1. Right From the Start Best Practices for Launching a Successful Association or Consortium The program will begin in five minutes

2. Right From the Start Best Practices for Launching a Successful Association or Consortium The program will begin momentarily

3. Right From the Start Best Practices for Launching a Successful Association or Consortium

4. About us Andy Freed, Virtual, Inc. Andy Updegrove, Gesmer Updegrove, LLP Between the two of us: ▫120+ consortia and associations ▫40 years of experience ▫From formation to merger or sunset

5. Why Start An Association or Consortia? To tackle a unique business purpose - like launching a standard ▫Develop the standard ▫Promote it ▫Brand and certify it To advocate for an unrepresented (or emerging) market segment ▫Raise its profile ▫Rally supporters and leverage resources

6. Why NOT to Start an Association or Consortia There isn’t a critical mass of members to garner sufficient financial and tactical support There is a dominant player in the same space that is already serving the needs of its constituents

7. Eight Fatal Flaws in Starting up Associations & Consortia 1.Legal missteps ▫Recreating the wheel – don’t be creative to no purpose ▫Don’t be too controlling – standards are about giving things away ▫Intellectual Property Rights (IPR) Policies can be a stumbling block Best Practice Tip: Remember what Lincoln said-- “He who represents himself has a fool for a client.” Find a law firm who has helped similar organizations get off the ground.

8. Eight Fatal Flaws in Starting up Associations & Consortia 2.Hiring too fast ▫Determine staffing structure and strategy before committing on people ▫Executive Directors wear many hats, you need to determine which is the most important:  Managing technical initiatives  Recruiting members  Driving advocacy agenda Best Practice Tip: Wait to make staffing commitments until the organizational structure is developed

9. Eight Fatal Flaws in Starting up Associations & Consortia 3.Lacking a Sales Plan ▫Getting members in the door is always harder than you think ▫Getting them in the door takes longer than you think ▫Understand what motivates potential members Best Practice Tip: Use the “Amway” model to drive a growing sales force from early sign-ons. Consider regularly scheduled informational webinars to support the sale’s process.

10. Eight Fatal Flaws in Starting up Associations & Consortia 4.Setting dues before determining budget ▫Need to determine needs of the organization and the universe of members before setting dues amounts ▫Many organizations ensure their failure by setting their dues too low ▫Should budget for 1.5 times of first year cash flow to develop cash reserves Best Practice Tip: Develop the first year expense budget and a reasonable list of potential members. Divide the expenses by the membership number to develop your first year average dues.

11. Eight Fatal Flaws in Starting up Associations & Consortia 5.Carelessness in designing the membership class structure ▫Figure out what types of members you need (e.g., big, small, vendor, end user, government, etc.) ▫Design the classes (rights, obligations and dues) to create “value propositions” ▫Dues can scale by revenues, type of entity Best Practice Tip: Benchmark against other organizations. Use sources like ASAE and Guidestar to garner benchmarking data

12. Eight Fatal Flaws in Starting up Associations & Consortia 6.Not sweating the details ▫Responding to inquiries ▫Sending out P.O.s to those that need them ▫Bank account details ▫Deficient Web site at launch ▫Web site logins Best Practice Tip: Don’t open the doors until you’re ready to sell. Look at software packages that help manage the membership process.

13. Eight Fatal Flaws in Starting up Associations & Consortia 7. Having the wrong Board  “Who is on the Board?” is the first question press and prospective members will ask  Geography, industry sectors represented, “marquee value” all send powerful messages  Board members are a critical set of volunteers. Are your Board members willing to put the time in?  Size Matters! (Neither too large nor too small) Best Practice Tip: Don’t be afraid to hold some seats open to get the right mix.

14. Eight Fatal Flaws in Starting up Associations & Consortia 8. Launching before you’re ready ▫People are predisposed to think new organization’s will fail—don’t reinforce that impression ▫It will be years before you get as much attention as the day you go public, so don’t waste the opportunity ▫An impressive list of founding members is key! Best Practice Tip: You control the launch date—don’t launch until you’re ready. It’s better to delay than make a bad first impression.

15. Questions? Andy Freed afreed@virtualmgmt.com +1 781-876-6205 Andy Updegrove Andrew.updegrove@gesmer.c omAndrew.updegrove@gesmer.c om +1 617-350-6800