Both large organizations and small companies have adopted the principles of lean startups. Concepts such as minimum viable products and iterative development are mainstay approaches for organizations developing both products and services.
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However, we do not often hear about non-profits and mission-based organizations using these approaches. Author Ann Mei Chang's new book, called Lean Impact, remedies this lack of knowledge by bringing deep expertise in the subject to bear on numerous case studies.
I spoke with Ann Mei as part of the CXOTalk series of conversations with the world's top innovators. During our conversation, I asked her to explain how the minimum viable product fits into the social sector:
The minimum viable product is essentially trying to come up with the smallest, quickest, cheapest way to learn about something where you have a high degree of uncertainty. Again, in the social sector, we often are trying to solve problems that are long-time, intractable, and in conditions that are highly dynamic, and so there is a lot of uncertainty, and there's a lot that we need to learn.
The book makes linkages between Silicon Valley startup approaches and the needs of social impact organizations. I asked Ann Mei to explain the differences between these two worlds:
One of the biggest reasons is the nature of funding. If you're at a tech company or any business, you usually have a customer that you're trying to serve, and you build a product or service for them. The customer pays for that product or service, and so there's a direct feedback loop. If people don't like your product, they aren't going to pay for it. You learn very quickly if you're on the mark or not.
When you're talking about social good, a lot of times the people who are paying for your product are different than the customer. So, you have already this complication where your feedback loop involves two very different parties who may have two very different interests. That complicates things. It makes it harder to drive your feedback loop.
On top of that, funders in the social sector, especially funders for nonprofits, tend to be very restrictive. They want to know your whole plan up front and then see you execute on that plan. They're often also very risk-averse. They're looking for immediate results. That also makes it hard to innovate. It's hard to pivot, experiment, and take risks. Some of these systemic constraints make it difficult for nonprofits to do the sort of testing and iteration that's needed to innovate.
On top of the funding side of the equation, there's also some innate challenges. It's harder to measure a social impact like, are you breaking the cycle of poverty? Are you making society more resilient and democratic? Are you developing? Are you helping kids get a better education?
These are things that take time, often, to answer, much harder than, for example, seeing if somebody makes an e-commerce purchase. These kinds of challenges exist in the social sector but not in the tech world or even in the business world.
Also, I think we need to be much more thoughtful and careful when we're experimenting with people who are vulnerable already. We can't do the Silicon Valley thing of move fast and break things because we're talking about real people here and real lives.
You can see it was a fascinating conversation. The video embedded above offers a summary, but you can also watch the full interview and read a complete transcript