Tomorrow: Facebook Livestream of Acumen Debates

Tomorrow (Wednesday) evening, at 6:30pm Eastern Time, I’ll be participating in the third in a series of Acumen Debates hosted by EY. The Debates are a fun format that create a livelier conversation than your typical panel. And the good news is that we’re livestreaming the event, so even if you can make it you can tune in on Facebook.

The debate topic is: Do impact investors need to compromise between financial and social returns?

I’ll be arguing, along with Debra Schwartz from the MacArthur Foundation, that there are many cases where compromises can and should be made. We will be debating against Greg Shell from Bain Double Impact and Hilary Irby from Morgan Stanley’s Investing with Impact Initiative, in a conversation moderated by EY’s Jon Shepard.

Here’s the link to watch on Facebook Live.

While I won’t tip my hand and share the points I plan to make tomorrow night, I do have one hope for the conversation, and for our sector as a whole. I hope we can all agree that, irrespective of the financial returns they can generate, if someone is going to be a truly great impact investor, they have to be passionate about impact.

This may sound like a truism, so let me explain by way of example. I read Fred Wilson’s blog every day, and the posts that make me smile the most are the ones in which he geeks out about technology: when he switches from iOS back to Android, or talks about the various wireless speakers he’s fidgeting with at home, or wades into conversations about Bitcoin and the blockchain. It’s apparent to anyone reading that Fred loves technology. It fascinates him. It’s what he’s passionate about. And I’m sure he can’t help but learn about the latest gadgets, all the time.

In the same vein, to be an “impact” investor (and putting aside if anyone still likes that term, which no one seems to these days), I would hope we’d be passionate about impact. And by “impact” I mean actual, tangible changes in people’s lives or in the environment. This passion would manifest, like Fred’s, in a deep, insatiable curiosity about what makes people’s lives better, and what leverage points might exist to make large-scale, lasting change. It would come across as profound attention being paid to improvements that happen in the real world, with all other indicators – including financial returns, which very well could be high – simply seen as means to an end.

These days, when I take part in and listen to conversations in our sector, I hear the most passion about funds, about returns, about fund structures, and about capital flows. It’s striking how comfortable we are talking about money. I’m looking forward to more days in which the passion we express, the deep curiosity we manifest, the conversations we can’t stop having, start and end with people, with communities, with what constrains and enables their lives.

 

The Easiest Money I’ve Ever Given Away

The easiest money I’ve ever given away was the day after my wallet was returned to me, untouched and full of cash.

Having done the mental work of literally imagining living without that money, it was easy to see the request to give money away as a simple reminder: “Ah, yes, this money isn’t mine after all.”

The practice of giving is just that, a practice. And like any practice, it is in the act of doing that the behavior becomes normal, expected, and part of our lives – not the other way around. The practice of giving is how we pound away at the mold of who we are. We exert effort and willpower until the very material of our selves begins to yield and take on a new shape.

Part of that reshaping manifests in a new story we tell ourselves, a story about how to think about our wealth and our skills and our possessions and the choices we can make about how to deploy all of them – maybe, just maybe – to reshape the world into the better image we dare to imagine.

Over time, we also discover that, in the act of starting to show up differently in the world, the world starts to show up differently in us. In the act of trying to shape the world in a new way, the world sneaks up on us and starts to reshape us too. If we are very lucky, both of those transformations will be for the better.

Today Acumen is celebrating its fifteen-year anniversary, and in a couple of months I will hit my 10-year anniversary at Acumen. Looking back, it’s easy be misled by the small, nearly imperceptible daily changes we have made in the world and that the world has made on us. But looked at from the vantage point of a decade, or a decade and half, it’s obvious that the changes are both profound and lasting.

If there’s one thing I’ve learned in this time, it’s that the only way to become the kinds of people who show up, who hammer away and who do the work is by showing up, hammering away, and doing the work. It also helps tremendously to have people who are willing to show up alongside you, people who are willing to pour their best selves into a shared vision about what is possible.

To all the people who have been willing to show up alongside me, and to all the people who have shaped me in ways that I hope you know (but I bet you don’t know fully): thank you.

