EC 045: Lean Startups for Social Change with Michel Gelobter30 min read
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In this podcast, I share a webinar that I setup with Michel Gelobter, author of “Lean Startups for Social Change“
The webinar is titled “Experimenting Our Way to Meaningful Change”
He discusses the Lean Startup approach, and how it can be used to quickly and efficiently improve social, environmental and community issues (homelessness, climate change, racism, government and nonprofit efficiency, and much more) without wasting time, resources and money.
You can watch a video the entire webinar with slides below
- Lean Startups for Social Change: The Revolutionary Path to Big Impact
- Contact information for Michel Gelobter
- Email: email@example.com
- Website: http://www.leanchange.net/blog/
- Twitter: @lean_change
- Portland State University Impact Entrepreneurs (Jacen Greene)
- Lean Portland
Brion (B): Welcome everybody. My name is Brion Hurley. I work with a group called Lean Portland and we are a volunteer group that works with local nonprofits to teach them Lean and Six Sigma principles and concepts. We’ve been working pretty aggressively, I guess, at that for the last couple of years now. I ran across Michel’s book a couple of years back and I thought that would be a good topic for us to share and talk about. I’d also like to introduce Jacen here, with PSU, who’s also helped us get this organized.
Jacen (J): Hi everyone. I’m Jacen Greene, Director of Impact Entrepreneurs in PSU’s School of Business. We’re a set of social innovation and social entrepreneurship programs and events for both students and community members. One of the programs I manage and teach in is our Certificate of Social Innovation. Undergraduate students, graduate students, and community members can take it to design and launch a new social venture – a nonprofit, a social enterprise, a government program. We’ve launched organizations such as the Dave’s Killer Bread Foundation, Next Garden, Construct Foundation, and a whole set of others. I teach Lean Startup methodology and this book is a great resource for our students and we’ll be using this webinar as a recording in our courses as well.
B: I’ll hand it over to Michel and you introduce yourself and then share some of your insights about your book, that would be great.
Michel (M): Thank you and thanks, everybody. Really glad to have a chance to speak with everybody. I am Michel Gelobter, I’m the author of Lean Startups for Social Change. I’ve been involved in social change work since a pretty young age and I have really come to realize, when I went into the for-profit world about the 15 years ago now to do cleantech software startups, I started realizing that I’d been doing startups in the social change world my whole life. My typical tenure on work I’ve done has been 5 to 7 years and it involves… One of the things I did was I ran the organization that wrote the first major climate bill in California, AB 32, the Global Warming Solutions Act before that. Most of my work has been in the environmental field. I introduced water conservation and water conservation pricing in New York City’s Department of Environmental Protection, helped start the first environmental policy program at Columbia University, so I’ve been doing a variety of stuff most of my life. I did the first major academic work in the environmental justice field.
When I got into real startups – software startups, business startups – I recognized that this is a really major part of my life and the way I’ve been working a lot already and was really interested in how this sector, the software sector in particular and the tech innovation sector, had been moving so fast and found that there was this technique called the Lean Startup that we in the social change world weren’t familiar with.
When I left startups, I did three companies over those 12 to 14 years and then I got a fellowship from the Packard Foundation to write this book, which I really had to write. I had to get it out. Just too many of my friends who were super smart and super innovative didn’t know what’s going on in the innovation world and how important this was and so I wrote the book and have been consulting and teaching and leading workshops ever since. That’s my story.
I am going to count on Brion to lead the Q&A process. I probably have to get off the webinar, unfortunately, around 12:45. My presentation will probably be around 20, 25 minutes. I am not monitoring the chat, so Brion, if something comes up urgently, please just interrupt and ask a good question if it comes up. I would ask that people maybe chat Brion questions and I’ll take a pause every couple of minutes to see are there any questions and have Brion moderate that so that I can focus on what I’m talking to you all about. All right?
M: All right. And you can hear me okay? The sound is good?
M: All right, terrific. Well, thanks.
I titled this talk Experimenting Our Way To Meaningful Change and I want to start by telling a story about the election in 2016. I have a couple of different ways I start this presentation, one is more casual, this one, I thought, for a webinar, let’s make it a little more exciting and relevant. There’s a country to win a presidential election and you can imagine, let’s say, that you’re Russia and you’re thinking about how do we intervene in a way that’s going to make that country more friendly to our government or to our policies.
