DonorsChoose.org Case Study: A Crowdfunding Platform Analysis

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ASSIGNMENT 2: Individual Case Study
Analysis
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Contents
TASK...............................................................................................................................................3
Q1: Critical evaluation of the idea and strategies adopted by Charles Best................................3
Q2: Analyse the opportunities that Charles best capitalised on..................................................5
Q3: Risk that business is exposed to............................................................................................7
Q4: Evidence that suggests business will last or whether it fizzle out........................................9
Q5: Evaluate the business model used by Charles Best............................................................11
REFERENCES..............................................................................................................................12
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TASK
Q1: Critical evaluation of the idea and strategies adopted by Charles Best
According to the given case study, it has been analysed that a social studies teacher named
Charles Best from alternative public high school which was situated in South Bronx. One day he
found himself very much frustrated because of not having a sufficient amount of resources
available in the school. Best was planning to secure their basic material but does not bring out
any specific classroom project to the final result (Béland and Cox, 2016). The basic reason
behind this issue is related to the lack of funds available to them. From the initial learning stage
Best was more challenging and decided to spend their entire summer vacation in search of this
problem and plan a goal to reach a specific solution. Keeping in mind about all these issues he
has decided to open an organisation called "DonorsChoose.org" website. The basic idea behind
the foundation of this particular website would direct link donors with New York City school
teachers those requiring capital for their classroom material and other activities.
It would provide innovative classroom facilities and plenty of educational opportunities available
to the students. This idea basically came in Best mind by getting impressed with the relatively
new enterprise like Uber and Airbnb. As an innovative entrepreneur, Best wants to have a well
effective technology and world-class facilities can change the perception of students and their
learning skills would also get development. By the development of this model student and the
donor would directly attach to a link which will help them to reduce the scarcity and inequitable
distribution of studying material and experience more better opportunity in the schools.
In the viewpoint of Charles Best, a technologically based business model strategy is being used
to deal with school problems. The primary reason behind using this particular strategy is that in
the recent past so many business enterprises have attained maximum benefits by the help of this
model. Because of this particular perception best has decided to make use of this strategy. This
particular selection would demonstrate Charles business curiosity and creative experience as an
entrepreneur toward future development. By the help of this model or concept of Crowdfunding
techniques both Uber and Airbnb companies have gain lots of success in the near future. It was
also analysed that as this model is totally new in the market and had delivered a reliable
alternative form of getting a sufficient amount of capital for small and medium types of
entrepreneurial new ventures. Crowdfunding is simply an effective concept of funding any new
business project by raising small capital from a wide number of people such as by using the
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internet (Gabrielsson and Politis, 2012). The chances of risk in getting such kind of capital are
very much low. It relies on the wide number of investors that invest at low levels. Entrepreneurs
like Best would rely on this crowd of the shareholder for feedback and ideas that often assist
during the primary stage of starting a new business.
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Q2: Analyse the opportunities that Charles best capitalised on
In accordance with the case scenario, it has been seen that there are plenty of issues which are
affecting Charles Best during the learning in school. Because of not having a sufficient amount
of resources available for material studies and for conducting any specific activities best was
feeling disturbed. By inner potential of having creative imagination power among Best in the
areas of social studies he was planning to look for innovative opportunities. Most of the
colleagues think that he is an educational and social entrepreneur (Alvarez and Barney, 2014).
According to Charles, three were a lot of people that would be willing to provide funds for small
business projects which vastly modified the classroom performance as well a creative lot of
educational opportunities. In order to develop a new connection among donors with a project in
the school, he examined plenty of creative private enterprises. The chances of growth
opportunities have been arising from the study of growth among two one of the best enterprises
such as Uber and Airbnb.
The basic reason for the growth of these companies is because of using innovative and advance
technology model. All these things would help Charles to accomplish his new business. There
are various opportunities which come after the development of this particular website. By the use
of crowdfunding concept Charles has created lots of innovative opportunity to raise million
dollars from any person with capital to spend. This funding tends to provide a forum to Charles
with an idea to present it in front of close investors. Because of this particular innovation, Best
has created an effective platform that can help in bringing people together and make use of the
network for a wide number of people with proper interest. It would enable them to give the
maximum contribution to a cause of new business that people believe in it. Charles can easily be
able to expand their wide number of investors from whom capital can be taken beyond the
traditional sources of relative and venture capitalists. The best part of this particular idea of
Charles is to draw the attention of maximum investors that can visit these websites and look into
the various project to invest in one that best suitable as per their personal opinion. The essential
opportunity from this business idea Charles can earn a sufficient amount of capital from the total
percentage of capital raised during the period of time (Kirzner, 2015). The organisation has
received a sufficient amount of national publicity and achieve a lot of prestigious non-profit
strategy award. The growth opportunity by this decision has gone up to a high level and slowly
started to expand their operation into various locations. This will assist teachers of schools to an
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outreach program to increase the capability of students and a creative lot of innovative career
opportunities for the young students those also want to become an entrepreneur. The overall
decision for establishing this idea would have open up plenty of opportunity for the investors as
well as another person those are needed such kind of innovation in their career.
