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?