You start small – you identify the kinds of people that you may want to influence to make a difference, you look in states like Florida, Michigan, Pennsylvania, Wisconsin. You use Facebook, you see that women, 40 to 65, there’s about 35 million women you could reach on Facebook in that audience. Narrow it a bit more, let’s just go for those who support Barack Obama or Hillary Clinton; that cuts us to 5.2 million people. And then let’s actually get really specific and look at those who might be blue-collar workers or labor union members, and that’s 28,000 people and that’s a segment.
Okay, what can we do to maybe affect the votes of 28,000 African-American women who are interested in the trade unions in four key states? So you can narrow it down and say let’s run some experiments and see what goes on with different populations that are key. Obviously, you get some polling data by the campaign chair, which is what happened, so you can further target the kinds of people that you might want to move. You say to yourself, “Let’s see if we can selectively mobilize voters in four key states. Let’s make sure we win the purple state of Florida – without that, we can’t do anything – and let’s see if we can breach the blue wall of Wisconsin, Michigan, Pennsylvania, of labor support for Democrat candidates.” So we say let’s use Facebook. It’s a simple tool, we have access to it, let’s see if we can do it. Let’s start running some test ads. These are all ads that were discovered by the FBI, and other intelligence agencies, to have been planted by Russia on Facebook for key populations.
You might start with mobilization – who can you get out to vote because they’re scared about gun violence or other types of violence? They might maybe even feel like they’re being targeted as White folks for being racist or that they are being sacrificed to a more diversity-oriented agenda, whatever the motivation, and maybe they’re very scared about immigration. These are women, maybe African-American women, union-affiliated, and they’re concerned, let’s say, about Dora the Explorer crossing the border. You can see some of these ads were pretty cute, pretty interesting. They looked pretty American to me, but they were all Russian generated.
Another potential solution is to suppress votes -what are some of the messages that might help with voter suppression? Blacktivists was an organization also formed by the Russians and they put out messages like this, “Black people should wake up as soon as possible.” They reminded us, I always joke with my African-American friends, “Did you really remember that Hillary said ‘super predator’ or did the Russians remind you?” They were running these kinds of ads so that we could all be irritated at things that Hillary Clinton, as an experienced politician with a long track record, had done in her past. Biden, obviously, participated to be more current in this kind of rhetoric to some extent.
The key, really, here was that they conducted a bunch of incremental experiments. They figured out – and these graphics are from one of the FBI’s reports on this – they targeted data collection, figured out who the customers were, who the people that they wanted to reach were, they stole some data, they took over some accounts, but they mostly just dug around Facebook to try to identify populations. They iterated stories, they ran different ads, saw the effectiveness, created fake accounts, ran a bunch tests with different personas, and finally, they figured out a way to amplify the message, including the fake accounts. They actually occasionally had real meet-ups that were with people they paid to show up in places to gather people. I think one of the things that was most alarming to the intelligence community was the president was part, and remains part, of this false amplification system. They recruited some pretty powerful ways to get, keep, and grow the people they were trying to influence.
They were going after these four states. It turns out they spent about $100,000. They spent more money on some other stuff, but on Facebook, they spent about $100,000, reached about 126 million people with that $100,000. Trump won and the margin of votes in these states were very small, it was a total of about, in the blue states, in the blue wall states, in particular, just over 100,000 votes made the difference in Trump’s victory there. And so, basically, they spent $100,000 to get 126 million impressions. If you were to run the math on that and assume that they’re basically spending about ten-thousandths of a cent per person they reached, and if you just attribute that spend to the votes that influenced – let’s assume this is the only way they reached people although there were others – that’s a pretty good price. They paid about $.70 per critical vote swung in Trump’s direction and they got it; Trump won the election and the rest is history.
That’s an example of a Lean effort to take over a country, basically, and this presentation will talk about some of the methods and thinking that lie underneath that approach.
Let me talk about why it’s critical to think about Lean Change. When I work in the social sector, in particular, it’s really important to explain to groups why this is not just a fad, it’s not just a temporary thing. The election is a great example of how important it can be. The thing that underlies, really, the power of this method more than anything else is that it’s possible, faster than ever before, to measure the impact of an action. Let’s just take environmental monitoring for example. It used to be that if you wanted to figure out what was going on in a stream up in the Rockies, you had to trek up there every six weeks and pick up samples from your device. No longer the case. There’s remote transmission by cell towers now and you can continuously monitor almost any environment on the planet remotely, either with cell phone signals or other GPS or satellite signals that allow you to transmit data at high resolution almost continuously from anywhere.
