Tag: Acumen

Lean Data: Closing the Gap Between Entrepreneurs and their Customers

~ Sasha ~ Leave a comment

This post originally appeared on Acumen Ideas, our new channel on Medium.com.  If you’re interested in the nitty-gritty of impact measurement, be one of the first to sign up for Acumen’s new Impact Matters e-newsletter that will come out monthly.  You’ll get great content at the cutting edge of impact measurement, and we’ll also make sure let you know when our full piece on Lean Data comes out in Stanford Social Innovation Review this winter.

In 2006, Sam Goldman and Ned Tozun set out to eradicate kerosene as a source of light in the developing world. As a Peace Corps volunteer in Benin, Sam witnessed the damage kerosene could do when an overturned lantern created a fire that nearly killed his neighbor’s son. They also saw what a scourge the dirty fuel was for poor, rural families without access to energy, eating up 15 percent of their spending.

Sam and Ned decided to start d.light design, a social enterprise that would solve this problem once and for all. With funding from Acumen and others, d.light set out to create a business providing low-cost solar lanterns to poor customers. Since then, the company has sold tens of millions of solar-powered lights across more than 40 countries.

So is d.light a success? By one measure, absolutely. They are seeing demand for their product and on track to reach 100 million customers by 2020. That’s nearly 10 percent of the more than 1.3 billion people globally without access to electricity. But for entrepreneurs like Sam and Ned — and all of us at Acumen with a mission to make a real dent in poverty — just reaching a large number of people isn’t good enough.

At Acumen, we’ve spent the last 15 years investing in social enterprises that provide critical goods and services to the poor. We invest in these businesses because they are hard-wired to reach large numbers of people: when a social enterprise gets its model right, it will reach more people per dollar funded than traditional aid or philanthropy.

But while it makes us proud to say we’ve helped a million people acquire a reliable solar light or 10,000 women give birth in a high-quality, low-cost hospital, we need more than just big numbers to tell us if we are actually changing people’s lives.

How can we know if we are making a real difference?

Over the last 10 years, impact investing has attracted lots of attention and dollars. Thanks to the success of d.light and other ventures like it, today there are hundreds of impact investors putting their money behind companies that aim to deliver a social and financial return.

Despite this growth, impact investors have done a terrible job of analyzing whether or not these enterprises are creating meaningful social impact.

For example, in June, the Global Impact Investing Network and Cambridge Associates published the Impact Investing Benchmark, the first comprehensive analysis of the performance of impact investors. The report does an outstanding job of analyzing the financial results of impact investing funds, but it says virtually nothing about social performance. That’s a problem.

You’d assume impact investors must be good at measuring social impact. How else could we call ourselves “impact” investors? Not surprisingly, 95 percent of impact investors say they measure impact.  But, if you scratch the surface, you’ll discover their definition of impact is mostly limited to big, flashy numbers: number of farmers using an improved kind of seed, number of kids attending school or, as in the case of d.light, number of lights sold.

This is a start, but it’s not good enough. Typical impact investors may know how many farmers a company has reached, but they don’t have a clue if these farmers are better off. They may know how many kids attend schools, but they can’t tell you if the students are from low-income communities or just transplants from the private school down the street. They may know how many households bought a new solar lantern, but they don’t understand if the children in these homes are still dying from kerosene fires.

There’s a good reason impact investors have been falling short :  the existing tools for measuring social impact are nearly useless to a social entrepreneur.

These tools, mostly inherited from large-scale, international development organizations, are cumbersome, expensive and typically take a matter of months or even years to produce any real data. For a cash-strapped, resource-constrained social entrepreneur trying to build a fledgling business in tough, emerging markets, these tools don’t make sense.

The good news is, we have an opportunity to change this. Unlike five or 10 years ago, the majority of the 2.5 billion people living in poverty now have access to a cellphone and, in another five years, virtually everyone will be reachable by phone or SMS. At Acumen, we’ve developed a new approach to impact measurement that takes advantage of this shift. Our approach is optimized for entrepreneurs building social enterprises in the developing world, and it capitalizes on today’s information revolution to gather data directly from low-income customers. Our goal is to use this infrastructure to understand our social impact and better serve the poor. We call this approach Lean Data.

Unlike traditional impact measurement, Lean Data is designed to quickly and affordably generate quality customer insights that can immediately drive entrepreneurs’ decisions.

