Balancing Bottom Lines as a Social Entrepreneur

Having the opportunity to work with technology entrepreneurs in the Fit Startup Factory and now social entrepreneurs via Social Change Labs has afforded me a unique perspective into the startup journey of each segment, and the unique challenges that they face. Although we preach the same methodology and approach to both parties (Business Model Generation, Customer Development, Lean Startup, etc.), there are obvious differences. In the next few posts I want to take a moment to explore some of those differences and would love to hear your thoughts as well.

In my first post, I discussed the differences regarding the starting point of entrepreneurial ideas, technology vs. social, and how that impacts the development of the business model. In my second post, we explored the challenge faced by social startups in serving multiple customer segments. In my third post, I emphasized the need for social entrepreneurs to truly explore the depths of the problem. In this post we will look at the delicate balance of bottom lines.

Bottom Lines

Startups are fundamentally customer-driven. For technology startups, and most business in general, listening to the customer and finding better ways to serve them fulfills the business’ fundamental bottom line: profit. But what about social startups with multiple bottom lines – financial, social, environmental, etc.? Is listening to the customer enough?

For example, consider a homeless shelter. If a shelter was to serve free beer to their “customers”, i.e. the homeless, as part of their service the place would be jam packed every night, but that would obviously detract from their fundamental social purpose. Simply focusing on “serving the customer” is not enough. Social entrepreneurs must keep the big picture in mind and constantly return to the core values of their business – social enterprises create social impact.

This weekend I had the opportunity to visit the Çöpmadam workshop in Ayvalık and spend time with Tara Hopkins, one of the co-founders of this leading Turkish social enterprise. For Tara the core values of her business are, in no particular order: environment, poverty, and women empowerment. The idea is simple – hiring never-employed women to make fashionable handbags and other accessories out of trash. There is environmental impact via the reuse of waste materials, generally industrial packaging; there is poverty alleviation through employment and alternative revenue creation; and there is also women empowerment through the focus on training and enabling women who had previously never worked for a salary before. Check, check, check. Most importantly, they have been able to find a market for their mission and their products, financially supported by both corporate sponsors and product sales.

But with multiple customers and multiple purposes, the balancing act of bottom lines becomes quite difficult.

To illustrate my point, consider a couple debates/challenges that Çöpmadam has faced previously in growing their business:

  • Incorporating Technology toward Mass Production 
    • Positives: lower cost and time of production; increase production capacity
    • Negatives: takes away from the empowerment of uneducated women; lose custom, handmade feel
    • Decision: No
  • Lower Prices to Compete Better with Competition
    • Positives: increase overall sales; extend reach to new potential segments
    • Negatives: reduce impact of poverty alleviation, i.e. providing above-market wages
    • Decision: No

I’m sure each of these decisions were not easy. Sacrifices were made. And I know there were a lot more difficult decisions than just the ones I outlined. But in the end, keeping the social purpose in mind, the founders made the decisions they had to make. And that is what sets social entrepreneurs apart.

Balancing Multiple Bottom Lines: an example

Another Social Change Labs semi-finalist, Cemre, has to balance the demands and expectations of different customer segments that currently have no relationship or even contact with one another. The idea: setting up a full-service ecotourism company to facilitate city dwellers to experience traditional rural life while enabling villagers to access a new source of income. The ecotourism idea is not new, not even in Turkey, but every case is unique and requires a delicate balance between the demands and expectations of all parties involved.

Basically ecotourism involves a clash of cultures, even within the same country, and thus social impact needs to be measured beyond simply income creation. As Cemre’s founders start planning their business, including two pilot trips this summer, they need to carefully balance some of the following questions:

  • How many tours/tourists can be bring without disrupting the life of the village?
  • How can we preserve the village’s way of life while meeting the comfort needs of the tourists?
  • How do we ensure a relatively equal distribution of wealth across the village brought in by these tours?
  • How can we support women’s empowerment and other social values through our program?

In this case, even though tourists are the paying customers (and for a startup, the paying customer is king!), it may not always be to best advantage of Cemre’s social impact mission to adhere to their needs and desires. Consider level of comfort, types of activities, usage of local resources, and even the additional carbon footprint brought in by each incoming tourists. Each of these are potential areas of conflict between more satisfied customers, and thereby more money, and the protection of the local ecosystem.

