Not quite a year ago, in a pre-pandemic time, Josh Kligman and Jeff Rum launched a subscription service with a software tool that helps nonprofits create digital annual reports. They named the Bethesda, Md., company, appropriately enough, Yearly.
Then March rolled in and they hit a wall. “We were cold calling for sales and kept hearing responses, like, We don’t know what’s next for our budget,” says Kligman. After a few more weeks of that, Rum made a suggestion: In the current climate, they had to revamp their old business model and asap.
Charging for Premium Services, Only
At first they considered lowering prices. Then they hit on something else: Instead of charging an annual subscription fee of roughly $900 to $2,000, using the software tool for creating annual reports would be free. Only premium services, like consulting services and copy editing, would cost something. (Fee for consulting services: at least $900 for 10 hours of service over a year; $500 for copy editing a digital report with up to eight sections).
The co-founders initially launched the company with a basic premise: Most nonprofits spend a significant amount of time and money producing an annual report for donors and others. It’s generally used for marketing and often doesn’t adequately showcase results. Why not help nonprofits create digital reports with lots of bells and whistles, like polls and videos, the kind of attention-grabbing features you couldn’t include with your basic pdf? In September, they introduced the service.
Then Covid hit and, as Kligman says, “Nonprofits came to a screeching halt.” In mid-April, on a Friday night, the co-founders decided to change their business model, opening up the annual report production tool to everyone, free of charge. Over six intense days, they hammered out the details, ready to unveil the new plan on May 5, Giving Tuesday.
To publicize the new approach, Kligman and Rum focused on such inexpensive moves as sharing social media content, as well as teaming up with the Association of Association Executives and other groups, holding free webinars on nonprofit digital story-telling through annual reports. “Also we got lucky,” says Kligman. That’s because, in May, the site Globalgiving.org included them in a list of top free resources for nonprofits.
As it turned out, the changes have paid off. According to Kligman, the company had 15 subscribers before Covid. Now, he says, “We have hundreds of customers.” The goal is to sign up 250,000 users globally over the next three years. To that end, the co-founders are in the middle of a fundraising campaign; they also are considering which of several accelerators to join.
Down the line, according to Kligman, they may offer an upgrade with extra features for a nominal fee. That could include things like more font options, additional collaboration tools or new analytical capabilities. But there are no plans to change the free access policy. “Everyone’s looking for virtual solutions now,” he says. “And we can focus on revenue from selling premium services.”
“I wouldn’t have chosen another time to launch this business,” he says.