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

2. 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

3. 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

4. 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

5. The Eight Fatal Flaws 1.Legal missteps 2.Hiring too fast 3.Lacking a sales plan 4.Setting dues before determining budget 5.Carelessness in designing the membership class structure 6.Not sweating the details 7.Having the wrong board 8.Launching before you’re ready

6. The Eight Fatal Flaws 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 ▫Ignoring antitrust laws Best Practice Tip There’s more to setting up a consortium than marking up another one’s bylaws. Hire someone who knows how to structure for success. Best Practice Tip There’s more to setting up a consortium than marking up another one’s bylaws. Hire someone who knows how to structure for success.

7. The Eight Fatal Flaws 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 Best Practice Tip Wait to make staffing commitments until the organizational structure is developed

8. The Eight Fatal Flaws 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 sales process. 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 sales process.

9. The Eight Fatal Flaws 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 ▫Set 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. 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.

10. The Eight Fatal Flaws 5.Carelessness in designing the membership class structure ▫Figure out what types of members you need (i.e. 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 Best Practice Tip Benchmark against other organizations. Use sources like ASAE and Guidestar to garner benchmarking data

11. The Eight Fatal Flaws 6.Not sweating the details ▫Responding to inquiries ▫Sending out P.O.s to those that need them ▫Bank account details ▫Deficient website at launch ▫Website 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. Best Practice Tip Don’t open the doors until you’re ready to sell. Look at software packages that help manage the membership process.

12. The Eight Fatal Flaws 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 critical 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. Best Practice Tip Don’t be afraid to hold some seats open to get the right mix.

13. The Eight Fatal Flaws 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. 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.

14. Questions? Andy Freed afreed@virtualmgmt.com +1 781-876-6205 Andy Updegrove andrew.updegrove@gesmer.com +1 617-350-6800 Additional Resources The Essential Guide To Standards/Forming & Managing a Standard Setting Organization www.consortiuminfo.org/essentialguidewww.consortiuminfo.org/essentialguide Seven Habits of Success New Associations www.virtualmgmt.comwww.virtualmgmt.com Ten Reasons Why Associations Fail www.virtualmgmt.comwww.virtualmgmt.com Ten Strategies for Association Membership Recruiting & Retention www.virtualmgmt.com www.virtualmgmt.com Additional Resources The Essential Guide To Standards/Forming & Managing a Standard Setting Organization www.consortiuminfo.org/essentialguidewww.consortiuminfo.org/essentialguide Seven Habits of Success New Associations www.virtualmgmt.comwww.virtualmgmt.com Ten Reasons Why Associations Fail www.virtualmgmt.comwww.virtualmgmt.com Ten Strategies for Association Membership Recruiting & Retention www.virtualmgmt.com www.virtualmgmt.com