Moreover, perhaps with a short-sighted view of increasing financial income, local villagers may actually welcome these changes, not factoring in the long-term impact to their livelihood and their environment. It is up to Cemre to manage all of those demands, keeping the big picture in mind, and make the right decisions in order to achieve lasting social impact.

 

When people ask me how social entrepreneurship is different from other forms of entrepreneurship, this is fundamentally the topic I explain: balancing multiple bottom lines. On the surface it seems fairly simple, but in practice, in each and every decision, to constantly and continuously seek social impact is far from easy, and often requires a lot of compromises. But that is the core of social entrepreneurship, a fine balance, but a balance that hopefully leads to a better world.

Summary: social enterprises constantly need to balance their multiple bottom lines in each decision that they make, and have the courage to stick to their social impact goals, even to the potential detriment of the business’ financial health.

Understanding the Roots of the Problem, not just the Symptoms

Having the opportunity to work with technology entrepreneurs in the Fit Startup Factory and now social entrepreneurs via Social Change Labs has afforded me a unique perspective into the startup journey of each segment, and the unique challenges that they face. Although we preach the same methodology and approach to both parties (Business Model Generation, Customer Development, Lean Startup, etc.), there are obvious differences. In the next few posts I want to take a moment to explore some of those differences and would love to hear your thoughts as well.

In my first post, I discussed the differences regarding the starting point of entrepreneurial ideas, technology vs. social, and how that impacts the development of the business model. In my second post, we explored the challenge faced by social startups in serving multiple customer segments. Now we’ll look at how social startups need to truly explore the depths of the problem.

What is Really the Problem?

For social startups, unlike for many technology startups, the problems are usually quite obvious. Social entrepreneurs are fighting to solve critical issues of human rights, environmental protection, social governance, etc. These problems are well-known, but because of their low or non-existent economic potential, are often ignored.

For example, consider Grameen Bank and the micro-finance model which provides the poor with access to financial services. The poor can’t go to a bank for a loan and are forced into the hands of unofficial moneylenders and loan sharks with outrageous interest rates and heavy-handed repayment methods. The problem is obvious; but until Mohammad Yunus, given the inherent belief that the poor were untrustworthy along with the high costs of dealing in small loans, no one bothered to try and solve it. On the other hand, think about Twitter: the problem or the need wasn’t as apparent at the beginning; it wasn’t only until people started using it, and shaping it to their own needs that its true function and value became apparent.

However, the preconceived clarity of the problem can often be misleading for the social entrepreneur. For while the social problem is quite obvious, the actual roots of the problem, along with external influences upon that problem are often undiscovered. And this can push social entrepreneurs too quickly beyond the stage of understanding the problem into crafting a solution, only to realize the error of their efforts later.

In Abhijit V. Banerjee and Esther Duflo fascinating book on global poverty, Poor Economics, the authors delve into some of these roots and external influences on poverty, and why many current solutions have come up short. Without trying to paraphrase the entire book, I’ll illustrate just one example, hunger. One of the most basic human needs, and a clear sign of poverty is hunger.

Undernourishment leads to a variety of chronic health issues and impacts a person’s productivity, which lowers their overall earnings, thereby leading to less purchasing power for food, etc., i.e. a typical poverty cycle. So thus we should just distribute food to the poor, or at least make basic staples cheaper then, right? In their studies, Banerjee and Duflo show that such government food programs have not led to increased nourishment and thereby higher levels of productivity for the poor. Why not? With cheaper basic food, one would expect the poor to buy and consume more of the same, helping them emerge from this cycle of poverty, right?

In fact, with more disposable income, the poor have been shown to buy richer or more expensive food, rather than larger quantities of basic food. The core issue is not simply hunger; there is the need for simply joys in life, i.e. eating foods that you like or being able to spice up your day with different tastes. In a life bereft of much joys, it is the small things, like a nice meal, that makes all the difference. It is for this reason that in the slums of the developing world, the most common electronic purchase is often the television, often before a refrigerator, with families saving up for years to procure one. It is the small things to make life a little more bearable.

Without understanding actual behavior and getting to the root of the problem it would be impossible to make a dent in the issue of global hunger, not to mention a lot of wasted resources.

Exploring the Problem: an example

Ben1Gönüllüyüm (I am a Volunteer), a Social Change Labs semi-finalist, has taken the long road in the path of customer and problem discovery. The social problem they are dealing with is quite obvious: Turkey has one of the lowest rates of volunteerism in the world, estimated at only around 3-4% of the total population. But the question “why” and the correct solution to solve that question is a bit more elusive.

