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How to Start a Purpose-Driven Venture

Mike Quinn is a 2007-08 Skoll Scholar and Oxford MBA alumnus, he is also the co-founder and former CEO of Zoona, one of Africa’s earliest fintech companies. With other 10 years of experience running a successful social business, Mike shares his hard-learned tips and experiences on how get a purpose-driven venture started.

In October 2019, I had the privilege of being a Social Entrepreneur in Residence at Oxford’s Saïd Business School. I delivered three talks and coached dozens of entrepreneurial MBA students who were seeking practical advice on how to start, build and scale a purpose-driven venture. This blog summarizes my first talk, ‘How to Start,’ with the others to follow.

Start by falling in love with a big problem

When starting a new venture, there’s a lot of pressure to come up with that one novel idea that nobody has ever thought of before. It can be discouraging at the idea formation stage to hear comments like, ‘Oh that’s not very unique!’ or ‘There’s another company already doing that!’ This pressure can lead to you spending a lot of your time trying to come up with a unique solution before choosing and understanding the problem you want to solve.

This is a backward approach for a few reasons. First, it’s almost impossible to come up with an idea that someone else hasn’t thought of or tried already. Second, if another company is already doing it, that means there is a real-life analog to learn from. And third, trying to come up with a solution before fully understanding the problem is the fastest way to start-up death.

A better approach is to spend time up front falling in love with a big problem. Pick a problem that you are passionate enough to spend the next decade of your life solving. Make sure it is big enough that no one solution will solve it completely. And be confident that if the problem no longer existed, the world would be a better place and you would be proud to have contributed to the solution.

Falling in love with a big problem is what will keep you motivated through all the investor rejections, people challenges and product failures that will surely come.

Pick the right co-founder(s)

There is a saying that ‘Founder’ is the loneliest number for good reason. There is so much to do when starting a new venture that having a team of 2-4 co-founders can make a huge difference in both the venture’s success and everyone’s well-being. However, finding the right co-founder(s) can be fraught with challenges, especially for first-time entrepreneurs.

Before you look to find others to work with, you should start by finding yourself:

What is your purpose?

What are your core values?

What is your personality type?

What are your strengths and weaknesses?

Which tasks do you jump out of bed for, and which drain your energy and cause you to reach for the snooze button?

I like to capture these on a ‘Me on a Page’ document that I review monthly to keep me grounded.

Next, understand that the ideal co-founder(s) enables you to be the best version of yourself (and vice versa). Find people who share your passion for the problem, resonate with your values and are equally committed for the long haul. Make sure they have complementary strengths and weaknesses and are people you enjoy being around.

This is a high bar to meet, and so it should be. Over my ten years at Zoona, I spent as much, if not more, time with my three co-founders as I did with my wife. We experienced exhilarating highs and gut-wrenching failures together. We had to work in a pressure-filled environment that was never stable, even when things were going well. Working in a start-up will either bring co-founders together or destroy relationships, so it’s critical to be purposeful about the people you will share this special bond with.

It takes time to know if you have the right co-founder(s), so in the interim there are some practical steps you can take. For example, ‘try before you buy’ by agreeing up front to test for fit and working relationships before formalizing anything. Build in staged check-ins and exit off ramps where people need to either commit or leave. When splitting equity, introduce share vesting so that a departing co-founder returns their unvested shares back to the company.  Have honest conversations and learn how to give each other feedback. This all takes courage and maturity but is absolutely necessary if you want to build a successful venture.

Rapid prototype to discover product-market fit

With the right problem and co-founder(s), you will have solid foundations in place to shift your focus to discovering product-market fit. Your goal is to develop a minimum viable product (MVP) that solves a major pain point for your targeted customers. You also need to validate that they are willing to pay for your product above what it costs you to deliver it. If you’re lucky, they will start telling other people who are like them to try your product, and you will achieve lift off.

A lot of things have to come together for this to happen, and it’s typically a race against time and running out of cash. If you spend all your time building a perfect product in your office, you are destined for failure.

Rather, take a rapid prototyping approach. Start with a small and consistent customer segment. Get to know who they are, their pain points, and the root causes of their pain points. Learn from them about how they already overcome these pain points on their own. Then, design hypotheses for how you could help reduce or eliminate their pain. Test hacked solutions that require the least amount of time and money to develop and seek quantitative and qualitative feedback. Make adjustments on the go and keep iterating as fast as possible until you have a working MVP and delighted customers.

