Today we’re learning from Lily Dempster, the founder of One Small Step app.
One Small Step is a social enterprise that uses technology and behavioural science to make it easy and rewarding for people to successfully adopt greener habits and reduce their carbon emissions. Their vision is to harness the best aspects of humanity to help avert the climate crisis and secure an environmentally-healthy future. It’s designed to help millions of people reduce their carbon emissions and offers a clear path to personal net zero emissions and climate positivity through the delivery of free science-based, data-informed courses and habits.
One Small Step gives clarity on the impact of the food you eat, the purchases you make, how you travel, the energy you use, and the waste you produce. It then provides solutions via easy, step-by-step courses to reduce emissions, with the option to switch to trusted sustainability products & services.
This was such an interesting episode for me! I’m less in the loop when it comes to the blueprint of building an app and acquiring users so I learnt a lot and I’m sure you will too. I also loved hearing about the things that Lily would do differently if she had a chance to start up again. When it comes to investing, it's important to remember that it's an ambitious and massive undertaking. Not having a strong revenue loop built in from the outset has made it harder because you're spending so much energy on the investment piece. It might have made more sense to get to their point of covering her own costs before embarking on that raise. In that case you're raising to scale up, not raising to surive. You'll have a much strong pitch.
And while I’ve got you here, remember to sign up to receive our weekly Hype-Girl hotline texts for a dose of motivation and joy. Head to our Norby link to sign up for free > femalestartupclub.norby.live
Let’s get into this episode, this is Lily for Female Startup Club!
Please note, this transcript has been copy pasted without the lovely touch of a human editor. Please expect some typos!
Yeah, sure. So I wanted to work in social impact or social justice ever since I was quite sort of young, my family, I think the kinds of conversations we had around the dinner table, my mom worked in mental health care and my dad was a journalist, but was very big on press freedom and public broadcasting. So they were both sort of activists in their own right. And I so I was I guess I was raised in a family where the value set was, you know, you you want to do good work, but also how are you going to contribute to society? And that was just something that I was raised in. And so that was a big frame of reference to me thinking about what I wanted to do through university. I studied law, which I decided, I think that was a mistake for me. At least I did a whole five year arts law degree, and law is fantastic because it teaches you how to think and process lots of information quickly. But the downside, you know, at least at that point when I was studying is that, you know, you had to work in corporate law to get really good. There wasn't a lot happening in Australia in terms of really good public interest litigation compared to some of the firms overseas. So, I early on in university realized that I wanted to work in the environmental movement because I saw climate change is a really significant social justice issue because it has such inequitable impacts both generationally and then for people that are at least responsible for having caused the damage are the ones that are most affected by it. And it also is just like a maximized for maximizing for human suffering and all kinds of human security threats that we want to avoid. So I felt like working on climate change was a really good use of my time and energy, highly intellectually challenging, very complex. Lots and lots of different areas you could contribute to. And so started down that path, but really struggled with like how to apply my my legal background effectively. And so ended up moving into campaigning. So political campaigning, looking at top down reforms at the federal level. I worked for an advocacy organization called Get Up. When I was in university fairly early on as a sort of junior campaigner, and then had worked in the Department of Prime Minister and Cabinet, which is a part of the public service to sort of learn how the sausage gets made in government. And that was very formative over two years and then went back into campaigning on on climate forget up was working on renewable energy, specifically in coal seam gas and running those campaigns. I really got a sense of how significant an impact we can have when we mobilize people in sort of the thousands to make changes to their consumer choices and also changes to their behavior. We sort of ran the numbers on some of the campaigns that I was responsible for. One where we were getting people to switch to a an electricity provider that was only generating renewable energy through their generation side of the business and was offsetting everybody's emissions Through their electricity, getting people to switch to green power another scheme and the impact was really significant with sort of 15,000 people in one campaign, 5000 and another took them a couple of minutes online to switch. So these were sort of fairly easy actions and yet the impact was really significant, not only in terms of the emission reductions, but also the fact that it was growing the market share of environmentally friendly business is growing their market power. So you're kind of pushing against the fossil fuel energy incumbents with a really, actually quite a positive campaign. And so that was sort of my lightbulb moment. Um going, okay, there's an underutilized sort of area of effort we could be we could be looking at in the environmental movement and that's really looking at people power and consumer movements. And, you