For the past 2 weeks, WattTime has been gearing up for two exciting Demo Days. In this blog post, we highlight our team’s experiences presenting at both BlackRock and Google.org, sponsors of Fast Forward’s 2015 summer accelerator.

BlackRock is the world’s largest investment firm, with $225 billion in mandates that explicitly address social, ethical or environmental considerations (link). BlackRock is also known for their philanthropy, supporting 20,000 young people all over the world for higher education and 1,942 nonprofit organizations through their programs (link).

We put a lot of preparation into this presentation, and are very thankful to the Fast Forward’s team, who helped us so much with advice, connections, and resources along the way.

Our cofounders Gavin McCormick and Dr. Anna Schneider had a blast practicing their one-liners, conducting interviews and finally presenting in front of BlackRock employees. When asked, “how would you summarize your experience at BlackRock’s Demo Day?”, Gavin says:

"One thing that was very fun was getting to pitch WattTime to a very finance-savvy crowd. Our technology can frankly be pretty complicated! But the folks at BlackRock immediately got it, and even started talking about linear optimization models and the connection to Enron. One even referred to us as the "Enron for good", which might be my new favorite tag line."

The center for Google’s philanthropy initiatives, Google.org proclaims “technology for social impact”, a strong initiative to use technology to make the world a better place. Each year, Google.org donates $100,000,000 in grants, 80,000 volunteer hours and $1 billion worth in products to nonprofit organizations doing good in their communities.

One of the biggest achievements was on the morning of Google’s Demo Day, Cofounder and CTO Dr. Anna Schneider and our analysis fellow Sohum had a breakthrough with WattTime’s Impact API. After years of R&D, we’ve finally expanded our real-time power grid analysis from just the largest power grids to every single grid in the continental United States. Get a sneak preview of the map here!

As part of the pitch event on Wednesday night, Google.org announced that they would be giving each of the 9 Fast Forward teams $30,000 AND matching donations from all other gifts that night. What a generous contribution!

When asked how he felt about this announcement, Gavin says:

“This is an amazing offer from Google.org and we are so grateful for their generosity. It was the cherry on top because we received a call from an anonymous donor that same day, also matching donations given that night. Which means, October 7 was an incredibly important night for us, with donations matched triple!”

After a smooth stream of presentations, we asked our team how they felt about the night and WattTime’s progress.

Dr. Anna Schneider, Cofounder and CTO: "Watching everyone pitch on stage, I felt so proud to be included in this cohort of wonderful humans. I've seen every single team reach milestones, clarify their vision, and gain confidence in ways that matter to them."

"Mentors from everywhere from Facebook to BlackRock to TechSoup came up to tell me how excited they were about our progress since we'd met a few short weeks ago. It feels like our team's hard work is making a real difference!"

Sho Kawano, Business Development: "The Google Demo Day gave me renewed enthusiasm for the potential for tech-nonprofits to enact change on the scale that we yearn for in the nonprofit sector."

Theresa Zhang, Communications: “It was amazing and inspiring to see so much support and enthusiasm for tech nonprofits like us. All in all, an amazing night!”

Breaking the nonprofit lifecycle into the typical "early" and "late" stages elides a vital stage—the "exit" stage. Is your org intending to exist forever, or is it intending to lead a non-eternal life?

Path away from profit

Pose this question to the founder of any for-profit startup in the venture pipeline, and they'll know their answer without hesitation. Either they plan to get acquired or they plan to IPO. Everyone gets rich, everyone is happy. Pretty simple, right?

At WattTime, thinking carefully about exit strategy was a key driver for us to forgo the for-profit model. We talked to a number of VCs and angel investors in the early months, and the more we reflected on their feedback, the more it became clear that our vision was incompatible with a for-profit exit.

To target IPO, investors want to see high barriers to entry for competitors. While we think it's important to protect our IP for now, we feel it would be impossible (and highly counterproductive!) to shut everyone else out in the long run.

On the other hand, to target acquisition by any of the big players in our field, we would have had to make our peace with ultimately being locked into that single corporate entity. With the right acquirer, we would create scalable impact by serving internal partners—but the ultimate scope of our impact would be limited in the likely scenario that we were blocked from forming meaningful external partnerships.