With any new venture, there is never a guarantee of success and always a high probability of failure. But if you get these three foundations right – falling in love with a big problem, picking the right co-founder(s), and rapid prototyping to discover product-market fit, you will be off the starting blocks and living the entrepreneur lifestyle!

5 Guidelines for MBA Programmes to Support Impact-MBAs

Before I came to the MBA, I was a service designer and user researcher in public sector innovation labs at the White House, World Bank, and later the City of Austin, working on making public services more user centered and user friendly. I came to the MBA at Oxford to complement my design skills with the business and operations skills I needed to take my prototypes to scale. 

When I got to the Saïd Business School, I joined the small but mighty group of “social impact” MBAs looking to take our work to the next level with business skills. Over my year as a student, and now as an intern at the Skoll Centre working on impact talent development, I’ve learned a few lessons that I think apply to any business programme hoping to support their social impact students: 

1. Understand your “impact-MBA” personas, and design programming accordingly

There are a lot of us that get lumped together as social-impact focused MBAs.

This includes;

  • the impact-curious who are looking to enter the field
  • those who are committed to impact but looking to move into a new sector
  • and those who want to accelerate their careers in their sectors

The same support doesn’t work for everyone. 

A lot of MBA programming around impact assumes that we need to be convinced that social challenges are worth caring about and working on. That is effective for the impact-curious, and converts some who are on the edge, but it doesn’t cater to the impact veterans who are already convinced.

That’s why one of the key, but more difficult choices we’ve had to make at the Skoll Centre this year, is to focus the Impact Lab on those who have deep impact experience. This might feel exclusive, but in fact, it ensures that different impact MBAs with different needs and expectations get what they want and need out of the programming. The more we realize there isn’t a single, one-size fits all “impact-MBA”, and design programming that serves more niche needs, the more meaningful students’ engagement will be. 

2. Look beyond impact investing and impact consulting

Just as there are different impact MBA personas with different levels of interest and experience, there are personas that bring different skills, experiences and interests within impact. There are former policy makers hoping to bring back a business perspective, software engineers looking to lend their skills to a social tech firm, marketers wanting to help rebuild trust in business… the list goes on. Yet, the MBA impact career pathways can tend to mirror those of the broader MBA, and overemphasize finance and consulting. 

It’s important that all MBAs, especially the broadly impact curious who might be convinced to pursue a career in impact, see that they have a place and role in the impact ecosystem. Impact investing and consulting are each fulfilling and prestigious careers, but they certainly aren’t for everyone, and don’t begin to cover the breadth of options and needs in the impact space. 

Keeping this in mind, this year the Skoll Centre is collaborating more closely with the careers team at Oxford Saïd to help MBA students navigate through the many different pathways and careers in impact. We’re particularly focused on engaging our incredible network of impact MBA alumni working in every sector from government to NGOs, tech companies, and marketing agencies to banks and consulting firms to share their learnings and advice with the incoming MBA class of 2019-20. 

3. Don’t let us lose sight of the humans

There’s the danger that when students are taught frameworks and tools for impact, they come out bordering on technocratic. It’s hard not to drink the kool-aid and believe that an impact consulting framework, or a human-centered design sprint could help us fully understand and solve the problem. Or that using rigorous financial and impact analysis will certainly help us identify the social innovations that will scale. And when we’re sitting in our future jobs sending fancy PowerPoints or building elaborate models, it has the risk of reinforcing what’s happening really is this simple! The optimism of the MBA is great, but it’s important to keep us connected to the humans at the core of all the challenges we want to address. 

This is where the Skoll Centre is looking to deepen its ties to our community. Oxford has a tradition of walling itself off, and we’re working on breaking this down and connect with the community. A great example was through Map the System. When my teammate and I analysed the system that caused inequality in early childhood in Oxfordshire, we found through our research with a local community organization, the Oxford Hub, that promising solutions never made it to implementation because impact reporting frameworks didn’t match the phase of solutions. It’s easy in a classroom to be convinced that impact measurement is important (and it is!), but the nuance comes from interactions with the real world. Creating those opportunities leads to understanding (and employability!).