In the beginning, the assumed “why” for Ben1Gönüllüyüm was a disconnect between potential volunteers and non-profits; they just needed a platform to meet and exchange information. If potential volunteers could just learn about and explore different volunteering opportunities from non-profits themselves, they would jump right in and this problem would be solved, right?

Not so fast. It didn’t work. People were not interested.

Following, the team decided to step back from this idea and take time to learn and explore the volunteering culture in Turkey a bit more intimately. They got involved in different non-profit organizations and projects. They built a small-scale platform to encourage and enable volunteerism amongst students at their school, Özyeğin University. They spent time getting to know organizations and volunteers in order to better understand their motivations and challenges. They found that in volunteers were a niche market, i.e. dedicated, passionate people who were brave enough to step outside the norm, and it wasn’t until they get involved in non-profit organizations did they find people like themselves. They learned that most volunteering opportunities are spread through word-of-mouth, or specifically a committed friend convincing and dragging them along. Specifically, they began to understand the “pain” of the volunteer: outcast, uncool, involved in worthless efforts.

And it is based on those key insights that the team started to build a new model, a new solution. The crux of their project now centers on a crowdsourced map of volunteerism, getting volunteers to “check-in” as they volunteer and enabling them to connect with each other across a larger community. And thus, via this map, volunteers can show how they are part of a larger change happening across the country and help convince their friends and family to take part as well.

Lesson learned: before they could think about solutions, they needed to understand the problem better first.

Fundamentally, for social entrepreneurs, the key danger is assuming they understand the problem, because everyone knows the problem. People write about the problem all the time in the media, complain about while riding on the bus, and discuss them in political debates. But that is only the surface of the problem, the symptoms that everyone knows. However, it is the social entrepreneur’s ability to truly understand the problem, deeper than anyone else, which enables them to derive truly workable solutions that actually solve real “pains” and create sustainable, lasting change.

Summary: social entrepreneurs have to make sure they are not misled by the obviousness of the symptoms, but rather spend time delving into the roots and external influences on the social problem they want to solve.

The Customer Segment(s)

Having the opportunity to work with technology entrepreneurs in the Fit Startup Factory and now social entrepreneurs via Social Change Labs has afforded me a unique perspective into the startup journey of each segment, and the unique challenges that they face. I want to take a moment to explore those differences.

In my previous post, I discussed the differences regarding the starting point of entrepreneurial ideas, technology vs. social, and how that impacts the development of the business model. Today we’ll examine the difference in focus when it comes to customer segments.

The Customer Segment

Residing in the cornerstone of every startup sits the ever-powerful, mythical customer, and it is the ability of the startup to serve this customer in a unique and highly valuable manner which transforms it from a promising startup idea into a sustainable corporation. When it comes to social startups, one of the key struggles involves serving multiple customers, or multiple stakeholders, each with their own unique needs, wants, and restrictions. Fundamentally, it is the capability of a social startup to cater to and bring these disparate groups together that forms their core value and drives impact.

Some well-known examples of social startups that have navigated this treacherous slope successfully:

  • Kiva: individual micro-donors, micro-finance institutions, and local entrepreneurs
  • Samasource: large corporations, local training partners, and unemployed youth, women, & refugees
  • Tom’s Shoes: fashion and socially-conscious consumers, local non-profits, children in Africa without shoes

Obviously, multiple customer segments are not unique to social startups. With the rise of internet platform business and social networks, technology entrepreneurs are often dealing with two or more customer segments as well. Consider Giysicini, a Fit Startup Factory tech startup, which serves individual fashion-conscious consumers and well-known clothing brands. For the individual user, they offer the ability to create a digital wardrobe, try different clothing combinations, and get recommendations for what to wear; for clothing brands, they offer the opportunity to connect with highly segmented markets, explore fashion preferences and observe user trends.

But, for social entrepreneurs, it is the ability to manage the complexity of multiple markets that makes or breaks the idea, making the entire endeavor a very careful balancing act. Each market requires its own value proposition; each market require its own channels and relationships. And sometimes each market’s needs or values can be in conflict with other segments.

Multiple Customer Segments: an example

Developer Factory, a Social Change Labs semi-finalist, has a very straightforward value proposition: help unemployed youth develop employable skills by teaching them how to code. However, their model is far from straightforward.