You can make change happen from anywhere

I hope by now you’ve had the chance to take at least one of the amazing +Acumen courses we have developed.

If so, you’re one of more than 250,000 people in more than 170 countries who has seen the power of these courses, and how their structure – group-based learning focused on real-world action – creates a powerful sense of learning and of community.

The course offering keeps growing, and one of our most bang-for-your-buck courses (where “buck” = your effort, since the course is free) is our Storytelling for Change course, which starts on June 21st.  We also have an amazing and growing lineup of on demand Master Classes, and I can promise that spending 2-3 hours of your time hearing the distilled wisdom of folks like Seth Godin, Elizabeth Gilbert, or Krista Tippet will help you move your important work forward.

I also wanted to let you know about a unique opportunity that will only be available for the next two weeks.

The +Acumen team is recruiting for a limited number of spots in the +Acumen Corps. This a special community for the most dedicated +Acumen students and change-makers – individuals who are committed to growing and using their skills to tackle problems of poverty and social justice. This is a place for learners and doers to keep on learning and doing, and to help others on their journey.

Members of the +Acumen Corps will have access to custom online workshops, to thought leaders from the Acumen community, to exclusive job openings and volunteering opportunities, and to chances to highlight your projects and receive support.

This is an amazing opportunity to get in on the ground floor of a network that is going to do important things in the world.

You can learn more here. And you or someone you know can apply here.

I hope you’ll join us. And please spread the word.

(one-click share on Twitter)

Lean Data Podcast

On Monday, Tony Loyd was nice enough to include me in his great series of Social Entrepreneur podcasts. We covered a lot of topics but dug in most deeply on Lean Data, particularly on how we are using it at Acumen to amplify the voice of low-income customers so our entrepreneurs can better serve them.  It was a fun conversation.

(if you’re not seeing the embedded link click here)

 

If this kind of thing is up your alley, you might want to sign up to receive the specialized newsletter we’ve created to share hot-off-the-press insights on what we’re learning through Lean Data. We send it out once every six weeks or so, so it won’t clog your inbox, and it’s full of great stuff.

It’s called Impact Matters and you can sign up here.

 

What’s in a Question?

This post originally appeared on Medium.  I’ll keep reposting these on my blog from time to time. If you want to learn more about Lean Data, check out the full story in this Stanford Social Innovation Review Article.  And there’s still one week to sign up for the free +Acumen Lean Data course.  It’s a great thing to do with a team.

Every day, more than 5 million new cellphones are sold. That’s more than 10 times the number of babies born each day. We are barreling towards a world where a cellphone will be in every pocket by 2020, and a smartphone in every pocket soon after that.

This revolution is making the unimaginable real— in the near future, we will have the opportunity to start a dialogue with literally every person on the planet. This new two-way conversation, where everyone participates, will pull billions of people into the mainstream by connecting them with one another.

At Acumen, we see inexpensive cellphones in the hands of a billion new low-income customers as a chance to supercharge the work we’re doing to end poverty. Through our Lean Data initiative, we are taking advantage of the spread of cellphones to talk to previously excluded segments of society. The focus of Lean Data is to equip startup social enterprises in the developing world with the tools and techniques to start a dialogue with their customers. Our aim is to empower these customers to articulate what they need to improve their lives.

Since starting this work in 2014, one of the most important lessons we’ve learned is that a cellphone in every pocket is just a starting point. The art of every Lean Data project is in the questions we ask. Ask the wrong questions, and you get back little of value. Ask the right ones, and you can move from data to information to actionable insights.

Great questions connect with customers and give them an opportunity to share their voice. But crafting a great question is no easy task. The slightest shifts in word choice can affect understanding; the smallest differences in intonation alter perceptions of sincerity. All of these nuances can bias the data and diminish its value.

For example, in trying to understand the usage of solar home systems in Kenya, we started with the question, “How often are you currently using (product/service)?” After testing this question over SMS, we received feedback suggesting we omit the word “often” and make the question more simple and direct. We quickly amended the question to “When do you use (product/service)?,” provided sample multiple choice replies, and received a higher level of understanding.