4. Help us be as rigorous about our personal impact as we would be about an organization’s

As a school focused on responsible business, Oxford Saïd’s theory of change is to pump out business leaders who can create change from within even the most “traditional” companies. But these leaders can’t live up to this vision unless they’re critical about their organization’s and their own activities and intentions.

The same theory applies within impact as MBAs join impact organizations like the United Nations, development banks, and corporate sustainability teams. These traditional players are the natural and prestigious next steps befitting an MBA, and it’s certainly possible to make significant change through these positions, but it’s important that we’re as rigorous about our impact and intentions going into these (or any other) organizations, as we are about our actions as a responsible leader working for an investment bank or consulting firm. 

That’s why in Impact Lab over the next year, we’re putting a finer point on developing a critical perspective on different themes within impact. With every activity, our objective is to help leaders to challenge their assumptions and ask themselves and others the critical questions necessary to ensure they are having the impact they promise. Importantly, we’re extending this perspective to being self-critical, so that students examine the biases and privilege they’re bringing into this work, and how they can overcome and utilize them to help create a fairer, more sustainable and prosperous world.  

5. Mainstream impact

Finally, the most important thing that a business school can do to create a fairer, more sustainable and prosperous world, is not only to support students that are interested in impact, but also to mainstream impact within the broader business curriculum. Oxford Saïd did a great job of this within the core accounting course this year. Each week, our professor had a group of students research, critically reflect and present on different themes within extra-financial accounting and reporting. The school also organized a mandatory union debate that examined the merits and limitations of mandated sustainability reporting. It was exciting that ESG factors and sustainability were thoroughly mainstreamed within our curriculum, and eye-opening (at least to me) to see how most corporates are thinking about sustainability and impact. Students were able to leave the accounting course, not only understanding the basics of accounting, but understanding the current state of extra-financial reporting, and how we might build on this progress in our careers. 

It would be great to see similar mainstreaming in other core courses like analytics, corporate finance, and technology and operations. The school already offers elective courses and co-curricular activities like the Skoll Centre’s Impact Lab for those who are interested in impact, but it’s all too possible for students who don’t come in with this interest, to avoid any content and reflection around impact at all during their MBA degree.

If we want to support every student to become responsible leaders and to pursue purposeful careers, a critical, human-focused, impact education is key for every MBA student.

Head shot image of Puja Balachander
Puja Balachander, Oxford MBA 2018-19 student.

Puja Balachander is an Oxford MBA 2018-19 student. She is also the co-founder of Devie, a trusted digital service platform that guides parents on their journey from pregnancy to parenthood, equipping them to become their child’s best first teacher.

Mapping the System to address sexual assault in New Delhi

On Sunday, 9 June 2019, the Skoll Centre’s Map the System Competition held its Global Final in Oxford for another year. Making it to the final six teams out of 20 overall finalists, the University of Oxford team, No Means No, took 2nd place, winning £3,000 in cash prize money. But the money and the prestige of being in the top three winners only came 2nd to the incredible journey of learning and discovery this team of five Indian students, four of which were Oxford MBAs.

Oxford MBA 2018-19, Prerna Choudhury and teammate and Duke University Sandford School of Public Policy alumna, Tanmayata Bansal, tell us how they mapped the system of gender-based violence in New Delhi, India.

In early January, we came together as a team with a common thread that is unfortunately part of the lived narrative of most Indian women—we all had either been victims of sexual assault or known someone close to us who had. In 2012, the brutal gang rape and death of 23-year-old Jyoti Singh brought the city of New Delhi to the forefront. Seven years later, Jyoti’s parents, who have now turned activists feel that change has not occurred and that justice in India has failed Jyoti and women like her.

Not only were we frustrated by the lack of progress made to address the problem in our country, but we were also passionate about wanting to be a part of the change. Map the System offered a public platform for us to break the societal taboo we had dealt with our whole lives, using the lens of systems thinking, which was particularly relevant to a problem as complex as ours that involved a diverse range of stakeholders and was multi-faceted in its contributing causes and solutions.

We conducted extensive primary and secondary research to help us map stakeholders and develop a narrative illustrating the interplay between these stakeholders. This ongoing interplay contributes to perpetuating sexual assault against women in New Delhi. We read news articles, op-eds, reports, and academic literature to help us understand the history and quantify the extent of the issue. We identified 20 distinct stakeholders that were either experiencing, contributing to, or trying to prevent the problem.