Friendship has changed. It used to be that you had to meet somebody, go for a walk, hold their hand at sunset, and now you can use Facebook and really measure what your traction is with people that you know across a broad array of things. People are becoming friends faster than ever before. I’m sure some of you have had the experience of running into somebody in an airport that you had never seen before but knew on Facebook. As a matter of fact, Brion and I, oddly enough, were on a plane to Trinidad, never having met before in person, on a plane to Trinidad together in December and he recognized me. We had already been talking, obviously, but we went from really close virtual knowledge of each other to actual physical knowledge of each other just because there’s a platform that let us recognize each other faster than ever before.
Even traditional methods of outreach are working faster than ever before. Let’s say you have a PTA meeting and you called a meeting and you sent out a flyer. In the old days, 20 or 30 years ago, you’d send out a flyer, see what happened in the next meeting and see how effective whatever you were trying to do was. But today, when people leave that meeting, you have their email address, you have their cell phone number, you might have their Instagram or Twitter handles, and if you design that meeting right, you can figure out, in two or three days after the meeting, whether people have been mobilized appropriately. Let’s say the PTA meeting decides that it’s time to go to the City Council and push for a 50% budget increase and everybody commits to developing a postcard campaign for their church by the next meeting. Well, you can actually email or text them two or three days later and see how they’re doing and get instant feedback on whether they’ve taken those actions in ways that, 20 or 30 years ago, you would have had to wait quite a while to find out if people had actually stuck to their word and if they don’t, you can shift the strategy and try something else.
That’s really what underlies all of this is, is this recognition that feedback loops are getting shorter everywhere and, as anyone who’s done any biology work or any kind of thinking about the real world, feedback loops are a really critical part of how a planet and people work and they are getting shorter every day and that’s really what underlies a lot of what I’m going to talk about for the rest of this stock.
With that, I want to stop for a second and ask if there are any questions that have come up yet.
B: Nothing yet, but if you have a question, feel free to type them into the chat area and I’ll get to them on the next session. Thanks.
M: Okay. We’re going now into the substance of the method now. Really, what we’re doing here is replacing the old model of social change. In the software world, it’s called waterfall, which is to say there’s a fixed sequence of events that leads to how you design a program. You have an idea for a product or a service or a movement; you build coalition, buy-in, consensus; you write a plan, you might even start acting on your own; funding proposal, you wait for some funding; you execute the plan; you measure impact; you evaluate impact, God willing. And if the impact isn’t as good as you’d like, maybe you end the program, but a lot of times, you just go back, whether the impact. Sometimes you don’t even measure the impact. You say, “This is working, we have a coalition, let’s get some more money and keep going.”
This is a real sequence, it takes a long time, you can imagine. I’m sure many of you have been involved in social change work where it takes two or three years to get off the ground because you have to talk to so many people and build so much consensus. Really, the Lean Startup is aimed in the private sector, the software you see is built this way as well, as in the public sector and the social sector at really throwing this model out and saying forget it. The main reason we want to do that is because, at the end of the day, no idea ever really survives first contact with your target. No matter how great your coalition, no matter how great your idea, whenever you go out in the real world to try to make it happen, it’s never quite the same as it was in your meetings or in your private thoughts and musings. There is always a difference between what happens in the real world and what your plan was.
The idea is how do we close that gap? How do we find that difference and that adjust more and more quickly? Lean Change has three principles and one underlying process – productive failure, or what in the private sector is often called fail fast, agile development as a methodology, and an ongoing focus on efficiency, trying to do things as quickly and for as low a price as possible, and there’s a process underlying all of it called customer development. I keep that word in the work I do in the private sector because customer development is increasingly a very, very technical field with lots of types of customer development and ways to do it and I want, when people leave my workshops, to be able to go find the tools that are out there, that are very diverse and, to use the word customer development helps people go find the literally thousands of tools and methods and articles and instruction that’s out there for how to do this process and we’ll get into some more of that in a bit.