It reframes impact measurement as customer feedback by applying Lean Startup experimentation principles to the collection and use of social impact data. While Lean Startup aims to understand product-market fit with questions like “Do you like this product?” and “Will you buy this product?,” Lean Data goes a step further by working to understand how a purchased product is — or is not — changing a customer’s life.

By asking questions via mobile phones and other existing customer touchpoints (such as a salesperson’s visit to a customer’s home or a company’s call center), Lean Data allows enterprises to get social performance data in a matter of weeks and at a fraction of the cost of traditional measurement approaches.

In the last year, Acumen has helped 12 of our companies measure their social performance by surveying more than 5,000 customers across seven countries. Each of these projects took weeks, not months, and cost thousands, not hundreds of thousands, of dollars.

Here’s how.

Lean Data leverages technology, so enterprises can communicate directly with their customers. It is now possible to get reliable, meaningful data directly from low-income customers either through calls or SMS messages. For example, we worked with Ziqitza, a healthcare company that provides low-cost emergency services in India to understand what percentage of its customers in Orissa and Punjab live below the local poverty line. Our results showed that 75 percent of customers live on less than $2.50 a day. In another case, we worked with Juhudi Kilimo, a microfinance enterprise servicing smallholder farmers in Kenya, to measure its social performance using a 10-question SMS survey. The survey showed that the loans Juhudi Kilimo provided to purchase dairy cows are helping farmers see an increase in milk yields of 60 percent.

Lean Data puts the customer first, not the investor. As an investor in social enterprises, Acumen needs impact data to manage its own performance. But we believe social enterprises should first and foremost be accountable “downward” to their customers before worrying about “upward” accountability to their funders. Social enterprises set out to solve meaningful problems for their customers, and they should only systematically collect impact data if that information helps them understand how their products or services are making a difference in their customers’ lives. The information should also be shared “upward” with funders, but that cannot be the primary reason for collecting data.

Lean Data gets underneath not just the “what” but also the “why” of product-market fit. Lean Startup principles focus on product-market fit: is there a demand for a new product in a given customer set? How satisfied are customers with the new product? Social enterprises can take this a step further, asking not just whether there is product-market fit, but why that fit exists. This is the first step towards understanding impact. When we discover why products are purchased, how well or often they are being used, and which problems they solve or fail to solve — like improved productivity, increases in household savings or fewer sick days — we empower customers to articulate what impact means to them. This kind of insight is invaluable to entrepreneurs looking to drive lifetime value, customer loyalty and social impact.

We’ve been developing Lean Data for a little more than a year and, while it is still in its early days, we see huge promise.

If we can give more entrepreneurs like Sam and Ned the right tools to understand their social impact and hear from their customers, they will, for the first time, have actionable data that can tell them, in real time, how to improve their products and create meaningful change.

The truth of this work is that the big, glossy numbers allow us to sing our own praises and raise more money, but they do little to help us improve the lives of the people we aim to serve. It’s time to dig deeper, to use technology to talk directly to our customers, so that our work can realize its full potential.

Twenty Two Oh Five

~ Sasha ~ 3 Comments

Yesterday night at bedtime, my son handed me this envelope.

2205

Earlier this year I visited with his Fifth Grade class and had a 90 minute discussion about Acumen. If you ever want to figure out how to explain what you do simply and clearly, I strongly recommend talking to a group of 5th graders. You’ll have to boil everything down to its essence in a great way.

I was blown away by how sophisticated and prepared the kids were: having 5th graders in a nice suburb of New York City ask me how things are going with the rice gassifiers that Husk Power Systems runs in Bihar gave me a lot of hope for the world.

What I didn’t know, until last night, was that a few of my son’s classmates took it upon themselves to raise money for Acumen as a thank you. They self-organized and went around to other classes in the school, talking about Acumen and asking kids to bring in bottles they would return for the 5 cent deposits.

So the $22.05 represents 441 bottles that 5th graders collected and returned because they wanted to help people they’ve never met who have less than they do.

The feeling I had upon receiving this envelope reminded of one of the most powerful impacts that fundraising can have on you. When someone you trust and respect shakes your hand, looks you in the eye, and agrees to give you their hard-earned money to support the work you do…well, I find that moment always motivates me to do the work harder and better, to do right by them and to earn the trust that they are placing in me and in my team.