The second phase included primary research which included 31 interviews across our stakeholder spectrum. We started by reaching out to our internal network and gradually progressed to sending out cold emails. We received an overwhelming response to our cold emails, which further strengthened our belief that the issue needs to be discussed on a visible platform.

These interviews further tied to our secondary research and gave us nuanced perspectives on the issue. The process also contributed to our final systems map which underwent multiple iterations – from a linear process map, to a rather convoluted and more accurate depiction of the problem and aspects related to it.

So what were our findings? We’ve outlined and synthesized our research and findings:

Solutions

Widespread change can only be achieved if the city of New Delhi implements a concerted city-level strategy that targets solutions in education, policy, law, technology, and infrastructure:

  • Education: All our interviewees advocated for education as key to fostering long-term change in mindset. Solutions targeting education taking the longest to make an impact but yield the highest probability of bringing about a paradigm shift.
  • Policy: Implementation and enforcement of policies takes time and is key to success.
  • Law: A comprehensive legal structure already exists in India to deal with crimes of sexual assault. Reform should focus on expedition, reduction of errors, and placing the victim at the center of the case.
  • Technology: Use of mobile phone apps and SOS emergency lines have provided women with an avenue to report sexual harassment. Social media campaigns have also enabled stigma reduction.
  • Infrastructure: Physical infrastructure such as lighting, or social infrastructure such as networks help reduce the incidence of sexual assault.
Tanmayata Bansal wit her team mates at the Global Final of the Map the System
Tanmayata Bansal presenting with her teammates at the Global Final of the Map the System competition on Sunday, 9 June.

Gaps & Levers of Change

  • A lack of prioritization and implementation can be addressed by prioritizing gender equality as part of the national agenda through policy changes such as reducing investigation times or portraying women in empowered roles in Bollywood movies.
  • A lack of sensitivity and support is mitigated through the creation of a safe and reliable place for women to fight against assault, achieved through repeated gender sensitization trainings and the building of strong social networks and cohesion among female professionals.
  • Shortfalls in staffing and representation are countered by increasing the agency and representation of women across sectors.
  • A lack of knowledge, awareness and accessibility can be addressed by increasing educators’ awareness of the importance of developing emotional intelligence in students.

Systems Map

Our systems map was divided into three parts:

  • A system that promotes gender equality: A map tracing the way in which gender inequality is deeply entrenched in Indian society and promoted from birth.
  • A system that normalizes sexual assault: A map analyzing the ways society, the political and legal system engage in victim blaming and shaming and enable the attacker through his ability to exercise control through power and bribery.
  • The mental models and underlying structures that support the system such as a deeply entrenched patriarchy, an outdated and rigid educational system, caste system, religious and cultural traditions, weak institutional support, and social stigma.

Download our map here

Image of group photo of team No Means No
From left to right: Tanmayata Bansal, Prerna Choudhury, Sahl Abdus Salam, Neha Sethi and Mridula Vasudevamurthy

Map the System empowered us to speak about a topic that was deeply personal to all of us. Ever since the competition, we noticed programs and campaigns happening in the city of New Delhi increasing awareness on the issue. Most notably, a leading radio station has started a campaign to make Delhi safe, especially at night by creating a sense of responsibility among its residents and urging them to be more vocal and actionable if they witness sexual harassment. We look forward to collaborating with such efforts and disseminate our findings and report among our stakeholders and organizations to take our efforts forward.

Authors: Prerna Choudhury Oxford MBA 2018-19 & Tanmayata Bansal Masters in Public Policy Analysis at Duke University.

An MBA for Social Entrepreneurship

It was 2017 and I was visiting an indigenous Aymara community of quinoa producers. After 3 years of hard work and with some funding from international organizations, these humble smallholder farmers received organic certification that would allow them to earn a fairer price on their quinoa. They put in all the necessary internal audits to prove that the quinoa was organic quality. That year should have been their second organic-certified harvest.

But all was not well.

I had already spoken with the certifier to learn that they missed the required $7,000 payment for certification, and I wanted to know why.