Normally, one could just open training courses and charge the students. But because of their focus on social impact, i.e. access to unemployed youth, charging students for the full costs of such a course would be counterproductive. Therefore, the team is working on different models, trying to understand different values that are being created and who would actually pay for those values. Currently they are working with three different customer/stakeholder segments:

  • Corporations or firms looking for programming talent
  • Unemployed youth with some theoretical training but no practical experience
  • Seasoned programming professionals looking to give back to the community

As a team, their goal is get corporations to outsource programming projects to the venture, then work on those projects with the students, using them as practice-based training and experience, which is a key gap in most university undergraduate programs. Seasoned programming professionals will serve as volunteer mentors and teachers (crowdsourcing) to increase the knowledge base and expand the reach of the program. Corporations get projects done as well as early PR with potential future hires; students get hands-on, fundamental programming skills at below-cost prices; programming professionals have a chance to give back to the ecosystem and gain further notoriety in the sector.

Fundamentally, the model looks good on paper, but there are some key questions:

  • Corporations
    • Will the corporations see the added value of working with students, and potential future hires, rather than the disadvantage of inexperience?
    • How much are corporations willing to pay for/support such this endeavor if they have no guarantee to hire and retain that talent later?
  • Programming Professionals
    • How committed with programming professionals be to the course as volunteer mentors?
    • How can they be motivated? What can serve as suitable rewards?
  • Programming Students
    • How much can they charge students in order to maximize access while ensuring commitment to finish the course?
    • What is the minimum level of theoretical knowledge necessary before adding practical training?

And the conflict in needs and values becomes apparent. Expanding the scope to serve more, but less-talented students would expand social impact, but probably not satisfy corporate clients looking for high-quality work and frustrate volunteer mentors who want to coach eager, talented individuals. Placing graduates directly in companies after the course would create strong value for corporations, but take away freedom and flexibility from students. Also, charging more for the courses would decrease the venture’s dependence on corporate sales but then may discourage many youth that need the training. And so forth.

It is the ability of the Developer Factory to solve these myriad of issues to everyone’s mutual benefit that will be its ultimate determinant of success.

Finally, more than just the challenge of multiple markets, with the focus on social impact and social change, social entrepreneurs aim to expand the depth and reach of their core value without losing sight of sustainable financial objectives. But that’s something we’ll save for the next post. Let me know what you think.

Summary: social startups are often challenged by the need to serve multiple customer segments, but it is the ability to bring those groups together via a creative model that creates their core value and drives social impact.

Understanding the Starting Point

Having the opportunity to work with technology entrepreneurs in the Fit Startup Factory and now social entrepreneurs via Social Change Labs has afforded me a unique perspective into the startup journey of each segment, and the unique challenges that they face. Although we preach the same methodology and approach to both parties (Business Model Generation, Customer Development, Lean Startup, etc.), there are obvious differences. In the next few posts I want to take a moment to explore some of those differences and would love to hear your thoughts as well.

The Starting Point

In the Lean Entrepreneur, Brant Cooper and Patrick Vlaskovits define the starting point for entrepreneurial ideas as usually one of the following: segment, problem, product, technology. For example, the entrepreneur first identifies a lucrative customer segment, then figures out what problems they are experiencing, before designing a product to solve that problem and figuring out the technology to deliver that solution. Each of the starting points are valid, and each carries its own challenges.

Starting With the Problem

For social entrepreneurs, the starting point seems to always starts at the problem:

  • Why don’t more people volunteer in Turkey? (ben1gönüllüyüm and Bir Elin Sesi Var)
  • How do we get people to consume less resources? (Eşya Kütüphanesi)
  • Why do small non-profits have trouble accessing individual donations? (Bağış Portalı and birayda)
  • How can we reduce our carbon footprint from plastic bags? (BagAway)

From there these social entrepreneurs try to delve into the extent of the problem, i.e. who is experiencing this problem, who actually cares enough to do something about it, and who holds the keys to actually initiating a solution.

An Example: Starting with the Problem

Eşya Kütüphanesi is an online platform to facilitate the sharing of household products amongst a larger community. The problem was simple: do people really have to “purchase” and “own” everything they use? Could some things be shared, borrowed, etc. to create higher levels of efficiency, and thereby reducing consumption and its effects on the environment?

