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Michael Lenczner, left, is CEO and co-founder of Ajah, a Montreal company that allows fundraisers to analyze the giving patterns of government bodies and corporations. With him is Daniel Drouet, the company’s vice-president and co-founder. (Christinne Muschi For The Globe and Mail)
Michael Lenczner, left, is CEO and co-founder of Ajah, a Montreal company that allows fundraisers to analyze the giving patterns of government bodies and corporations. With him is Daniel Drouet, the company’s vice-president and co-founder. (Christinne Muschi For The Globe and Mail)

THE CHALLENGE

Using public data, entrepreneurs wring cash from the world of charitable giving Add to ...

Each week, we seek out expert advice to help a small or medium-sized business overcome a key issue.

The fundraising world can be tricky. Navigating government agencies, foundations and companies to apply for grants can feel like a maze.

Enter Michael Lenczner, an entrepreneur and community organizer from Montreal. He has worked with non-profits and also happens to be a fan of open access to data, having encouraged governments to publish data for the better part of a decade, including as co-founder of Montreal Ouvert.

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In 2009, Mr. Lenczner merged these experiences and interests when he co-founded Ajah, a company dedicated to streamlining the fundraising process. Ajah’s Fundtracker tool lets fundraisers analyze the giving patterns of government bodies and corporations and see who has funded agencies with similar mandates to their own.

Ajah pulls all of this data into one spot, largely from publicly available documents such as government disclosures, charity tax returns and corporate social responsibility reports. Fundtracker paints a picture of Canada’s funding ecosystem: who funds whom, how often, and when.

Each funding body has a dedicated page showing whom it has historically funded. It works in reverse, too – charities and other fundraising bodies each have their own landing page, so clients can see who has funded them. Clients can follow an organization and receive an e-mail every time it receives new funding.

“Imagine you could watch your competitors, and get an e-mail every time they made a sale,” Mr. Lenczner says in Ajah’s cozy, 13-employee office in Montreal’s Plateau district. “That’s what you can do in the non-profit sector, because there’s so much data about it.”

Fundtracker was originally built for smaller fundraisers, but larger clients, too, have begun to subscribe to the service. Ajah released a more expansive “pro” edition at the end of the summer, at a higher price point. It’s selling well, but now Ajah’s leadership is wondering what should come next. Direct sales work best, and the company has just expanded its sales team to five people from one.

Mr. Lenczner, who co-founded Ajah with vice-president Daniel Drouet and chief technology officer Nicholas Cadou, is confident in the product, but the company’s 500-plus clients are just a small fraction of the Canadian market, which includes 85,000 registered charities in addition to other fundraising bodies.

He admits that “we’re learning the sales and marketing stuff as we go,” he says. “We’ve been pretty risk-averse in terms of not growing our team too fast, until we were sure we had a product market for it.”

Should Ajah continue growing its sales team organically? Add an experienced sales manager to the leadership team? Or focus their energy on broadly marketing the product for the first time?

“We still want to grow faster, and we’re not sure what the best next step would be.”

THE CHALLENGE: How can a young company best convince customers that its unique product can help them crack the enormous Canadian fundraising market?

THE EXPERTS WEIGH IN

David Eaves, public policy entrepreneur, consultant and open data expert, Vancouver

It is fantastic that Ajah has poured its energy into expanding its sales team. Put the pedal to the metal on sales.

What I would want to know more about is size of the market and length of the sales cycle. The smaller the total market and the longer the sales cycle, the more organic growth feels like the right move, since additional funds are less likely to have a dramatic impact. The bigger the market and the shorter the sales cycle, the bigger the sales team I’d want to have to maximize my coverage as quickly as possible.

Ajah’s core asset is not the open data it collects – that is free – but the tools which enable its customers to intelligently understand, analyze and learn from the data. The more jurisdictions it is able gather data from and thus serve up its tools, the bigger its market will be and the busier its sales force will get.

One possibility would be to look at the markets Ajah serves and find all the ways they’ve helped the sector become more resilient, more efficient and effective. Use this as a pitch not for prospective clients, but for provincial governments that currently do not readily provide the data Ajah needs. It would also be wise to look internationally. If they can adapt their service to ingest data from other jurisdictions they could radically expand the market they serve.

Niraj Dawar, marketing professor at Ivey Business School, University of Western Ontario, and author of the upcoming marketing strategy book TILT, London, Ont.

Ajah is facing a challenge many startups face: Having developed a product, they realize it is just as difficult, if not more difficult, to build a market. The good news for the company is that its product clearly has traction. Now the company needs to segment this potential customer base. A great first step that Ajah has taken in this direction is to separate the needs of the smaller and larger entities, offering a pro version for more sophisticated customers.

At this stage, Ajah would be well served to think about dimensions other than size along which the needs of buyers differ. Knowing that the data is organized by verticals, such as education, environment and health, I would still suggest they determine which of the verticals is most relevant for them, which verticals offer the most funding, which ones deal with the most non-profits, which ones require the most sophistication. Any salespeople Ajah hires will be much more effective if they are given clear targets.

A finer segmentation will yield a better understanding of the data needs of clients, and will feed into building products that are better suited to each type of customer. It will also further increase the entry barriers for competitors looking at this space.

Neil Gallaiford, president and principal strategist at the non-profit marketing firm Stephen Thomas, Toronto

The non-profit community is relatively small and conservative, so testimonials and, even better, referrals are extremely valuable. I would recommend that Ajah establish a formal program for collecting both.

Ask every client for a testimonial and ask every client to suggest names of colleagues at other organizations to contact, and even offer a discount or other reward for referrals that pan out. I’d try a dual discount if two charities pair up to purchase. All of the above gets your satisfied customers working to promote your product.

THREE THINGS THE COMPANY CAN DO NOW

1. Ajah should set up a formal program for referrals and testimonials to let their clients’ satisfaction speak for itself.

2. Break down their client base by field and study each one’s needs to find ways to reconfigure Fundtracker to address those needs.

3. Consider expanding the service to other jurisdictions that their product can easily adapt to, such as provincial governments or other countries’ non-profit markets.

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Interviews have been edited and condensed.

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