know, there's been a really big focus on top down political reform and how essential that is, doesn't take away the fact that it's still essential, but that I think people fundamentally misunderstand how we change dynamic systems like our society, how we de carbonized society, and we really do need grassroots change at all levels of society in order to be successful. And the I. P. C. C. Report, the latest one that's come out has sort of shown that now, looking at going way too technical, but what's called demand side climate change mitigation, they're like 40 to 70% of of the global carbon emission reductions we need to make could potentially come from demand sites so that changes in behavior effectively. And one small step is dedicated to helping people make those changes in their behavior. And I also studied a bit of economics and choice theory and my political science degree and had been obsessed with behavioral economics and behavioral science. So I was really noting out on the potential applications of that emerging research in the product that ultimately built, how do we effectively support people to make better decisions, working with the way that people make decisions and take action rather than just info dumping or sort of guilt tripping. We really wanted it to be positive and something that actually supported people in growing their well being as as well as having the environmental impact, wow, sounds absolutely amazing. I love everything that you're doing. I'm so curious about this time in your life where you're having these thoughts, you know, you you studied law, you're obviously a non technical founder, from what I can tell and you've decided to embark on becoming a tech entrepreneur and developing an app. Do you quit your job and go all in? Are you starting with a small M V P. And I should preface to everyone, I am less familiar with talking about tech and apps and all this kind of thing. So you're really gonna have to step me through the blueprint of your journey? Like I'm a grandma? No, it's good because I was basically a grandma starting out as you said, non technical founder. So going, okay, I'm gonna build, you know, a mobile application with this sort of feature set where we can do a b testing a multi variant testing of columns and design and user interface. Like that was a really tough ask what it was just me at the start, um I would say the first few years of trying to do this with the toughest I didn't really know who to listen to because you know, I didn't have a coding background. So one option is okay, I learned to code myself a second is that I bring in a technical co founder who can who can execute the coding and development side for the business. And for me, the third was sort of raising money and hiring outsourced developers. I went with an option where I I went through an accelerated program that was designed for tech enabled business is sort of supporting female founders. And the intention was they'll pair you with a team of developers and they'll help you build out your MDP and you didn't have to front up the initial capital to do that. They took an equity stake and they would build the MDP. So I on the face of it, it's called, she starts through blue chili on the face of it, that seemed like a good option. But I think I didn't have any experience in product management and I think I was also not great at sort of being really clear about what I knew. Like I knew my my eco conscious consumer market really well from years of grassroots campaigning and I knew a ton about what I what needed to be in the product from a behavior change standpoint. And I wasn't I didn't push hard enough on that because I was sort of like, well, I don't know anything about running a business, I don't know anything about building a minimum viable product. So let's let's do it in the way that I'm I'm being told to do it or being suggested. And so I think there was probably, yeah, a good 18 months where we made very little headway despite working really hard, you know, doing some government grants sort of bootstrapped it. I did a crowd funding campaign where I raised $30,000 from the public, launched a local version of the app, kind of an early version in Canberra using some white labeling, so it was really tough because I just didn't have that technical co founder who really understood what I was trying to achieve. And that alignment is so important when you're building something that's never been built before. And for a long time, I had people often say to me like what you're trying to do isn't possible. No one is going to change their behavior through a mobile app, It's too hard. No one gives a crap about the environment. You know, your market is gonna be really tiny, you know, you get all kinds of lots of opinions then they says, which is totally fine. I mean, you know, if it was obvious to everybody that was a good idea, it would already probably exist. But what I what changed it for me was getting in some really fantastic technical advisers, really just through loose tie contacts, I had Simon Sheikh who was was the former Director of Get Up where I worked and now the founder of the Ethical superannuation fund Future. Super. He introduced me to bryan Rowlands who was very senior in at Lassie and the senior product guy there at lessons, a massive software company in Australia. And we just really hit it off, like I remember I was like, sorry to swear, but kind of shooting myself when I first met him, talked to him on the phone because I thought, oh, this guy's not gonna be interested in what I'm doing. You know, I barely have a product, it's really just me at this point, but he was just so lovely, you know, some of the best people I think for me in business that I've met are highly intelligent but just have no ego and no pretension and they're sort of the best people to work with. And So Brian was really, really