Once they realized this was the problem they were passionate about and were excited to solve, the team started exploring different customer segments that recognized this problem, considered it significant and wanted to do something about it. this obviously involved lots of customer interviews, a plenty of revisions of their business model and initial assumptions. It’s not easy changing established habits, but within the larger population they discovered a group that was active sharers and borrowers within their own circle of friends, nicknamed Generation G.

Now they are in the process of figuring out the right product/service to effective facilitate these sharing transactions and the type of technology they will need to scale the solution outward.

Starting with the Segment

Then there are social entrepreneurs who start with the segment, a disadvantaged, marginalized portion of the population, i.e. the homeless or youth with mental disabilities (Mor Menekşem).

Usually they have some connection to the population – either they are personally themselves from that population, or have a family member or friend who has been marginalized. To develop effective solutions for the niche market requires an in-depth appreciation of their life, their day-to-day struggle, and the inherent problems that go along with it. Then the right solution and required technology can be determined.

An Example: Starting with the Segment

Mor Menekşem aims to create employment opportunities for the mentally disabled by running a greenhouse to raise purple violets and sell them as a brand for mental disability awareness. One of their team members serves as the Turkish Mental Disability Federation Chairman, and from the beginning the team was focused on developing a social enterprise to serve and aid the mentally disabled.

As they delved into the current conditions of the mentally disabled in Turkey, two big issues came up: employment opportunities catering to the mentally disabled were almost non-existent, and there was low awareness of mental disability in the general population. It is a problem that is oft hidden away from the public eye, and resources to support individuals and families are scarce.

Thus was born the idea of Mor Menekşem, transforming a simple flower into a socially-conscious consumer product that can serve as a symbol for the mentally disabled. Now the team is working to better understand the consumer segment of this equation, i.e. the type of people that would be excited to support such an effort through their purchase decisions.

Basically, unlike technology entrepreneurs, you rarely ever see social entrepreneurs enamored with a product or a technology first. It is the problem or it is the segment that drives them. It is solving that problem, or serving that segment that serves as the core of their business model.

There are definitely technology entrepreneurs who start with the segment or the problem, but unfortunately, more often that not, we come across entrepreneurs who are sold on their own product idea but are not actually solving a significant problem or meeting a significant need. Perhaps what we need to help technology entrepreneurs start thinking more like social entrepreneurs, actually embedding themselves with the population they want to serve and learning to empathize more with the people and the problems they face rather than simply developing and then trying to sell a product. The technology is only as good as its fit with the problem or need it is trying to solve (i.e. the Segway).

What do you think?

The Dance of the Key Partner

There is nothing more alluring than the dance of the key partner – you eye each other from across the dance floor, gauging the relative appeal of the opposing party, trying to understand if she’s worthy of your attention. And then the dance begins – who brings what to the table? what are your offering in return? how can I appease the other to get what I want? who will blink first?

In the social sector, the dance may not be about profit but there are other factors at work: status, prestige, impact, publicity, funding… I have to admit, the social sector does have a bit more openness, transparency than the for-profit world. Is it the innocence of those at work in the sector, or perhaps they are just less trained in the arts of corporate wiles and negotiation?

Sometimes the dance is like two mice trying to convince the other that they are actually elephants, fleet of foot on the dance floor. Sometimes only one of the parties is the mouse, and then we just try to discover who is deceiving who. In our case, I admit we are mice… but what are we trying to appear to be?

In the past few weeks we’ve started into the first throes of this dance with a large non-profit organization to co-develop our volunteering platform. Our goals are the same, i.e. increase the rate of volunteer activation in Turkey, we are both at relatively the same stage of idea development, and we generally agree on the main philosophical approaches to the subject but our relative strengths and areas of focus are quite different. Basically, we are attempting the attack the same problem from different angles. From a purely logical standpoint, it’s a solid match. But the dance must still be danced.

Given the limitations of social startups, specifically in regards to funding and resources, strategic partners are a must. It’s impossible to own all the resources and activities required during the startup phase, and even pretty difficult when they scale. But given the relatively politicized environment of the social sector, choosing the right partners, and weighing the relative gains and losses of the partnership, is essential. Don’t jump into the dance with any nice-looking mouse or elephant that comes along.

Questions to consider:

  • What are my Critical Success Factors?
  • What are the Key Activities and Key Resources of my enterprise?
  • Which of these can I achieve via a strategic partnership?

