Deshpande on Entrepreneurship-Part 24: How do you measure real progress in a social enterprise?

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Desh Deshpande

By Desh Deshpande

(Editor’s note: This is Part-24 of the weekly video column with philanthropist and serial entrepreneur Desh Deshpande, with excerpts from his book “On Entrepreneurship and Impact.” This column appears every Monday.)

Desh Deshpande

Social entrepreneurs are definitely out to change people’s lives for the better. And, they put in whatever it takes to make that dream come true.

You may be one of them.

How do you know if what you are doing is really working AND if you are making a meaningful difference?

Here is the litmus test for that.

If the work you are doing makes the people come back for more and you have a waiting list of potential beneficiaries, then you know you are having a meaningful impact.

In other words, there should be a pull from the target segment for a solution and not a push from you to embrace the solution.

Whenever possible try to get the people that are benefitting to share some of the value by paying for the solution. That will really show the hunger for the solution.

Even after you have asked for some money, if you still have a line of people waiting to be served, then you know you are onto something.

A word of caution

It’s easy to fall into a trap where you sugarcoat your offering to get people to buy into an intervention. You might see some initial traction, showcase progress, raise more funds, and continue sugarcoating the solution to get more people engaged.

This is the classic push approach and is unlikely to scale, let alone sustain itself.

As a social entrepreneur, one surefire way to see if you are having an impact is to see if the beneficiaries are willing to pay even a nominal amount to participate in the intervention.

Let’s take an example from the farming sector in India.

Subsistence farmers need to increase their productivity and income and the biggest deciding factor is water. Access to water makes a huge difference in the amount they can produce.

There are simple hacks farmers can use to double or triple their productivity and income. One such hack is digging a farm pond, typically a 100x100x15 feet pit, that can be used to store rainwater to irrigate 5 acres of farm. We have implemented it recently in the Hubli Sandbox where we pay for part of the fixed costs and the farmers pay the variable costs. Because the return on their investment is so high, we have a huge line of people waiting for this intervention.

We know that we are making real progress in the farm pond project because of the wholehearted participation by the farmer and especially since they are willing to pay for it.

Having such a positive feedback loop provides you with a strong signal that you are making an impact. It helps you as it:

  • Provides a financial model that you can use to scale up and impact more people
  • Helps improve the intervention by getting feedback from those you serve. Since they pay, they receive the service with dignity and are not shy in voicing their opinion.  This helps you to continuously improve the product similar to what you have to do in a competitive market segment..

 (About Desh Deshpande: During his entrepreneurial career spanning over three decades, Gururaj “Desh” Deshpande has built several companies. He has injected his passion for innovation and entrepreneurship into a number of social impact initiatives in India, the USA and Canada. He has been recognized for his entrepreneurial accomplishments by many institutions including being named co-chair of President Obama’s National Advisory Council on Innovation and Entrepreneurship. He currently also serves as a Life Member of the MIT corporation. He resides in Boston together with his wife, Jaishree.)

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