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Better by Measure: Value Creation (Class 2, SVA Products of Design 2014)

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Rebecca Gard Silver
Rebecca Gard Silver

What business models support the creation of value to civic society, the environment and human health? Better by Measure, a class from the Products of Design masters program at the School of Visual Arts (http://productsofdesign.sva.edu), explores how startups can build value by critically embracing civic, environmental, and human health challenges. The course is taught by Jen van der Meer (@jenvandermeer) and Rebecca Silver (@rgsilver). This presentation was adapted from Jen van der Meer's presentation for Big Apps: http://www.slideshare.net/JenvanderMeer/big-apps-am-i-for-or-non-profit

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BETTER BY MEASURE VALUE CREATION Class 2 | September 11, 2014 BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
OUTLINE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 2 BUSINESS MODEL CANVAS CRITIQUE BUSINESS SCHOOL: BETTER KNOW A BUSINESS MODEL TEAM ASSIGNMENTS CONCEPT GENERATION
BUSINESS MODEL CANVAS CRITIQUE STARTUPS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
BUSINESS SCHOOL BETTER KNOW A BUSINESS MODEL BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
FOR PROFIT, NON PROFIT OR SOMETHING ELSE? BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 5 V. $
YOU USED TO HAVE TO PICK A LANE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 6 $ FOR PROFIT MAKE MONEY NON PROFIT DO GOOD V. The social responsibility of corporations is to increase profits. Milton Friedman, 1970
NOW ITS A PARADOX OF CHOICE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 7 501 (c) 3 501 (c) 4 501 (c) 7 501 (c) 9 Social Enterprise Social Impact Social Business Sustainable Enterprise S Corp LLC C Corp B Corp Coop $
YOU NO LONGER HAVE TO CHOOSE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 8 $ NON PROFIT with sustainable revenues FOR PROFIT out to change the world $
KEY DIFFERENCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 9 $ NON PROFIT Defined to fulfill a mission Tax exempt Does not retain profits Does not distribute ownership Assets belong to organization Cant use funds other than to fulfill the mission for which it was formed FOR PROFIT Pays taxes on profit Can distribute ownership to employees and investors Assets belong to the owners Can have a capital exit, benefitting the owners of the company $
BOTH REQUIRE MONEY (& LOVE) TO SUSTAIN AND GROW BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 10 $ $ $ $ NON PROFIT with sustainable revenues FOR PROFIT out to change the world
$ FOR PROFIT BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 11
FOR PROFIT FUNDING SOURCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 12 $
FOR PROFIT FUNDING SOURCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 13 $
ARE YOU A STARTUP OR A SCALABLE STARTUP? A startup is a human institution designed to deliver a new product or service under BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 14 extreme uncertainty. Eric Ries A startup is a company designed to grow fast. Paul Graham, Y Combinator For a company to grow bit, it has to make something a lot of people want. To reach and serve all of those people. A startup is a temporary organization formed to search for a scalable repeatable business model. Steve Blank Most startups change their business model multiple times. A scalable startup is a special class of startup world class team, large vision, large target market, passionate belief and a reality distortion field.
STAGES OF INVESTMENT CAPITAL REQUIREMENTS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 15
NOT ALL NEW COMPANIES ARE GROWTH STARTUPS NEW COMPANIES FORMED IN 2012 Retail Store Service: Business Service 13% BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 16 Consulting 29% Services: Other 17% Technology: Internet 14% Real Estate 14% 13% Source: Kaufman foundation, Legal Zoom Startup Environment Index 2012
NOT ALL COMPANIES ARE GROWTH STARTUPS NEW COMPANIES FORMED IN 2012 Retail Store Service: Business Service 13% BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 17 Consulting 29% Services: Other 17% Technology: Internet 14% Real Estate 14% 13% Source: Kaufman foundation, Legal Zoom Startup Environment Index 2012
FOR PROFIT HYBRIDS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 18 SOCIAL ENTERPRISE: Social or environmental purpose, may be willing to limit scale opportunities to meet more local goals, or directly serve the need. B-CORPS: A type of social enterprise that also agrees to transparently share financial results. SOCIAL BUSINESSES (Yunnus): For profits that reinvest to meet a social need. SOCIAL IMPACT GROWTH: Aiming for scale and for social/environmental outcomes, and high growth returns to investors. Source: http://www.ssireview.org/articles/entry/ in_search_of_the_hybrid_ideal
$ NON PROFIT BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 19
