Tuesday, August 30, 2011
Interview with Brandon Hance, GoodThreads
Have you ever been working on something at work, and suddenly realized what you were doing was applicable to something completely unrelated in your personal life? That's what happened to Brandon Hance, founder of GoodThreads (www.goodthreads.com), a new service which makes it easy for participants in charity walks and events to create personalized T-shirts, supporting the nonprofits running those events. Brandon tells us the story about how the loss of his aunt to breast cancer--his mother's participation in a charity walk to honor her--inspired him to take the technology from his firm, AudioLife (focused on music and entertainment marketing), and apply it to the nonprofit sector.
What is GoodThreads all about?
Brandon Hance: Sometimes I find the best way to explain the way GoodThreads came about, is through my personal story. What happened with me, is my aunt had passed away from breast cancer last year, and my mother decided to walk in the Avon Walk for Cancer in her honor. That was my first exposure to fundraising via an event. As I watched her go through the process, I saw her go about creating a personalized T-shirt to wear on the day of the race. She was going back and forth from Target, using things like a Sharpie, glue, pictures, and other things of that nature, to design her own shirt. Finally, she nailed down the shirt she wanted, and proceeded to create shirts like that for all of her friends and family who were going on race day, to support her and cheer her on the sidelines. I thought it was a cute idea, but didn't think too much of it at the time. However, when we got there to the event, I saw that there were thousands of people who had gone through a similar process for their own loved ones. They had gone through a time consuming, expensive process to create personal T-shirts, which was a hassle, but even more importantly, didn't benefit the nonprofit.
I started speaking with some of the people at Avon about that, and asked them why they were missing out on such a huge branding and fundraising opportunity. They told me they didn' t have the upfront capital, technical expertise, nor did they have the staff to handle that kind of service for donors. I said--wow, that's a pretty big missed opportunity. Thinking about the idea with my co-founders at AudioLife, we mocked up a design, and showed Avon our idea--how about something like this? They said it would be amazing. After interviewing a dozen or so nonprofits focused on these events, we found the response was overwhelmingly positive. We felt extremely excited about helping others, so we created a new venture called GoodThreads, which leveraged the technology and proven systems we have at AudioLife, but applied to a new focus, specifically for the nonprofit sector.
So, what is GoodThreads? GoodThreads is a platform that helps nonprofits increase donations, awareness, and engagement for their cause, by allowing supporters to create their own, personalized merchandise that tells their story, with the proceeds going to the causes that they are so passionate about.
What does that look like from the consumer's standpoint?
Brandon Hance: A consumer, when they are registering for an event, has the opportunity to buy and personalize an item, which is one additional step in the registration process. There are also what are called fundraising pages, where people who register from the event can also raise money from friends and family. In addition to giving money, you can also introduce a new opportunity to buy personalized merchandise, with all of the proceeds going towards their fundraising goals. Consumers who have a fundraising goal can upload photos, write a personal message, potentially include the names of loved ones inflicted by a disease, and hopefully tell their story, around the merchandise, which helps them become more connected to the cause and the event.
How difficult was it to handle all that personalization of T-shirts and merchandise?
Brandon Hance: Actually, we already did that with AudioLife--where he have 250,00 clients now, ranging from entry level garage bands to the largest artists in the world like Paul McCarty, Rihanna, Kid Rock, and others. T-shirts in the music business are a stable. That's the benefit of all of our experience, because we've been able to leverage a substantial percentage of what GoodThreads has built and proven with AudioLife, from the technology and overall supply chain infrastructure standpoint. What we wanted to do, was leverage that technology and apply it to a new market where we felt we could do a lot of good. So, we raised money, and put together a staff of people with deep experience and expertise in the nonprofit industry. So far they've done a great job, and we've been really excited about the productivity they've been able to achieve in a short period of time.
How much goes back to the nonprofit?
Brandon Hance: It's substantial, but it depends on the item. The way the overall model works, is there is a minimum price, the base price, and we allow the nonprofit to mark them up to set the retail price. The difference becomes the donation. Consider a T-shirt, which is probably the most common item, and has a $10 hypothetical base price--which represents our cost to the nonprofit, including all of our costs of manufacturing, fulfillment, and profit margin. From that point, we allow a nonprofit to set the retail price, which could be $20, or $25, or whatever. Susan G. Komen sells in the $25 to $30 range, and I'd expect more often something in the $20 range, just to keep the math simple. In that case, the nonprofit generates a $10 donation every time a shirt is purchased. If you look across the U.S., there are 30 million participants every single year that participate in these events, and many of them are in multiple races, plus the average number of donors those people have supporting them is about 8. That means, for every one registrant for an event, there are eight donors who give them money, and donate to help them raise their fundraising goals. If you think about it, it's a new category of fundraising in the marketplace. If you understand the size and scope of the industry, there's potentially a really large opportunity here.
When you started working on AudioLife, did you ever think it would have anything to do with nonprofits?
Brandon Hance: Certainly, it wasn't the original intent. But, we were seeing, with larger clients, an inclinatoin towards philanthropy. We had clients like the Beastie Boys, who had been selling some premium items--$750 deluxe box sets--with all the proceeds going towards nonprofits they are really passionate about, in their case The Pablove Foundation for children's diseases. We're seeing more and more of that, and there seems to be a natural connection between the two. Hopefully, over time, there will be more and more opportunities to cross promote one another. However, there was never a vision, it was really just seeing a need and opportunity, and we felt we had the chance to do our part to help.
Were you surprised no one else had done this yet?
Brandon Hance: Yes, I was shocked. This wasn't a business plan I had been researching for years, it was really something I accidentally had fallen into. But, the more and more I spoke with nonprofits, the more confused there was no solution for this. We saw the thousands and thousands of people at Avon, and even then I didn't know it was something unique to Avon, until I spoke to the Susan G. Komen Foundation, the City of Hope, the YMCA, and figured out that's how all of their events are too. It's apparently a huge white space, which no one has cracked into yet.
Is this available so that any nonprofit can use this now?
Brandon Hance: The vision is definitely to open it up in the coming months as a self service solution, so that both nonprofits and their supporters can go onto the site, and automatically create accounts and design merchandise, and so forth. We're trying to get to that as quickly as possible. However, the initial product won't have that capability, which is something we're working on as we speak.
Right now, we have a handful of key partnership with some of the software vendors in the space. To help you understand, pretty much every nonprofit uses a software vendor to mange their online efforts, providing fundraising, CRM, event registration, and so forth. Those software companies are the ones we will be announcing partnerships with in the coming weeks. We're finishing integration with them now, and each of those has a handful of clients, who are very excited about what we have to offer and have agreed to be the early test case for the solution. Those partnerships and early campaigns will be live in just two weeks.
Thanks, and good luck!