To put it bluntly: pursuing a for-profit exit might scale our business, but it would actually be a pretty crappy way to scale our idea.

So, what's our endgame instead?

For a nonprofit, there are many more exit strategies that are open to you, and often much less clarity about which strategy is the best fit. This SSIR piece from the Global Development Incubator makes a strong case for thinking as carefully about exit strategy as for-profits do, and lays out some options to get you started:

Plotting an Endgame: Six Options. Excerpted directly from "What's your endgame?", SSIR, 2015.

WattTime's intended strategy is a mix of these. In fact, if we divide our work into "research," "education," and "assistance" programs, each program falls into a different exit strategy.

• Our research program is a classic example of the "open source" path. Environmental demand response is a "breakthrough idea," and we are well equipped to conduct and disseminate the foundational research to place the field on firm scientific footing and promote it towards maximum impact.
• Our education program follows the "replication" path by operating pilot projects that lay the groundwork for commercial adoption, with the ultimate goal of evolving into a certification program that keeps for-profit players in check while providing them with highly-desirable branding opportunities.
• Our assistance program follows the "commercial adoption" path by helping for-profits incorporate environmental demand response into their existing products, from electric vehicles to commercial HVAC. In many cases, this looks like providing a software API that links our data and algorithms to their consumer-facing products.

Although the article uses the phrase "pathologically cooperative" to describe the open source model, we live that value across our programs, and probably most actively in the assistance program. Interestingly, this means that our bias toward cooperation is strongest in the area of our work that would be most strongly competitive if we were a for-profit!

In the very latest stages, we hope to follow a variant of the "government adoption" path. Government can "acquire" most of our activities by folding them up into one of the existing Department of Energy national labs, which already have deep expertise in scientific research, pre-commercial pilot projects, commercial assistance, and certification programs. (In fact, we considered moving under the umbrella of a national lab early on, but hoped we could create impact faster by staying small and nimble in our early stages.) Government has a weaker track record for maintaining delightful software that companies are happy to build their products on top of, but it's not unprecedented, and efforts like the US Digital Service are paving the way to improvement on this front.

There's one key role of government that's missing from the article but present in our long-term strategy: regulation. If legislatures, DOE, or public utility commissions mandate corporations to participate in our commercial adoption program, then that's a huge step toward mission achievement for us. Like I mentioned above, many companies are perfectly capable of copying our activities once they have an incentive to do so, and regulation can be an effective incentive. So government regulation could be the most impactful outcome of our work, while also putting us out of business for good. I suspect this is true of many other nonprofits, and I'm surprised it wasn't explicitly included in the SSIR piece.

Putting it into practice

Once you've clarified your nonprofit endgame, there's of course the little matter of making it useful.

Knowing WattTime's exit plan has given us a great answer to that perennial question, "why aren't you a for-profit?" Acting like a scalable Silicon Valley for-profit would be inconsistent with our values, in large part because we think it would lead to a smaller scale in the long run.

Another benefit is giving us a framework for thinking about how scalable we should make different arms of our business. For instance, remembering that our ultimate goal is to enable others to replicate our model helps us resist over-investing our limited resources in any one pilot project. But the core R&D—that should stay in known hands (like our own) to build a trusted brand for the eventual certification program.

Of course, it's not always easy to be growing something you care about to the depths of your being, yet planning its demise at the same time. Keeping a mental distance between the organization and its vision helps with this. So too does remembering that your mission is to actually create real change—and if that change means that your org winds down, you and your colleagues can free up your energy to tackle the next big problem.

The take-home

• Are you leading a baby for-profit? Think carefully about the implications of pursuing acquisition or IPO, and make sure that the benefits outweigh any compromises you'll have to make before or after your exit.
• Are you leading a baby non-profit? Read this article and build one or more endgames into your theory of change from the beginning.
• WattTime's endgame is a mix of a few nonprofit exit strategies, but "sustained service" is not one of them. If all goes well, our impact will continue far beyond the lifetime of the organization.
• Knowing our exit strategy has helped us stand firm on our values, and will help us allocate resources moving forward.