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Q3: Risk that business is exposed to
There are plenty of positive aspects collected from the mention case study. Generally business
risks tend to the possibility of a commercial business inadequate earning due to any uncertainty.
Some of the crucial examples are changing the preference of investors regarding their
investment, increase in competition and modification in government policy. In the case of
Donor.org business there was a great chance of not having a valuable amount of funding for their
small projects. It can directly or indirectly affect Best business ability to operate for a longer
period of time. As per the nature of Charles, he was more challenging and ready to face any kind
of risk that are coming in front of him. But he sometimes faces losing everything which was
invested during starting a business (Sadgrove, 2016). Basically anything that can threaten a
company’s strength to fulfil its overall targets or to attain their financial objective is associated
with some sorts of business risk.
In the case best, there is a huge risk which comes from external sources in order to regular the
website for the investors. While in case a company cannot be able to shelter itself from such kind
of risk entirely, there are plenty of effective ways by which Charles can control its negative
impacts. For this purpose, Charles needs to make use of risk management strategies. Business
risks are generally related to the entire operation of the new entity. These are specifically
impairing their capability to deliver both investors and another stakeholder with a sufficient
amount of return in coming time. Like, Charles can make a certain decision that can affect their
profits or may not anticipate crucial activities in the near future that can cause huge business
losses of failure. In the starting of 2017, it has been found that grant money was coming to an
end, the organisation would make huge strides in relation to accomplish their expansion.
Moreover, it has seen that the observers have thinking, whether DonorsChoose.org should reach
to their decided goal of estimating a total earning of $100 million per year. It could have a risk
that the impacts on fundamental inequalities in the educational system should also not overcome
in coming time. Henceforth, all these above risks are have huge impacts on the future growth and
development of Charles business (Kozubíková and et.al., 2015). They would also think that their
business would come to an end in case of sufficient amount of capital is not available at the end
of every year. Keeping all this business risk, Charles needs to make a contingency plan that
would help him in any critical situation and chances of losses can control up to a level. In case,
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business would not be able to accomplish with risk, they need to take crucial steps that can help
in mitigating the implication by using a well organise strategic risk plan.
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Q4: Evidence that suggests business will last or whether it fizzle out
It has been seen that, every new entrepreneur loves to have their business starting phases. It can
be exciting and challenging. But with the new venture, it also comes some anxiety and
wondering about how to tell if this business would last for a longer period. In order to get long
term growth planning, it can be hard to be indicating that there are definitely some of the sure
sign that things can might about to fizzle out. Some business would have a specific characteristic
that tends to cause them to last for a long time other than others (Quirke, 2017). It has been more
come in nowadays that some of the new ventures would last for very few time, whereas some of
them are got successful. Entrepreneurs would get excited at the initial phases of the month of
launch and the sparklies down when real work plan has been set. In order to make business
continues for a longer period there have to be regular efforts made to remain in the market.
In the case of Charles business, it sparks of business a strategy has laying down at the close of
2017. They are not able to incurred sufficient amount of capital to operate their business. This
will directly make impacts on the performance and viability of the business in the market. The
ideas must be innovative and some urgent plans must be ready to deal with such kind of issues
(Lu and et.al., 2014). A growing business needs the specific intellectual amount of capital as it
was seen in the case of Charles. They are working consistently for the purpose of generating a
sufficient amount of capital from using crowdfunding concept. This will draw the attention of
maximum inventory to show their interest in DonorsChoose.org projects. According to the
business ideas which is introduced by Charles is more interesting ways to fulfil all sorts of school
needs that they are not able to get because of not having a valuable amount of capital. By the
help of this particular business idea chances of getting maximum outcome or a specific amount
of resources is remain available within the business.
