Joshua Ross On Why Investors Must Double Down On Social Enterprises With Scalable Solutions

After working as a partner in one of Sydney's top hedge funds, Josh quit the industry to pursue a career that better aligned with his values.

Teaming up with his best friend Adam McCurdie, they founded Humanitix, the world's first social enterprise ticketing platform that dedicates 100% of profits to charity. In 2023 alone Humanitix donated over $4M to its programs, and now has offices around the globe. With tickets for good, not greed, Humanitix takes the booking fees we all hate paying and funds access to education, healthcare and life’s basic necessities to millions of humans across the world.

Josh discusses why investors need to make big bets on technology and focus on solutions with the potential to scale their impact, and how on the ground experience is the best market research you can find as an aspiring entrepreneur.

Highlights from the interview (listen to the podcast for full details)

[Indio Myles] - To start off, can you please share a bit about your background and what led to your work in social impact?

[Joshua Ross] - I grew up in Sydney, Australia and studied economics and law at university, but I dropped out of law because two years into my degree I got a job at a small hedge fund in Sydney as an investment analyst. I went all in on that for a couple of years because it was interesting work, and it allowed me to build the financial freedom to do what I wanted with my life.

I turned around one day when I was 20 to one of my best friends Adam [McCurdie] and said, “if I'm still at this hedge fund in five years, get me the hell out.” It was a short-term trade, but I just want to build some financial independence so I could do what I wanted with my life. Adam and I were best friends from about 18 years old. We travelled a lot together backpacking, which is quite common for Australians because we're at the bottom of the world and love to see the rest of it.

We travelled quite a bit, and when you travel through Southeast Asia and low-income countries, you realise how lucky you were to be born in Australia, never mind for me in Sydney with loving parents and a good home.

We realised there was an interesting world where you could do a lot of good, and there's a lot of low hanging fruit in low-income countries where you can make a substantial difference to someone's life quite easily.

At the same time as we were university students, we were reading books like Banker to the Poor by Muhammad Yunus. For those who don't know, it's an incredible story about a guy in Bangladesh in the seventies who effectively invented the concept of microfinance to lift people out of poverty with a nonprofit structure.

That stuck with us as a social enterprise model. We thought this guy was so cool because he took one of the oldest industries in the world (banking) that's notorious for screwing over poor people and flipped it on its head. He turned it into a way to bring people sustainably out of poverty, and we wanted to do something like that with our lives.

We wanted to use the skills we were learning at university to build something sustainable and potentially maximise our impact we could create in this world. Obviously $5 loans don't go very far in Australia, so we were scratching our heads wondering about what we could do in Australia? We weren't hippies just running around; we recognised that if we quit university and then started a normal nonprofit, we would run out of money quickly. It would never be sustainable.

Instead, Adam went into management consulting, and I went into the hedge fund. We built our skills, built up some savings, and created our network so that when we came up with a good idea, something in the direction of what Muhammad Yunus built, then we would have the abilities and firepower to give it a proper crack.

Along that journey we made a bunch of promises to each other about what could get in the way of us creating this impact, because we recognised that a lot of university students or young people are quite idealistic, but they get caught up in a mortgage and the rat race. Very few people get back to chasing their dream.

We made a promise to each other when we were backpacking in Sri Lanka for a couple of months that when one of us or if both of us came up with a good idea, we'd support the other to make it a reality so that it wasn't such a lonely scary step to get off the conventional track train.

That's the origin story to me and Adam teaming up to do it, and the way we went about it which I think is quite different to a lot of other social enterprises where the entrepreneur dive straight into it, we took about eight years to decide what we were going to do and resource up in advance if that makes sense.

As co-founder of charity ticketing platform Humanitix, can you share more about this social enterprise, its theory of change, and the impact it's creating?

For those who don't know, Humanitix is the world's most ethical ticketing platform. We believe in tickets for good, not greed, and so what that means in practice we've built a competitive ticketing platform any event organiser can use. Whether you're running a 10-person yoga workshop, a music festival for 30,000 people, a bunch of gigs or a Mother's Day lunch at your school, we can help you.

Those are all typical clients we have on our platform, and you can sell tickets with much lower fees versus say Eventbrite, which is our main competitor. The cherry on the cake is that we have no shareholders. We're a registered charity in Australia, New Zealand, America, and soon to be the UK.