Let me give you a real-world example of this. There was 100,000 Homes Campaign that ran for about 30 months between 2011 and 2014. What they basically did was they tried to turn homelessness work on its head. Believe it or not, most work on homelessness focused on temporary shelter, getting people off streets. What 100,000 Homes did was they said how about if we get homeless people homes? In about 40 communities around the country, different communities experimented with ways to permanently solve the challenge that homeless people were facing. You can see the dark blue success rate that they had compared, in an immediate post-recession period where homelessness was going way up. Unsheltered homeless individuals in these 40 cities went up by 38% between 2011 and 2014 due to economic turmoil, turmoil in the housing market. You can see in the communities that focused on this that, in fact, they were able to drop homelessness in all those communities compared to control groups that they used. That campaign has now matured into Operation Zero, which is a nationwide campaign to try to reduce homelessness to zero in some key communities.
The first real principle of productive failure is challenging for us in the social sector, it’s challenging for everybody. It’s the hardest part and the thing you have to train yourself to think about differently when you’re working on these kinds of issues. Failure is often not an option. In the private sector, somebody invests some money, you try an idea, if it fails, that’s called risk. Investors lose their money all the time to ideas that don’t work. On the other hand, if you have to do something like educate low-income communities or get homeless people into homes so they can live longer and more prosperously, you really can’t fail. These are problems that are not going to go away, that will continue to be pressing; most social problems are. And so we have this paradox of wanting to fail fast and wanting to experiment quickly so that we can fail quickly, really, so that we can look for the next level of success more quickly as well.
One of the reasons it’s really important to fail more quickly is – I think there’s at least two main reasons – one is most social change work has limited social and political capital accessible to it. We don’t have endless resources – we can’t be Uber or Lyft where you bring tens of millions of dollars to conquer a market – and eventually, you wear out, particularly, the social and political capital, the goodwill. That team, that coalition will eventually fall apart if you aren’t successful. People will find better ways to spend their time.
And then the sources of money have different persons as well. There’s something that I call donor regrets or moral opportunity costs. When you run a social change program and it fails, it might have been bold and innovative but your donors say, “God, I know I could’ve given that money to the soup kitchen and people would have definitely had food,” and so there’s this way in which you get a little extra bitterness, a little extra regret when a social change project fails. The ability to fail quickly shaves those, reduces that friction and keeps the opening, the opportunity to solve really hard problems, broader if you can move more quickly through your failures.
Finally, a key part of failing is to learn from your failure, to actually document it and say, “This is what we know.” If you do that rigorously and we, as a community in the social change sector, start doing that rigorously, we can, like in the private sector, start sharing wisdom about things that we’ve actually, in a measured and quantitative way, tried and have fail so that we don’t have to continuously reinvent the wheel and can move towards more and more optimal solutions more and more quickly over time.
I’ll take another deep breath here. I don’t see any new questions. Are there any?
B: Doesn’t look like it.
M: Okay. Here, I’ve put, at the end of this, a pretty provocative example of where failure is not an option. Can we really, in the United States, afford to fail in Afghanistan? Just think of the ways we are skewered on that question right now. A lot of people would say that the Soviet Union’s failure in Afghanistan led to its collapse. Can we afford to fail? Have we failed? Do we have social and political capital left to go fix Afghanistan? Or would we have been better off running a more experimental intervention where we tried different things and didn’t wear people out quite as much as we have now because of the death toll and the mayhem that our traditional waterfall plans have led to in that campaign?
Basically, the second principle of Lean Change is agile development, using agile techniques, which is to say, represented by this chart, build, measure, learn, queue up what you’re trying to learn, run through iterative cycles quickly – put a product out, put an effort out, put a solution out in the world, measure how it works, study it, and change it until it’s really working the way you want it to work and is growing in the kinds of ways you need it to grow.
Let me show you a little bit of a conceptual idea of why that’s so important. In a traditional process of innovation, we think, we make something, maybe we release it to the world. We make it a second time, release it again, and we try to mature a product just by releasing newer and better versions all the time. We might have three soup kitchens in a city that a church is trying to open and they open one and then they open the second and they open the third, but maybe they don’t really know whether hunger is actually being reduced yet because they haven’t measured.
