Can You Turn Your Existing Services Into a New Business Opportunity?
You might be sitting on a new revenue stream within the infrastructure you already have. That’s something the Wikimedia Foundation learned when building a new enterprise technology product that tapped into existing market demand.
Finding new opportunities for nondues revenue can be as straightforward as finding a way to cover some of your biggest sunk costs.
That’s what happened with the Wikimedia Foundation, the 501(c)(3) nonprofit that operates one of the most popular sites on the internet, Wikipedia. It found itself in a position to develop a commercial product with assurance of its success, in part because of the popularity of its existing data.
Large tech businesses like Google, and even other nonprofits, such as the Internet Archive, are heavy consumers of the information that gets published on Wikipedia. (Google, famously, uses Wikipedia data in its “knowledge panels.”) Supporting these use cases required the foundation to leverage its existing resources. Lane Becker, senior director of earned revenue at the Wikimedia Foundation, noted that this tended to divert financial resources from other parts of the organization.
“When it comes to big—and even not-so-big—technology businesses, they’re often some of our heaviest content consumers. Which is great! We love that they use us as much as they do,” Becker said. “But we increasingly felt as though it was unfair to ask our individual donor base to continue to support the load on our service that these commercial organizations have been putting on it.”
So the foundation developed Wikimedia Enterprise, a commercial version of its core product for organizations that use the foundation’s many services extensively, especially through programming tools such as application programming interfaces (APIs). Both Google and the Internet Archive, fittingly, were recently announced as its first customers.
Building Value for Business
While Wikimedia Enterprise exists in part to help financially support a related product that has real costs behind it, it’s also a service that brings added value for interested clients.
In offering a commercial product, the subsidiary can focus on building higher-quality APIs, customer service, assistance with product setup, and a service-level agreement that guarantees uptime. This provides a level of product reliability ideal for mission-critical commercial use cases where the service is a priority, rather than an afterthought.
Becker noted that the initiative’s benefits aren’t all tech-related. Wikimedia has made strides in educating potential clients on how volunteers build Wikipedia’s content—which is coming in handy now.
“We have seen that, the more that new companies understand about how the Wikimedia environment and community operates, the better able they are to make meaningful use of the content volunteers create,” Becker said. “So we see a part of our job as building that understanding—not just building the software that supports it.”
Org-Chart Lessons for Associations
If you see an opportunity to build a new business venture for your association, be prepared to color outside the lines as you develop it.
“Building a for-profit business inside a nonprofit organization can be challenging,” Becker said. “In particular, determining the right mix of bringing on new people and resources for the project versus making use of existing resources in the nonprofit.”
To help get its enterprise product off the ground, the foundation built a team outside of the existing org chart, which Becker described as “a small, cross-functional team of product and engineering people who weren’t actually located within our product and technology departments.”
“Being at a distance from these more established departments gave our team the opportunity to try new approaches that were better suited to the commercial problems we were trying to solve,” he said.
Eventually, the team members will be worked back into the org chart once the product is more established, Becker said, but breaking them off from the standard structure during the early stages gave them room to experiment without existing organizational pressures. “No one in product or technology was relying on us to get it right the first time,” he said.
Still, Wikimedia’s values, mission, and internal relationships remained key to making the team work.
“If you do choose to take a similar approach, make sure you’re putting people on the team who understand that building and maintaining these relationships is just as important a part of the job as building the actual product,” Becker said.
(Andrii Yalanskyi/iStock/Getty Images Plus)