All of the profits we make from those booking fees after covering the cost of running the platform flow into some of the world's best charities, alleviating poverty in the countries we operate, but also in low income countries where there's so much good you can do per dollar compared to very wealthy countries.

At Humanitix, we are a registered charity with no shareholders. To the best of our knowledge, we're the world's most scaled software as a service technology platform using a charity structure, because it's a pretty niche space. Most social enterprises are in fast moving consumer goods.

Who Gives A Crap is in toilet paper, Thankyou is in water, Tom Paul Newman in America makes Newman Salad Dressing. There are lot of goods, cafes and those types of businesses using a social enterprise model, but we recognise technology and software is one of the most lucrative industries in the world in the for-profit sector. We wondered can we replicate that in the nonprofit sector and have the best philanthropic return on capital like you see with technology in the for-profit world?

That's the concept, and our broader vision is that if we can do this in ticketing there's a lot of commoditised tech industries you could do this in. Our long-term vision would be to build an Amazon of social impact. Amazon started in books but look what it does now. Humanitix started in online ticketing, but let’s see what it does in 20 years’ time’ there could be a whole bunch of different business verticals with a 100% non-profit structure that is solving social problems at scale.

The other element to our theory of change is we think it would be powerful for the world to have technological charities that have resources to solve problems with software. Right now, traditional non-profits have their hands completely tied behind their backs with respect to solving problems with technology. Philanthropists don't like to pay for overheads like software developers, and development is a high risk and expensive endeavour that doesn't fit the world's current mentality around non-profits.

Say you have a large charity that has hundreds of millions of dollars and the board signs off on spending 20 million to build a piece of software that may or may not scale and work. If it doesn't work, that's a scandal now, because the public will say, "you wasted $20 million of philanthropic funds. You blew it up.” Board members who are worried about their reputation will step down, and it's bad for the charity.

With the Humanitix model, no one's philanthropically funding us. We earn our living through the ticketing platform, so if we take high risk bets on technology to try and solve problems at scale and it doesn't work out, no one sacrificed anything for that, so there's no scandal. Even though that shouldn't be a scandal anyway, there's no perception issue with our model.

Our long-term vision would be for Humanitix to be big enough and profitable enough to fund its projects, but also carve out some of its profits to make more innovative high-risk bets on technological solutions for the world. Currently, technology is just a weapon for the for-profit industry, which is a shame because it's changing the world faster than anything else. It has so much potential to do good if bundled with the right incentives.

In 2019, we were fortunate enough to interview you co-founder Adam McCurdie on the Impact Boom Podcast. Since then, how have you seen the Australian business for the good landscape evolve?

It's been a hell of a five years for us, because probably after airlines, event ticketing was one of the worst industries to be in during the pandemic. We had been building Humanitix for six years when COVID-19 happened, and we'd volunteered a lot of our time in the early years and spent time living with our parents and not earning a salary.

We built it with people who joined us, and they become your friends and then it becomes a bit like a family. When COVID hit it was scary because we thought everything, we'd been building that was working was going to be lost over something completely out of our control. Like so many others we didn’t foresee this, so that was a hard for me and Adam, probably the low point of our careers and maybe even our lives.

What was beautiful (and one of the strengths of a social enterprise) is the staff are there for more than just a salary. If you work at Ticketmaster or Eventbrite in their sales or customer service team, it's just a job. No one is passionate or driven by their belief in Ticketmaster as an organisation, it would be hard to conjure up that feeling!

When you work for an organisation that's trying to solve global poverty and help the world's most disadvantaged people stand on their own two feet, then if you can't pay full time salaries because you're in a pandemic, people will still work full time because they care about the cause. We reduced salaries across the board so that we could survive with the cash burn, but everyone was still 110% in.

During that time, we took a lot of market share, and I'd say in 2019 we were just a challenger. We were starting to make an impact on the scene, but we were very much a challenger and not dominant in Australia and New Zealand. Fast forward to now, we don't have exact numbers on some of our large competitors because they're private, but we're confident we're the largest self-service ticketing platform in Australia and New Zealand.

We’re also the most ethical by a long shot, we’re the only charity doing this. In the last five years, we've transformed from a challenger into a market leader in this part of the world, and in America we're now in that challenger phase where Humanitix is very much up and running. It's going to overtake Australia in a year or two, but it is still a challenger in America given the size of the market.