Contrast that with the agile process. The area under the curve there is you can think of as time on the horizontal axis and risk on the vertical axis. Everything under that curve is what you call unvalidated effort. It’s work that you’ve done but you’re not sure that it’s had an impact. You contrast that with a smaller incremental approach using agile techniques. You reduce those loops so that you eventually have just a series of small products, Minimum Viable Products, agile efforts to test key components of ideas so that you grow the product with much lower. The area below the curve in each of those orange triangles is a lot smaller than the one under the blue line. The idea is to just keep iterating and confirming what you need to know or changing what you’re doing until you have a confirmed impact and moving more in smaller agile steps but moving more quickly with less overall risk because there’s a lot less that you don’t know as you move further and further out into the implementation curve.
And so you can think, from an agile perspective, of that wiggle curve as what’s called, in agile, a backlog, a sequence of hypotheses – do people have this problem? Do people want to solve this problem? Does our idea solve the problem? Do people want the solution? Will people pay for the solution? How much will people pay for this solution? Etc. You really want to break your problems down into little pieces that can be tested.
Let me give you an example. There are many forms of testing that I’ll cover in a minute, many dimensions to the testing that I’ll cover in a minute – it all starts, really, with what we call the value hypothesis – what’s the problem and what’s the solution you’re proposing to that problem. The value hypothesis has two components, which is do we know the problem, like do we actually know what the problem is, and second is do we know what the solution is. That’s called the value hypothesis.
You can think of three examples I give here – goal: solve global warming, goal: end mortal racism, AKA lynching, goal: end homelessness. These are initial value hypotheses. A hypothesis, we think we can get states to cut emissions of greenhouse gases, and you can think of a Minimum Viable Product of that as being Obama’s Clean Power Plan. It’s a great idea. It doesn’t solve global warming, but one of the problems is that we can’t figure out a way to get Congress to pass legislation, so maybe we can do it in the states. In the case of ending mortal racism, one hypothesis says maybe this light-of-day media exposure can slow the rate of police murders. Black Lives Matter tested that hypothesis. Ending homelessness, I discussed the 100,000 Homes Campaign already.
There’s a second piece to that solution set, which is called the growth hypothesis. This is one of the really important and, when you get more experience in this work, it turns out to really be the very, very powerful element of the Lean Startup and Lean Change, which is that you want to not just know that you have a solution; you want to understand whether that solution can be big enough to solve the problem. That doesn’t mean you have to solve the whole problem, but it does mean that you want to be able to measure whether the investment you’re putting in, in social, political, financial capital, is appropriate to how big your idea could ever be. What’s beautiful about this hypothesis and data-driven process is that you can measure whether there’s a snowball’s chance in hell you’ll ever actually achieve the scale that you need to with the solution you thought of.
Back to those three goals – stopping global warming for the United States, the growth hypothesis is Congress passes climate legislation. If we had federal climate legislation, we would be a long way down the road towards solving the global warming problem from the US’s perspective. The necessary scale, we know, is roughly we have to swing about 15 Senators, about 40 Congress people’s votes. Ending mortal racism – Black Lives Matter isn’t enough, exposure is not enough; we want to actually end disproportionate violence. We would like Black people to not be killed at a higher rate than White people. What’s the scale of that? Is it Colin Kaepernick? Is it NFL football players now moving from isolated? One solution, let’s put videos up of people suffering violence, rough to watch. Another solution is let’s expose millions of people to football players and college football players who feel this is a really big problem and get all of them to think about it differently, an effort that was tried. If we’re reaching 100 million people who look at football every month during certain times of the year, is that a solution? Is that the right scale? Clearly, Kaepernick was an MVP that was testing that. Ending homelessness – they’ve chosen 40 cities to try to go to zero homelessness and they’re now trying it at that scale as well.
What you’re doing in your learning is not just testing your ideas but you’re testing how your ideas will grow and, as a part of that testing, you’re learning the things that accelerate adoption for your ideas, that accelerate the speed at which you can make a difference.
I’m going to stop again and see if there are questions yet. We have about six more slides, so we’re close to the end.
B: Nothing yet.
M: All right. We’re not dropping though, the numbers are good, thanks. Hi all 33 of you. Thank you for sticking with it.
So how does this work? Basically, the last two slides have really covered just the solution – what’s the value proposition, how much can it grow – but there are many other dimensions to whether your solution, your product, your idea will work. They’re captured in something called the Lean Canvas and it’s available in my book, it’s available somewhat online for the social sector.
