#28 Full on failure in social entrepreneurship is seriously not an option (but learning is)

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I graduated from business school in 2012 into what felt like a climax of bro culture in the startup and entrepreneurship space. It was as if all the banker bros who had been laid off or left the scene after the financial crisis had traded in their suits for hoodies and migrated out west. And in that culture, failure – not the fail fast, lean type of failure I embrace but straight up eating sh** – was worn as a bit of a badge.

While I believe fully in the spirit of failing fast, human centered design, and iterative/agile development, I also have seen the terminology bastardized at times to an extreme. One founder I knew in Chicago invested a hefty sum of money in developing and starting an app that people could use to find friends to brunch with. The entire app and business failed within months.

Water under the bridge? Sure. Very expensive water. The average cost of developing an app is well into the 6 figures.

Most social entrepreneurs either literally can’t afford that type of investment. And if they can, and it totally bombs, that’s a ton of $ that could have otherwise funded social impact in ways that had already been proven to work. It’s a risk our sector or space or whatever social impact is can’t afford – literally and figuratively. Our space needs to much change for irresponsible management and loss of so much money.

Full on failure in entrepreneurship is a privilege

The strongest social entrepreneurs I know and those I love helping most come from they communities they impact, communities that are always underserved and often low income. They don’t have the financial freedom nor the will to see their new venture totally fall apart or not work.

Full on failure in social entrepreneurship is complex from a savior standpoint

Look, underserved communities have big needs – thus being underserved. If a founder or company can’t figure out how to meet those needs in a sustainable way, it’s more often than not due to a glitch in the value proposition to the community being served versus anything else. Whatever revenue model exists, and whether a venture is for profit or nonprofit, it will work if the social impact is strong and welcome by the community impacted.

When impact is neither strong nor welcome, that’s where toxic charity and the savior complex generally comes into play. I see it a lot, and am at times hesitant to work with new founders who want to help a “cause” they care about a lot with their shiny new nonprofit or social enterprise but haven’t taken the time to learn about and immerse themselves in communities they’re hoping to serve and learn more about what’s worked, what hasn’t, and why.

Failing fast can work, but only if done in small doses for the purposes of disciplined learning

Again, I love lean. I love human centered design and design thinking. I love the general concept of identifying assumptions, testing them, and evolving products or services from the learning.

But a lot of people misinterpret failing fast.

The basis of all these philosophies is around identifying and testing assumptions before investing in ideas or supposed solutions. Yet I see too few people taking taking the time to do their homework to really identify the unknowns behind assumptions. Yes, everything you don’t know can be an assumption about an unknown right now, but is it unknown because nobody knows it, or is it unknown because you’re not doing the legwork and research and learning from what’s already out there?

If it’s the latter, and you’re trying to drive pressing social change . . . that just doesn’t make strategic sense and it jeopardizes your impact potential. Because likely, you’re going to test something that someone has already researched or tested. If it works, great - redundant, but great. If it doesn’t, you’ve now wasted a ton of money and energy and impact potential finding out something somebody else already knew.

What to do: Be disciplined

Before you start testing things or even identifying assumptions for your new venture or idea or strategy, figure out what is already out there. It’s going to take legwork and discipline. It’s going to take a lot of talking to people and observing behaviors and researching all over the place. Do all the best practices of human centered design. It will take some money.

But ultimately, it’ll help you narrow in so well on the unmet social needs and gaps that exist within whatever you’re trying to do - and then it’ll be time to test. To fail fast and fail forward. That’s where the real impact and real revenue potential starts.

I love helping social enterprises and nonprofits – or individuals with ideas – through this process. If you do it with intention and discipline you’re going to have an organization that makes it. I promise it won’t be easy, but it’ll be worth it.