A Female Founder’s Reflections of Shutting Down an Education NPO

Hi Becky! Who are you and what are you currently working on?

My Name is Becky LeBret, I am from Los Angeles, CA and I am founder of Lotus Launch, a unique four-step program and a community helping female founders take control and grow their businesses.

This new project is me bouncing back from a disaster. It’s been moving fast because I’m using lessons learned from my previous business, Sisu Academy. While it has the same heart - I still work to support marginalized entrepreneurs to grow, execute, build systems, and scale through the SaaS solution I am building - the way in which I am approaching it is completely different. Mostly thanks to my lessons learned through failure. 

Sisu Academy was a tuition-free non profit boarding school for at-risk youth in San Diego. Our students were not fitting in well at the normal school environments and typically had trouble at home or at school. Our business model initially was based on donations from both large and small donors. We were working toward sustainability by building in revenue streams, mainly through an on campus incubator. We closed down operations before we could see that phase through. 

‍

What’s your background and how did you come with Sisu Academy’s idea?

Before Sisu Academy, I was working in the start up sector in Silicon Valley for a “Unicorn”, a billion dollar valued start up in the Human Resource Information Systems realm of business.

I excel in partnership development, strategic thinking and in building infrastructures for communications. That’s code for working well with people and understanding how to lay the foundations for effective communication.

I’ve also worked in conservative consulting corporations, law firms and and insurance companies. I’ve had a lot of corporate experience so the comfort and stability of a regular job and income was all I knew. 

I always had a nagging feeling that I could do so much more and make some positive social change in the world, I just didn't know how and was scared to do so. It wasn’t until I met my husband, a serial entrepreneur, and fellow do-gooder, that we decided to start this new social good venture. 

The idea was inspired by my co-founder, my husband. His mom suffered mental health issues, he had an absent father and was raised by his grandparents primarily. We reimagined a school that would offer support for young kids so they had the care and support they needed to succeed.

One day we were at a bar in Humboldt, California and on the back of a napkin we imagined what a new school would look like. It included a place to offer a supportive living environment where kids would build their dreams, their businesses. I thought it was too crazy to work. Then I went to work researching it, building the business plan and then poof; we started to gain momentum. 

‍

How did you go from idea to product?

It took six years to get from idea to launch. We were industry outsiders having never been in education, but we were comfortable learning and building partnerships. Starting a non profit is not for the faint of heart, especially bootstrapping one.

We started Next Ed Research first, which is our education research and development entity, before launching Sisu. My husband and I were the primary ones involved, then we successfully attracted a highly regarded teacher in the San Diego area to be our first hire.

We used all the startup tools we could (Slack, Asana, Google Suite) and then we ventured into Salesforce for Non profit as our CRM. It was very difficult to get the employees to adopt technology used in start ups so that was tough on me because I had my tech stack that I was used to.

We ran into a lot of obstacle when building the product. One example from a tech side is Salesforce for Non profit because it is a beast. Once I got the hang of it I started small think tanks with other non profits who were using Salesforce for their social good projects. Salesforce recognized our work and featured us as a social good program who was doing some great things with the tech in our non profit. That was an honor. 

We were successful in getting a lot of press both nationally and local including TV stations and news outlets to cover our endeavor. I was the behind the scenes person focusing more on operations, while my husband was the one who was going to networking event after networking event to get us to visibility we needed to get the dollars coming in. Our project was exciting and new with a huge mission to save kids lives. This is the sort of thing that attracts a lot of attention. 

Which were the strategies to grow your business?

We used everything we could. Email marketing, social media, events, galas, media, new stories, speaking and interviews. They all worked and contributed to our success. The most successful thing we did was network our asses off, meeting the right people, getting our story in front of the right people was what made all the difference. 

Once we had our model and plan in place we spoke at about six conferences a year, attended dozens more, added over 500 new contacts a quarter for the first three years. We were part of every local networking organization that we could be part of to talk about the business and spread the word about the business. The Chamber of Commerce served as a powerful vehicle, but it was really about getting introduced to the right people so they could introduce us to the right people. We had three TV interviews, numerous podcast interviews, and wrote articles for news outlets. One connection and meeting would lead to the next and before you know it we are being invited to Washington DC to meet with the Secretary of Education. The effort was exhausting at times, but it served as a way to “megaphone” the mission and vision so we could reach the right people who could help. 

‍

When did things start to go in the wrong direction?

Marketing was never our problem, we were successfully getting the word out there. Where it was hard was cash flow, this was a major disadvantage. This is the root of the issues with small nonprofits. Paying for operations is a constant battle, from month to month.