To know the work that these kids went through – learning about Acumen, courageously going up to their friends and asking them to bring bottles from home, having those kids then go home and explain the same story to their parents – makes me want to work twice as hard and twice as smart.

I hope this story inspires you as much as it’s inspired me.

What would be fabulous is if more kids choose to do a similar project – to collect and turn in 441 bottles to support Acumen or another cause of their choice.

If they want to, let me know how I can help.

 

People like us

~ Sasha ~ 2 Comments

A few years into my job as a fundraiser, one of the things I grew to hate was being sent lists of rich people. What, exactly, was I supposed to do with them? Of course, by definition the people who can give a lot of money are the people who have a lot of money, but that qualifier alone means next to nothing.

As Seth keeps reminding us, our work is to find our tribe, people who share a worldview, and to communicate to them that “people like us do things like this.”

WSJ_people like us

This Wall Street Journal ad nails it for me. While the WSJ no doubt has all the obvious data you’d hope they have – about income levels and geography and demographics and and and – about their readers, the ad boils everything down to:

People who don’t have time to read the Wall Street Journal make time to read the Wall Street Journal.

(will.i.am – producer, entrepreneur, philanthropist)

People like us – busy, successful, top of the heap enough that we now wear multiple hats – believe that the WSJ helps keep us where we are, believe that it is our access to this kind of content allows us to continue to be the thing we are so proud to be.

It’s specific and aspirational for the group that people who identify with that worldview, people for whom that story resonates.

What is your group? What is their worldview? What story do they want to be a part of?

(Want to learn more?  Sign up here.)

Good Society in India

~ Sasha ~ Leave a comment

I’m in India this week, and today I had the pleasure, and challenge, of facilitating a selection of “Good Society” readings with the Acumen India Fellows.

The opportunity to take a step back and be reminded of the words and deeds of the great thinkers and activists throughout history is a rare one, and I thought I’d share some of my favorite excerpts from these readings.

While these excerpts lose some of their richness when taken out of context, I hope they serve to remind you, as they do me, of the great thinkers we have in our corner as we work to build a future of greater rights and dignity for all.

 

Universal Declaration of Human Rights (1948) (link)

“Preamble. Whereas recognition of the inherent dignity and the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world.”

“Article 1. All human beings are born free and equal in dignity and rights.”

“Article 6. Everyone has the right to recognition everywhere as a person before the law”

 

Letter From Birmingham City Jail (1963) by Dr. Martin Luther King Jr (link)

“I am in Birmingham because injustice is here…Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny.”

“History is the long and tragic story of the fact that privileged groups seldom give up their privileges voluntarily.”

“I am coming to feel that the people of ill will have used time much more effectively than the people of good will. We will have to repent in this generation not merely for the vitriolic words and actions of the bad people, but for the appalling silence of the good people. We must come to see that human progress never rolls in on wheels of inevitability. It comes through the tireless efforts and persistent work of men willing to be co-workers with God, and without this hard work time itself becomes an ally of the forces of social stagnation.”

 

The Republic, (390 BC) Plato (link)

“He who is to be a really good and noble guardian of the State will require to unite in himself philosophy and sprit and swiftness and strength.”

 

The Social Contract (1762), Jean Jacques Rousseau (link)

“Man is born free; and everywhere he is in chains.

“The problem [in creating the Social Contract] is to find a form of association which will defend and protect with the whole common force the person and goods of each associate, and in which each, while uniting himself with all, may still obey himself alone, and remain as free as before… [To do so] Each of us puts his person and all his power in common under the supreme direction of the general will, and, in our corporate capacity, we receive each member as an indivisible part of the whole.”

 

Development as Freedom, Amartya Sen (link)

“The usefulness of wealth lies in the things that it allows us to do – the substantive freedoms it helps us to achieve. But this relation is neither exclusive (since there are significant influences on our lives other than wealth) nor uniform (since the impact of wealth on our lives varies with other influences.”

“Expanding the freedoms that we have reason to value not only makes our lives richer and more unfettered, but also allows us to be fuller social persons, exercising our own volitions and interacting with – and influencing – the world in which we live.”