This year in Australia we're on track to give over $10 million to our projects from Australia and New Zealand, which is super exciting. In 2019, we were trying to get to a million dollars, so it gives you a sense of how much we've scaled over the last five years.

Did you ever imagine or envision that Humanitix would reach this point?

Absolutely. One of the reasons we chose software, technology and ticketing is that you can scale globally, so you can have more impact because software scales so well compared to other business models. The way someone uses a ticketing platform in America, Europe or Asia is the same as they use it in Australia.

It's a bit like Microsoft Excel, there are not many cultural barriers to entry or unique elements. Of course there are differences in markets, but they're not enormous. The market dynamics are also important. For example, it might be the case that distribution is completely different in America to how it operates in Australia for many industries, so a whole different business model is required.

What we do is very scalable, so our intention was always prove this can work in Australia and then scale it globally. We could go from giving $10 million to hundreds of millions of dollars with the same product.

What is required from ecosystem builders, businesses and governments to maintain momentum in this social enterprise and business for good movement?

I don't think the social enterprise industry is radically different from any other industry in the world. It is different, but it's not radically different, and so if you look at say the Australian technology sector, what made it successful was case studies of success. Atlassian was wildly successful, therefore investors thought, "I want to make a thousand times my money, so I'm going to fund the next one," whether it be Canva or something else. Then you had Afterpay in FinTech, and investors thought, "I want to replicate that.” Now we’ve had a FinTech boom.

It never starts with something along the lines of, “the University of New South Wales had an ecosystem hub with a bunch of accountants helping entrepreneurs to write pitch decks.” No, it never works like that. Often the mistake with funders in the system is they try to fund ecosystem building stuff as opposed to just saying, "let’s get a portfolio of 20 social enterprises together and hope two of them become the next Atlassian of social enterprise.” Then, when one starts to work, I'm going to cut out the other 18 and triple or quadruple down on the one that's working.

In the social enterprise funding world, what we've experienced is the complete opposite; everyone likes to spread their funding to many entrepreneurs that needs the help as opposed to a venture capitalist’s mindset, which is if something's working, be greedy and try and get it all in your portfolio.

In the social enterprise sector, we still have a nonprofit mindset where if you start making money investors think, "you don't need me anymore, I'll stop funding you," as opposed to, "this has worked, we could quadruple our spending on this and scale." Now the marginal return on your investment is a much lower risk.

“The entrepreneur doesn't need me because their idea is working,” so the investors step back and go to the entrepreneur who needs them. No wonder it's a cottage industry. Every time someone gets something that's starting to work, they don't get follow on with funding, so the whole ecosystem is broken.

I think every university in Australia now has a centre for social impact and a bunch of funding going into start-up hubs, but that's never how an industry succeeds, name me one business where that's been the formula. It's about creating the giants who allow other people to follow. I'm so excited about Who Gives A Crap, because it's working and its funders understand this, so they’ve double down on it.

Their funders are all for profit funders, so they're thinking rationally about it, whereas we're in a nonprofit social enterprise space.

We’ve consistently seen as we were trying to fundraise to get the idea off the ground that people will give you a little bit of money, but then as soon as it starts working, they tell you to find other funders. There's no greed for impact, and we need that greed.

The system is still broken, but we will see if it can change over time.

What advice would you give to an aspiring change maker or entrepreneur who wants to make a difference but doesn't know where to start?

Humanitix would have failed if I didn't have an epic co-founder; I would have failed many times on my own. I'm not saying that to be nice and diplomatic, I really mean that. I would have burnt out a million times trying to do something ambitious on my own, and so having a co-founder who you can have good, direct, open communication with is vital.

You also need the same work ethic; I think if you had a co-founder with a different work ethic, you'd end up breaking up in an ugly way because the animosity would build when you're under pressure. You see a lot of successful businesses have a co-founder set up, just like the ones I’ve already mentioned. Atlassian, it was two people, Canva, it was three. It depends on the scale and complexity of what you're trying to build, I'm talking about big ambitious projects requiring more work.

There are other social enterprise models that are amazing and operating on a much smaller scale and are more niche focused, and I guess that's a different paradigm (I probably can't give too much advice about that because I haven't done it). My other advice would be to get cheap experience in what you're trying to do. I have friends who have opened a cafe, but they’ve never ran or worked in a café. They just decided one day that they were going to start a cafe. They probably should have gotten a casual job in a cafe for two months and maybe tried to get the manager role after a few months before spending money on building their own cafe!

