When you’re developing a sustainable solution to a social problem through your impact startup, you’re likely to begin with a lot of questions: Who’s actually affected? What are the root causes and consequences? And how can we effectively address them?
To create impact where it matters most, it’s essential to fully understand the problem, your target group, and the key stakeholders. Of course, every startup comes with its own unique challenges. That’s why this chapter offers guidance you can tailor to your situation.
This section is for you if …
- you’re planning to launch an impact startup – or already deep in the process with your team.
- you know what problem you want to solve but don’t yet fully understand who your target group is.
In this section, you’ll learn how to …
- clearly define the social problem and understand its root causes.
- identify the effects of the problem.
- define your target group and stakeholders.
Define the core problem
The first step is to clearly define the problem you want to solve. This sets the foundation for analyzing its root causes and consequences. Describe the issue from the perspective of the people affected by it. Try to be as specific as possible and base this on what you currently know.
Social problems often exist on different levels: social, environmental, and economic.
- Social dimension: his relates to how people interact and how society is structured. It includes topics like social justice, education, health, and community networks.
- Environmental dimension: This involves climate and environmental issues, such as global warming, biodiversity loss, soil degradation, or water scarcity.
- Economic dimension: This covers financial and economic factors like income levels, wealth distribution, or economic development.
Example:
“Many people in rural areas of Lebanon lack access to clean drinking water.”
Identify the root causes of the problem
To fully understand the core problem, you can break down its causes in four steps. Start by asking: Why does this problem exist?
1. Identify key categories of root causes
Sort the problem into main causes and assign them to the following categories:
- Social trends (e.g., demographic shifts, urbanization, digitalization, regulations, laws, standards)
- Use of technology (e.g., fossil or renewable energy, e‑learning platforms, telemedicine)
- Economic conditions (e.g., unemployment, income inequality, inflation)
- Cultural understanding (e.g., traditions, customs, values, social norms)
- Environmental conditions (e.g., climate change, resource availability, natural disasters)
- Institutions (e.g., schools, healthcare providers, local organizations, community initiatives)
- Political conditions (e.g., government stability, international trade agreements, sanctions)
- Individual needs of specific groups (e.g., access to education, healthcare, housing)
- Public knowledge and awareness (e.g., education levels, awareness, tech literacy)
2. Dig into the causes using the 5 Whys technique
To explore the problem more deeply, ask “Why is this happening?” for each cause you’ve identified – and repeat that question five times. This helps uncover the root causes. These deeper insights form the foundation of your problem and give you a fuller understanding of it.
Example:
If the core problem is “Many people in rural areas of Lebanon lack access to clean drinking water,” a 5 Whys analysis might look like this:
- Why don’t they have access to clean drinking water? – Because there are no water treatment facilities.
- Why are there no water treatment facilities? – Because there isn’t enough funding.
- Why isn’t there enough funding? – Because local authorities don’t allocate sufficient budgets.
- Why don’t local authorities allocate enough budgets? – Because the issue isn’t seen as a priority.
- Why isn’t it a priority? – Because there’s low awareness of the health risks linked to unsafe water.
3. Use research to support your analysis
Use databases like Google Scholar, JSTOR, or PubMed to find relevant studies and data. Public reports (e.g., from the UNDP or national governments), statistics, documentaries, news features, and publications from associations can also be helpful – just make sure to fact-check your sources.
Attending networking events, conferences, industry meetups, or expos can also give you valuable insights.
This data-driven approach gives you objective perspectives on the root causes of the problem – and helps confirm or challenge your assumptions.
Analyze the effects of the problem
Once you’ve explored the causes, the next step is to identify the effects. What consequences does the problem have for the people affected – and for their broader environment?
1. Use the 5 Whys technique to explore the effects
Use the same method as before. For each effect, ask: “What does this lead to?” Repeat the question to uncover deeper, systemic impacts – whether environmental, political, social, economic, cultural or even spiritual.