NON PROFIT FUNDING SOURCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 20 $
NON PROFIT FUNDING SOURCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 21 $
SCALE IS ALL THE RAGE IN NON PROFITS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 22 The average founding year of the 10 largest U.S. non profits is 1903 Not for profits are one of the U.S.s fastest growing sectors, which grew 60% to more than 1MM organizations from 1999 to 2011 How more recent organizations got big: 1. Developed funding in one concentrated source rather than across diverse sources 2. Found a funding source that was a natural match to their mission and beneficiaries 3. Built a professional organization and structure around this funding model The jury is out on whether scaling organizations will translate into scaling impact. There is an emerging set of questions about how to scale links to local community engagement, which may be the linchpin of lasting social change. -Bridgespan Group Source: http://www.bridgespan.org/Publications-and-Tools/Funding-Strategy/Why-More-Nonprofits-Are-Getting-Bigger.aspx#.U6RblY1dU7s
WHERE THE MONEY COMES FROM SOURCES OF REVENUE FOR REPORTING PUBLIC CHARITIES, 2009 Fees for Services & Goods from Private Contributions 13% Government BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 23 Fees for Services & Goods from Private Sources 53% Other 2% Grants 9% Government 23% Source: The Nonprofit Sector in Brief, 2011. National Center for Charitable Statistics, The Urban Institute
STILL DONT KNOW WHICH WAY TO GO? BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 24 $ NON PROFIT with sustainable revenues FOR PROFIT out to change the world V. $ WHAT DO I DO FIRST?
WHERE TO START? CUSTOMER DISCOVERY BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 25 Lean startup, lean launchpad (the focus of the next few classes, and the approach in class) Form a hypothesis about how you will grow Define your total addressable market, or the size of your total addressable beneficiaries Business model canvas Validate your early hypothesis Test and learn
TEAM ASSIGNMENTS THE MOMENT OF RECKONING BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
THE PLATFORMS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 27
THE ACCELERATOR TEAMS May, George & Berk Eliz, Elisa & Heath Miguel, Lusha & Steve BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 28 Brandon, Andres & Lucy Lance, Julia & Vidhi [See us after class if to know whether we categorized you as a Maker, Mover Shaker or Marketer]
YOUR CHALLENGE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 29 This semester, each team will launch a growth startup Each startup will be designed to either leverage and build off the platform of the company youve been assigned (Uber etc.), or to disrupt the company youve been assigned (you will make this choice next week) Your startups will be designed to build economic value by critically embracing civic, environmental, and human health challenges
THE APPROACH Following Lean startup model: Hypothesis driven, customer centric business model, BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 30 rapid iteration, designed for growth Use measured impact assessment as lens to build business: Will evaluate scenarios for potential environmental, civic, and human health impacts your startup may create, and refine your business models to: Redefine impact as opportunity: Reframe potential impacts as opportunities to build stronger more resilient business models Create benefits: Create a demonstrable net positive impact to environmental, civic, and/or human health challenges Adapt: Be flexible to build for unforeseen consequences
CONCEPT GENERATION EXERCISE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
BRAINSTORM TIME YOU HAVE FIVE MINUTES (PER PROVOCATION) TO BRAINSTORM NEW BUSINESS MODELS BUILT OFF OF YOUR COMPANYS PLATFORM, WHICH: BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 32 1. Create as much EVIL as possible how could you destroy civic society, the environment and human health at the same time? 1. Would make money THIS WEEKEND (aka in two days) what could you get up and running right away and how?
HOMEWORK FIVE CONCEPTS BETTER BY MEASURE | WEEK 1: 2: SEPTEMBER 4, 11, 2014 2014
HOMEWORK BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 34 FIVE NEW START-UP CONCEPTS (PER TEAM) PRESENT VALUE PROPOSITION FOR EACH CONCEPT SUBMIT TO CLASS DROPBOX FOLDER BY 4PM NEXT THURSDAY READINGS: All about disruption Reading: The Disruption Machine http://www.newyorker.com/magazine/2014/06/23/the-disruption- machine Reading: Clayton Christensen Responds to New Yorker Takedown of 'Disruptive Innovation' http://www.businessweek.com/articles/2014-06-20/clayton-christensen-responds- to-new-yorker-takedown-of-disruptive-innovation
FOLLOW THE CLASS UPDATES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 35 PRESENTATIONS: http://www.slideshare.net/Silvereb

More Related Content

Better by Measure: Value Creation (Class 2, SVA Products of Design 2014)