 

The University and the Leadership Factor in Nigerian Politics (1988), Chinua Achebe (link)

“Leadership is a sacred trust, like the priesthood in civilized, humane religions. No one gets into it lightly or unadvisedly, because it demands qualities of mind and discipline of body and will far beyond the need of the ordinary citizen. Anybody who offers himself or herself or is offered to society for leadership must be aware of the unusually high demands of the role and should, if any doubt whatsoever, firmly refuse the prompting.”

 

Lean Data Goes Deeper

~ Sasha ~ 5 Comments

One of the most interesting questions we’re grappling with right now on the Impact team at Acumen is how to develop a more robust, rigorous, and transparent form of quantifying the social value our companies create. While I don’t believe we will ever fully understand all the social value created – and while there will always be room for debate and interpretation – I do think today we have the tools to get a lot closer to customers and hear how they value products.

And if we can figure this out in a clear and compelling enough way, I believe that would open the door to creating a true marketplace for social impact.

What we’ve learned with our Lean Data Initiative is that we can, thanks to the prevalence of mobile phones and other enabling technologies, now quickly and easily gather data directly from our customers in ways that drive insights for us and our companies – everything from customer loyalty metrics to poverty levels of who is being reached to customer satisfaction.

What we’ve been kicking around – and where I’d love your help – is the best approach to quantifying self-reported value.

Meaning, after a customer has purchased a product (a solar light, safe drinking water, an improved seed) and experienced the benefit, what are the best, most reliable ways to ask her how much she values that product? Because she is the one who is living it, accruing benefit from it, she is best placed to explain what it’s worth to her.

We’ve been having fabulous conversations on our team, conversations that get back to the basics about things like consumer surplus and why demand curves slope down; conjoint/discreet choice analysis to get to revealed preferences; and things as simple as asking how much, having experienced a product, someone would have been willing to pay for it.

To clarify the kinds of things we’re thinking about and where I’d love your thoughts:

  • How to best phrase questions that help Acumen’s customers accurately articulate the value they get from a product or service
  • Whether there’s a best way to ask “how much would you have paid” after people have a product to understand how much they value it
  • Prize-based, conjoint approaches where we give a subset of folks $100 to spend on one of a few bundles of goods / services, to understand real rank-order preferences

I’d appreciate ideas for approaches that might help us get the answers we’re looking for. Suggestions welcome in the comments or please just email me directly.

Impact: The Future is Now (Take 2)

~ Sasha ~ Leave a comment

Something strange happened with the embedded YouTube video in my last post for email subscribers.

Until I figure that out, here it is again:

impact future is now

 

Impact: The Future Is Now

~ Sasha ~ Leave a comment

One of my greatest points of pride from 2014 is how far we have come at Acumen in how we think about and measure impact. So much of the talk in impact investing feels stalled on the question of whether to measure impact, and we’ve spent almost no time or energy, as a sector, on the HOW of measuring impact. I believe if we get this how right, we can measure impact in a way that makes sense for entrepreneurs and brings us real and real-time insight into customers and how we are meeting their needs.

In this talk at Acumen’s Partner Gathering from November, I share my thoughts on how we can break through the logjam in measuring impact by changing our perspective about about what impact measurement really is (hint: it’s about customer insights) and by using new tools and techniques (hint #2: mobile phones, call centers) to gather data.

TGIM

~ Sasha ~ Leave a comment

“It’s almost there. Today’s Thursday,” I hear a fellow passenger say to her friend as we all walk off the train. Yet another person counting the seconds until the weekend.

(At that moment, she had 115,200 seconds to go.)

On and on we tromp down the endless treadmill, until, perhaps, we step up and step off.

It is especially rare to wake up one day and muster the courage to jump off alone. The treadmill’s moving too fast, and we might hurt ourselves when we jump.

What gets us there is the slow, consistent work of finding like-minded people to dream with, to experiment with, to discover what a different world might look like. We draw our courage from them, as they do from us.

When the moment finally does come to leap, we are surrounded by a community trust, that catches us, shows us the way, and cushions the fall.

Happy Monday to you.

What I Deserve

~ Sasha ~ 8 Comments

I live in a wealthy community in a wealthy country. I had, and have, a stable, supportive family and access to world-class education. I am male and I am white.

Last week, as part of my time with the Acumen India Fellows, I spent some time 135km outside of Hyderabad, in the villages surrounding the town of Kosge.  We were there to understand the issue of marginalization of rural women, and to do so we spent time in villages, with women’s self-help groups, visiting schools and talking with NGOs and the police force and with doctors in public hospitals.