Really, you can think of these nine boxes, generally, will help you describe almost anything you’re trying to do and you start, really, by filling this out like you would fill out a paper napkin. You put your guesses as to what’s going to be true about your project in each of these boxes. You start in the middle, you typically work clockwise from value proposition. The two most important boxes are the value propositions and the targets. You don’t try to solve all of these at once. You want to be sure you know what your value prop is, you want to be sure you know who your targets are.
Then it does tend to be that your relationship and the pathways or channels that you reach people are very important. You might want to start thinking about revenue and expense as you get a little deeper in, and then you start really modeling what are the activities, the resources, the partners. The activities can change really radically. An example I use in my book is Title IX activism on campuses, which was started by a series of blog posts at a Northeastern University by a woman who had been date raped, and morphed into an organization that’s the premier Title IX advocacy organization in the country. They didn’t start with, “Let’s have a policy arm,” they started with, “Let’s tell stories on a blog about sexual assault,” and that morphed into what is a powerful organization that has a completely different set of key activities now. So they worked their way around that chart in a way that led them to the most effective type of action eventually.
What you want to understand is that every component of your organization, of your solution, eventually, should be based on a hypothesis, on a test to ran. You start by seeing if you have a solution, but eventually, you may test different kinds of activities, different kinds of partners and really come at it not from a waterfall perspective but from a perspective of if I make this choice, what will the impact be? Let’s go test that as fast as we can at every stage of our growth and moving forward as we mature as well.
The key instrument in that kind of testing is called the Minimum Viable Product. If you’re on this webinar, you’ve probably heard that term. My favorite way to describe that is the smallest thing you can do/make to learn what you need to learn. It’s a tool for answering a specific question. People often say, “That’s not really the solution; that’s just a set of questions you’re answering or you’re building a test,” but I’ll give an example.
Let me just try to think of a quick one. I’ve worked on a workshop, people were trying to build a microgrid for Harlem in case of weather disturbance and also to build an alternative energy system in Harlem, New York. It turned out the most critical, most near-term thing they had to know was was it legal? Were you allowed to implement a microgrid in a city like New York City? You think, “Okay, the MVP is really simple. Let’s just go ask the decision-makers, the power regulators in New York, whether we can do that.” You think, “That’s not really a product is it? It’s just an interview; you’re just answering some questions,” but treating it like a product allows you to treat it as a rigorous step in the development of the bigger unit that you’re building, the overall project that you’re building.
But it is actually a product also. Think about what happens. After you’ve conducted that interview and you’ve had an approval from the regulators, they say, “Yeah, thanks for talking to us. I know you don’t have anything to show us yet, but we would approve the right kind of microgrid for Harlem.” That’s kind of a product actually. If you know, if you’ve got it locked in a can that it’s possible to legally do this, that’s a component of your product. You don’t have the permit yet, but you have a pretty good test of whether you can get a permit. So never underestimate just the power of even conversations or talking to your targets, talking to the people you want to impact and the importance of that in building what you’re trying to build, ultimately, even if you take small steps along the way.
The overall process of customer development – and I’m starting to run out of time, but you can find this in my book – discovery, validation, scaling and movement building. I’m not going to spend a lot of time on this, but this is a lot of what you’re doing… The whole canvas is used, really, in the first two boxes and the last two are really some different steps you take once you want to grow.
Let me just talk a little bit about what qualifies as an MVP. There are lots of types of MVPs, you can Google it, there are endless, creative MVPs. I’m going to go into all the details here, but you really want to find a way to feel as if the product already existed, to test behavior by your targets in a way that’s as real as possible. One of your targets is often funders and, no, maybe you can’t figure out if you’re going to get a $1 million check in six months, but you can figure out how long it takes them to return your phone call based on your idea. You can send out memos or emails and see how responsive they are.
Your first MVP might not be, “Did we get a check?”; it might be, “We are going to hypothesize that this is such a good idea that funders will meet with us within a month. Okay, let’s go ask six of them. Shoot, none of them want to meet. Gosh, the odds of getting a million-dollar check seem a lot smaller.” Or, “Yeah, they met with us right away. It looks good, it looks like we can take the next step and eventually iterate our way towards a proposal that they will fund.” There’s all kinds of fabulous ways of testing this stuff. Facebook offers a huge amount of them if you use it right. LinkedIn, Twitter, all those folks have all kinds of ways of engaging large numbers people with propositions that feel very real and ways that, short of the final product, simulate people’s interest and excitement about what you’re trying to do.
