Nonprofits And New Technology

In the early days of the California gold rush, Americans with urgent messages for the western frontier were confronted with a problem.

The westernmost United States Post Office was located near the very heart of the country in St. Joseph, Missouri, barely 200 miles west of the Mississippi River. Sending a letter the remaining 1,700 miles to the west coast was considered practically impossible.

Seeing a business opportunity, the Central Overland California and Pikes Peak Express Company began a letter carrier service using riders on horseback. Eventually, the route was taken over by Wells Fargo, using the now famous moniker, "Pony Express."

The Pony Express is what legends are made of: heroism, struggle, and adventure. It is storyteller gold for movies, children's books, statues, and paintings—like this one by Frederic Remington.

The business side of the Pony Express, however, was a dismal failure. Less than two years after the first ride, the final delivery was made in 1861.

 So what happened to the Pony Express?

For starters, the Pony Express business model had some serious issues.

The first issue was culture.

The promise to deliver the letters took precedence over the safety and working conditions. It was a big, bold claim which had almost no chance for sustainability. (How would you respond to recruiting ads asking you to "risk death daily"?)
Pony Express Recruiting Poster "Orphans preferred"?
They also faced a pricing dilemma.
Initially, the price to deliver letters up to 12 ounce was set at $5. Considering that in 1860 median income across all wage earners was around $300 per year, $5 (nearly $150 in today's terms) was simply impractical for the average person.

To increase volume, they slashed prices dramatically over the next 19 months, all the way down to $1 by July 1861, an 80% price drop in little over a year and a half.

Another problem was proving actual results.
The fact that riders could be robbed or injured, coupled with an inability to confirm delivery to the final destination, made it very difficult to know if the letters actually arrived. We may use the fancier term, "return on investment" but at the end of the day the ability to demonstrate results matters.

However, even with these and many other issues, a bigger threat to the Pony Express was on the horizon.

The real problem? New technology.

In late October 1861, Western Union completed the first commercial intercontinental telegraph line from Washington D.C. to San Francisco.

With the final connection of the last wires, instant communication from sea to sea became a reality. At the same time, the risky prospect of sending a horse and rider cross-country with urgent messages became a much less appealing idea for building a business.

While this broke down the barriers to faster, more reliable, and more cost-effective information sharing, it was very bad news for Pony Express.

So what is the moral of the story for nonprofit management in the 21st century?

Creating a future-facing culture is essential.

What worked yesterday will not work today. What works today will not work tomorrow.

And it's not just ponies and stagecoaches. Mobile phones replaced MP3 players, which replaced compact discs, which replaced audio cassettes, which replaced 8-track players.... and so on.

Simply believing that "change is inevitable" is not enough.
Successful people go beyond accepting what they can't change. Instead, they chart a course for the future.

This is hard work, which requires us to be intentional. It forces us to continually re-examine ourselves. But as difficult as that may be, it is critical to the future of the nonprofit organizations we serve.

Creating future-facing culture means taking risks. It means doing things you have never done before. It means always looking for new ways to accomplish better results.

This kind of culture also makes an intentional effort to eliminate the fear of failure from daily operations. If you truly want your nonprofit to be successful, you will need a team of people who trust your leadership to celebrate wins while viewing failures as stepping stones and opportunities to learn what you did not know before.

The scientific community figured out long ago that the sooner you establish and test a hypothesis, the sooner you can start to learn from the outcome.

One of our primary goals at StratusLIVE is to help organizations build for the future. We have never wanted to build just another transactional tool to track donations. We also refute the notion that putting a new coat of paint on old technology and calling it the "Next Big Thing..." is acceptable.

Instead, StratusLIVE software is designed from the ground up to fundamentally shift how nonprofit organizations relate to the people they serve as well as donors who support their mission.

As Mike Trainor, the president of StratusLIVE, told me the day we met, "We do not build technology for technology's sake. We solve problems that have plagued the nonprofit software industry for years so that our clients can focus on their mission, be better fundraisers, and deliver better results."

Learn to identify trends and hit them head on.

One of the most interesting aspects of the Pony Express story is the fact that the reign of the telegraph (and the ensuing demise of the Pony Express) didn't happen overnight. There was a wave of innovation for which they were seemingly completely unprepared.

Samuel Morse first patented Morse code in the 1830s. Then in 1844—nearly two decades before the Pony Express—the first transmission from Washington D.C. to Baltimore, Maryland was accomplished. The first successful telegraph across the Atlantic took place in 1858.

Shortly after the successful completion of the transcontinental telegraph system in 1861, telegraphy was quickly and thoroughly adopted worldwide.

Change makes people nervous, but we have to inspire confidence in our teams and build future thinking into your culture. Do this by celebrating the past, measuring the present and opening up your organization to change to make room for growth opportunities provided by new technological advances.

Action is required.

Think about the current state of nonprofit direct response marketing for a minute. Are our campaigns yielding results we expect or need? Have direct mail conversion rates improved or declined in recent years?

While there may always be exceptions, data across the nonprofit fundraising community is almost universal: direct mail continues to struggle.

The obvious temptation is to hunker down and keep all models the same. Maybe with better pictures or stories, we will do better next time.

Or, maybe we can try to make up for the dwindling conversion rates somewhere else. But of course, somewhere else becomes more and more difficult to find.

Embrace new technology to help your team focus on results.

Instead, we could come to the realization that, as your direct response marketing budgets come under greater scrutiny, your nonprofit must embrace new technology for better strategic, tactical, and operational work.

You have to provide the best tools on the market to help your team make faster, smarter, more productive decisions. This is the only way to move from throwing darts to using data to boost ROI and deliver consistent performance gains.

It's always a good time to make a good decision.

As you think about the changes you would like to make to build a future-facing culture, remember the old proverb:

"The best time to plant a tree was 20 years ago. The second best time is now."

Bring your people together and spend some time talking about what is still working and what needs to change. Also, challenge your team to identify inefficiencies in processes, technology, and results.

And remember, the only way people are free to succeed is when they are also free to fail.

We would love to join that conversation. To get started, reach out today, request a demo, or touch base with me directly.  

Posted by StratusLIVE