As the lead of the startup studio program at build3, I’m constantly concerned about the actual impact we generate. We claim to help build startups that better the mind, body or planet, but are we just tooting our own horn, or are we making strides in fulfilling our purpose?
Defining and measuring social impact is particularly hard for early-stage startups. Early-stage startups generally race to achieve product-market fit. As a result, there are many moving pieces in the early stages of a startup’s journey. Therefore, consistently tracking impact metrics is an arduous task. Additionally, investor pressure, the complexity of social issues, and limited resources hinder an early-stage startup from prioritising social impact.
On the flip side, there are multiple benefits for startups that can successfully define and measure their social impact goals in the early stages of their development. Startups that can communicate their impact goals effectively can -
Communicate the value they provide to various stakeholders.
Make data-driven decisions to maximise their impact.
Better align the work they are doing with their mission and purpose.
As a sherpa, I have always looked for frameworks that help early-stage startups align with the UN SDGs (Sustainable Development Goals). While researching, I stumbled upon the Impact Management Project (IMP), which seemed well-suited to define and measure a startup’s impact.
According to IMP, the impact can either be positive or negative. An organisation moves towards collective well-being if its net positive impact outweighs its negative impact.
The Impact Management Project (IMP) Framework provides a standard approach to measuring and managing impact. It includes five dimensions of impact: what, who, how much, contribution, and risk. The framework is designed to help startups and other organisations align their work with the SDGs and measure their impact.
Here’s a brief overview of each dimension and how it can be implemented:
What: To implement this dimension, the startup should define the outcomes it is trying to achieve and identify the indicators that will be used to measure progress towards those outcomes. For example, suppose a startup is working to reduce greenhouse gas emissions. In that case, it might define the outcome as a reduction in emissions by a certain percentage and use indicators such as energy consumption and carbon emissions to measure progress towards that outcome.
Who: To implement this dimension, the startup should identify its stakeholders and understand their needs and priorities. This can be done through stakeholder engagement activities such as surveys, interviews, and focus groups. For example, suppose a startup is working to improve access to healthcare in a particular community. In that case, it might identify stakeholders such as patients, healthcare providers, and community organisations and engage with them to understand their needs and priorities.
How much: This can be done by defining the startup’s theory of change, which outlines how the startup’s activities will lead to the desired outcomes. For example, suppose a startup is working to improve access to clean water in a particular region. In that case, it might define its theory of change as follows: by providing water filters to households in the region, it will improve access to clean water and reduce waterborne diseases.
Contribution: To implement this dimension, the startup should identify the relevant SDGs and targets and articulate how its work contributes to those goals. This can be done through a theory of change or logic model that outlines the startup’s activities and how they lead to the desired outcomes. For example, suppose a startup is working to improve access to education in a particular community. In that case, it might identify SDG 4 (quality education) as the relevant goal and articulate how its work contributes to achieving that goal.
Risk: To implement this dimension, the startup should identify the risks and challenges most relevant to its work and develop strategies to mitigate them. This can be done through a risk management plan outlining potential risks and challenges and identifying strategies to address them. For example, suppose a startup is working to improve access to healthcare in a particular community. In that case, it might identify risks such as inadequate funding, lack of community support, and regulatory barriers and develop strategies to mitigate them.
Looking for support in building your next big idea? Contact us today. Know more about build3 at www.build3.org or write to us at firstname.lastname@example.org. We also run a CVC program for manufacturing and engineering startups, you can read more about it at www.pennarbuild3.com