fantastic as a support, same with Jason, Serafino, another guy that came in as an advisor, he's a really experienced chief technology officer of a of a fintech in Australia. And I started working with those guys about mid 2019 and they really helped me to understand how to structure, you know, a lean product development business or lean product development team, help me hire my first in house developer and really understand what was needed, both in terms of tech stack choices and just how to manage developers as a non technical person. And so I just got really good mentoring basically it was invaluable raised some some pre seed funding with their support and and then we were sort of away and then software was sort of neutralized as an issue because whereas prior to that it had been really tough just to even get a product that worked in the way that even at the most basic level to to test the assumptions that I had, it was really tough so that that was a huge turning point, getting those guys in my corner and they you know they're still both of them involved with the business to this day. And so thanks brian and Jason and Simon. Well that's amazing. Yeah the technical part of getting that M. V. P. Ready and getting the first kind of version. It just seems like such a challenge. And then you've got to I guess onboard users and and see what they're doing when they're using the app and and starting to kind of take that next phase of launch and kind of marketing. How did you go about launching into the market and getting your first kind of core users? That part was easier because again the grassroots campaigning, there's a lot of similarity between digital marketing and and sort of digital campaigning. So you know I ran some live events, did sort of launches, went to little festivals collected, built an email list. And then just at that point facebook advertising was really good. It was cheap. Unlike my experience with it now. And so a couple of $100 behind some some ads just I think for the crowdfunding campaign as well, we were able to list that way. And you know the facebook ads were really cheap I think we put 200 bucks behind them and we acquired our 1st 1000 kind of sign ups that way. So we had a really good, yeah we had a really good initial demand. Oh my god and and so that works really well and you know, because I think what we were doing was, was novel at the time and also really strong environmental focus. Um, it's very mission driven. It was pretty easy for us to get some press as well. So we had a few, you know, going through the accelerator. And then with what we're trying to build, we had, I sort of, because I was based in Canberra at the time, was able to use the local media a bit to kind of get the brand awareness up potentially too early. You know, it didn't necessarily need that exposure at that point when we barely had a product, but that, that helped too. So I think that initial phase of acquiring the 1st 1000 sign ups was easy. And then as we started to try to scale up user acquisition, which, you know, for the mechanics of a model, like my business, you really need to have accelerating user acquisition on a monthly basis if you're going to grow because you've got a high churn product with a mobile app, even with good retention, you basically need to have an increasing number of new users to be able to scale the user base. And that's been a big challenge for us actually, you know, we, we've found that we can, we've got a pretty good, what's called a paid user acquisition engine. We've done that through Tiktok. Um, and then google ads and you know, we're continuously testing different channels, But, and we were able to find a really good partner to work with that helped us on a pay for performance basis, which was great because you're not, you're not paying for the service, you're paying for the outcome and they were an international firm. It's critical. Yeah. And so that that's worked pretty well. But I think where we haven't done as well actually is like in our content marketing, we haven't had a full marketing person on staff the whole time. So you know, we've got a, we've got a really solid mailing list and we're sort of sending stuff out to people and we have our followings on social media, but we're sort of doing a lot through the app proper. Now in terms of community building, we have a bunch of community and group features and we're really focusing on supporting people to connect into their low called sustainability initiatives, working in groups on the activities that are suggested in the app. All of its highly personalized by the way, like the types of action plans that you get for yourself in the app to reduce emissions. But yeah, it's sort of a community first strategy at the moment is how we're looking at growing, really focusing on user referrals if you're an e commerce brand owner. You've probably thought about whether your product suits being subscription based, maybe you've got a beverage brand or a beauty product that has a high repeat purchase rate, join fast growing Shopify brands like athletic greens and rise coffee that are growing their commerce subscription and retention businesses on apps. 