Earlier this week in the part three of this series on Making Impact Work for Startups, we discussed how to track your progress: iKPIs and measuring impact—this post is part four. To see the entire playbook with a full background on using Founder Institute's For Progress impact metrics framework, we recommend you start at part one.
If you're an impact startup founder, enter your 1-minute pitch video at PitchForProgress.com by May 28th for a chance to pitch live to impact investors in the July online Demo Day event + win prizes!
Background
Startups tend to look at existing markets for their product, rather than the potential markets that could benefit from their solution but lack the means, access, resources, or knowledge to connect with the product.
This is ingrained in startup culture. How-to guides tell founders to focus on their "ideal" customer, not necessarily those who could benefit most from the product or technology. Think about how you are determining the target market for your product. Are you asking yourself who needs your solution, or who needs it and has the means to reach it?
What are your assumptions when it comes to your market and product, and who might this cut out of the equation at the offset? One big assumption today is that our customers will be digitally connected, with a smartphone and internet access.
These assumptions can become self-fulfilling prophecies. For example: assuming your customers are mobile means you will market your product via mobile devices. These people will become the only ones exposed to your business, and therefore most of your customers will be mobile. The cycle reinforces itself, and can lead to the exclusion of other potential markets.
Action Points
Look at the shortcomings and blindspots within your industry, not just your existing customers or existing routes for taking a similar product to market. Think of your startup journey until now, and how you have iterated your product, and what obstacles you may inadvertently have raised for other potential customer segments in the future. Who has your product been built to service? Are they the only ones who actually need your product?
One way to understand this might be to suspend all financial dimensions of your business, and simply imagine a scenario in which your product is free to use and openly accessible, and where everyone on Earth possesses the knowledge and means to utilize it. In this scenario, who else is avidly using your product, that is not readily able to do so in your real world go-to-market reality?
Finally, consider what elements of your product can be modified to better cater to potential customer segments that would otherwise be less able to utilize it. Thinking for a while about the potential for such additional customer segments may affect how you decide to focus in your future product development or go-to-market strategy.
Case Study Example 1: Fairly AI
- Fairly AI (FI Toronto) is a tool for organizations to audit their artificial intelligence (AI) systems across business units to eliminate biases, protect privacy, and ensure the transparency of automated decision-making.
- This company offers a case study in the need to look at the market/customer’s actual use cases, in order to derive the aligned iKPI. This is because the core technology itself does not confer SDG alignment in and of itself, in this case, the checking of data sets or auditing of ML algorithmic outputs alone, has little inherent SDG alignment.
- However, the actual value of Fairly AI’s product is eliminating errors—errors that if left unchecked, can create algorithmically-learned biases, which can have harmful real-world human consequences. Quantifying that impact is very clearly SDG aligned—that is, biases eliminated from AI protocols, or from the data sets that train them, can create reverberating positive impact on the lives of those affected by the decisions of such AI applications - which increasingly, is all of us.
- Fairly AI analyzes entire systems for potential biases in processes and internal compliances. The impetus for building this Regulatory Technology came directly from the founders looking at new needs in a rapidly-developing AI market. Co-founders Fion Lee-Madan and David Van Bruwaene are both deep domain experts, who saw that AI biases are not only real, but also preventable through screening of ML systems. Knowing that there is a strong ethical need to correct these biases, regardless of future legal requirements to address them, showed the need is urgent for solutions that can be deployed now, from within product development teams using new AI systems. While individual customer use cases present potential for alignment across practically any of the SDGs, generally iKPIs would seem to align clearly with UN Sustainable Development Goal #10, Reduced Inequalities.
Case Study Example 2: Fohat
- Fohat (FI Curitiba) - is a blockchain-based Energy Trading Platform for markets integrating energy production sources.
- Fohat offers a clear example of how a company’s specific market or customer use case may be needed to provide the context for assigning an iKPI metric. In this case, a blockchain-based tracking system or smart contract execution platform, alone, would offer little indication for a clear SDG-aligned metric.
- However, realizing that smart ledger platform is used solely for the trading of energy, and primarily the cleantech deployment of low or zero-carbon energy sources in many underdeveloped areas, like new microgrid and alternative energies, the iKPI alignment suddenly becomes clearer.
- The company’s solution ensures the balanced control of ongoing power generation assets in arrangements like local microgrids and virtual power plants, as well as provides ancillary services and process management for energy providers. The market use-case points clearly then toward iKPIs under the category of UN SDG #7, Affordable and Clean Energy.
Next in this series on Implementing iKPIs and making impact work for startups, we explore how to leverage your team towards continuing impact momentum and accountability—because getting your team engaged at the outset is one thing, but maintaining that activity will be critical to keeping your progress sustainable.
Making Impact Work for Startups: the iKPI Playbook
In 2015, the UN released 17 Sustainable Development Goals (SDGs), an urgent call for governments, businesses, and organizations to align efforts towards “a shared blueprint for peace and prosperity for people and the planet.” As business leaders, it is past time to assume our share of this indispensable responsibility. We cannot rely solely on governments and large organizations to act without our support.
The biggest problems of humanity can and must be solved by entrepreneurs, who are currently the most effective catalysts for change in the world. We are therefore calling on entrepreneurs to form “Impact Companies” that address SDGs such as eradicating extreme poverty, ending world hunger, and achieving gender equality. To be successful, we believe entrepreneurs should weave sustainability into a concept we all understand - KPIs. That’s why we’ve come up with “impact” KPIs, or iKPIs.
The Founder Institute has put together a free Progress Planner tool to search and generate iKPIs, as well as a playbook for startup founders to work towards becoming an Impact Company through realistic, trackable steps. To help guide entrepreneurs, we will provide supporting resources, including practical iKPI recommendations, real-life applications and metrics, and example case studies, through 10 key steps - this post is #4 in that 10-part series.
The Founder Institute believes we cannot rely solely on governments and big organizations to fix the world's problems - the time is now for entrepreneurs to also do their part.
Use our free For Progress planner to search iKPIs (Impact Key Performance Indicators) by keyword, or browse iKPIs by the 17 UN Sustainable Development Goals. Don't be intimidated by seemingly impossible impact metrics - instead, find specific SDGs that your business can positively influence.
Try the Progress Planner tool at FI.co/Progress, or learn more startup impact initiatives across the FI global network at FI.co/Impact.