  • 1. BETTER BY MEASURE VALUE CREATION Class 2 | September 11, 2014 BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
  • 2. OUTLINE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 2 BUSINESS MODEL CANVAS CRITIQUE BUSINESS SCHOOL: BETTER KNOW A BUSINESS MODEL TEAM ASSIGNMENTS CONCEPT GENERATION
  • 3. BUSINESS MODEL CANVAS CRITIQUE STARTUPS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
  • 4. BUSINESS SCHOOL BETTER KNOW A BUSINESS MODEL BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
  • 5. FOR PROFIT, NON PROFIT OR SOMETHING ELSE? BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 5 V. $
  • 6. YOU USED TO HAVE TO PICK A LANE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 6 $ FOR PROFIT MAKE MONEY NON PROFIT DO GOOD V. The social responsibility of corporations is to increase profits. Milton Friedman, 1970
  • 7. NOW ITS A PARADOX OF CHOICE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 7 501 (c) 3 501 (c) 4 501 (c) 7 501 (c) 9 Social Enterprise Social Impact Social Business Sustainable Enterprise S Corp LLC C Corp B Corp Coop $
  • 8. YOU NO LONGER HAVE TO CHOOSE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 8 $ NON PROFIT with sustainable revenues FOR PROFIT out to change the world $
  • 9. KEY DIFFERENCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 9 $ NON PROFIT Defined to fulfill a mission Tax exempt Does not retain profits Does not distribute ownership Assets belong to organization Cant use funds other than to fulfill the mission for which it was formed FOR PROFIT Pays taxes on profit Can distribute ownership to employees and investors Assets belong to the owners Can have a capital exit, benefitting the owners of the company $
  • 10. BOTH REQUIRE MONEY (& LOVE) TO SUSTAIN AND GROW BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 10 $ $ $ $ NON PROFIT with sustainable revenues FOR PROFIT out to change the world
  • 11. $ FOR PROFIT BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 11
  • 12. FOR PROFIT FUNDING SOURCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 12 $
  • 13. FOR PROFIT FUNDING SOURCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 13 $
  • 14. ARE YOU A STARTUP OR A SCALABLE STARTUP? A startup is a human institution designed to deliver a new product or service under BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 14 extreme uncertainty. Eric Ries A startup is a company designed to grow fast. Paul Graham, Y Combinator For a company to grow bit, it has to make something a lot of people want. To reach and serve all of those people. A startup is a temporary organization formed to search for a scalable repeatable business model. Steve Blank Most startups change their business model multiple times. A scalable startup is a special class of startup world class team, large vision, large target market, passionate belief and a reality distortion field.
  • 15. STAGES OF INVESTMENT CAPITAL REQUIREMENTS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 15
  • 16. NOT ALL NEW COMPANIES ARE GROWTH STARTUPS NEW COMPANIES FORMED IN 2012 Retail Store Service: Business Service 13% BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 16 Consulting 29% Services: Other 17% Technology: Internet 14% Real Estate 14% 13% Source: Kaufman foundation, Legal Zoom Startup Environment Index 2012
  • 17. NOT ALL COMPANIES ARE GROWTH STARTUPS NEW COMPANIES FORMED IN 2012 Retail Store Service: Business Service 13% BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 17 Consulting 29% Services: Other 17% Technology: Internet 14% Real Estate 14% 13% Source: Kaufman foundation, Legal Zoom Startup Environment Index 2012
  • 18. FOR PROFIT HYBRIDS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 18 SOCIAL ENTERPRISE: Social or environmental purpose, may be willing to limit scale opportunities to meet more local goals, or directly serve the need. B-CORPS: A type of social enterprise that also agrees to transparently share financial results. SOCIAL BUSINESSES (Yunnus): For profits that reinvest to meet a social need. SOCIAL IMPACT GROWTH: Aiming for scale and for social/environmental outcomes, and high growth returns to investors. Source: http://www.ssireview.org/articles/entry/ in_search_of_the_hybrid_ideal
  • 19. $ NON PROFIT BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 19
  • 20. NON PROFIT FUNDING SOURCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 20 $
  • 21. NON PROFIT FUNDING SOURCES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 21 $
