Lean Startups for Social Change: The Revolutionary Path to Big Impact

By Michel Gelobter

For years, the lean startup has been revolutionizing both new and established businesses. In this eye-opening book, serial social entrepreneur Michel Gelobter shows how it can do the same for nonprofits.

Traditionally, whether creating a new business or a new program, entrepreneurs in all sectors develop a plan, find money to fund it, and pursue it to its conclusion. The problem is, over time conditions can change drastically—but you're locked into your plan. The lean startup is all about agility and flexibility. Its mantra is “build, measure, learn”: create small experimental initiatives, quickly get real-world feedback on them, and use that data to expand what works and discard what doesn't.

Using dozens of social sector examples, Gelobter walks you through the process. The standard approach wastes time and money. The lean startup will help your organization vastly increase the good it does.

• Language: English
• Publisher: Berrett-Koehler Publishers, Inc.
• Release date: Nov 2, 2015
• ISBN: 9781626561519

Michel Gelobter

Michel Gelobter is the founder and chairman of Cooler Inc., a for-profit social venture that helps businesses and consumers reduce greenhouse gas pollution. He was formerly director of environmental quality for New York City, director of the Program on Environmental Policy at Columbia University, CEO of Redefining Progress, a cofounder of BuildingEnergy.com, chief green officer for Hara, and senior advisor to the Packard Foundation.

Book preview

Lean Startups for Social Change

Lean Startups for Social Change

The Revolutionary Path to Big Impact

MICHEL GELOBTER

Foreword by Steve Blank

Introduction by Christie George

Lean Startups for Social Change

Copyright © 2015 by Michel Gelobter

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First Edition

Paperback print edition ISBN 978-1-62656-149-6

PDF e-book ISBN 978-1-62656-150-2

IDPF e-book ISBN 978-1-62656-151-9

2015-1

Project management, design, and composition by Steven Hiatt, Hiatt & Dragon, San Francisco. Copyeditor: Steven Hiatt. Proofreader: Tom Hassett. Cover designer: Irene Morris.

To Nathan, Marco, and Troy

Maybe it is a better idea to let our lives teach us what to believe instead of making our lives conform to our beliefs.

Barbara Brown Taylor

Sermon, Riverside Church, July 14, 2013

Contents

Foreword by Steve Blank

Introduction by Christie George

1   Making Change the 21st-Century Way

2   Lean Principles and Process

3   The Difference a Sector Makes: Lean Startups for Profit versus for Social Change

4   Discovery I: The Nine Guesses

5   Discovery II: Get Ready, Get Set …

6   Discovery III: Get Out of the Building!

7   Discovery IV: Pivot, Proceed, or Quit

8   Validation I: Get Ready to Get Big

9   Validation II: Priming the Pump

10 Validation III: Keep + Grow = Scale

11 Creation: Scaling Impact

12 Institutionalization: Building the Lean Organization

Conclusion: Lean Change and the Choices Ahead

Resources: Sample Lean Change Canvases

Bibliography

Acknowledgments

Index

About the Author

Foreword

For over two decades, I worked in startups creating new products. When I retired and had to reflect on how new ventures were built, I realized that there was a more efficient way to use startup money, resources, and time. I developed a process called Customer Development and helped found a movement that embodied its core practices—The Lean Startup. This approach to innovation, along with business model design and agile development, are today transforming business as we have known it.

With this book, Lean Startups for Social Change, Michel Gelobter brings this powerful toolkit to the social sector.

The social sector has to keep up with, and in some cases outpace, changes in private markets to protect the noncommercial values and assets that form the bedrock of all we care about.

This book covers the core practices of the Lean Startup—how experimentation should supplant detailed planning, the critical practice of listening to customers (or targets in social-sector speak), and agility—while showing how nonprofit and government organizations can embrace these processes.

Innovation is vital to both the social sector and business, but the two do not operate, and therefore do not innovate, in the same way. Michel provides in-depth stories, examples, and tools to bridge these methods of innovation, relying on his years of experience in each of the relevant sectors—business, government, and nonprofit—to do so.

