Ben Gose in the Chronicle of Philanthropy: “A year ago, a division of TechSoup Global began working on an app to allow donors to buy a hotel room for victims of domestic violence when no other shelter is available. Now that app is a finalist in a competition run by a foundation that combats human trafficking—and a win could mean a grant worth several hundred thousand dollars. The app’s evolution—adding a focus on sex slaves to the initial emphasis on domestic violence—was hardly accidental.
Caravan Studios, the TechSoup division that created the app, has embraced a new management approach popular in Silicon Valley known as “lean start-up.”
The principles, which are increasingly popular among nonprofits, emphasize experimentation over long-term planning and urge groups to get products and services out to clients as early as possible so the organizations can learn from feedback and make changes.
When the app, known as SafeNight, was still early in the design phase, Caravan posted details about the project on its website, including applications for grants that Caravan had not yet received. In lean-start-up lingo, Caravan put out a “minimal viable product” and hoped for feedback that would lead to a better app.
Caravan soon heard from antitrafficking organizations, which were interested in the same kind of service. Caravan eventually teamed up with the Polaris Project and the State of New Jersey, which were working on a similar app, to jointly create an app for the final round of the antitrafficking contest. Humanity United, the foundation sponsoring the contest, plans to award $1.8-million to as many as three winners later this month.
Marnie Webb, CEO of Caravan, which is building an array of apps designed to curb social problems, says lean-start-up principles help Caravan work faster and meet real needs.
“The central idea is that any product that we develop will get better if it lives as much of its life as possible outside of our office,” Ms. Webb says. “If we had kept SafeNight inside and polished it and polished it, it would have been super hard to bring on a partner because we would have invested too much.”….
Nonprofits developing new tech tools are among the biggest users of lean-start-up ideas.
Upwell, an ocean-conservation organization founded in 2011, scans the web for lively ocean-related discussions and then pushes to turn them into full-fledged movements through social-media campaigns.
Lean principles urge groups to steer clear of “vanity metrics,” such as site visits, that may sound impressive but don’t reveal much. Upwell tracks only one number—“social mentions”—the much smaller group of people who actually say something about an issue online.
After identifying a hot topic, Upwell tries to assemble a social-media strategy within 24 hours—what it calls a “minimum viable campaign.”
“We do the least amount of work to get something out the door that will get results and information,” says Rachel Dearborn, Upwell’s campaign director.
Campaigns that don’t catch on are quickly scrapped. But campaigns that do catch on get more time, energy, and money from Upwell.
After Hurricane Sandy, in 2012, a prominent writer on ocean issues and others began pushing the idea that revitalizing the oyster beds near New York City could help protect the shore from future storm surges. Upwell’s “I (Oyster) New York” campaign featured a catchy logo and led to an even bigger spike in attention.
‘Build-Measure-Learn’
Some organizations that could hardly be called start-ups are also using lean principles. GuideStar, the 20-year-old aggregator of financial information about charities, is using the lean approach to develop tools more quickly that meet the needs of its users.
The lean process promotes short “build-measure-learn” cycles, in which a group frequently updates a product or service based on what it hears from its customers.
GuideStar and the Nonprofit Finance Fund have developed a tool called Financial Scan that allows charities to see how they compare with similar groups on various financial measures, such as their mix of earned revenue and grant funds.
When it analyzed who was using the tool, GuideStar found heavy interest from both foundations and accounting firms, says Evan Paul, GuideStar’s senior director of products and marketing.
In the future, he says, GuideStar may create three versions of Financial Scan to meet the distinct interests of charities, foundations, and accountants.
“We want to get more specific about how people are using our data to make decisions so that we can help make those decisions better and faster,” Mr. Paul says….
Lean Start-Up: a Glossary of Terms for a Hot New Management Approach
Build-Measure-Learn
Instead of spending considerable time developing a product or service for a big rollout, organizations should consider using a continuous feedback loop: “build” a program or service, even if it is not fully fleshed out; “measure” how clients are affected; and “learn” by improving the program or going in a new direction. Repeat the cycle.
Minimum Viable Product
An early version of a product or service that may be lacking some features. This approach allows an organization to obtain feedback from clients and quickly determine the usefulness of a product or service and how to improve it.
Get Out of the Building
To determine whether a product or service is needed, talk to clients and share your ideas with them before investing heavily.
A/B Testing
Create two versions of a product or service, show them to different groups, and see which performs best.
Failing Fast
By quickly realizing that a product or service isn’t viable, organizations save time and money and gain valuable information for their next effort.
Pivot
Making a significant change in strategy when the early testing of a minimum viable product shows that the product or service isn’t working or isn’t needed.
Vanity Metrics
Measures that seem to provide a favorable picture but don’t accurately capture the impact of a product. An example might be a tally of website page views. A more meaningful measure—or an “actionable metric,” in the lean lexicon—might be the number of active users of an online service.
Sources: The Lean Startup, by Eric Ries; The Ultimate Dictionary of Lean for Social Good, a publication by Lean Impact”