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The Difference a Sector Makes: Lean Startups for Profit versus for Social Change

I’ll never forget the time that Vince, a chief financial officer I’d recently hired out of the private sector, walked into my office and asked, “So … how do we make money?” He’d gotten on top of spending in record time and had a firm grasp of our burn rate—how much cash we were using each month to pay our bills. He’d reviewed payroll for any discrepancies or inequities. He’d established policies for promotions and new hires. The one thing he couldn’t figure out was how we made money. And, strictly speaking, we didn’t.

An organization’s relationship to revenue is one example of a big difference between business and the social sector. There are others, including ...

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