Don't let success detract from innovation
A conversation with Brett Hagler, Founder of New Story
New Story is on a mission to “pioneer solutions to end the global housing crisis by empowering families to become land and homeowners in thriving communities”.
Last night their founder, Brett Hagler, spoke at a private dinner event hosted by my friends Justin Wheeler and Alex Pavone over at Funraise.
If you think about it for a moment, the mission to end the global housing crisis is MASSIVE. In fact, to hear Brett tell it, the sheer cost of solving this crisis is somewhere around $50 Trillion. That’s TRILLION, with a “T”.
It’s an overwhelmingly large problem that would stop many leaders in their tracks. It’s an impossible goal. Something that you might think is simply impossible — a silly and unachievable objective for a single nonprofit organization.
Here’s what was most interesting to me as I listened to Brett share last night.
He knows it’s an impossible goal. The math simply doesn’t math. In fact, the entire charitable sector in the U.S. only generates annual revenues of ~$450 Billion. Bridging the gap between that and $50 Trillion is impossible. Especially for a “charity” that is only generating somewhere around $10 Million per year.
That’s why Brett and New Story, a “nonprofit” organization that got their start at Silicon Valley’s famed Y Combinator, decided they couldn’t continue on the same path that helped them go from $0 to $10 Million in a decade.
This is where Brett and New Story’s story becomes a bold and courageous narrative on leadership. By all traditional indicators, New Story was on a massive growth trajectory. They were scaling effectively; revenue was increasing at a level that beat industry trends and all indicators. They were building more houses every year than expected and delivering greater levels of value than anyone anticipated.
This was a win. They were on an upward swing. Nothing was broken.
And yet, Brett’s heart was unsettled. While New Story was at an all-time high in both revenue and mission impact, they decided that they needed to radically transform the organization because without doing so, they stood nearly zero chance of accomplishing their bold mission.
“You can’t let success detract from innovation and mission growth”, Hagler said.
He knew that philanthropy alone could not solve this problem. If New Story is going to achieve their bold mission, they needed to evolve beyond a reliance on philanthropy and instead find a market-based solution to the global housing crisis.
Transitioning their organization from a philanthropy-focused home building nonprofit to an organization that is focused on bringing about market-based solutions where those living in poverty can begin to access housing by becoming land and homeowners required New Story to transform themselves. They didn’t just need to change a little thing here and a little thing there.
They upended their entire business and service model.
Hagler, his board, and his entire team believed so deeply in their mission that they chose to essentially blow up their organization while all external indicators suggested they were doing great.
Nothing was wrong. There was no downturn in their effectiveness or their fundraising results. And yet, they knew they couldn’t achieve their mission without massive organizational transformation.
New Story undertook this transformation effort several years ago, and as a result their revenues fell by ~40% year-over-year. For any other organization, this would have been considered a massive failure, their board would have stopped the effort and demanded that they go back to “business as usual” so that they could return to prior year revenue levels.
But that’s not who New Story is.
About this multi-year revenue decline, Hagler said, “As a leader, you have to think beyond the quarter or the fiscal year when you’re on a mission like this. You have to think about the future 15-20 years from now. If you think about this quarter or next you’ll never accomplish the big goals.”
Adopting this new approach to achieving their mission wasn’t easy. It was frightening. There were many conversations about the risks of this kind of transformation, and whether they had made the right call. There were countless days of worry. Fear of having to lay people off because they weren’t hitting revenue numbers to cover all of their expenses.
Nevertheless, they were committed to achieving their mission.
And they knew that the status quo approach to their business wouldn’t get them there.
Several years after undertaking this bold transformation, New Story is back on a path to growth, their new business model is now proven and taking hold in many of the global markets where they work, and their organization is experiencing the kind of renewed and refreshed growth and scale they had enjoyed previously.
Their mission continues to be overwhelmingly large and complicated. They understand and acknowledge that their one organization can’t solve this global housing crisis. But what they’re doing is becoming a model — a blueprint — for a viable solution to the global housing crisis by bringing those who live in poverty today into market-based home and land ownership.
This is a testament to the organization’s focus and commitment to their mission above their own comfort, and an example for all in the social good sector that you can achieve significant impact if you’re willing to take bold chances.
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