There lies a contradiction at the heart of the impact space. In order to know if your intervention is creating impact, the impact itself must be measured and compared to a world without your solution.
Yet in a space where time, capital and other resources are scarce, it can be hard for entrepreneurs building with impact in mind to justify the time, capital and resources associated with traditional data collection. This leaves us in the strange situation where many of those designing for impact may have little to no insight into if they are creating any impact at all.
The lean data methodology developed by Acumen offers an elegant solution to this issue, providing a lightweight, low cost and efficient data collection strategy that can be seamlessly integrated into existing operations.
Even for those already collecting data, the methodology can give structure to early thinking and provide a baseline upon which to build future reporting. At Enviu’s FoodFlow program, we adopted the approach in the development of our venture SokoLink. Here’s how we used it to build a better circular business.
So… what actually is lean data?
At its core, Lean Data is a five step process that guides entrepreneurs in adopting and utilizing a data strategy. From the initial definition of an impact question, to taking action based on the data generated. The steps are as follows:
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- Definition of an impact question
- Choosing a technology through which to collect data.
- Conducting the collection of data
- Learning from the data
- Taking action based on the conclusions.
In the Acumen model, data is often collected from surveys, a form of data collection that has been made infinitely more accessible due to the near ubiquity of mobile phone adoption. This survey data can then be validated by several phone calls or in person interviews. Importantly, there are no hard and fast rules and the methodology does not tie you to a particular form of data collection.
The approach in fact encourages incorporating data collection into existing customer touchpoints, such as an after sales call, or conducting in person interviews when a representative set of phone numbers are not available. In the case of our venture SokoLink in person interviews were the leanest way to incorporate data collection into our work.
Following this process ensures the generation of good quality, actionable and statistically significant impact data. We’d recommend any resource constrained impact entrepreneur who wishes to make impact data integral to the operations check to look into Acumen’s course on Lean Data or view the ample documentation on the methodology.
How we used Lean Data to validate our venture SokoLink
SokoLink is a market linkage venture that makes up part of Enviu’s FoodFlow program. By formalising Kenya’s fragmented food value chain, and better linking smallholder farmers to the market, we aim to create impact by increasing farmer income and reducing food losses that arise as the result of the informal nature of existing food distribution in Kenya.
As serial entrepreneurs running on minimal capital we needed a lightweight, low cost and easy to implement method to validate whether we were creating the desired impact. Lean data provided just that.
Mapping out our customer journey, we identified 3 existing in person touchpoints with our client farmers, further reducing the cost of data collection by eliminating the need to collect data via SMS or remote means. Our approach was simple, as we sourced produce from farmers we noted the market price against the price we paid for the order and were able to quickly identify that we were paying farmers 20% more on average, and up to 45% more in peak cases. In a similar integrated fashion, we now also collect food loss data during these touchpoints at the farm.
With our core assumptions validated, we are now integrating lean data into the heart of our business model as we build our technology platform to provide farmers with unrivalled transparency into the market for their goods. By collecting information on income level, quality of market and add-on services provided during our initial farmer registration, we will have a data baseline from which we can continually monitor the impact we are having.
With lean data, we achieved all of this without investments in new technology, without hiring any new staff or causing our clients to be inconvenienced or lose time.
The case for making lean data a key piece of your toolkit
No matter how bold our impact goals, if they can’t be measured, we’re building in the dark. As entrepreneurs, the lightweight and efficient access to impact data that this lean methodology provides serves two key roles.
Firstly, it enables improved communication with funders, drawing a clear line between dollars invested and impact achieved. By using a lean approach and incorporating it from the very beginning of the venture building process, we can avoid any difficult or costly attempts to measure data after the fact.
Secondly, and perhaps most importantly, it gives us the ability to tell our stories. With the great challenges we face in almost every sector, it is our responsibility to go beyond just building the solutions. We must actively inspire consumers and market participants, showing them that a better way of doing things is possible. When we know our impact, we can share it.
Interested in what we’re up to? Check out our work and see how we’re building world changing companies in diverse sectors, from the maritime industry & plastics to fashion and food!