Image of Alexander Wankel

Quinoa prices had plummeted to their lowest levels in years and the grant project supporting the community had ended.

Worse yet, the cooperative had no connections with international clients willing to purchase organic quinoa at a premium price, so their valuable harvest sat in the warehouse for nearly a year.

The farmers couldn’t come up with the money and by the time a buyer came, it was already too late to pay for the next year’s certification. Years of efforts had been wasted, and the farmers were now stuck with poverty-level quinoa prices once again.

How could this tragic situation have been avoided? 

An MBA (or any type of higher education) is not a silver bullet for solving problems like these, but it can be a starting point. Business has the power to create wealth, but this wealth often doesn’t reach those who need it most desperately.

As an Oxford educated MBA student with the added privilege of graduating debt-free thanks to the Skoll Scholarship, how should I strive to use business as a force for good? How can I avoid the mistakes of other short-lived projects that have failed to deliver their goals? How can business school skills be of service to smallholder farmers, to ecosystems, to the Earth that we must share?

Image of Alexander Wankel

MBAs teach the core concepts upon which our economic system is built, by extension affecting everyone in society. In some ways, an MBA is geared towards profit maximization, both of MBA alumni and of the corporations they work for. After all, official Financial Times MBA rankings are based partially on the who has the highest salaries 3 years after graduation. With the field of impact investing on the rise, the win-win philosophy of “doing well by doing good” has caught on, affirming that achieving positive social or environmental impact can be profitable.

However, those of us who are committed to a social problem know that impact work often requires sacrifice. As a social entrepreneur the hours are long, the risks are many, and the most significant victories take years to achieve.

As societies face escalating existential threats due to climate change and rising inequality, the MBA programs of tomorrow may look drastically different from those of today. Some of my courses this year have helped me imagine this change and provided me with the language to express it. I’ve learned that there is a difference between avoiding harm and contributing to solutions, that if traditional financing tools don’t meet the needs of social enterprises we can invent new ones, that future business models should be restorative and regenerative by design, and that a major task of business today is to help find a just space for humanity within our planetary boundaries. I’ve also learned the traditional tools of finance, accounting, economics, and strategy which have helped leading business ideas scale and grow.

Although actors from many fields and disciplines must work towards solutions, the role of business is unique because economic activity is the root cause of the most critical environmental problems affecting our world. After all, cleaning up a mess is not as good as preventing it in the first place. This means cutting off or minimizing the flow of pollution and resource depletion from businesses, and some top firms such as IKEA and Unilever are now working to do so.

To prevent catastrophic 2-degree climate change, carbon emissions must sharply and drastically reverse from their long-term steep upward trend. There is no precedent for this and currently there are few signs that this is happening at a sufficient pace. Without cooperation from businesses, the task may be impossible. Social entrepreneurs must also work to build and prove the technologies and business models that will provide the building blocks of this change.

This year has reaffirmed my commitment to social enterprise, which to me means using the tools I have learned to create business models that benefit local communities and ecosystems.

In September I plan to return to Andean farmer communities after a year at Oxford to witness some of the same realities with a new perspective and a new set of resources. I plan to scale my company, Kai Pacha Foods, which I have now realized has a core purpose: to build healthy foods out of healthy ecosystems. By designing food and beverage products based on native crop systems in which each food plays complementary ecological and nutritional roles, we are crafting a business model capable of generating a profit while also improving the livelihoods farmers who conserve land, water, and biodiversity.

Image of Quinoa

After a year packed with so much learning, I have much work ahead to put these concepts and tools into practice. Likewise, the business world and business education have a lot of work ahead to play a more positive role in building an economy that can be sustained on a planet with finite resources.

At Saïd Business School, I have learned about innovation in impact and responsible business alongside the more traditional concepts of an MBA upon which our current economic system is built. From these pieces, the task now falls to us to assemble solutions that are equal to the scale of the problems afflicting our planet.

Image of field of Quinoa

Alexander Wankel, 2018-19 Skoll Scholar.

How might big business fight poverty?

Puja Balachander is an outgoing 2018-19 Oxford MBA, a member of the inaugural Impact Lab, awardee of the Skoll Venture Awards 2019, and social entrepreneur. On Friday, 11th July, she attended the Business Fights Poverty conference at the Saïd Business School. Here she shares her own personal experience.

