Snowball Fundraising

We Launched A Non-Profit Fundraising SaaS

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John Killoran

Founder, Snowball Fundraising

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Snowball Fundraising

snowballfundraising.com

from Albuquerque, NM, USA

started February 2011

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Hi there! I’m John Killoran, the CEO of Snowball Fundraising. We launched Snowball several years ago to try and disrupt the nonprofit fundraising space by offering a truly affordable and yet super powerful fundraising platform.

The problem we’re trying to solve is that there are over a billion dollars per year spent on technology by nonprofits. We believe that money should be going to causes and not technology. So we’re striving to create a fantastic platform that's affordable for nonprofits and allows them to raise a lot more money. Snowball allows for more nonprofits to have that technology so they can do great things in this world. That was the founding vision of Snowball. And now we’ve built this platform, and we’ve had thousands and thousands of nonprofits sign up for it that are using it daily. We’re very excited about it.

Snowball is super exciting because every month we have hundreds of organizations signing up for the service. We’re well over 15,000 sign-ups just in the last few years. The majority are using our free plan and can have great technology in their hands at no cost. We make our money on free plans from tips and payment processing, and that’s very gratifying.

The other thing that is compelling and interesting about Snowball is that we are developing a new authentication technology that could eliminate donor abandonment. It's a two-click donation button, and our organizations will be able to implement it in the next few months. The goal is that we are providing the solution that overcomes donor abandonment. To us, donor abandonment is one of the biggest problems out there, and it just needs to be solved. It costs organizations unbelievable amounts of money. An organization spends a lot of money driving people to their cause, and the numbers are staggering: 6 to 8 out of 10 donors abandon the transaction after clicking the “donate” button. At one moment they were ready to give, but the need to fill in their credit card information and complete the whole process stops so much generosity from occurring. We’re excited that Snowball has the technology to overcome this problem of donor abandonment.

What's your backstory and how did you come up with the idea?

I spent 25 years as an environmental and sustainability expert running consulting services for the federal government and solving environmental problems as an environmental professional. And one of the problems that plague compliance with environmental laws and regulations is getting people to complete simple tasks and to know that they’ve done so. This was a constant failure in the industry. So I came up with an invention called the I Swear To God Button that could be put in an email. We would program the servers to blast out these emails with these buttons in them and all people would have to do to verify that they had completed a task was complete a two-click process right from their email. It was very popular and it took off with the Army and the Air Force. We called it Auto Pilot.

Carry the inspiration from the initial idea and keep it with you as you learn and grow. Keep going until you can’t possibly go any further.

One day my business partner and I were sitting around and realized that if we can get people to do these tasks, follow up and follow through with our button, maybe we can do the same thing and get a whole lot more donations generated for nonprofits. We were hesitant about it because we were environmental consultants at the time, and this would be a different sector. But we launched and we are super excited that we did. We love our product and we love the technology that we built. Over the last eight years, I’ve learned so much about the industry and overcoming donor abandonment. Helping nonprofits raise more money has been very gratifying.

Take us through the process of designing, prototyping, and manufacturing your first product.

When I look back at the first product, I can’t believe how far we’ve come. The first product was super exciting but, quite frankly, it was very painful because it was not a fully automated system and it kept us partially in an unscalable low. But creating this new authentication system was a big deal. No one had ever authenticated a payment this way, so there was a lot to learn in a short period.

When we decided to go forward with this product, we had a limited budget and resources. The first product we launched was a two-click donation button and it only worked in an email. So you had to receive an email from a nonprofit, but getting those emails integrated into all of the various email services in the world like ConstantContact, MailChimp, etc., was very overwhelming.

What we did was create a manual process where we worked hand-in-hand with the nonprofits. We thought it was a great idea and wouldn't be that big a deal. But it was in many ways a disaster because we ended up sending all their emails to them. It was a very complex process of creating all these one-time tokens and uploading them and merging them with their email blasts with the message they were sending. The results were great, and it was so fun to be so intimately involved with the nonprofits, see the technology work first-hand, and see all the donations come pouring in. But we had a team of people just uploading tokens into the system so that they’d fire out from the various email services.

Now it’s all automated, so we don't have to do any of that, and it’s way better. But back in the day, it was this fairly manual process. We had no idea it was going to work because no one had ever paid by opening an email and clicking two buttons. We had no idea if people would like it or not. So the first product involved a lot of manual work and it was very scary. We never knew how it was going to work out, but seeing donations fly in every month felt so good.

on-launching-a-nonprofit-fundraising-technology

Describe the process of launching the business.

