THE NEW AUDIENCE DILEMMA

"Small markets cannot satisfy the near-term growth requirements of big organizations."

I've been reading the Clayton Christensen classic The Innovator's Dilemma.

While I don't find the book fascinating, I do keep finding myself thinking "ohhhh ... yeah ... okay, that makes sense."

I found myself feeling that this morning, while reading the case of the Apple Newton in Chapter Six, titled "Match the Size of the Organization to the Size of the Market".

New markets tend to start very small. And yet they tend to outperform large, established markets over time.

But, because those new markets start very small, the growth they initially produce is too small for the larger, existing organization to care about or invest in.

Much to my consternation, I've seen this play out with some new audience initiatives at large nonprofits.

We discover together the new audience, prove out the way to acquire them as enthusiastic new fans and donors, and then design the systemic solution for their ongoing, full lifecycle management.

But then the problem hits.

Compared to other immediate opportunities with the established audience, this new audience is (for the moment) lower ROI and (for the moment) fairly "small beans" in revenue scale.

So, either all at once or over time, the nonprofit leader in charge of the effort decides to divest of the new audience and put that money into the existing audience.

As Christensen's work suggests, this will be a detrimental decision over time. But there's no data to prove it, at the time of divestment. Shifting the investment from new audience to the existing audience actually appears more responsible.

And that's a shame.

Christensen's solution: a smaller organization fully focused on the new market needs to be created at the right size to match the size of that new market.

Not many nonprofits are willing to startup an independent, new team in their organization to focus on that new audience, even though that's almost certainly what they should do.

Thus, indeed, that's "The New Audience Dilemma".

Speaking of which 🙂 ... if you want to buck the flat-revenue trends, focus on developing a new audience or creating an amazing new experience for your existing audience, our next Wonder Camp in Charleston SC is the place for you! All the details are in the link in the first comment. See you there!

PS - "The New Audience Dilemma" also makes sense of some of the immense proliferation of nonprofits. We've seen an increase of 400,000 nonprofits in the U.S., over the past 20yrs. I've thought that a net-adverse trend. But maybe it's not. Maybe new nonprofits are doing what existing nonprofits can't do: reach new audiences for their cause.

Photo: Charleston sunset, from a family trip in 2021. Let's go there this April and get creative and refreshed together!