We split up into four groups, and as luck would have it I ended up in the village that seemed completely stuck, where little progress was being made, and where it felt like there was little hope for improvement.

A village where every single woman said that she is beaten by her husband.

A village whose women, when asked what a woman should do if she is regularly being beaten by her husband, responded, “be patient.”

A village where payment of dowrys is on the rise, and where dowry deaths still occur.

A village where girls often get married when they are 12 or 13 years old, and where it is hard to figure out if that is as terrible as it seems or if, in fact, betrothal protects a young girl from sexual predators.

A village whose public hospital, 4km away, has exactly one young doctor, in her 20s, who is on call 24/7, and no additional nursing or medical staff we could identify, working in a hospital whose annual budget, according to the doctor, was less than $2,000 a year.

Returning home from this trip, on the way back from JFK airport, I was talking to my driver who was originally from Guyana. He described life in his country simply, “If you are born rich, you will die richer. If you are born poor, no matter how smart you are and how hard you work, there’s no chance for you, you will always be poor.”

Yes, it’s true, I have the choice, each and every day, of how to live my life, of how hard to work, of what opportunities to pursue, what risks to take, and what my attitude is going to be. I have agency and to some extent I reap what I sow.

But the fundamental point is that I live in a place and a time, and I was born in a place and a time, where my actions yield results. And for far too many people, including the women we spent hours sharing stories with, talking about hardships and often laughing through the discomfort of it all, every force in the world is undermining their ability to realize even some small fraction of their human potential.

It’s so easy to hide from the realities of the world, how cruel and unfair it still is for so many people. And while it is natural to insulate ourselves from these harsh, cruel, ugly realities, it strikes me that we cross a line – the line between self-preservation and delusion – when we start telling ourselves that we deserve the lives we have.

We don’t.

We have the lives that we have, we played some small part in creating them, and it is our choice, every day, to do what seems right to us with the gifts we have been given, however big or small.

Compilation

Lean for Social Impact – June 23rd

~ Sasha ~ Leave a comment

I’m thrilled to announce that on June 23rd I’ll be the lead instructor, together with Bob Dorf as Chief Mentor, for the new +Acumen course Lean for Social Change.  This is our first large-scale launch of this course, after a very successful pilot late last year.  Sabrina and Afzal wrote a great post sharing what they got out of the first course.

You can sign up for the course here.

Bob is a startup guru, and having the opportunity to partner with him is incredible.  In case you don’t now Bob, he’s the co-author, with Steve Blank, of The Startup Owner’s Manual: A Step–By–Step Guide to Building a Great Companyand he’s a serial entrepreneur who has started seven companies (he describes them as “two home runs, two base hits, and three great tax losses”) and coached or invested in dozens more. More than just an expert who travels the world helping startups, incubators, big companies and governments, Bob is exceptionally kind and humble, he’s an incredible coach who is quick with a smile. And, lucky for us, he’s bribable with Diet Cokes.

This is going to be a fun, rubber-hits-the-road course – highly practical and hands on, and intensive.  It will push you to take the steps you need to take to get out of the building, talk to customers, put your minimum viable product in their hands, and get the real feedback you need to make your social venture a success.

No expertise required!  But like everything you’ll get out what you put in.  If you have a social venture that you’re working on, or planning to work on, this course will kick you out of first gear.  It’s hands-on. You’ll take powerful frameworks and put them into practice.

Here’s the deal, so you know what to expect going in:

  • It’s an intensive, eight week course.  Best guess is that you’ll need to put in 10 hours per week.   (The time you put in for this course will be highly leveraged, so think of this in terms of time saved not time lost.)
  • You’ll be using the business model canvas to map out your business; you’ll build out a real prototype; and you’ll get of the building to get the feedback you need from customers, suppliers, partners, and competitors etc.
  • Work is done in teams.  You’ll be learning from and supporting each other, not sitting alone in front of a computer.
  • Course participants will have an idea for a social venture tackling an issue of poverty.  If you don’t have a fully formed idea yet that’s OK, the course will help you form and shape one.

This course is a chance for you to take a big leap forward.  It’s an opportunity to use tools that have revolutionized Silicon Valley and apply them to your social venture.  It’s kind of the start of a revolution.  Be part of it.