Getting questions right is not a new idea. Indeed, Angus Deaton’s recent Nobel Prize was largely the result of his foundational work on designing household surveys. What’s new is trying to gather rich data over a cellphone. While you can run an effective focus group with a loose guide of topics and you can cover a lot of ground in a 90-minute one-on-one interview, a typical SMS survey is limited to 10 questions and 150 characters per question. These constraints are a powerful pressure-cooker for the questions we ask. We’ve got to make every word and every question count.

So what makes a great question?

For us, a great question is one that is easily and consistently understood by customers. It’s one that makes the complex simple. And it’s one that yields insight around what matters to the customer and the social enterprise trying to serve them.

One of the biggest challenges in impact measurement and international development is understanding not just the breadth but the depth of impact. In Acumen’s case, depth is defined by the degree of change in their well-being a customer experiences from one of our investments’ products or services. For example, we know that a solar light is a better solution than a kerosene lamp, but exactly how much better and why is tricky to figure out. This isn’t an academic exercise for Acumen or our companies. Ultimately, we need to understand our customers’ needs to know where to direct our capital to drive the greatest impact, and without impact data we are simply flying blind.

Because we work across multiple sectors addressing a number of the problems of poverty, our challenge extends beyond just figuring out the quantitative impact of owning a solar light or sending a child to a low-cost private school. Our goal is to go one step further and understand the qualitative difference in value that our customers experience when comparing the various products and services available to them.

Photo by Joanne Schneider

Can we really compare the impact of a year of schooling to owning a solar home system? We’re not sure, but we think it’s worth a shot. We believe that trying to understand these comparisons from a customer’s perspective will push us to listen harder and deeper, and it will test the limits of our ability to get rich data through mobile phones.

We asked ourselves if we could create a question or a set of questions that get at this topic directly, helping our customers share what they value most and why.

 

While a single question to cut through the complexity of our work seemed far-fetched, we knew that similar attempts have been made before. Twelve years ago, Frederick F. Reichheld, Rob Markey and Bain & Company developed the Net Promoter Score® (NPS). According to the Harvard Business Review, the NPS “substitut[ed] a single question for the complex black box of the typical customer satisfaction survey.” Today, it’s become widely adopted by the Fortune 500 as one of the most effective ways to measure customer loyalty. Just as NPS provides companies with a method to effectively judge performance and generate qualitative customer feedback, we wanted to create a single, unifying question to compare social impact.

Photo by Joanne Schneider

We started by asking ourselves whether the NPS question — “How likely is it that you would recommend [product/service] to a friend or colleague?” [1–10 scale]” — could serve as a good proxy for how much impact a product had for our customers. We wanted to test this by asking NPS questions together with our depth of impact questions to see if products with a higher NPS also had a higher depth of impact.

We piloted this approach in Kenya and India in two surveys, and the initial results were not as promising as we had hoped.

Despite the proven success of NPS with more affluent, educated customers, the question didn’t seem to perform well with our customers who are typically poor, have limited formal education and little experience with surveys. In follow-up conversations, we heard that the 0–10 scale was hard for them to understand and the hypothetical “would recommend” language didn’t translate well.

Lean Data surveys are short and inexpensive to conduct, so it’s easy to test and refine questions. We experimented with four different versions of the question before landing on a question, inspired by NPS, that seems to perform well: “Have you ever recommended product/service to a friend?” We also played with three different answer scales and arrived at a workable solution. Instead of a 0–10 scale, customers choose between three responses: “Yes, I’ve told many friends;” “Yes I’ve told some friends;” or “No, I have not.”

Once we saw the effectiveness of this question, we wanted to go further, to learn not only whether or not customers recommended a product but also the drivers of meaningfulness of that impact. Drawing on the concept of Constituent Voice developed by Keystone Accountability, we developed a second question, asking customers to respond from “strongly agree” to “strongly disagree” to the statement: “There have been changes in my home because of (product/service).”

