Lean for Social Impact – June 23rd

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.

Bob Dorf – Two customers

Recently I, together with Acumen’s Global Fellows, had the chance to spend the day in a training session with Bob Dorf. Bob, together with Steve Blank (who writes a must-read blog), is the author of The Startup Owner’s Manual: a step-by-step guide to Building a Great Company.   Steve, in turn, was an investor in Eric Reiss’ (author of Lean Startup) startup IMVU which I blogged about here.

Bob, Steve and Eric have done incredible work in demystifying and breaking down what it really takes to create a startup – yes drive, vision, tireless devotion, but most importantly it’s about finding customers, talking to those customers, figuring out what they really want and how they’ll really behave with your product.  It’s the opposite of sitting in a garage, having a eureka moment, investing time and energy and way too much money in that idea and then figuring out if people want the thing that you’ve built.

I learned a ton from Bob, and am still processing most of it, but there was one piece that really jumped out at me as being hugely important in the nonprofit space, in particular to fundraisers.

One of the stories we tell ourselves is that our work is different and hard(er) because the beneficiary of our work and the customer from whom we are fundraising are rarely one and the same person.  It’s this disconnect that can make everything so tricky, because just because you deliver transformative impact for your beneficiary doesn’t mean your fundraising goes through the roof.

Bob made the simple point that there’s nothing particularly new about this.  Google, for example, is free to you and me and anyone as customers.  We get the best search in the world served up instantly with an ever-improving suite of accompanying products.  The service that pays for it all is Google AdWords which has a completely different customer set.  In Bob’s language, Google needs two separate business model canvases, one for me (user of Google Search) and one for whoever buys Google AdWords.

“But wait!” you protest.  “That’s different!  Google AdWords only works because Google Search works.  Their growth goes hand-in-hand.  Not so in the nonprofit world where I can deliver a world-class product/service and it has no connection to whether or not I can raise another dollar from a funder!”


But also perhaps not.  True, funding decisions are not typically made as objectively or in a data-driven way, whereas Google Adwords purchases surely are.

Then again, when was the last time we really rolled up our sleeves and found a way to monitor how good our nonprofit service delivery really is, how satisfied customers really are.  When was the last time we presented clear compelling metrics from the front lines – metrics that proved out hypotheses, metrics that drove to real insights?  And when was the last time we took those metrics and showed them to our funders and said, “THIS is what we’re doing!”

Sure, it’s not exactly the same, but it’s also not so different.  And it’s nice to know that we’re not so special, that having two (or many) customer sets isn’t novel.  And it’s a helpful reminder that building a value proposition and finding customers (aka “funders”) is just as core to everything we do as whatever service delivery work we do.

Spreading ideas and vanity metrics

Last week a guy I’ve never heard of on a blog I’ve never seen posted my Generosity Experiment video on his blog, generating a nice flurry of tweets from a bunch of folks.

My first reaction should have been: “Great!”

My first reaction actually was: “Great, but I wish he’d written the post with a link to my blog / Twitter handle, or a link to the video on TED.com to make it easier for people to find me.”

And so the question I must ask myself, again, is, “What business am I in here?” knowing full well that of course I’m in the spreading ideas business, which means that having additional blog subscribers and Twitter followers is gratifying but it’s just a means to an end.

One of my favorite concepts from the Eric Ries’ Lean Startup is the notion of vanity metrics.  These are numbers that startups parade around to impress their customers, their  venture investors, or (worst) themselves.  They are numbers that tell you almost nothing about whether the business is actually succeeding.  User growth or topline revenue numbers are great candidates for vanity metrics – as opposed to metrics like utilization rate of your fixed assets; total sales generated by your median salesperson versus a breakeven number; or number of months to cashflow positive for each new site that you open.

If you’re in the spreading ideas business then what you want to measure is how far, well, quickly, and to whom your ideas are spreading.  Seems tautological until you start thinking about, say, whether and why one might want to publish a book.  Being “published” used to be a clear divider between those could / could not spread ideas, but that dividing line is becoming a lot more permeable.  Yes, it still matters a lot today, but that’s fading fast.

If you take this notion seriously you can’t help but wonder what other vanity metrics are going to be outdated 10 years from now.  Serious candidates could include: your job title, the school you went to, working for a “blue chip” company, the average SAT score at your kid’s high school.

And core metrics that I bet are going to matter more and more: speed of integrating new information; engagement in self-directed learning; willingness to go to bat for things that matter; ability to be remarkable in situations that seem unremarkable; connecting with and delighting customers; putting your whole self into everything you create; working through and with uncertainty; adaptability; and self-knowledge.