From this they would have learned so much, made fewer mistakes, and even might've realised they didn't want to do it. That would have taken two to three months, and they would have been paid to do it! I think that mindset is often missing with social entrepreneurs, which is if you can go and cheaply work in your idea or industry while getting paid to do it, that’s fantastic. With Humanitix,

Adam and I volunteered at events to understand more about the event industry, and it's important to do that before trying to build a ticketing platform because otherwise there are academics out there trying to build platforms for something you've never even practice.

You're going to build the wrong solution; waste a lot of money and you probably won't get a second chance because you blew it up. Your funders aren't going to help you again because you made a whole bunch of stupid mistakes because you didn't understand what you were trying to build.

This doesn't mean you need to go and do a whole bunch of market research online and never do the thing; it means do the thing cheaply. Go and work in the cafe, go and work in events if you're going to start an event ticketing platform, and that's real market research. Market research is not asking, “how big is the ticketing market? Oh, it's tens of billions of dollars? I guess we can make a return on that, tick the box ‘good business model’.”

A lot of people think in this academic way, and you obviously need a market.

If you're going to become an entrepreneur and try and build something, try and do it first, it's about free education. We're conditioned to think that market research is Googling competitors, finding their presentations, writing down their revenue, and calculating their total addressable market.

People look at their competitors’ websites and write down three points of difference or do SWOT analysis on the strengths and weaknesses of their competitors. Go and work for one of the competitors for a few months, you'll learn way more and that's real market research!

If you're going to try and take on Nestlé, go work for Nestlé for two months. Do the market research from within the company, you'll become a savvier competitor.

What inspiring projects or initiatives have you come across creating a positive change?

Here in Australia Thankyou stand out as having done so much in the world. I think it's close to 15 years that they’ve been running big campaigns and building with the Australian public this concept of social enterprise. For those who don't know Daniel Flynn and the team there, they've had an interesting journey with some amazing media campaigns. From a brand perspective, they're switched on.

Who Gives A Crap have also done incredibly well. They're a bit different, they're a for profit, but I still respect their model, and they're doing incredible work. Globally, Patagonia is probably my favourite, and for those who don't know Patagonia make outdoor climbing and hiking apparel. The founder last year put all the equity into a non-profit foundation for the environment.

It's such a cool brand with such a cool quality product, and you can take your stuff in there and they'll repair it. They're big supporters of not wasting garments. Now they're giving (I don't know the exact numbers), I think close to a hundred million dollars a year to their projects, and we look up to that. They built it in a different way, we've been a non-profit from day one, but it just goes to show there are so many different models to create impact. There is no single correct formula.

To finish off, what books or resources would you recommend for our audience?

If you're interested in impact, a foundational book for me was The Life You Can Save by Peter Singer. It challenged me more philosophically and on a moral perspective. It's an amazing book. There is a free audio book, but I highly recommend getting the paperback copy, because if you're anything like me when a book has a lot of facts and figures, if I listen to it as an audio book I don't digest the information properly. Also buying their book supports The Life You Can Save Foundation, which is phenomenal, it's one of the best portfolios or projects to fund if you care about global poverty.

Another good book is Doing Good Better by Will McCaskill. It’s an interesting book on how to be effective with your time and resources to create change in the world. My personal favourite, the one that kickstarted the journey for me was Banker to the Poor by Muhammad Yunus. This is the story of how in Bangladesh in the 70s a man completely flipped banking on its head for the world's poorest people. It's not a boring banking book, it’s an amazing human story. If it sounds dry, trust me it's not.

I highly recommend reading Banker to the Poor, it's a phenomenal case study. Muhammad Yunus, one of the greatest social entrepreneurs of our century won a Nobel Peace Prize for what he created with Grameen Bank. He started by doing it cheaply and a whole bunch of real-world market research.

He was an economics professor who gave his students $10 each. Then, he sent them back to their villages, saying, "I don't care about paperwork, we don't have a logo, we're not even incorporated, start giving people in your community $2 loans and let's see if they can start a business which becomes sustainable.” There was no paperwork or collateral, if they lost the money, they lost the money.

He found real world experience cheaply, and so to any aspiring social entrepreneurs, that's my strongest message, get experience. Real world market research is the format to experiment in.