Adam McCurdie On The Battles Of Starting A Technology Social Enterprise Out Of Nothing
Adam McCurdie graduated as a mechanical engineer and mathematician, spending the first years of his career as a management consultant for large organisations around the Asia Pacific.
After learning about social enterprise and its power to solve the world's biggest problems, he quickly began exploring ideas to better incorporate technology as a core driver in the sector. Adam is now one of Australia’s most successful young social entrepreneurs. He co-founded Humanitix, the first social enterprise ticketing platform which is now selling tickets for thousands of events across the Australia and New Zealand, disrupting the online ticketing industry, seeking to direct the billions of dollars in ‘annoying’ booking fees to help close education gaps for disadvantaged children.
Adam and his co-found Josh Ross recently won Third Sector Social Entrepreneurs of the Year 2018. Humanitix has also secured funding from Google, Atlassian Foundation and NSW Government.
Adam shares some of the key lessons learnt from co-founding Humanitix, from cultivating the right mindset and staying the course, as well as insights into the social enterprise sector (and ongoing debate as to how the sector defines itself).
Highlights from the interview (listen to the podcast for full details)
[Tom Allen] - Could you please share a bit about your background and what led you to working in the not-for-profit and social enterprise sectors?
[Adam McCurdie] - I started off being really interested in maths and sciences, and that's what I really focused on at university. Studying engineering, and mechanical engineering and maths. That led me to a career in management consulting. From there, I then went on to do a Masters in Agriculture and Environmental Economics. That was at the University of Sydney. I guess it was there that I started to become more exposed to concepts around social enterprise. A bit more of the sector. What was going on, because I was doing a bit of ad hoc lecturing and tutoring at the Business School while I was studying that Masters.
It just really excited me. I did that Masters because I was more passionate about thinking or solving my personal goal that I had, which was, ‘how do I take the skills that I've learned, and the enthusiasm that I have, and all my energy, and apply it to something that will really make it as tangible and significant contribution to the world?’ which viewed as being I guess the best thing a person can do.
Obviously, the first problem to solve there is, well, what is a contribution, and what would be a contribution? That was certainly the kind of muddled path I was trying to navigate there, around what would be a really exciting, great thing to be spending my time doing, and then that's where I slowly started to become more aware of the social enterprise space, and the way the charity and not-for-profit sectors are being improved with new ideas, and new models. Models around sustainability, and scale, and incorporation of better technology, to have much wider sustainable impact.
Fantastic, so that led you to co-founding Humanitix. Can you please tell us a little bit more about this platform, and the impact that you intend to make?
Sure. In that process, I teamed up with a best friend of mine, Josh Ross. He had similar ambitions to look to solve some of the bigger problems in the world, and make a contribution through social enterprise.
We were exploring the range of business ideas that we thought might be a good fit for a social enterprise model. In that, we started to recognise that firstly, technology has largely been accountable for the greatest increase in wealth and prosperity that the world has ever seen over the last few decades, particularly, and that social enterprise idea would perhaps best lend itself to adopting some of the same mechanics.
Being a technology player, and trying to be a scalable enterprise, like an Amazon, or a Facebook, or a Google. These are the biggest companies that are having the biggest influence.
We were looking at industries that might be right in that regard, for disruption. That's where online events ticketing, just stood out as a great fit for a whole range of reasons. Chiefly, that it is a multi-billion dollar industry making super profits.
Everybody across the board resents these profits that the industry makes, because it's that $10, $20 booking fee that you get slapped with at the end of buying your tickets to a show or a festival or something like that. So we thought, ‘what if we could redirect these billions of dollars in booking fee profits, to the things that we care about?’ And we put the bullseye now on education, as we believe that education is one of the most sustainable ways that you can have great change across global inequality, poverty, improvements of the environment, it just touches so many spheres.
It certainly shows a lot of potential, and you obviously have a great amount of recognition in what you've done until now. What have been some of the key challenges then in setting up Humanitix, and how have you navigated your way around them until now?
There's been lots. The first key challenge was funding. Our intention was always to run this as a not-for-profit. Therefore, having no equity in the business. We saw that as the best way that maximises our impact, so that we can redistribute all of our profits to our education projects without having to worry about paying our shareholders. In doing that, that's very difficult to raise money, so at the beginning, Josh and I were self-funding this whole project. We didn't seek to raise money at the beginning at all.
To do that was very difficult. It meant we had to work our jobs, and then in our spare time on the weekends, and at night, we would then dedicate our time to building this idea. But, like everything, you can't really do much in your spare time. You've got to focus full time on it. The first major decision was made that we should go full time on this, but we did it in a way where we decided, perhaps let's just make one of us go full time on this, while the other person stays in their job, so that we can share a salary, and work together to create this, and then create a bridge where the other person can then hop off and join full time as well, once things are humming, if we're successful.
We made the decision that I would go full time on Humanitix, and that Josh would stay in his job. We did that for about 16 months, sharing a salary on a handshake, with no paperwork. Just trying to build this thing from scratch, which was very difficult. But, we were great friends, and it all worked, thankfully. It was very challenging. Then, once we got this thing running, and it was proven to be potentially a good idea and well executed, Josh then left his job, joined me full time, and then we were both volunteering full time, because we were still self-funding it, and on the hook, and only accountable to ourselves.
