Making money, profit, and impact

A friend and I have been emailing the last few days about the non-profit organizational structure of MatchBOX Coworking Studio. He’s thinking about doing something to impact entrepreneurial communities. It won’t be directly part of his main business but will build off of his success there and could lead indirectly to even more opportunities in his core business. This is similar to how I view MatchBOX.

Sometimes when you’re starting something you forget to do basic things like get a haircut.

DelMar, my first business, gave me the experiences that helped shape my role in getting MatchBOX going.

[naive 2004-era Mikel to the commercial property manager] Holy cow, rent for a small office costs how much? … I don’t know this CAM fellow, but I really don’t see why I have to pay him each month … You want me to sign a lease for 3 years? I don’t know what I’ll be doing 3 months from now.


And more importantly than the missing office space was the missing community


[naive Mikel’s internal monologue] I must be the only crazy person in this town that works like this. (I wasn’t,  and the 250+ members of MatchBOX today prove that).

So once DelMar had given me those experiences, I was able to incorporate  those into the non-profit entity that became MatchBOX. Even though MatchBOX has the legal structure of a non-profit, we try to operate it very much like a small business. There has been a business model from the beginning. We charge members dues so that they value it and so that the leadership of MBX always must listen to them in the same way that a small business owner must always listen to her customers. We do take donors’ money to keep those member dues as low as possible so that the place is accessible to as many people as possible. But those donors are also customers in a sense. MatchBOX is providing a service to them. It is the service of allowing them to give back to early-stage entrepreneurs.

So even as a non-profit, we try to run MatchBOX as small business owners because that’s what we are. By being a non-profit, we said up front that if this thing ever makes a ton of money we won’t keep it for ourselves. That money will benefit the community in some way.

It is this profit-first mindset that, I believe, has allowed MatchBOX to have the impact it has had thus far and will keep it growing well into the future. The impact isn’t just in the money generated.  And you don’t need a non-profit legal structure to have non-financial impacts. Plenty of great, for-profit businesses have a lot of non-financial impact in their communities. Side note: read Small Giants. Lots of great examples of these types of businesses.

But for someone like my friend that has many experiences in scaling revenue-generating companies, it can be helpful at the start to have the non-profit structure to basically hold yourself accountable to the principles that you believe will have the most impact.

So, friends, whatever legal structure you choose for your next venture, just don’t leave behind the sound small business operating lessons that you’ve learned.

[Friends, don’t worry. Not everyone of our email conversations will become a thinly veiled blog post.]