John Gossart - Cofounder & CEO at Goodworld

Welcome to another CEO Wisdom pod. We have John Gossert with us today. He's co-founder and CEO at Goodwill, also CFO, lots of things. Uh, he's a Georgetown professor, he's a musician, a former military officer. Uh, interesting guy, interesting background. John, I'm glad to have you on the pod. Tell us a bit more about yourself.

Thanks a lot. Um, appreciate being on. Uh, I I guess a lot of times when I'm speaking or I'm on panels, aspiring entrepreneurs ask me about my path and if it's— if it's— there's some lessons they can learn. And I wish I could help them, but I had a very unusual path. You mentioned as a military officer, I, I got an ROTC scholarship at Boston College because I couldn't afford to go. I couldn't spell Army. I didn't know what I was getting into. But I ended up spending 22 years as an Army officer. The last 5 years I was in the counterterrorism space based out of the Pentagon. But I spent a lot of time in places like Pakistan and Yemen, East Africa, and in uniform a lot of times, obviously, in Iraq and Afghanistan. So I got out, retired, retired from the military, not retired, retired. And then there were some guys that I had taught with, taught economics at West Point with, and they had an idea for a startup that became Ride Scout. So I was part of that founding team. It was in the era of loose money, so we raised some money based on, you know, an idea and a prototype, which is very difficult to do now. And we got acquired by Daimler Mercedes, so that was kind of life-changing. And then founded Good World with Dale Pfeiffer, my partner. It's in the philanthropic space. It's a fintech, but it's in the philanthropic space. And as, you know, Jesuit Catholic trained, I always wanted to do mission work later in life. My wife talked and I talked about it, but, you know, the, the Daimler exit gave me the opportunity to raise some money and start a company that was a for-profit company, but, you know, every dollar we make is directly, you know, connected to doing good out there in the world. We've got thousands and thousands of charity partners, so it's been pretty fulfilling.

And how do you make money with Good World? What's the business model?

Yeah, we have 3 revenue streams. So basically, We're making it easy for people to give, for companies to execute workplace giving programs, and also for associations like United Ways to do things like payroll deduction and employer matching on that side, and then on the donor side to create a seamless donation experience. In fact, we first started Good World, uh, we started it with the idea of social payments, uh, and we built a platform where you could just comment #donate and a number on Twitter and Facebook and Instagram, and you would get a reply back, uh, not in your DMs, but you get a reply back that everybody could see from, from the charity. Um, so that's, that's where we started. Uh, right now we have 3, uh, revenue streams. We take transaction fees for the nonprofits, um, that we have, um, on the platform. And then on the company side, we take, uh, subscription fees as well as licensing fees. We also do some joint dev, uh, with our partners, uh, always something that's going to make the platform better for all our partners. We don't do anything custom that's not going to improve the platform for all of our, uh, all of our partners. Um, so yeah, so subscription fees and licensing fees and, uh, transaction fees.

And who are your competitors? How's this different from GoFundMe, for example?

Yeah, it's interesting that you say that because we, you know, we exist in both spaces. For companies and for nonprofits. So on the nonprofit side, obviously we're competing with, with Classy. Classy was acquired by GoFundMe about a year and a half ago. So they're one of the biggest in the space. We compete head to head with them on nonprofit tools. But with regards to workplace giving and corporates, we're kind of head to head with Benevity. And then on the donor side, probably DonorBox, uh, is our biggest competitor. But we're offering our partners is, you know, they're able to dip into all three, uh, of those marketplaces. So we're really an all-in-one platform for, you know, nonprofits and companies and associations.

Interesting. What's been the challenges of running that, uh, company since, uh, you've started it almost, uh, 10 years ago or more?