2. Back up your analysis with current research
Use recent studies and data to better understand the long-term effects of the problem. How you can do this is described above under Identify the root causes of the problem.
3. Visualize the problem with a problem tree
A problem tree is a visual tool that maps out the causes and effects of the issue – and can also be useful when presenting your work. Here’s how to build a one:
- Draw a box in the center of your diagram and write the core problem in it.
- Below it, list the direct causes. Add deeper causes underneath those.
- Above the core problem, write the immediate effects. Then, above those, list the ripple effects.
- The problem tree branches upwards and downwards.
- Use arrows or lines to show any connections between causes or effects. Leave placeholders for any missing pieces you’ll fill in later.
You can sketch the problem tree using a basic drawing tool or just pen and paper.
PHINEO’s Social Impact Navigatoralso includes a helpful visual template:
Consider the systemic context
To fully understand the problem, you should place it in a broader systemic context. This helps you design interventions that address the right causes – at the right level.
1. Use the social change matrix to map your problem in context
The social change matrix helps you place the problem in a broader system by dividing it into four quadrants:
- Quadrant 1: Material and structural – Problems that affect large groups and require structural change, such as legal or institutional reforms
- Quadrant 2: Material and individual – Outcomes of structural problems that impact individuals or small groups, such as lack of education or poverty
- Quadrant 3: Symbolic and structural – Problems related to public perception or collective beliefs that require changes in public discourse
- Quadrant 4: Symbolic and individual – Problems tied to personal attitudes or self-perception, like low self-esteem
Think about how your problem shows up in each quadrant. Do all four need to be considered? Where do the root causes and effects sit, and which ones should you address? Material change is tangible and measurable. Symbolic change deals with cultural norms and social attitudes.
Structural changes happens at a system or society level. Individual changes affects personal behavior and mindset.
Sometimes, however, change on an individual level – material or symbolic – can spark broader systemic shifts. In other words, change doesn’t only come from the top down; it can also start bottom up. A shift in values, for example, can eventually transform structural or material conditions.
Example:
Let’s say your core problem is “low environmental awareness among the public”. This would fall under Quadrant 3 (symbolic and structural) because it reflects public perception and calls for a shift in public discourse.
Potential solutions might include awareness campaigns or policy initiatives to strengthen environmental consciousness (symbolic), and actions that promote behavior change (material).
Define your target groups and stakeholders
Based on your problem analysis, you can now clearly define your target groups and stakeholders.
Think about who is directly responsible for the root causes of and who is affected by the consequences. These are likely your potential target groups and stakeholders.
1. Who are your target groups?
Your target group includes the people, organizations or systems you want to create impact for. The ones you want to bring real change to are your direct target group. If needed, you can break this group down further into subgroups to tailor your solution more precisely.
2. Who are your stakeholders?
Stakeholders include any persons or groups who have an interest in your solution or who can influence its success. Important: All target groups are stakeholders, but not all stakeholders are part of your target group.
A stakeholder analysis can help you answer key questions:
- Who are the relevant internal and external stakeholders?
- What are their expectations, concerns, and hopes?
- How might they support – or challenge – your solution?
Examples of stakeholders:
- Internal stakeholders: your target group, team members, leadership.
- External stakeholders: investors, government agencies, NGOs, partner organizations, grassroots initiatives, or companies.
Target group vs. customers
In the Lean Impact Journey we make a distinction between your target group when working on your impact model and solution, and your customers when developing your business model.
How you use these two terms depends on what your solution looks like. In this playbook, the target group refers to both the people who use your solution and those who benefit from it.
Depending on your solution, these might be the same people – or not.
Next chapter: Validate your findings
You’ve completed the first major step! You now understand the root causes and effects of the social problem and have identified your potential target group and key stakeholders.
In the next chapter you’ll learn how to validate your findings through real conversations with your target group and stakeholders.