect & admiration - wishing each other luck before Praxis's Finale Presentation Event for the 2013 Nonprofit Accelerator. — with Justin Wheeler, Eddo Kim and Justin Zoradi in Los Angeles, CA.

A mutual respect and admiration – wishing each other luck before Praxis’s Finale Presentation Event for the 2013 Nonprofit Accelerator. — with Justin Wheeler, Eddo Kim and Justin Zoradi in Los Angeles, CA.

For example, at one of Praxis’s accelerator events, a Fellow got bad news: their manufacturer, the only one they trusted to meet high quality standards, had a production issue which meant they were going to miss a very important promised delivery date. They were put in a lose-lose situation: risk losing trust by missing the delivery date, or risk losing trust by outsourcing to a lower quality producer. Given their early-stage and small customer base, this decision had far-reaching implications that could severely damage their brand. They explained the situation to their peers around a fire pit late one night. This group of seasoned entrepreneurs with different insights helped them think through implications and ultimately make the best decision.

This is the epitome of how the Praxis team advises Fellows to manage tensions: they admit they don’t have all of the answers. They seek empathy, and ways to embody the Gospel.  They find a way to prototype (test) their assumptions, and pursue the path that will have the greatest impact. This accelerator program is designed to provide hands on support, world-class mentorship, and a peer community to help them think through these decisions holistically.

Laura Gossman lives in Pasadena, California. She is the Director of Operations at the Max De Pree Center for Leadership and a recent new mother to son Benjamin and wife of Adam Gossman. She received her M.A. in Cross Cultural Studies from Fuller in 2006.

Fieldnotes Magazine is a publication of the Max De Pree Center for Leadership at Fuller Theological Seminary. We would love to hear from you about people, businesses, or other organizations we can interview or feature. Please email the editor at Fieldnotes Magazine.

 

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