The Problem: Jobs to be Done

Jobs to be Done: a term coined by Clayton Christensen, author of The Innovator’s Dilemma, to put creators of products and services in the mindset of their customer. People don’t buy milkshakes because it’s a milkshake or even because it tastes great; people buy milkshakes because it fills their stomach during a long commute and keeps them full or because it silences their kids from whining (read the full article here). People buy products because they are trying to get something done. If you don’t understand the “job” you can’t devise a better solution. No one cares about your product; people care about the results that it brings, so focus on the promised change.

As legendary Harvard Business School marketing professor Theodore Levitt once put it, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”

So with volunteering, what is the job to be done?
Or more specifically, how are they filling that job now instead of volunteering (i.e. alternatives)?

I believe if we can solve this issue, or at least gain deeper insight into this issue, we can make some serious inroads in solving the riddle of low volunteerism in Turkey. Perhaps I’m just a dreamer, but at least it’s worth a shot, right?

So we’ve started doing problem interviews while keeping an ear out for what jobs people are trying to get done by volunteering or not volunteering. On a surface level, the assumed answers are probably: “to make a contribution to society” or “to give back for opportunities received” or even “an emotional drive to do something meaningful for others”, but, if that was the case, what are the alternatives to volunteering? Donating the charities? But even that has has a low rate of participation. So these reasons may apply to a few people but is not indicative of the overall population, and people may say these things but there is definitely something deeper.

volunteering: jobs to be done?

  • to socialize:
    One of the key insights that came up from the interviews was the innate desire to participate in volunteering activities with other people. Consider a FB event page – people in Turkey first check out who else is coming before reading about the event and considering whether to attend or not; a classic community-based culture element. Moreover, almost everyone indicated that previous participation in such activities stemmed from a referral, i.e. “Hey I’m going to attend this thing; you should come too!”

  • to achieve departure from work or find a hobby:
    Some interviewees, specifically those with full-time jobs, saw volunteering as a distraction from the daily grind, like going to the museum or having breakfast by the Bosphorus. In this situation, schedule flexibility and entertainment value is important. It can’t feel like work; it should be different type of activity from whatever they do day-to-day. And it should be relatively convenient.

  • to gain a sense of belonging to a community:
    Interviewees stated on several occasions that participation provided a sense of belonging to a group, an identity. Or they indicated a desire to join such activities as a group, strengthening the existing group bond. This is related to the first point, but with a slight twist, not so much, “who else is going?” as “what can we do together?”, in a sense blending the first and second points.

so what?

Basically, based on these traits, the traditional models of matching volunteers with NGOs used in the Western World doesn’t seem to apply to the Turkish context. In those contexts volunteering is often seen as an individual activity and such platforms would support individuals applying to opportunities. Plus, with a higher sense of community responsibility, people actually sought out such opportunities. This is not the case in Turkey. Thus, how can we fit volunteering into their worldview, to position it to satisfy an existing job? The search continues.

The Problem: interview approach

The Customer Development approach is built on a foundation of one-on-one customer interviews. It is trying to get to the bottom of the issue, something that can’t easily be achieved using surveys or website analytics or complaint forums or even focus groups. It is letting your potential customer talk you through the problem and how it affects their life, peeling it back one layer at a time.

The point of these interviews – to learn.

You don’t push anything, sell anything or even try to convince. You are there to learn, to let you eyes be opened to unexpected and unforeseen possibilities. Don’t even talk about your potential solution. Focus solely on discovering the problem. Giff Constable, in his post “12 Tips for Customer Development Interviews”, states that you should “get psyched to hear things you don’t want to hear”, i.e. be there to let your assumptions be dashed and hopefully take one more step to actually building something that people want.

And this is as applicable to social startups as they are to tech startups or any other startup. In fact, as a social startup, we need to evaluate the needs of all stakeholders: money-paying customers, clients we hope to serve, institutions we are hoping to partner with, etc. Can we actually build something that all these stakeholders want?

So How Do I Conduct these Interviews?