  • 22. SCALE IS ALL THE RAGE IN NON PROFITS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 22 The average founding year of the 10 largest U.S. non profits is 1903 Not for profits are one of the U.S.s fastest growing sectors, which grew 60% to more than 1MM organizations from 1999 to 2011 How more recent organizations got big: 1. Developed funding in one concentrated source rather than across diverse sources 2. Found a funding source that was a natural match to their mission and beneficiaries 3. Built a professional organization and structure around this funding model The jury is out on whether scaling organizations will translate into scaling impact. There is an emerging set of questions about how to scale links to local community engagement, which may be the linchpin of lasting social change. -Bridgespan Group Source: http://www.bridgespan.org/Publications-and-Tools/Funding-Strategy/Why-More-Nonprofits-Are-Getting-Bigger.aspx#.U6RblY1dU7s
  • 23. WHERE THE MONEY COMES FROM SOURCES OF REVENUE FOR REPORTING PUBLIC CHARITIES, 2009 Fees for Services & Goods from Private Contributions 13% Government BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 23 Fees for Services & Goods from Private Sources 53% Other 2% Grants 9% Government 23% Source: The Nonprofit Sector in Brief, 2011. National Center for Charitable Statistics, The Urban Institute
  • 24. STILL DONT KNOW WHICH WAY TO GO? BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 24 $ NON PROFIT with sustainable revenues FOR PROFIT out to change the world V. $ WHAT DO I DO FIRST?
  • 25. WHERE TO START? CUSTOMER DISCOVERY BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 25 Lean startup, lean launchpad (the focus of the next few classes, and the approach in class) Form a hypothesis about how you will grow Define your total addressable market, or the size of your total addressable beneficiaries Business model canvas Validate your early hypothesis Test and learn
  • 26. TEAM ASSIGNMENTS THE MOMENT OF RECKONING BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
  • 27. THE PLATFORMS BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 27
  • 28. THE ACCELERATOR TEAMS May, George & Berk Eliz, Elisa & Heath Miguel, Lusha & Steve BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 28 Brandon, Andres & Lucy Lance, Julia & Vidhi [See us after class if to know whether we categorized you as a Maker, Mover Shaker or Marketer]
  • 29. YOUR CHALLENGE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 29 This semester, each team will launch a growth startup Each startup will be designed to either leverage and build off the platform of the company youve been assigned (Uber etc.), or to disrupt the company youve been assigned (you will make this choice next week) Your startups will be designed to build economic value by critically embracing civic, environmental, and human health challenges
  • 30. THE APPROACH Following Lean startup model: Hypothesis driven, customer centric business model, BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 30 rapid iteration, designed for growth Use measured impact assessment as lens to build business: Will evaluate scenarios for potential environmental, civic, and human health impacts your startup may create, and refine your business models to: Redefine impact as opportunity: Reframe potential impacts as opportunities to build stronger more resilient business models Create benefits: Create a demonstrable net positive impact to environmental, civic, and/or human health challenges Adapt: Be flexible to build for unforeseen consequences
  • 31. CONCEPT GENERATION EXERCISE BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014
  • 32. BRAINSTORM TIME YOU HAVE FIVE MINUTES (PER PROVOCATION) TO BRAINSTORM NEW BUSINESS MODELS BUILT OFF OF YOUR COMPANYS PLATFORM, WHICH: BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 32 1. Create as much EVIL as possible how could you destroy civic society, the environment and human health at the same time? 1. Would make money THIS WEEKEND (aka in two days) what could you get up and running right away and how?
  • 33. HOMEWORK FIVE CONCEPTS BETTER BY MEASURE | WEEK 1: 2: SEPTEMBER 4, 11, 2014 2014
  • 34. HOMEWORK BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 34 FIVE NEW START-UP CONCEPTS (PER TEAM) PRESENT VALUE PROPOSITION FOR EACH CONCEPT SUBMIT TO CLASS DROPBOX FOLDER BY 4PM NEXT THURSDAY READINGS: All about disruption Reading: The Disruption Machine http://www.newyorker.com/magazine/2014/06/23/the-disruption- machine Reading: Clayton Christensen Responds to New Yorker Takedown of 'Disruptive Innovation' http://www.businessweek.com/articles/2014-06-20/clayton-christensen-responds- to-new-yorker-takedown-of-disruptive-innovation
  • 35. FOLLOW THE CLASS UPDATES BETTER BY MEASURE | WEEK 2: SEPTEMBER 11, 2014 35 PRESENTATIONS: http://www.slideshare.net/Silvereb

Editor's Notes

  • #16: http://www.venturegiant.com/news-channel-396-when-should-an-entrepreneur-start-looking-for-investors.aspx
  • #17: Source: Kaufman foundation, Legal Zoom Startup Environment Index 2012