Yeah, I mean, I guess we've gone through a lot. The original social payments idea, we kind of went all in on that. Our investors were very excited about that because we were looking at an evolution from #donate in the philanthropic space to, you know, #buy in the commerce space, #contribute maybe in the political space. So we did a priced round right out the gate, got VC-backed right out the gate. A lot of people were, you know, excited about this. Um, not only VCs but MasterCard, our biggest strategic, got on the cap table. They were very excited. And I think at the end of the day, the, the one assumption that I made, that nonprofits would connect to the platform, they'd come onto the platform, that was true. We got thousands of nonprofits right out the gate. Um, but the fact that the assumption that we made about, um, you know, kind of the adoption and activation, it wasn't anywhere near the volume that we needed to do, uh, for a sustainable company. So the first challenge was how do we create one platform that NPOs and companies can come on to, uh, because the original social payments platform was kind of a second platform that they had to manage. And so we just weren't seeing activation in the numbers that we needed. So that was probably the, the first big challenge, knowing that one of my main assumptions was not true. So we kind of found ourselves in a buy or build situation. We acquired a company called Cheerful to give us kind of the full spectrum of fundraising and workplace giving, and then we built our own CRM so we can really go head-to-head with everybody on that. So our first challenge was really that, that I, I was not correct in my assumption. We acquired that company in, in January of 2020, and then COVID hit in March. So I would say that was, that was a pretty big challenge, especially considering, you know, it did a balance, uh, transaction to acquire the company. So, um, we briefly like threw all our cash at it, and it was going to be one of these things that was gonna, you know, kill the company or save the company. Thankfully, uh, it ended up saving the company. And I would say right now I have more pedestrian challenges probably that face a lot of founders, which is long sales cycles, uh, especially for our larger, um, our larger partners. You know, doing things with MasterCard, um, we're, we're working with Dow Chemical here pretty soon, uh, Procter Gamble. Um, those are, are the most lucrative partnerships, but they also take the longest. A lot of technical due diligence, a lot of compliance due diligence, and a huge chain of decision makers, you know, going up there. So they, you know, they move not very agilely, they move pretty slowly.

And how big is the decision for them? Walk me through it. So they get through your sales pipeline and they want to use the platform, let's say, for rewards and recognition or workplace giving, right? How big of a decision is it for them?

Yeah, volunteering, events, ticketing, Yeah, you know, we do all of that.

So how did they hear about you first? Walk me through like the full sales funnel.

So we do a lot of, I mean, you know, as much as some of these companies are talking about innovations, especially with AI, with regards to funnel and, you know, setting up meetings, calls, closing deals, In my opinion, and you know, maybe not a lot of people agree with me, but legacy email is still king in our business, in our space. So, you know, we're sending out thousands of emails on drips.

Cold emails, right?

That's right. We're also, well, so we have an integration inside Slack that anyone that hits our website we get their, you know, their LinkedIn info and things like that. So when people hit, we know that the intent is probably a little bit more. We also spend money to buy data sets of intent data, and we've used a bunch of them. But, you know, finding out who our competitor is that they're using right now and when that contract is up for renewal is critical, uh, because we, we craft these emails, you know, very, very carefully. So the language on a cold email versus the language on an intent data dataset versus, you know, people that are coming through our website, these, these are different things because we're telling them like, like, we know you use this, here's what we do, you know, here's why it's better, let's just, you know, have a conversation. The other thing is, you know, you can come in and use a free version of the platform. Very limited functionality, but they see the great UX, they see the great customer support, uh, and then we upgrade. That's a huge part of our funnel. So, but yeah, email, um, LinkedIn, and then, you know, when we get inside something like the United Way and we got our first, you know, half dozen United Way customers, they're marketing for us. So you know, having references from them to get to other United Ways. And now we work with United Way Global. So we've kind of penetrated that. There's, you know, there's thousands of affiliates and, you know, we're kind of the preferred solution inside the United Way. And that's been huge.

And how big is the decision for them? Like, because I see the pricing on your website here, there's a free plan, then there's $99 per month. But you also take a percentage, right, of like what goes through the— your platform. Correct?

Yes, that's, um, like on the NPO side. So there's different tiers that nonprofits, uh, can pay us from free. Uh, if it's free, we're going to take 2.8%, uh, and you're not going to get a branded, uh, experience. It's going to be co-branded with us. Um, but you can get in, you know, for $99 a month. That's kind of our lowest paid tier. And we don't take any fees for nonprofits doing that. And that's important because over the last 6, 8 years, there's this huge race to the bottom on fundraising platforms. And so, you know, some of our competitors like GiveButter were running down to no fees, you know, and no licensing. They run almost exclusively on a tips model. So in my mind, I don't really see a lot of scaling opportunity with nonprofits because, you know, so many are offering their services and platform with no fees. So we bring those guys in at 2.8% because we've got a better experience, you know, on that side. But when we talk about workplace giving, you know, we have about a dozen different features and companies can, you know, get them à la carte. They can start low and start adding. But, you know, we do a little bit of everything. Like I said, payroll deductions, employer matching programs, volunteering rewards, event ticketing, give cards, you know, digital gift cards. So we do all that. So a lot of times we have a company come in and they just want to do workplace giving. We're just going to do like a payroll thing or a matching thing. They get exposed to our platform and they just start, you know, adding on. So You know, we have contracts from companies that are $2,500 a year. We have contracts from companies that are, you know, close to $100,000 a year.