Michel and I met through our shared interest in the environment. He moved from social entrepreneurship to software entrepreneurship in the mid-2000s and contacted me to help with his first company. I went in the other direction. After I retired I started serving on nonprofit boards as chairman of Audubon California and then as a public official on the California Coastal Commission.

While I’ve helped accelerate innovation over the last three decades, I share with Michel a desire to repair the world we live in and to pass on to future generations a place with the same opportunities and beauty.

We must all learn to innovate, to change, to preserve what we most care about. With this book, Michel has made an invaluable contribution to that task.

Steve Blank

Pescadero, California

Introduction

What if we were building solutions that we knew worked rather than spending months or even years planning and simply hoping for the best? What kinds of problems could we solve? How many lives could we change? As the director of an investment fund focused on startups with social impact, I think about these kinds of questions all the time.

In 2011, the epilogue to Eric Ries’s The Lean Startup suggested that an ultimate outcome of lean startup practice would be the creation of new institutions with a long-term mission to build sustainable value and change the world for the better. The idea was to make new businesses that would build a better world.

Of course, the world is full of groups that already have that mission: nonprofits, government agencies, and organizations devoted to social change. Five years after the publication of The Lean Startup, I’m excited to introduce a book devoted entirely to them. Since The Lean Startup was first published, a thriving ecosystem of organizations and investors has emerged that’s committed to learning how to make the social sector more effective through lean startup principles.

What is refreshing about social innovation is the scope and importance of the challenges being tackled. We’re not simply optimizing to sell more widgets. Rather, social sector entrepreneurs are applying their creative energy and rigorous analysis to some of the world’s most entrenched problems—problems that have persisted precisely because they resist easy solutions. This also means that we’re solving problems that are too important to be left to the inertia of what we’ve always done and too vital to be addressed only with good intentions.

This is precisely what encourages me about this moment and about Michel’s book. What the lean startup offers the social sector is a rigorous methodology to test new ways of solving problems. It provides organizations with a framework to quickly test new ideas and validate those that might be most effective. Critically, it saves social innovators our most valuable resource: time. Applying the lean startup methodology to social change allows for fresh experimentation that could transform society in ways that traditional social and business institutions may have overlooked or been afraid to try in the past. Lean startup thinking encourages us to get out of our heads and to test our proposed solutions in the real world to actually create massive, transformative social change.

When The Lean Startup was first published in 2011 the applicability of lean principles to the social sector was not yet as apparent as it is now. Early meetups were sparsely attended, and people expressed doubts that a business methodology could be applied to the social sector.

Fast-forward a couple of years, and we’ve seen everything from dedicated convenings on Lean Impact to a track for social innovators at the main Lean Startup conference. Most important, I’ve seen powerful examples of social change organizations applying lean principles to critical, world-changing work. Within our own portfolio at New Media Ventures, online organizing groups like SumofUs, activists for corporate accountability, are relentlessly focused on experimentation, routinely testing dozens of campaigns with their members before deciding—through evidence—which to focus on. Upworthy, one of New Media Ventures’ early for-profit mission coinvestments, itself started as an experiment and has since been hailed as one of the fastest-growing media startups of all time. Upworthy’s curators famously come up with twenty-five headlines for each piece of content they propose, alternatives that they can then test precisely to find out which headlines hook an audience.

We simply need more. We need more change and more progress, and we need more social sector organizations being effective agents of change. Finally, we need more specific examples of lean startup in practice in the social sector. This is where Michel’s book comes in, and it provides a great start focused exclusively on nonprofit organizations and government agencies.

The task now is to scale the practice of lean startup in the social sector, but how do we go about doing that? It’s not enough to highlight the work of social entrepreneurs. Funders play a critical role in advancing the cause. Some are eager to understand how to integrate lean’s focus on serving real needs in a measurable way. Others are risk averse by design. Funders in government and private philanthropy are stewards of limited resources, and it can feel safer to support things that have proved effective rather than innovations that might simply fail fast.

But I would suggest that the biggest risk funders face is not having enough impact. We’re going to need to change the way we fund social sector organizations if we’re to maximize our impact as funders. Because of its laser focus on measurement and experimentation (and, as Michel points out, service to those most in need of it), lean startup can actually provide the validated learning funders need to make better decisions every day about how best to spend their resources. Lean startup offers a way to elicit evidence of demand for specific solutions before a lot of money is spent.