The key MVP, never be discouraged, is just listening. Get out of the building and talk to the people whose lives you want to change. Stop talking to each other, stop talking to your allies, stop talking to your partners; go talk to the people you want to work with. Go talk to your targets in a designed and intentional way and listen to the data they give you.
Let me talk a little bit on the institutional level and I’ll wrap up. Once you get into bigger organizations, you move into… This kind of process can go from being for a particular small piece of innovation, can be incorporated into the lifecycle of very big organizations. The core portfolio of an organization is often called the execution arm where they have business models that they move through that become a big part of their revenue or their impact, depending on whether it’s the social sector or the private sector, but it’s important for organizations to have an exploration or an innovation portfolio that they’re introducing ideas in, ejecting them, or moving them to maturity so they eventually become part of the execution engine, part of the core business or core business model or change model of the organization. They’re really, increasingly, conceptual models for how this kind of small-scale incremental innovation can be used in big organizations to scale and keep an organization healthy and vital.
There are also a lot of tools, like innovation accounting, which is really, in some sense, the Holy Grail. You want to get to the point where you’re in an organization that’s really testing, let’s say, five or six things at once and that you’re measuring the rate at which you test. Ultimately, the way that software companies grow fast and the world’s most innovative companies grow fast and, increasingly, the world’s most innovative social change activists grow fast is they don’t just test their hypotheses; they actually measure how fast they’re learning. Because using a rigorous system, like Lean, really forces you to rigorously say, “We wanted to open a summer program in six cities, and we opened a summer program in one city. It took us six months the first time. Now we want to go to six cities. What did we learn, through these experiments, about what some of the critical things were? How long did it take us to run the experiment, let’s say, that involved recruiting teachers in Chicago? Okay, we did that in four months last year. Look at our experiments, look at how we designed the recruitment process. Can we do it in two months? Can we stand up a new program faster?” By making learning rigorous and structured in this way, you can accelerate the speed at which you can innovate.
The best example I know of this is, unfortunately, still in the private sector. Intuit developed a new business. It used to take about three years for a new business idea, if a new business idea was going to be successful. By success, that means it would generate $50 million a year in revenue. It typically took three years to understand whether a new business at Intuit would make it to $50 million. Over the last decade, ending about five years ago, they got to this point, they reduced that time horizon to six months. Today at Intuit, they know whether a business is going to hit $50 million a year in six months down from three years. Think about how much of a competitive advantage it gives them to know how to prototype and run a business. That also can be true for social change work, that we learn about learning itself and that we change the curve that we’re learning on so that learning happens faster, growth happens faster, impact happens faster and bigger.
I think that’s my last slide for this show, so I have a few minutes to take questions. I may be interrupted, but let me just open it up. Thanks.
J: Michel, I want to thank you so much. This is Jacen Greene from Portland State University, one of your co-hosts here. I want to say that is the best description of an MVP I’ve heard and I’ve been teaching courses on Lean Startups for social innovation for years. I love the way you put that, “It’s a small thing you can do or make to learn what you need to learn, a tool for answering a specific question.” That actually gets around a lot of the hangups my students have around MVP like, “I can’t build an app right away,” or, “I can’t even build a mockup.” I love the way you put that where it’s just you’ve got that hypothesis, you just are going to test it in the easiest, fastest way possible.
B: We don’t have any questions right now, Michel, but I see you’ve got your contact information on there if they have questions. I’ll be putting out a link to the webinar and then we’ll resend out your contact information if someone does want to follow up with you. But again, also want to really thank you for your time and for sharing.
M: My pleasure. I hope I can make it up there sometime soon to chat with you all in person. There are, basically, training techniques about how to do MVPs that, obviously, I didn’t go into today, but in about 90 minutes, that can get you started pretty well usually.
B: We talked about maybe a live workshop where people could practice some techniques like that, so if people are interested in that, we can try to schedule something maybe later this year.
M: Okay, thanks a lot.
B: Thanks, everybody, for joining in and we’ll talk to you soon.