Having spent my former life working in the public sector, I have to admit I’ve often been frustrated by the narrative in business circles around social impact. The message is often implicitly or explicitly that government and philanthropy have failed, and therefore business needs to step in to save the day by bringing the “rigour” to the impact sector that it desperately needs.

I walked into the Business Fights Poverty 2019 conference prepared to hear the same rhetoric again, and found it refreshing that rather than painting business as the cure all, the conference theme this year was around “Purposeful Collaboration.” It brought together players from major corporations and the third sector, and emphasized a systems approach to problem solving, where business wasn’t the solution, but it was part of the system of solutions necessary to address the complex global challenges we face.

Yet I couldn’t help but notice the irony of what I saw compared to the expectations I had encountered in government. I was always told that we needed to adopt more rigorous “private sector” methods to understand the ROI of the resources the government spent on social impact. But the conference showed me that the private sector is being far more lackadaisical about their impact efforts than government ever was.

The need to move from defining a corporate purpose, to creating structures, processes and culture that actually facilitate that purpose were repeated in nearly every session, yet the examples cited and celebrated at the conference seemed tokenistic and only superficially impactful. The keynote speaker for the day from Unilever gave a presentation that seemed to equate socially inclusive and progressive marketing with Unilever’s social impact. In a corporate intrapreneurship workshop, speakers from major companies told us about their social innovation initiatives to surface ideas and potential ventures from within their employees. And while I’m sure there might be positive social outcomes that come from these efforts, they sounded more like employee engagement than social innovation.

I’m not sure that celebrating these efforts is helping move companies towards more ambitious and rigorous social impact efforts. At the same time, I’m aware that being overly critical of companies’ incremental efforts could be counter-productive. Incremental progress is better than none at all, and who’s to say that companies won’t throw up their hands and figure that if they’ll be criticized, either way, they might as well go back to a pure profit-maximizing focus?

So rather than a critique, I left the Business Fights Poverty conference with questions. How do we encourage companies to be more ambitious and rigorous about their social impact efforts? Celebration and commendation like we did at the conference felt disingenuous, and like they wouldn’t catalyse the urgency and scale of transformation needed to address the challenges we face. Critique has the potential to scare companies off, or put them on the defensive, stopping them from engaging with the academics, public servants, and third-sector players that might be able to help them in their transformation. Is there a middle ground between these that might put companies under an optimal level of pressure, and provide the optimal support that will spur them forward in their impact journeys?

Puja Balachander, 2018-19 Oxford MBA

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Lean Impact: How to scale social innovation for good

Closing the Gap – a series of Oxford University postgraduate student insights to the Skoll World Forum 2018

Nikhil Dugal, Skoll Scholar and 2017-18 MBA at Saïd Business School, reports on the Skoll World Forum workshop ‘Lean Impact: Scaling Innovations for Social Good’.

Ann Mei Chang is the author of the upcoming book, Lean Impact, on how modern approaches to innovation can drive massively greater social impact and scale.

She is the former Chief Innovation Officer and Executive Director of the U.S. Global Development Lab at USAID. Prior to her pivot to the public sector, Ann Mei had over twenty years of experience at leading Silicon Valley companies including Google, Apple, Intuit, and some startups.

At the Skoll World Forum, she led a workshop titled Lean Impact: Scaling Innovations for Social Good where participants were introduced to the lean methodology to help develop more scalable solutions for social innovation. Participants were asked to arrive with a social challenge or a solution where they’d like to see growth.

Session for Lean Impact - Workshop cabaret tables at the Skoll World Forum

The workshop started with her posing an intriguing question. There has been slow but steady progress in multiple focus areas in the development sector such as sanitation and health, but shouldn’t we be shooting for progress at the same rate as disruptive technologies such as mobile phones? Their adoption has skyrocketed over the past two decades unlike any other technology deployed in the social sector.

Edison once stated, ‘genius is one percent inspiration and ninety nine percent perspiration’. A lot of time when we think about innovation, we focus on the one percent inspiration, but success is about making that idea practical and applying it to achieve true impact at scale in the world.

The lean startup movement has done a good job capturing the fundamental strategies for scaling up in the startup sector but the movement mostly addresses businesses in the private sector. Lean impact aims to help fill in the gaps for applying the lean methodology in the social sector.

