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How to Startup?

Phase 1 - Non Profits

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The process involves evaluating existing ideas or mapping a value chain to identify problems

When founders are just starting out, it is important to deeply understand the problem. To be able to clearly define the problem at hand, founders need to take both an analytical (quantitative) and qualitative approach.

 

We recommend starting off by creating a value chain of the current system of interest & then go about talking to people as well as looking at data to identify bottlenecks.

Value Chain mapping:  Any problem area has a number of sequential & parallel activities that different stakeholders do to accomplish a goal. Value chain mapping is the process of:

1. Identifying all of these tasks

2. Segmenting them by audience

3. Identifying what is solved in each, what is unsolved, friction points, and value drivers.

 

Once you have identified the different steps and actors in the value chain, you can look at quantitative data to understand major drivers and bottlenecks. 

 

It can also be useful to capture what jobs your users & other major actors in the value chain are trying to get done and capture them through this JTBD framework. This can help later when you are generating ideas to solve for your users.

  • What does the value chain/system map of the problem look like?

  • Have you identified Jobs-to-be-done for your users?

  • Have you talked to at least 10 people/orgs who face the problem?

  • How many people are affected and what are their exact demographics?

  • How are they affected – if the problem is solved, what will be the gain?

  • What all issues/factors lead to the problem – is it validated which issue if solved, will lead to problem solution. 

  • Why hasn’t the problem been solved yet? What is hard about it?

Discovering & evaluating your idea/ Intervention:

Once you have deeply understood the problem, you can put on your creative hat to start generating ideas that can solve the issues in the value chain. In the idea generation stage, you can be as bold and crazy as possible. And once you have all the ideas on the table, we recommend evaluating them using the following guideposts: 

North star metrics & review of existing approaches

Before you set about building your product/service, it is important to clearly articulate what is your north star metric. A north star metric is an objective quantitative measure that will allow you to measure progress and know whether the problem has been solved at scale. Once you have identified your north star metric, you can look at your potential ideas & see if they are powerful enough to make a meaningful impact on your north star metric.

It is also important at this stage to review the evidence base of approaches that have already been tried to solve the problem and have a clear understanding of their impact and limitations. This can help you reject some of your ideas or even generate new ones.

  • What quantitative data will show that the problem is solved at scale; and you have accomplished your mission

  • What are 3, 5, 7 year quantitative leading metrics to measure to see you are on path of meeting northstar indicators?

  • What are the most successful/celebrated approaches to solving the problem?

    • What impact have they been able to create and at what scale?

    • What are their limitations?

EPIC framework:

The biggest trap we have seen non-profit founders falling into is building a product or a program that will at best be a band-aid to the user’s problem or will not lead to a large scale systemic impact. 

 

As we work with non-profit teams & help them identify what ideas are worth working on, we have developed an EPIC (Evidence, Public Good & Innovative Program for Change) framework to look at non-profit startup ideas. 

  • Evidence based narrative building & policy change:
    Nonprofits exist to solve problems where markets fail. One of the most important things you can do is to collect evidence that highlights the extent of the problem and build the narrative around it. The data based reporting can also be used to inform better implementation of  policy and even build the case for policy changes.

    In fact, quite often the problem exists because of the absence of feedback loops in the system. By building the evidence basis around it and installing a feedback loop, founders can often find their high leverage point in the system. 

    • Do you have readily available primary or secondary data that highlights the issues with the status quo?

    • If not, can you generate this data through surveys or get access to it through academics and research institutions?

    • Who are the leading thought leaders & philanthropists working on the topic and where do they hangout?

    • Are there conferences on this topic where you can present?

  • Digital Public good:
    It can be useful to explore if there are any public goods that can be created that can enable access to certain services that weren't previously available to your target audience. Digital public goods are often very high leverage interventions as they are inherently scalable because of the zero marginal cost of delivering them.

    • Does your intervention rely heavily on certain kinds of information being available to your target users?

    • Is the information currently available but proprietary or has a high cost of access for your user?
       

  • Innovative product/program 
    Do you have an innovative program that can deliver impact at scale?  For a program to be scalable it needs to be cheap enough, simple yet powerful enough to be delivered at scale.

Cheap enough:

  • What is the per unit cost of delivering the solution to the end user?

  • How much do people/government currently pay for a similar service?

  • Would anyone of these have enough budgets to pay for the service -user or  government ?

  • Are there enough incentives so that markets can ultimately crowd in?

  • Can tech help bring down the costs through reducing user acquisition cost / ops efficiency / program delivery?

Simple yet powerful enough:

  • What is the state of evidence?

  • Is intervention narrow enough  as opposed to broad - trying to solve multiple issues in value chain simultaneously?

  • Will intervention solve the problem even if other allied issues aren't solved?

  • Is there a way to measure intervention impact?

  • Can tech help standardise the service at scale?

Some non-profits will find that just one of these approaches will be enough to create a large systemic impact but for most it will be a combination of all the three,

Risk & favourable tailwinds

It’s also helpful to know whether your problem area is underinvested or overinvested.

 

Underinvested problems offer founders a large playing field as very little has been done in the field and anything you do can be powerful. On the other hand, overinvested problems are quite wicked - they are often more difficult than they might appear from the distance and that’s the reason they have yet not been solved despite a lot of attention and money being put on them. One must look for why that’s the case.

  • Is the intervention already being done by others? If yes, what is the problem with current intervention and how will you do it differently?

  • Are there comparable models in other countries or for other problems?

  • Are there any major technology or policy shifts that make it possible to solve the problem now?

  • Have you identified risks to the success of your intervention? 

Team and availability of funding

For your idea to come to fruition, it is not only important that there is funding available in the sector but also that your team is excited about working on it. 

  • Funding Friendly: A compelling case of impact that attracts support from donors

    • Is it a funding friendly area of work

    • Is it already crowded with other players

    • Have you identified potential funders for the intervention

    • Do you have a list of 20 potential funders for your work

  • Team Idea fit: Team has skills, expertise and passion to execute the idea

Scale Strategy

High-impact nonprofits clearly articulate their scaling strategy, addressing three aspects:

  • Scalable product/program: Cheap enough & simple yet powerful enough as defined above.

  • Payer-at-scale: This is either user, philanthropy or government 

  • Doer-at-scale: This is either your organisation, other non-profits, market or government.

For ideas, where policy advocacy or creation of digital public goods is the key intervention, the doer-at-scale is always your organisation and payer-at-scale is often philanthropic capital.


But for ideas, where program/product delivery is the key, it becomes important to answer who will pay for it & deliver it at scale. 

Read the second step of building a high impact non-profit here.

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