Applying lean startup principles to the social sector or to the funding of social change is not without its challenges. Transformative social change can take a long time. Quick fixes and easy solutions are rarely available. Seemingly successful short-term solutions may have adverse long-term consequences, and when social change experiments fail, we fail real people in need. We all need to start sharing examples of what lean learning looks like in practice and destigmatize taking near-term risks to keep the focus on long-term benefits. I hope this book catalyzes honest conversations around these challenges and spurs us as a community to find creative solutions to address them.

Overall, a thriving culture of lean within the impact entrepreneur and funder communities could accelerate social change by removing taboos around experimentation and failure. If we can truly embrace the value of learning what works, then the social sector may be happily surprised by completely new innovative solutions that become widely adopted much more quickly than the forced models of the past.

Great nonprofits and great government agencies are not like great businesses. They are, first and foremost, effective agents of social change and uplift of the kind we all hope to be part of. With this book and with the growing lean startup community, we may be getting closer to that better world after all.

Christie George

San Francisco

1

Making Change the 21st-Century Way

Making change is hard—even before you start making it.

Whether you’re in a big government agency, you’re confronting a problem in your own community, or you’re just trying to make a difference in a few people’s lives, getting started is a challenge. You convene meetings, make plans, find partners, agonize over the right approach, cajole donors or funding agencies, compromise. You build a model that a lot of people sign on to, you secure funding, and you get started.

The stakes are especially high for making change in the social sector because failure is often not an option. In contrast with the private sector, social innovation requires something harder to get than money—it takes political and social will. If an innovation fails to deliver a vital product or service the momentum required to try again is often dissipated for years.

Aware of these stakes, the team you’ve assembled is working from a playbook you’ve painstakingly built, but you launch into a world that hasn’t seen anything like this before. A new community forms around the idea. There’s an excitement about the change that will come, an anticipation of the start, dreams about the middle and the end, about the time when the world, in some measure, will be a better place. Whether it’s a new childcare center, an advocacy campaign to shut down a polluter, a trade association for dog trainers, or literally a new way of getting trains to run on time, a lot of work goes into gathering the energy and good will to get started.

And starting is when the real trouble begins. Sometimes the change you hoped to make actually happens, but, more often than not, there’s a hard road ahead for your initial vision to actually manifest or for the change you hoped for to be big enough to make a difference. You work with the risk that all the planning and good will has been for naught.

To the founding team this process feels unique, but it is in fact the pattern of much innovation in business, government, and the social sector. It takes a tremendous amount of personal, social, and financial capital to get an idea off the ground, but all too often when the initial plan meets the real world the results are nothing like those anticipated.

Just over a decade ago, a revolutionary way to make change emerged from Silicon Valley: the lean startup. Companies were starting and failing so quickly that the startup pattern no longer felt unique. The lean startup alternative bypassed the freight of a plan and securing social and political capital behind it to focus on where the change actually has to happen and where the best-laid plans almost always run into trouble: in their direct encounter with customers.

The Lean Startup for Social Change

The lean startup turns the traditional, process-heavy approach to innovation on its head. It replaces detailed planning, consensus-building, and fundraising for something you aren’t quite sure will work with speed, experimentation, and direct interaction with the people you are trying to reach. Initially the purview of software startups, the lean startup has jumped the fence to some of the world’s largest companies, including Facebook, Google, and General Electric. Lean startup techniques are how these companies now regularly serve billions of people.

Social change advocates as well as a wide variety of traditional nonprofits and government agencies have also started adopting some lean startup techniques. The Obama administration launched the General Services Administration’s 18F and then the broader US Digital Service to upend how the federal government delivers services. Mott Hall Bridges middle school in New York City’s Brownsville neighborhood endowed a program fully in less than a week (and ultimately raised more money than it needed) to overcome the systemic bias that keeps qualified low-income kids out of the best colleges. Invisible Children, a faith-based student organization, reached tens of millions of people in one week to raise awareness of war crimes in Africa. By using the lean startup model for social change, these efforts delivered