Ash Maurya, in his book Running Lean, does a great job in laying out the format for doing problem interviews. Without taking too much away from Ash, what we are trying to discover through these 15-20 interviews is as follows:

  • What is the “real” problem? Does it fit the problems we are assuming?
  • How are customers solving this problem currently? (i.e. what job are they trying to get done and how are they doing it?)
  • Why, why, why, why, why? Keep digging to understand the customer’s context.
  • Some basic demographic information if we need to further segment the market based on the feedback
  • Get permission to discuss more later, after you’ve figured out a solution, and ask for introductions to new people you can interview

The Approach to our Context

  • Set the Context: “Volunteerism rates are low in Turkey, 5% compared to 30% in Germany or 35% in the US; and this has adverse effects on the ability of NGOs to offer critical services, community integration in large cities as well as overall economic performance.”
  • Describe our Assumptions (see previous post) followed by: “Do you identify with any of these statements?”
  • Problem Ranking and/or Problem Discovery: ask the interviewee to state which reasons they identified with the most. Oftentimes, just setting the stage will have the interviewee start discussing a reason that is much more relevant; the point is just to let him/her talk and work together to get to the root of that problem.
  • Exploring the Customer’s Worldview of Volunteering: we try to make it as personal as possible, exploring previous experiences of volunteering if relevant, the reasons why they volunteered previously and why they don’t do so anymore, what are the barriers; moreover, we are trying to discover motivational reasons for why people do volunteer – what would propel them to volunteer now?

In the next post I’ll start describing some of the insights we are gaining through these customer development interviews. Then we’ll see where we end up… 🙂

The Problem: digging out the roots

How to raise the rate of volunteerism in Turkey? More specifically, why are people not volunteering now?

We wanted to look specifically at young people, college students and young professionals; maybe married but no kids yet. We realize that housewives are also a big “market” for volunteers, i.e. kids are out of the house and they have a lot of free time on their hands to contribute, but let’s focus on the first segment for now. Perhaps we’ll need to pivot to the 2nd soon enough.

Problem Assumptions

Our target market, they have some discretionary time but it’s limited by work, studies, hanging out with friends. They would generally be considered middle-class, as in they are not scrambling around for a 2nd job to make ends meet, but have a lot of responsibilities. Our assumptions for why they don’t volunteer (in no particular order):

  • Ignorance or Lack of Information: they don’t know where are they are opportunities to volunteer or how to volunteer or even what they can contribute.
  • Not Enough Time / Busy Schedules: they have too much going on as it is, often working overtime or craming for exams that they don’t have time to commit to another activity.
  • Lack of Trust in the 3rd Sector and NGOs: there is a general sense of distrust in the system, fueled by recent scandals regarding the inappropriate use of funds by an NGO as well as political or religious affiliations of NGOs

Understanding the roots of the problem will help us design a product that can effectively draw these people out, either by eliminating these barriers or providing significant incentive to overcome them. But before we move forward with a solution, we need to make sure these assumptions are actually true statements of our target market and not just in our own minds.

So… sure they sound reasonable, but are they true? Heeding the wise words of Steve Blank, it’s time to Get Out of the Building! Stay tuned as I describe our attempts to understand the problem through individual problem interviews, i.e. customer discovery.

The Problem: beginnings

So what’s the problem?

Every entrepreneurship adventure starts with a problem or a need, and this is all the more true for social ventures. In fact, usually the problem smacks you in the face, it’s just that no one has stepped up to the plate to tackle it. Large institutions, government, influential people in politics, business, media – I don’t think so; instead it falls into the hands of people like you and me, wondering why someone hasn’t done something about this before then rising up to meet the challenge.

The problem… we learn about it one day, then it starts gnawing at us, popping into our minds when we least expect it. What are people doing about this? It’s like a nasty crick in your neck, a bug bite you keep scratching at throughout the night. It keeps popping up all around you, waking you up at 4 AM, until you decide you are not going to ignore it anymore. Now that’s a good problem to solve.

What problem are we struggling with?

There’s plenty of problems to go around in Turkey, and we could fill a blog talking about them and complaining about them, but my dreams are in social entrepreneurship and I believe that any discussion of social entrepreneurship must first begin with volunteerism and giving.

Social entrepreneurs are generally dependent on the goodwill of their communities to translate their business models into widespread systematic change, through a large group of people volunteering their spare time, resources, money to bring those dreams to reality. These social enterprise business models require an innovative approach to cost structures, given revenue stream restrictions, of which volunteers and donations serve as the backbone. Without motivated volunteers, without consistent charitable giving (even small amounts) embedded into the culture, the road to sustainability becomes that much more difficult.

According to the 2011 World Giving Index by the Charities Aid Foundation (CAF):

  • Turkey ranks 136 out of 153 countries in terms of charitable giving (money, time, helping others)
  • Only 14% of the population provides monetary donations to charities
  • Only 7% of the population volunteer their time

What are the roots of this problem?

Well… that’s what we need to figure out. Stay tuned.