You have to keep cash flow coming in at a steady and reliable rate. The nonprofit world, similar to a receivables business, relies on commitments for future donations. As a result we were living from donation check to donation check. If the money doesn't come in when it’s supposed to, your services stop. Not something you can really do with a school. We had some teachers chipping in time here and there to cover the gap, but it was constantly a race against time and their salaries getting paid.

It was difficult managing the “just in time” nature of building an untested, never before, new education model in a system rife with challenges. Continuing to ask for the belief in the people around you just so you can keep going is tough because so much is at stake. Your team is not made up of entrepreneurs, in our case they were all teachers. From their perspective all they saw were missed goals and late deliverables. They struggled to handle the instability of launching something new. 

It didn’t help that my husband and I also had a baby during the beta launch of the school. My son was literally born in the middle of this project. When you are a mother, you can’t move as quickly as you once did and burn the midnight oil as you wish; especially when both parents are involved in the same project. Our biggest arguments were in deciding who was given the opportunity to work more and who had to work less on any given day. We decided to hire a nanny, which we couldn’t afford. 

‍

Which were the causes of Sisu Academy’s failure?

In the nonprofit world, few donors want to donate toward salaries or overhead and when running a school these are a major expense. We had to creatively find ways to pay the bills and bring in more money. We hosted galas, auctions and small marketing campaigns to bring in smaller donations. Although we raised about $1M dollars, the program was expensive to run and we couldn’t operate on an accounts receivable basis with an active school with real live students. We had to rethink our overhead and our cost per student. Our employees were the largest expense, followed by room and board for the students. 

We were waiting for a major check from a donor and it was four months late, it nearly buried us as our employees were getting restless and losing faith in the mission and our intentions. The check came just in time but the cultural damage to the staff and students was too great.

We decided to make another pivot, pull the ripcord, move toward virtual learning which helped to solve our cashflow problem. We then made plans to merge with another local school who was moving from charter to private. The ink had not dried on the new merger when the pandemic hit and through our project into total chaos. One week before everything shutdown the writing was on the wall so we moved quickly to place the girls in public schools and back with their caregivers. It was devastating and embarrassing as it was so public. Everyone in our inner and outer circles knew what we were up to and ultimately the fate of the program.

If you had to start over, what would you do differently?

Given the opportunity again and starting this next business I would:

a) Focus on Cash: Align operating budget with cash on hand not based on accounts receivable or accrued revenue. I would have also increased our credit limits well before we needed it. I’m definitely not as scared of debt as I used to be, I view it more as a tool to manage cash and grow during a start-up. 

b) Pivot fast, but ensure that you have the money to pivot. We decided to exit for several reasons, the risk increased considerably once the pandemic hit, and there is no equity in a non-profit. In a for-profit, the strategy may have been different, but this was reality. 

c) Recognize when to hire staff and when to hold off. Hire slow or not at all. We got so much pressure from the staff, parents, and students against remote learning and the “walls of a school” we caved. This led to high overhead in areas when maybe we shouldn't have. We certainly didn't know how quickly the learning environment would have changed to move online, the pandemic only accelerated it. 

d) Build means to track progress, measure, and manage. Data always shifts through growth, so just ensure metrics are aligned with the mission. Set aside time to do high impact projects, like managing an operations dashboard and sharing it with partners, staff (if you choose) or investors. Don’t add a middle manager out of the gates to manage the metrics, or prepare to have your vision sidetracked.

e) Develop personal boundaries. Don't give up more than your future self is willing to. This time around, I am thinking more carefully about the sacrifices I am willing to make for success. I am envisioning what my life will look like when it does succeed. I want to ensure I have the proper time for my family and friends, my husband and my son, and do the things that I want to do, like see more of the world and make some positive change while I’m at it. I’m creating a business that will fit my lifestyle today and will grow and easily adapt with my projected lifestyle 5-10 years from now.

‍

Which are your favorite entrepreneurial resources?

• Websites: IDEO.org for tips on how to design with the human in mind.
• Books: Shoe Dog, Phil Knight; Zero to One, Peter Thiel; Innovation and Entrepreneurship, Peter Drucker; Hiding in the Bathroom, Mora Aarons-Mele; The Prize, Dale Russakoff; Daring Greatly, Berne Brown; Grit, Angela Duckworth.
• Tools: Flipboard, Asana, Slack, Salesforce, G-suite, Later and Libby. 
• Articles: I reference a lot of research journals through universities to learn about current case studies in entrepreneurship.

‍

Where can we go to learn more?

Here’s Sisu Academy’s website.

Here’re two Sisu Academy's news stories: one at the beginnings, and one just before we closed.

This is my side hustle work as I am building Lotus Launch.

Here’s my LinkedIn. Check my articles and work in the featured section.

Finally, here’re my Twitter and Instagram accounts.