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We have a constitution with environmental objectives, both the sort of the objects of the business and then as a director, director's duties include having to advance those objects and take them into consideration. So that's how we navigated that from a governance standpoint. We have alan's law firm, do our social enterprise constitution. And so yeah, for profit, it meant that we were able to access capital from investment sort of specifically a lot of impact investors, tech based angel investors that was easier initially than having to raise from philanthropic donors, so that I think it was really hard call on whether to go nonprofit or for profit. And I think there's arguments for both, especially when you're cause driven. But in terms of monetization, you know, that's something we're, we're really working quite hard on at the moment. Um, you know, we have a solid user base. We've, I think the biggest achievement is that we've proven the products effective. It actually does what it says it will do, probably could go a bit further in terms of being effective. But you know, we've got users reducing their carbon emissions through the tool, which I think is a really awesome achievement given how difficult changing behavior can be. And so from a monetization standpoint, we had a subscription based offer for a while. We took that off because we felt like we were sort of making it harder for people to access the best parts of the tool. And then we've had referral partnerships. So we do sort of like good on you if you're familiar with them. Um, ethical consumers Australia. They're great by the way there. They rank fashion brands on their environmental and labor credentials and so you can sort of scan a barcode at a shop at a shopping mall and see if you know, there's a very comprehensive amount of brand ratings there. Plus you can search on their site for sort of the best brands. But they ran a referral arrangement that I think hit a really good balance between allowing them to bring in some revenue with a free product while also not compromising their integrity. And so the way we've tried to do that is we only recommend businesses that really really supporting people to reduce emissions, not just in a marginal way but in a big way. And then also we give non sponsored recommendations and we show the basis of our recommendations. So with third party accreditation and examples in like superannuation, we have a green finance program in the app. We ask people to switch their superfund if they're up for it. So they're not investing in fossil fuel projects. And there are several funds in Australia that have these screening policies where they won't invest in fossil fuels and there's sort of third party accreditation for that or that market forces has done a really, really good assessment of the funds that that have those kind of green portfolios. And so we recommend verbs superannuation who are supporting us with a with a referral fee. They also support a lot of projects around gender equality. We think there are really great fun, but there's a bunch of others as well that are good. And so we recommend those as well. And that's kind of how we've we've looked at monetizing. Well we've also just launched one small step for businesses. So it's sort of like the version of the app but allows for a lot of collaboration between colleagues and then data dashboard. So you can kind of see the impact that you all having carbon emissions from staff setting up live challenges. So we just launched that in the last month. Wow, that's really cool. And so do you go out and pitch to like the HR department of a company and try and get them on boarded and do they, do they pay you for that or? Yeah, that's the point of monetizing with it definitely. It's on a subscription basis. Yeah. So they you charge them to be on their got Yeah. Charge charge companies to use the product at the moment. It's $2 per user per month annual or $5 per user per month monthly. Yeah, so that's a very low price point. But you know, we're just we're just starting with the office. So yeah. What's your like when you're looking at your marketing and kind of acquisition now, what is it that shifts the needle for kind of just getting the everyday consumer and getting businesses on board. Yeah. You mean in terms of how do we get traction in acquiring new users acquiring customers? Look, I don't think that we've we've sort of nailed that yet. It's something we're continuously working on definitely. I've found for my business that we have a surprisingly good impact in user acquisition from press coverage. I'd always thought of thought of press coverage as it's like building brand value and brand awareness but it's not going to necessarily have an obvious and direct impact on your acquisition numbers, but that's not been the case for us whenever we have press coverage, what we tend to find is that we'll see a dip in our cost per user acquisition in the kind of couple of days following. Um So that's been a great one and then with the enterprise piece like offering the tool to businesses we really have just started. So I wouldn't say that I've got a recipe for success there yet. Um just sort of um talking to people that already have relationships with, looking at, you know, getting at, we did a fair bit of customer discovery of the types of industries that would be interested in using this tool and the types of jobs titles who are the decision makers. So it's all standard kind of enterprise sas business development stuff really. We'll see how we go. You've recently been going through a raise. I'm wondering what your experience has been like and what you've learned going through this process that you can pass on to anyone else who is going through the journey. Yeah, I mean there's a lot that you can learn from doing capital raising. So it's a bit hard to answer that question to be honest because it's like, well a lot, it really depends on what, you know if you're listening to this, like what your goals are. I mean, I can just speaking from personal experience of what my goals were and then interacting with the kind of capital raising ecosystem in Australia. I guess some key things are that it's good to know what stage you're at and so you can, you know, raising money is extremely intensive emotionally. And in terms of the workload nick Crocker from Blackbird, who also supports the Start made accelerator has some really good resources that are publicly available, I think via start mates website on this. So if you're thinking about fundraising, I