Monthly Archives: August 2013

Nonprofit Arts as Lean Start Ups

I am reading THE LEAN STARTUP by Eric Reis.  I was inspired after attending a session at the NTEN conference where a nonprofit environmental group explained how their operations were fueled by startup models. 

I am increasingly convinced that arts organizations will find greater success if they turn to startup or entrepreneurial models over traditional institutional structures.  Nonprofits are indeed corporations but they are SMALL businesses, not large multi-nationals.  They serve a community and are literally small in comparison in the operating budget schema. However, they are even more like a start-up than a traditional small business — let me refer to Reis’s frameworks to demonstrate. Notice the crossovers:

1. Entrepreneurs are everywhere: The concept is “a human institution designed to create new products and services under conditions of extreme uncertainty.” 

That uncertainty is the crux of constructing a season or a work of art — each one is incredibly unique and who knows if the audience will come.

2. Entrepreneurship is management: “A startup is an institution, not just a product, and so it requires a new kind of management specifically geared to its context of extreme uncertainty.”

3. Validated learning: Startups exist not just to make stuff . . . or even serve customers. They exist to learn how to build a sustainable business.” 

Most arts organizations have post-mortems for their art making — not their business making.  How can we ‘make stuff better’? Why not do that for the business as well?

4. Build-Measure-Learn: “The fundamental activity of a startup is to trun ideas into products, measure how customers respond, and then learn whether to pivot or persevere. While nonprofit arts are geared to a community service and learning track, the concept holds true. And we need to measure and learn more to best serve our communities.

4. Innovative accounting: “To improve entrepreneurial outcomes and hold innovators accountable, we need to focus on the boring stuff: how to measure progress, how to set up milestones, and how to prioritize work.”

It is about making the art, but in order to succeed the arts administrators need to set up milestones, to measure, to know how to prioritize, because most of us are continuing to do “more with less” — the mantra of the new economy.

Whether you read Reis’ text or not, I recommend that arts managers deeply consider how to embrace the uncertainty of art-making by turning to structures and systems that support it.  Keep making but start setting measurable goals and prioritizing to mission.  Arts organizations are cultural entrepreneurs.