Ann started the session with three principles to follow in order to achieve lean impact: Think big, start small and relentlessly seek impact.

  • Think Big: Think about the problems that you want to solve, instead of thinking about problems you can currently address based on your resources. For example, Astro Teller from Google X stated that we should be clear whether our aim is to make a 10% or a 10x improvement. Sometimes 10x could actually be easier because fewer people have tried it.
  • Start small: Key to innovation is about how fast you’re able to iterate your solution. That’s why you should start small. It’s easier to test something out with 10 people rather than 1000 people.
  • Relentlessly seek impact: You need to love your problem not your solution, and relentlessly seek impact in your interventions.

Further, she stated that social innovation lies at the intersection of three pillars: growth, value and impact.

Ben diagram of Social Innovation. Value/Growth/Impact

1) Value

The value in the social sector comes from two customers, your funders and your end users.

You need to understand what your end users need, and not move forward with assumptions. Are you delivering something people want or come back for? How do you make something people desire and demand?

A prime example for testing customer value is PATH water filters. They tried two versions when they were going to market, one was the simplest and cheapest version, and one was a nicer model that cost twice as much. Three times as many people bought the nicer version because they didn’t want something that looked like a trashcan sitting in their living room! You want to create real world conditions to see how people will respond in the real world because observed data is more valuable than self reported data.

Meanwhile, funders are looking to minimize risk rather than enhancing learning. Funders need to look at starting small, taking more risk and placing lots to bets. Based on traction, funding can be scaled up over time.

2) Growth

Do you have an engine for growth that doesn’t just grow linearly but accelerates over time? Many organizations focus on scaling their work in the short term instead of the long term. In the social sector, we often see growth curves like the inverse hockey stick. An organization can scale quickly but then when they reach 100,000 or 1 million people, there are just not enough donor dollars to continue scaling up and stagnation occurs.

A typical grant program can cause organizations to scale up too fast instead of iterating, starting small and testing solutions before scaling them up. We need to also validate drivers that can accelerate growth in the long run.

3) Impact

It is also possible for an organization to scale up too fast, and focus on vanity metrics such as the number of people they reach or total funding mobilized. This leads to scale with unclear impact. Instead, innovation (outcome) metrics should be drivers for how your intervention works, such as adoption rates or percentage of users working or studying longer. How can we test early on to see if the intervention solves the problem we are addressing? There are several linkages between an intervention and the resulting impact that need to be confirmed before scaling up.

Organizations like ID insight are introducing cheaper and faster tools to evaluate impact, lightweight proxies that can tell if the intervention is working before investing in expensive evaluations like RCTs.

Decision vs. knowledge focused evaluation

Ann went on to explain that there are four proto-typical business models in the social sector:

  • Market-driven: These rely on market forces for traction, and are the easiest to scale. For example, Off-grid Solar uses a pay-as-you-go business model using mobile money over time instead of customers facing a large upfront cost.
  • Cross-subsidy model: This involves cross-subsidizing an impact generating non-profit service with a for-profit or revenue generating activity. A leading example is Arvind eye care that has each wealthy patient pay for up to 3-4 people. Facilities are different but everyone gets the same quality healthcare.
  • Replication: Microfinance was pioneered by the Grameen Bank in Bangladesh by Mohammed Yunis. This model has now been replicated and spread around the world to reach over 200 million people.
  • Government spending: This is a often the most appropriate/likely path to scale for basic services such as health and education, where the government is usually the biggest provider and potential partner.

Workshop Exercises

The session also included a workshop to help participants work on their ideas.

The first included defining a goal and a problem. To identify a goal we can start by asking, ‘How will the world be different in 10+ years if you succeed?’. A problem is what is preventing the goal from being reached today. These problems are due to some root causes. If we identify those, it can help frame the solutions to address them.

The second exercise was to generate lots of solutions to pick one for testing. Attendees were asked to be creative and think outside the box, keeping in mind that high risk leads to high reward. Participants must start with a blank slate in order to do so. Then, one idea must be selected from this list and the attendee must identify their assumptions behind it and how the solution will play out.

The third exercise was about asking who will pay for the product/service at scale and who will implement the solution at scale.

To learn more about Lean Impact and Ann’s upcoming book, visit leanstartup.co/social-good