In accordance to remain sustainable for a longer period in the competition, it is essential for
Charles to make certain strategies that can help their ideas to stay for so many years. Before
DonorsChoose.org can grow and sustain their momentum Charles need to take action in order to
support certain points that can develop positive based for long term sustainability. Operational
efficiencies can embed a perception within an organisational culture that tends to make people
more sensitive to costs and organise proper communication among various investors.
Entrepreneurs are no longer only just a business term, it is an essential way of sustaining life.
Charles must always have a great attitude that can see and seize that correct opportunity that
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especially help them to perform well in near future time. According to Westerman, Bonnet, and
McAfee, 2014, the current business information, it has been clearly seen that in case Charles
does not make any innovative decision for earning the valuable amount of capital for their
business the chances of getting failure can get enhanced. Despite being getting the valuable
amount of awards and capital sources from crowdfunding they are not able to get worth for their
website. Thus, there is a huge chance of business downfall and also losing their investors those
are providing capital for their venture.
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Q5: Evaluate the business model used by Charles Best
In the given case study, it has been found that Charles has used Innovative and Technology
business model in order to start their own business venture. It has used by getting inspired from
the two of the most successful business Uber and Airbnb. This model is having great success in
the private sector. The business model is a basic foundation that is connected with overall
technological innovation that constructs essentially for an effective outcome. According to this
model which acts as an essential system to solve the issues by identifying new investors,
engaging with their requirements and monetising their value (Schaltegger, Lüdeke-Freund and
Hansen, 2012). This specific framework contains cause and analyses the effect relationships
which would provide a base for classification of a business idea.
In accordance with this mode which is used by Charles in their business because of their two-
way relationship. It would mediate proper connection between technology and overall business
performance. By the help of innovate model in the right manner can help Charles best to take
valuable decision to engage a maximum number of client in their businesses. An innovative
business model has the potential to face any kind of challenges present in a market and provide a
huge chance of getting maximum value in the near future in the near future. The primary benefits
of using this model are to research and development in accordance to accomplish innovative
technologies and products. The successful expectation of the latest ideas is more reliable to a
business that has to be able to improve their processes and improve services as well as other
facilities to increase the profitability of the company. The main reason behind using this model is
to implement the right techniques so that chances of attracting maximum investors through
crowdfunding can get an increase in near future (Casadesus‐Masanell and Zhu, 2013). The
overall decision happens to be profitable for Charles as they are effectively founded their own
business that can help in increasing performance and remove inequality among the colleagues in
the private school. It is a considerable aspect of literature deal with the formulation of economic
value for increasing corporate environment and social performance. In order to this report which
would argue that business model innovation can need to support a systematic and ongoing
formulation of business activities that can assist Charles business sustainability in near future
time.
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REFERENCES
 Alvarez, S.A. and Barney, J.B., 2014. Entrepreneurial opportunities and poverty
alleviation. Entrepreneurship Theory and Practice. 38(1). pp.159-184.
 Béland, D. and Cox, R.H., 2016. Ideas as coalition magnets: coalition building, policy
entrepreneurs, and power relations. Journal of European Public Policy. 23(3). pp.428-445.
 Casadesus‐Masanell, R. and Zhu, F., 2013. Business model innovation and competitive
imitation: The case of sponsor‐based business models. Strategic management journal. 34(4).
pp.464-482.
 Gabrielsson, J. and Politis, D., 2012. Work experience and the generation of new business
ideas among entrepreneurs: An integrated learning framework. International Journal of
Entrepreneurial Behavior & Research. 18(1). pp.48-74.
 Kirzner, I.M., 2015. Competition and entrepreneurship. University of Chicago Press.
 Kozubíková, L., and et.al., 2015. Personal characteristics of entrepreneurs in the context of
perception and management of business risk in the SME segment. Economics and
Sociology.
 Lu, C.T., and et.al., 2014, February. Inferring the impacts of social media on crowdfunding.
In Proceedings of the 7th ACM international conference on Web search and data
mining (pp. 573-582). ACM.
 Quirke, B., 2017. Making the connections: using internal communication to turn strategy
into action. Routledge.
 Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
 Schaltegger, S., Lüdeke-Freund, F. and Hansen, E.G., 2012. Business cases for
sustainability: the role of business model innovation for corporate
sustainability. International Journal of Innovation and Sustainable Development. 6(2).
pp.95-119.
 Westerman, G., Bonnet, D. and McAfee, A., 2014. Leading digital: Turning technology into
business transformation. Harvard Business Press.
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