Okay, got it. That's very interesting. Walk me through also, as an employee, uh, of that company, how do I go through your platform? What does my experience look like as a donor?

Oh, I'm sorry, you're saying as an employee?

Yeah, as an employee.

So you're, you're seeing your company on a branded platform. So you're really not seeing much of Good World on that. And, you know, your company— let's, let's just take, you know, donations. So, you know, if the company says, you know, we're going to match any donations to our partners, or some of them say we're going to match any donation to any one of the 1.6 million nonprofits in the United States, 501s, then the company is going to build kind of the site and GoodWorld is going to be embedded in that. And so there's a seamless donation experience that all the donors have a dashboard so they can look at all their activity and they can see where their employers matched. You know, they're getting automated receipts. They can send themselves duplicate receipts. They can download all of their activity year to date for tax purposes. So it's really a seamless experience for the donor. And there are some other platforms that I would say are comparable on that end, but nobody beats us on the back end for like employers and companies because they have an option to just check like every paycheck that I get, donate 5% to this cause.

Absolutely.

Yep.

That's pretty cool. And how widespread is that practice in like big corporations? Do you feel like most employees are given that option?

You know, I, I don't think so. I would, I would, I would say it's definitely in the minority. Um, I don't know exactly what percentage it is. Um, CSR, corporate social responsibility, you know, it was really big 6, 8 years ago. It's a little bit less now. And some of those are economic concerns, you know, kind of budget cuts at companies. But I'll be honest with you, I think that, you know, kind of in the political environment that we've been living, you know, for the last 8 or 10 years, it's become less important as a branding thing. You know, we used to pitch companies 6, 8 years ago and say, you can't afford not to have a program. Because the people that you're going to employ, they're going to demand some social impact, right? So your Bombas and your, you know, Warby Parkers, uh, or they're going to take their skills to another company where they feel better about working there because there's a social impact program. And for the company, um, you know, there's also— they got to deal with their customers and consumers, and consumers are willing to pay a little bit more for Bomba socks than other socks because, you know, they'd like to offset some of their spending and do some good. That was a very powerful pitch for us back then. I would say it resonates less right now, partly because companies and people have less discretionary funds, but also it just seems that in this political environment that, I don't know, it's less important.

Yeah, the baby was thrown out with the bathwater, right? Like with, uh, with Was the job cuts in nonprofits, that was like way too excessive, right? I mean, Elon had a point, right? Most of it was inefficient, but also not everything can be like super efficient and automated, and there's a lot of human work, unfortunately, and I think that was pretty devastating for nonprofits, right?

I agree. I think that, you know, when you're talking on the government side, with Doge. There's a ton of inefficiency in the government. Nobody was going to argue that point, but you have to roll up your sleeves and do the intellectual hard work to identify those deficiencies. And these guys came in on the government side, they just made chops. They said, we want 25%, you know, reduction. And, you know, it's a little bit of a clown show, uh, including some on the national security side, you, you know, some cuts of some people that were incredibly important, and Doge didn't get that until after the cuts, and then they were scrambling to get these people back, uh, you know, in their jobs. So I think the execution of that was, uh, was very clownish. Um, and yeah, that's unfortunate. On the MPO side, um, you know, their margins are, are tight always, um, but in a, in a political environment where I'll be very specific about it. In the Trump administration, it just seems that the values associated with giving have been diminished.

Yes.

And I think companies are taking the lead on that. It's more valuable for them in this administration to spend money on lobbying than it is on workplace giving programs. And that wasn't the case some time ago. I think we'll get back to it. But, you know, these are harder dollars to spend, I think, right now for corporates, which the fact that we're profitable and VC-backed and growing every year, it just tells you how good the platform is. I didn't build it. You know, the engineers behind me built it. But that shows you how good it is that we can continue to grow even in this environment.