I remember going to a lawyer after lawyer trying to find the right one to help us start this business. Trying to find the right one was a very difficult and depressing process. I’d go from one lawyer to another and they would tell me it would take 6 months and $50K before I could legally take on investments. But to let everyone out there know, there’s hope. You can always find the right lawyer. Don’t just go along with what the lawyer says. If you don’t like the answer, find another lawyer. And we did.

The right lawyer had us up and running in a few days, and it only cost a few thousand dollars. We were able to take in investments, but it had to be from high net-worth individuals and not institutions. It's a very basic process with these high net-worth individuals. There are 13 SEC standards for classifying someone as a high net-worth individual, and the two that I can recall off the top of my head are: 1) You have to have a net worth of over one million dollars excluding your house, or 2) You have to earn more than $200K per year. And those two cover about 90% of the investors we’ve encountered. Once you’ve got someone like that, you can pitch them on a business and have them invest if they wish.

Make sure you write a great pitch deck and explain to them how they are going to make money. Keep the deck under 20 slides. Don’t write a business plan. Investors don’t read business plans anymore. Write a business plan for yourself not for your investors. Your business plan is like a book about your business and how you are going to succeed. So your slide deck is like a summary of your business plan for your investors and how you will find mutual success. And it’s great when you get an investor interested and asking tough questions because you’ve written the business plan and you’re ready to give all the answers. Once you’ve done this, it's just about getting in front of the right people.

And then there’s putting a valuation on your company. It’s a tricky thing, but if you can demonstrate that you have a company that can scale from 1 customer to 50,000 customers and the revenue chart makes a hockey stick shape while the costs only gradually increase, then you've got a compelling business that you can get investment with. And that’s what I did.

To date, we’ve raised over 11 million dollars from those individuals without having to take on any institutional money. And we’re not sure we’ll ever need it. And it’s been great for us. That’s how we launched the company.

Since launch, what has worked to attract and retain customers?

The only way to retain customers is to have a great product. This is a learning process for every business person. And at Snowball, we have a very simple quality statement. When we talk about our quality statement for the company, we are talking about the answer to the question: How do we get everybody in the company, from the CEO down to the interns, to be marching in step and ensure that everything we do is high quality? The answer isn’t some long, convoluted statement. It’s very simple. It’s only two words. Deliver Delight. This is something that you can’t forget, and it’s instilled in every team that comprises Snowball. Development, Product Management, Marketing, Sales, Customer Success, and Design all have this mindset of working toward delivering more delight, both to each other and the customers.

I can’t tell you how many meetings we’ve been in where an idea has been proposed and we all have to ask the question of whether or not it delivers delight. And it clarifies everything for the group because if we are, then we do it. If we aren't, we realize we are missing the mark and we drop it. This is like the North Star of the company, because when you create a delightful company, people use it, and they share with others, and they don’t quit using it.

How are you doing today and what does the future look like?

The future looks great for Snowball. The organization is humming along right now. There’s a lot of synergistic things happening right now, things are feeling very productive. We love the way things are going. We’ve had year-over-year growth for the last 5 years and we are looking at a big uptick coming.

We’ve worked for so many years trying to offer this software that is free to nonprofit organizations. What we’ve come to realize is that there’s an entire market that is willing to pay for our product. They trust it more if they are paying for it, and so we’re now marketing toward that sector of the market. It’s great because it’s increasing many KPIs for us, such as revenue and customer lifetime value, and that is great to see.

People are always interested in paying for extra services and extra features, so we’re focused on that right now and have been for several years. This sector of the market is a nice sweet spot because it's under-served and not dominated by any one company. And that’s perfect. We’ve been building out our platform for so long that now we feel like we can fit nicely into these higher-ticket categories, where people have been charging subscription fees for years. We’re very excited about the next four or five years.

The question of profitability is a funny one. I always find that as our revenue goes up, we would technically become profitable, but we always reinvest those back into the company. We hire more people and do more things. So we’re not technically profitable, but the company is doing well, and we have plenty of investment behind us to keep going this route.

The long-term goal of the company is to get up to about $6 or $7 million per year in recurring revenue. That would be a great spot for us to be at, where we’d be extremely profitable yet continue to offer tremendous value to the market. That’s where we’re aiming.

Through starting the business, have you learned anything particularly helpful or advantageous?