think some of his advice and publications online are like excellent, but really it's about, you know, you can expect to work on this full time for months. Um, if you're, if you're doing a raise and the kind of key things that you want to be thinking about are like who you're targeting. So there's all these different sort of stages of investor sophistication you have angel investors, often, people who are really passionate about the whatever you're working on, whatever problem you're trying to solve their kind of happy to put in a bet that's fairly high risk and are supportive of you and that, you know, they're great people to find early and then you've got sort of family offices, which can be kind of in between point between angels and venture investors and then institutional investors. Venture investors, you know, they typically have a more sophisticated way of assessing, you know, deals and the suitability of your business for investment and typically also have higher expectations, not just in terms of your attraction when you're going to them to raise, but also your prospective returns. You know, one key thing to understand about venture investment is those funds are structured so that they need to have each investment at least conceivably being able to return the full amount of the fund so they're looking at Can you over time and fairly quickly get like over a 10x return on the investment they're making. And so it's really helpful to know your own numbers and no, you know what what you can conceivably think about. Like if you have an understanding of your revenue model, any points that you can validate numbers that you can put in front of people where you validated your assumptions always gonna go really well. And I would also just say like people are really happy to give feedback. So, you know, you can sort of soft start and just start to build relationships with people, ask for feedback. A lot of venture funds and some family officers do office hours. You know, you can meet with analysts and they'll give you feedback on how you're going. Um, and that can be really helpful when you're just kind of getting a sense of the lay of the land. I remember when I did my seed round, actually asked 11 investor, you know what, how should I price this round? You know, what do you think I should do? And I had some angel investors as well. And I just sort of asked for advice and use the power of loose ties. So I didn't know anyone with money when I was starting out, but I've been involved in the startup community in Melbourne, you know, I was working through a great co working space called one roof. And so I just sort of like, how do I meet investors? And I just started there by asking the question and talking to people that I knew and slowly getting introductions that way. The other thing that I think is really great for when you're raising money is you want to have really regular communication. So for people who are on your list, think of it like customer record management, you know, you've got a list of people who are prospective investors, you have an initial chat, you send them through some materials, you know, and then maybe a follow up investment deck. So you have a couple of conversations between those conversations, you want to be sending updates as often as weekly to your investor list saying, this is what we said, we were gonna do, this is what we achieved. This is what we're still working on. And you turn, you know, that's how you build a relationship, because it's actually about, it's so much about relationship building. People want to feel that they can trust you. They want to feel that you do have the traction that you're you're saying you have and so if you can communicate regularly even just during that fundraising period for the three or four or six months or whatever showing that you're delivering that that has a really big impact. Yeah. Sorry that's probably like I said there's so much that you can talk about. Like so many insights there so so great. Thank you so much. I'm curious to know like for you it sounds like you're in series A right, you're you're doing a series a round or no, we're still see I wouldn't say that we're series A we're not covering our costs. So I think especially with the changes to the to the market lately off the back of changes to the economy. Um you know if we're doing series A we we wanted to have pretty significant monthly recurring revenue to feel that we could justify that and raise it a decent valuation and for what you're doing now with this seed round, what does that enable you to do? What what's the next phase of one small step? Yeah. I mean I think what I mentioned about maybe before we started recording but launching in a couple of other countries so you know going into the U. K. New Zealand Canada there's still some I think our focus is really we need to turn it into a viable and sustainable business financially. Um that's a that's a core part of what we're doing over the next six months really, because the capital raising environment isn't isn't great at the moment, neither in Australia or the United States, so focusing on this enterprise kind of offer one small step for businesses and also really investing in the community features that we've built and supporting people in tapping into local communities because we see that as a really strong growth strategy. So there's sort of 33 pillars that's sort of like growing our revenue, growing our user acquisition through this community's peace and referrals. And then the third is just engagement. Like working on making the tool as good as it can be constantly improving it based on user feedback and insights and there's a bunch of stuff that we, you know, it's never done. You constantly want to make changes to it to make it to make it more effective as you gear up for fall. You need to find the right people on your team to help your small business fire on all cylinders linkedin jobs is here to make it easier to find the right people you want to talk to faster and for free. If you follow me on linkedin or you're a subscriber to our newsletter, you already know how often we're sharing jobs that are coming directly through linkedin. It is so powerful, you can create a free job post in minutes on linkedin jobs to tap into the world's largest professional network with over 30 million people in the UK alone. It's why small businesses rate linkedin jobs number one for delivering quality hires verse their leading competitors. 