Yeah, I fully agree with everything you said. Like, I'm a super capitalist also, like, but I think it's important when you make a lot of money to give back, right? It's— and it just sucks to be rich and not to give back and be at the top of the mountain. It's very like megalomaniac, and it's— you start like consuming yourself, I think. So I think that's, uh, it's pretty sad to, to see that indeed. Um, and also like, it's weird, right? Like a company, it's not woke to give back to causes, you know, especially the ones that are well run. There's like tons of organism that rates nonprofits like they would rate an actual company, right? How efficient they are, how good they are, the impact that they have. And to me, it's just like a no-brainer to invest in that company if they've been background research and I know that they're super efficient. And it's like no-brainer.

Well, I mean, it's so easy to vet companies and nonprofits now, uh, you know, you can spend 5 minutes, uh, on your laptop or phone and do a proper vet.

Yeah, just ask an AI or deep research.

Yeah, you can ask an AI or there's platforms out there like GuideStar that we have an API integration with. But, you know, there's a public-facing part of that. You can get, you know, kind of your Trustpilot-type reviews on nonprofits. You can see what percent they spend on overhead versus, you know, given to their own causes. So it's very easy to vet these companies and vet these nonprofits. So to your point, there's really not an excuse because there's studies, many studies out there that show that the bottom line is affected positively by companies that carve out a piece of their budget for social impact.

Have you evaluated the impact that AI is going to have on society and how is that going to impact you if UBI will be a thing eventually? Do you spend time thinking about these things?

Well, we certainly use AI, um, you know, from our engineers, uh, that use some of our, our enterprise AI integrations to, to give them simple tasks, uh, and, and to come up, you know, with the code much quicker than they would. Obviously, we do unit and regression testing with human beings, but, you know, it's getting better and better every day. So we do that on the engineering side. We certainly do it on the marketing and sales side with content development. I think AI is really great at that. And our customer service, you know, we had 100% human customer service 3 years ago. And now I would say AI having a conversation with donors or companies probably has cut that down to about 60%, 50% maybe of human interaction requirement. And we don't hide it. You know, our AI is named Gemma, and she's, you know, she's very transparent. You know, she tells you she's an AI, but in many cases, don't tell my people, but she's better at some of these conversations. So we use it, but I think when I'm thinking about strategically and philosophically about where we're going with AI, It really doesn't affect the tactics of our company, but it certainly affects our lives. And so I think a lot about that. I think about the danger of us ceding kind of our agency, ceding our authority to AI and then not checking that. So if you have a student that uses AI to write a paper, that's not the end of the world. Maybe they don't get caught, they get an A. Maybe they get caught and they get an F. But at the end of the day, You know, if that kid wants to pay a college big money and then not learn, you know, or his parents pay that, well, whatever, that's on them. But when we talk about, you know, large companies that affect our lives every day, you know, um, you know, the AI companies, or, or, you know, tactically like the Ubers and the Airbnbs and things like that, um, I mean, I think that can be dangerous if we're willing to cede, you know, our agency, and if we're giving it more and more Uh, that can be dangerous when you're talking about, you know, not the kids' paper, but you're talking about national security, uh, you know, or things like that. So yeah, I, I, I think about that at night.

Yeah, I love it. Um, you and I should do a round two because we should explore the musician part and all of that. Uh, I really like, like, everything you've built, how you think. John, where can people find out more about you?

Uh, well, on the Good World side, on the, on the company side, uh, Good World Now .com is our, our webpage. Uh, you know, all my guys are on LinkedIn. Um, we, you know, you can just with a click of a mouse or click of a pad, uh, get a demo or just, you know, have a chat with us. We're pretty streamlined company. Um, so we're very responsive. You know, hit that chatbot and you're going to be, uh, you're gonna be talking to somebody live, uh, if you want. You'll first hear Gemma. She's great too, but she can help you set up a demo. Yeah, so goodworldnow.com, uh, on the company side. And then, uh, on, on my personal side, uh, my website is johngossertmusic.com. Uh, so that's where the, the music side of my life is. I'm very fortunate that the guy that was the CEO of the company that we acquired, uh, is my COO. And he runs most day-to-day operations, which is great to have. I obviously— I'm the fiduciary, so I do a lot of CFO work and audit, uh, you know, and provide strategic guidance. But, uh, Richie Kendall, my COO, is amazing.

There you go, shout out to your COO. So that was John and Charles for another