In the early tests we’ve run, we’ve seen correlation between reported depth of impact and the strength of agreement to this “meaningfulness” question. For example, owners of solar lights who “strongly agree” with the statement reported an 83 percent reduction in expenditure kerosene, while the customers who said “agree” only reported a 69 percent savings on kerosene. These are just preliminary results, but we’re starting to see that this question might allow us to compare across different interventions, so that customers can tell us what they value the most and why.

Photo courtesy of Joanne Schneider

While we’re still fine-tuning both of these questions, the progress we’ve made is exciting. Low-income customers are enthusiastic to engage in dialogue, and we are seeing that it’s possible — if you work at it — to develop new questions that capture rich, meaningful data about the wants and preferences of this emerging set of customers. At the end of one of our surveys, one happy customer expressed her satisfaction with the service she received at a health clinic and then added, “I really enjoyed being interviewed.” Clearly, we’re on to something.

These are the kinds of customers whose voices we aim to hear. Our Lean Data work is focused squarely on helping the startup social enterprises we invest in to listen more actively to the low-income customers they serve. For them, Lean Data is a chance to talk to their often remote and dispersed customer base in a way that doesn’t break the bank.

While Lean Data is, today, being used mostly by startup social enterprises, our work in learning to ask the right questions over mobile phones is universal. The low-income customer of today is the low middle-income customer of tomorrow. Hundreds of millions of people in the developing world are poised to improve their well-being, but this depends on how well we, as a society, listen to them and adjust our efforts to meet their needs.

So much of this rests on the simple act of caring enough to ask the right questions.

Raising the bar

10 years ago, if you wanted to get into the social impact/social enterprise sector, it was enough to say “I think I want to find ways to take a business approach to solving social problems. That makes so much sense!”

5 years ago, if you wanted to do this work you needed to show that you had some direct, relevant experience, a spike of some sort that allowed folks to connect the dots between things that you’ve done and the work you’re proposing to do now.

Today, the expectation is significant direct experience that matters.

If you want to work with social enterprises in the developing world, the expectation is that you’ve spent real time in the developing world doing related work – a couple of years, not a couple of months.

If you want to be a marketer for a great cause, the pool of applicants shooting for that job have been in the great cause marketing business for a while already.

If you want to invest overseas, the expectation is that you have both investing chops and a direct understanding of the markets and businesses you’d like to invest in.

The great news is, unlike 10 years ago, when you had to a make a giant leap, there are countless opportunities for smoother, more gradual transitions.

To start, it’s never been easier to form a group and take free online courses for social changemakers. Our +Acumen courses are designed for just this, and in the next month you can learn about Lean Data Approaches to Measure Social Impact, Storytelling for Change (available in English or Spanish), and Social Entrepreneurship 101.

Or maybe your path will take you to a mainstream firm that offers a rich set of pro-bono opportunities—like those offered by Bain, Ernst and Young, and PWC—or you’ll go to one of many progressive nonprofits that work with big companies—including Taproot Foundation, TechnoServe, Bankers without Borders and MovingWorlds.

Or you could work directly for a social enterprise: right now Burn, Esoko, and Seed Schools are all hiring.

And of course nearly all the top MBA programs now have social enterprise offerings, including Kellogg School of Management, Stanford Graduate School of Business, The Wharton School, Duke Fuqua School of Business, Yale School of Management and Harvard Business School.

This is what happens when a sector goes from “brand new” to “adolescent.”

Today, the bar is higher, but so are the opportunities to help you get over it.

 

(Big thanks to Duda and Ashley for helping me get this post over the line)

Geeking out Next Thursday

I’m looking forward to speaking at the Catalyst for Social Change event this coming Thursday, November 12. I’ll be speaking together with Jake Porway, the founder of DataKind and Samuel Sia, one of MIT’s Innovators under 35.

The event is at Fordham Law School at 7pm, and there are still a few seats left – you can get tickets here.

We’ll be talking about innovative approaches to data and measurement, and using them to make the world a better place. It should be a lot of fun.

While I don’t know exactly where the conversation will go, I suspect that if you’re the kind of person who finds this image funny then you’ll have a blast. Hope to see you there.

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