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Um, and that's why, you know, I think I probably would do something differently than how I how I did do it in the business, which is I was really focused on product validation and making the product as effective as possible. And I think that like, I'm really proud of the work that we've done there because it is really difficult and we're doing something so much more complex and ambitious than, I don't know, setting up like a really simple widget to support businesses to book calendar appointments more effectively. Like we're covering, how do people change up their mode of transportation, diet energy systems, like the food that they purchase waste in their home? It's just such an ambitious and massive undertaking. So I'm proud of the work we achieved, but I think not having a really strong revenue loop from the outset built into the, into the initiative has made it harder because you do have to effectively work on the business and then take yourself out of it and trust that the team you have around, you can kind of keep things moving along while you focus on investment. So yeah, that if you can get to a point where you're covering your own costs, I often, I really think that that's that's the best possible scenario because then if you are raising money, you're doing it not because you need money to stay alive, you're doing it because well, we want to scale up and we want to start offering our, you know, our app to these really large enterprise clients and so we need account managers and we need some additional developers, you know that that's a fantastic way to pitch to a venture investor compared to we validated some stuff, but we don't have any money, can we have some money? Yeah, so I would, I would say like definitely I would have shifted our focus to be a lot more on revenue initially and I think probably coming from a nonprofit background and being so cause focused, I sort of didn't have a strong interest in how we generate revenue initially. And I think the best thing you can do is really worked very hard on the business model and validate that early because if you have revenue coming in, you know, it completely changes the, the whole scenario of what you're doing. You're in a much better position in terms of leverage with investors and you also then have your own resources that you're generating to reinvest back into the, into the initiative in this same kind of note that we're on at the moment when you look back and reflect on this journey of building an app and kind of being in tech, Is there anything else that you either wish you did differently at the beginning or wish that you knew before you started? Like hindsight bias is really seductive. I mean there's so many things that I feel like I that were like only obviously mistakes like 12 months later, it really reminds me of Game of Thrones. Like you know how the guy in season one Sean Bean, he gets killed and he's sort of in Game of Thrones and it's like the whole thing of game of Thrones initially was like the characters pay for the consequences of their actions, but it's sort of like really like there's like a slow burn so that you actually see that occur. And I feel like it's sort of similar with startups, like you just don't know what you don't know and you're gonna make mistakes and that's okay. I feel like I'm very lucky because I've learned so much in doing this and I think the thing I would have liked to have known before I started is actually to back myself and my instincts more because if you're making other people's mistakes, you're not gonna learn as well as if you're making your own so go with your own instincts, you will fail faster and you'll learn more effectively if you say, well, I really thought this was the situation, I thought this is what was going to happen and I executed these actions and then the opposite happened or it did work as I intended. Okay, well I can start to build up a sense of trust in myself and my decision making or no, I need to recalibrate because I had my understanding of this situation was wrong. So you're building in your own feedback loop by testing things in the real world, but based on your best assumptions of what you think is going to occur. And I think that's really important for women founders, not, you know, not to stereotype, but there is a tendency to have like what's called, like an external frame of reference that I certainly have this and it's still something I have to work on is constantly seeking advice, you know, consuming information, trying to learn. And I often just need to pause and kind of go, well, what do I think about this? And and not taking all of the external info and just figure out what I think first and go from that place. That's something I wish I had known earlier. It would have saved me a lot of time. Yeah, I feel like I fall into that trap a little bit a lot. It's really, really, really common because, you know, you don't want to be pigheaded and be like, I know everything and I'm just gonna do it my way and you don't wanna be that person. But I think for most women it's a safe bet that they're undervaluing their own decision making skills. Yeah, that's powerful. Thanks for sharing that. I love that. Thank you.
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