The Lean Nonprofit

I think of Eric Reis’ book, The Lean Startup, as an innovation handbook.  Eric, a software engineer turned successful entrepreneur, sets out to dispel myths around innovation and entrepreneurship.  He unpacks what it actually takes to innovate in the real world.

What the book really does is recast the old entrepreneur-in-a-garage yarn we’ve heard so many times.  Eric reminds us (video link to his Google talk) that every entrepreneurship story we’ve ever been told (think The Social Network) has the same basic structure:

Part 1: entrepreneur (and a couple of friends) have a revolutionary idea.  They pull all-nighters in the proverbial garage, write a bunch of code, and the idea comes to life.

Part 2: “photo montage” that lasts about two minutes long while they actually build the company.

Part 3: entrepreneurs fight over how to distribute the spoils.

The Lean Startup is all about Part 2, the actual work of figuring out if the thing you’re building is of any value to your customers.

Eric’s main premise, based on his own experience as a serial entrepreneur, is that most innovators and their teams waste huge amounts of time because they prioritize getting work done over figuring out what their customers want.  In Eric’s case, as the CTO of a software company called IMVU (which lets you make cool online avatars), he spent six months killing himself writing 25,000 lines of code.  The catch was that when IMVU put the software in front of 16 year old kids (their customers) they discovered that a core functionality of the software that had taken six months to develop – that it worked with every major instant messaging  platform – was absolutely useless to the 16-year-olds.  Six months of work totally wasted because the team wasn’t willing to test their assumptions at the beginning.  Six months building functionality when they could have built a webpage in one day and gotten the same answer.

If innovation is all about operating within conditions of extreme uncertainty, and if we are first and foremost in search of answers and only THEN building our products, then we have to get a lot better at getting answers quickly (and yes, I do believe that social change work nearly always operates under conditions of “extreme uncertainty.”)  To do this, we have to get better at what Eric calls “validated learning” – getting clear data around our core assumptions – by iterating through a BUILD – MEASURE – LEARN cycle:

By embracing a Lean Startup mindset, you build products in a completely different way.  Your early products’ only job is to allow you to test your assumptions; you do this by MEASURING results that validate or reject these assumptions; and you LEARN from these results, and either pivot your company strategy to a new direction or continue on course.

The big point of the giant chart (the whole point of the book really) is: the main determinant of whether / how quickly we innovate is how quickly we can go through the BUILD – MEASURE – LEARN cycle.  The faster we go, the more quickly we learn, the more often we pivot, the less time we waste.  We optimize for learning and build organizations that are made to adapt quickly.

Makes sense, but it’s not how we (any of us) act most of the time.

And this is where the lightbulb went off for me about the social sector.  It’s never felt to me like we are, by and large, built for innovation, yet that always felt like it had to do with willingness to take risk – especially on the part of the big institutional players.  And while there’s some truth to this critique, it also partially misses the mark.

Imagine if you had to write Eric’s chart for the nonprofit sector.  My best attempt at this looks like this:

The lightbulb moment for me is that we are structured as a sector to have a BUILD – MEASURE – LEARN cycle that lasts three years (sometimes longer)…the time it takes to get a grant, execute against that grant, write the grant report during and after the grant, and potentially renew.   So the underlying problem isn’t about willingness to take risk, the underlying problem is the false premise that long cycle times make sense – when in fact as a sector we need new and better solutions nearly everywhere and need to create engines of innovation to get us there.

Our sector conducts itself with an academic approach to learning – with all of the rigor and the long, slow cycle times that always entails.

Of course there’s amazing work going on nearly everywhere, people bucking the system, working around the barriers, making incredible things happen despite the structure being all wrong.

But what would a world look like in which we acknowledged that we don’t have all the answers?  What would it look like if we asked ourselves NOT to be right from the get-go but instead to create approaches and systems that are designed from the outset to incorporate learning quickly?

I think it would look pretty different from what we’ve got today.  I think that business approaches would be a bigger part of the answer not because it’s inherently better when people pay for things but because businesses are designed with built-in feedback loops from customers.  I think that providers of capital would feel more like long-term partners and no one would survive who didn’t learn quickly and adapt often.  I think we’d listen to end customers a lot more and treat experts less like experts and more like people with accumulated experience from which we can all learn.

What else would a Lean Nonprofit sector look like to you?