Absolutely! The first thing that comes to mind is investing in content marketing. You don't have anything unless you have people coming to your website reading about your product. For many years, we’ve been investing heavily in content marketing and it’s brought tens of thousands of customers to our website each month, and it’s moved the needle for us. So I strongly believe in content marketing.

Another great part about it is that it endures long after you pay for it. If you’re paying for ads, the second you stop paying for ads, you disappear. With content marketing, once you earn that spot on the first page of Google or its knowledge box, it’s much more long-lasting. If you do the maintenance on it, you can keep yourself there.

What platform/tools do you use for your business?

There are two platforms that I think have made a difference for us. The first is Hubspot. It has brought together our sales and marketing efforts, it gives us so much more insight as to what is happening on our website and what's going on with our customers. I honestly don’t know if we could be living without it.

The other is a little more technical. It’s a platform called Spreedly. We process a lot of donations for nonprofit organizations. A lot of the nonprofits don't need to process through us because they have an established merchant account with great rates that they've built up over the years. Spreedly allows them to use Snowball with their existing merchant account. So they get the credit for all their throughput as well as being able to use our tools, and that’s a big win for us as well as the nonprofits.

What have been the most influential books, podcasts, or other resources?

Two things come to mind and they both have to do with Stoicism. The first book that I recommend, especially for every entrepreneur out there, is called The Obstacle Is the Way. It’s a fascinating book written by Ryan Holiday, and it clarifies the Stoic mindset. Stoicism was the leading philosophical school in Rome. It teaches an outlook on the world so that you can really enjoy this experience of life and also be super productive. The book is basically about the fact that no matter what you do in life, obstacles are going to come your way; the key in life and Stoicism is to become good at overcoming obstacles. The book argues that perhaps the number one skill that everyone should be focused on is how to overcome obstacles. Learn about the mindset and the process for overcoming obstacles, because no matter what you do in life, you'll be in front of obstacles. So you might as well get rid of them.

The second is Meditations by Marcus Aurelius. He was the fifth of the five great Roman emperors. He wasn’t just a philosopher—he was running the Western World. All kinds of calamities occurred during his rules like plagues, earthquakes, and other natural disasters. And despite it all, the Roman empire grew to its greatest extent, to the peak of its existence. A lot of that is attributed to Marcus Aurelius and his Stoic way of approaching problems and running his empire. It’s an amazing book, one of the great works of Western literature, and I think every entrepreneur should have a copy of it in their backpack at all times. It’s great because any page you open up to will help you dial in and keep the right perspective and mindset about the world.

Advice for other entrepreneurs who want to get started or are just starting out?

The first thing that comes to mind is tenacity. You’re going to launch with an idea, and with my experience and from what I’ve heard from other entrepreneurs, that idea is not the one that will make you successful. There are many pivots in your future. You’re going to try things and the world is going to punch you in the nose, and there are going to be failures. But the thing is, if you quit, it’s all over.

If you're tenacious and never say die and keep pivoting, you’ll find a spot. Carry the inspiration from the initial idea and keep it with you as you learn and grow. Keep going until you can’t possibly go any further. That’s what I’ve found to be the most important in my experience, and it ties back into the book I recommend, The Obstacle is the Way. There are three pillars in having a Stoic outlook. One is to have the right perspective—to be calm and open-minded, to tune into your environment, and listen to the voices around you. Two is taking the right action—affirmative action. The third is to persevere—seeing it through and not quitting. So that ties back to tenacity. Just persevere, and in time you’ll accomplish it. If you give up, it’s over and that’s a shame. So you just need to be able to take hard times and difficulties but persevere. That's the best advice I have for entrepreneurs and startups.

Everybody is so optimistic when they start, then they get completely dismayed when the world punches them in the nose and they have failed. And you can’t take that personally. The key thing is to learn from it because every failure and every tragedy that is going to occur in business and life is loaded with gifts for you. So if you have the right perspective, of course, you’ll suffer failure. but you'll also see the gifts that are there. And those gifts are really important because they will tell you something great. They can be clues for the right pivot or the right thing to do next. So have the right perspective, be aware, pay attention, don't freak out when a failure occurs, just learn from it, find the gifts within, and persevere.

Are you looking to hire for certain positions right now?

Yes! We’re always on the lookout for Ruby on Rails developers. We have positions from senior to mid to junior, so if you’re a Ruby on Rails Developer, please reach out to us. We'd love to talk with you. Send your résumé to [email protected].