Then, after that, that's when slowly we started to attract the interest of some philanthropists. That was incredibly difficult, because we can't offer equity to an investor, because we've gone down the not-for-profit routes. We can't raise debt, because well, we're a website and it's very difficult to convince somebody to give you debt on reasonable terms when you've got no hard assets. We were asking for donations, from philanthropists. It's very difficult to do that when your pitch is, ‘we're an online ticketing platform, that's going to redistribute the profits of an industry, in order to achieve these education and global equality outcomes.’ But it's a very difficult sell, because you're trying to transform a mindset, where people are more typically donating to the more typical kind of causes, and fantastic charities.
Because straight away, they'd look at us, and say, ‘oh, it is a business. What's the investment? What's my equity, what's my return?’ To which, we’d say, ‘let's just slow this conversation down a little bit. There is no return. There's exciting leverage, and there's exciting scalability, and there's an exciting ... There's so many facets to this, it's amazing if this works. Sure it's risky, it might not work, but if it does, wow. What impact this is going to make.’
That's not everybody's cup of tea, which we found out the hard way.
What have been then some of the biggest lessons you've learned on your journey until now?
Firstly, having a co-founder.
Having a really good co-founder is so valuable. It just couldn't have happened if it was just me working on it.
It's impossible. Reflecting back, that is ... There's just no way that we could have got to where we've got to today. Just having that relationship with your co-founder that we were able to cultivate, which takes work and is difficult. But, that was key, because now you can have two heads driving really hard towards achieving this goal, and just working together to make this happen. Ideally, with complementary skillsets, which we had as well.
But the other thing is, finding a way to cultivate a mindset that you can expect, and enjoy, and appreciate the trudge that it is, this slow burn to create something from nothing. It's quite a mental battle.
I've got a lot of learnings from ... in terms of just cultivating a state of mind that perhaps tempers your expectations around how quickly things are going to happen, and tempers your expectations around how quickly or successful this idea should be, because you in your heart know that this is the greatest idea ever. ‘I'm so passionate about it, why isn't everybody else passionate about it?’ Just cultivating a more healthy state of mind, and position towards that. It's a bit more practical and realistic.
It's really nice to hear of such a great relationship that you've formed with Josh, with your co-founder. Because it's not always the case, right? You've obviously got some great lessons there from how to sustain that relationship successfully as a co-founder. But also, you talk about these other important traits. Are there any really important traits from the top of your mind, Adam, that you believe successful, purpose-led entrepreneurs should really have?
I think it's much the same as regular start-ups would have. I think much the same traits, which is, I think, largely around persistence.
Just that ability to stay the course, and be flexible, not be brittle in your mindset, but things have to be the way you think they are. You need to be malleable in that regard. But, to expect that necessity to be malleable, to expect problems, to expect a grind of frustrating things and tasks, and things that pop up that you didn't foresee would be part of this glamorous journey that you might have painted in your head.
I think that's pretty agnostic across the board, that a social entrepreneur, or regular entrepreneur, or anybody trying to do something, it's just a reality of how things unfold, particularly when you're trying to create something out of nothing.
Definitely. In your involvement then, in this not-for-profit sector, how have you seen it change over these last few years, and where do you personally see it heading?
It's an interesting one.
It's been really promising to see more awareness around social enterprise, and the importance of business to play a role in having a greater purpose, and a greater contribution to society.
Whether that be all the way, in our case, being a 100% profit redistribution model, or at least something. CSR, not just being a green washing exercise.
That kind of behaviour is becoming more and more transparent, and there's definitely a tide of expectation that's being placed on business, to play a greater role in solving some of the bigger problems. I think with that, comes a lot of opportunity.
In my mind, it's still a relatively new space, where there's lots of opportunities to define... There's still arguments around what the definition of social enterprise actually is.
The ongoing debate.
You're operating in a space where the name of the industry is still being debated as to what it means. Heavily. That to me is really exciting. Because it means that one can define it, or one can make a case for one way to look at it, while others can make a case for another way to look at it. Both concepts don't have to compete necessarily, but it's just interesting, because it's a state of flux.
Are there any really inspiring projects then, Adam, that you've come across recently that you think are also creating some fantastic positive social change?
As part of what we do, we team up with what we see as our implementation partners, which are our partner charities, which we team up with to deliver the work that we do by redistributing 100% of our profits. Particularly a charity called Room to Read is doing some fantastic work around literacy programmes, as well as life skills. One of their projects focuses specifically on girls in the developing world, improving literacy programmes and life skills. We were made aware of this by the Atlassian Foundation, who's a big funder of us now as well [of Humanitix]. They opened our eyes to the social return on invested capital, and the need to invest in literacy programmes and life skills for girls in the developing world, and just how much that can move the dial, and how much good that can do. Just the basic ideas even around being able to raise one's opinion, and put forward ones ideas, or do those kinds of things are lacking in many parts of the world.
Having a really well-structured way to do that, and collaborative way to do that is what Room to Read provide as well as hard literacy.
It sounds like a fantastic organisation. To finish off then, Adam, what books would you recommend to our listeners?
There's lots of books. I've just recently finished a particularly interesting book. It was Homo Deus, by Yuval Harari. It was the book he wrote after Sapiens which got a lot of recognition. The reason I liked Homo Deus a lot, was it's a book that looks forward, and suggests where we might be heading as a species, and why we might value certain things over other things, and our general trajectory as a society. It's written well that it's not trying to set a prophecy as to what it thinks is going to happen, but just more creates food for thought around where we might head, or the several directions we might go based on our tendencies to want to do particular things. I think it sets a really nice framing to think about, for me, at least, the kind of contribution I'd want to look to make, and the kind of things to be aware of that might be the new problems to try and solve, or the new contributions to make in the future.
There will always be contributions to make, and things to improve and navigate in a better way.
That book just, to me, is just really great food for thought. You could come at it from so many different directions.