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Solu­tion design: Find­ing a solu­tion that cre­ates impact for your start­up

You’ve come to the right place if …

  • you want to found an impact start­up or are already in the mid­dle of it with your team.
  • you know which prob­lem you want to solve and know its caus­es and effects.
  • you know about your tar­get group and their needs and addi­tion­al stake­hold­ers.
  • you have cre­at­ed a per­sona or a rep­re­sen­ta­tive pro­file of the tar­get group.

This chap­ter helps to …

  • devel­op inno­v­a­tive solu­tions for your social prob­lem.
  • devel­op hypothe­ses about the poten­tial impact of your solu­tion ideas.

Review exist­ing solu­tions and iden­ti­fy poten­tial for inno­va­tion

There are already solu­tions to many social chal­lenges that have been suc­cess­ful­ly imple­ment­ed by oth­er coura­geous peo­ple. If you are famil­iar with these solu­tions, you may be able to adopt indi­vid­ual aspects and close gaps.

1. do your research

Get an overview of exist­ing solu­tions, ini­tia­tives and projects that deal with your prob­lem area. Gath­er infor­ma­tion on gov­ern­ment pro­grams, NGOs, pri­vate ini­tia­tives, tech­no­log­i­cal solu­tions and local mea­sures.

2. eval­u­ates exist­ing solu­tions with the help of a SWOT analy­sis

By ana­lyz­ing the reach, tar­get groups and suc­cess of exist­ing solu­tions, you can see which ones are already well posi­tioned and where there are still gaps. This allows you to rec­og­nize which parts of the prob­lem are already well cov­ered and where there are still unre­solved chal­lenges.

One tool that can help you exam­ine exist­ing solu­tions is the SWOT analy­sis. Pro­ceed as fol­lows:

  • Iden­ti­fy strengths: Note down what works par­tic­u­lar­ly well about the solu­tion. What advan­tages does it offer com­pared to oth­er solu­tions? What makes it suc­cess­ful?
  • Iden­ti­fy weak­ness­es (Weak­ness­es): Con­sid­er what prob­lems or gaps exist. Are there aspects that could be improved? What obsta­cles lim­it effec­tive­ness?
  • Iden­ti­fy oppor­tu­ni­ties: Ana­lyzes which exter­nal fac­tors could have a pos­i­tive impact on the solu­tion. Are there trends or new tech­nolo­gies that could make the solu­tion even bet­ter? What pos­si­bil­i­ties are there for expan­sion or improve­ment?
  • Rec­og­nize risks (threats): Rec­og­nizes which chal­lenges or risks could jeop­ar­dize the solu­tion. These could be com­pet­ing solu­tions, a lack of resources or neg­a­tive trends that make imple­men­ta­tion more dif­fi­cult.

3. devel­op at least two solu­tion ideas

Finds areas where new solu­tions can be devel­oped to close exist­ing gaps. Con­sid­ers which inno­va­tions could either com­ple­ment exist­ing solu­tions or offer com­plete­ly new approach­es. These could be new tech­nolo­gies, part­ner­ships or cre­ative busi­ness mod­els. Or per­haps you can imple­ment an exist­ing solu­tion in a new region? That is also worth con­sid­er­ing.

Devel­op at least two solu­tion ideas that dif­fer in one impor­tant aspect so that you can com­pare the dif­fer­ence in the vari­ants lat­er with the tar­get group. For­mu­late a clear hypoth­e­sis for each vari­ant as to why it might work bet­ter. This way you can lat­er check which ver­sion is the most suc­cess­ful.

Ini­tial thoughts on a poten­tial busi­ness mod­el

At this point, you should con­sid­er how you can dif­fer­en­ti­ate between the cus­tomers (who pay for the solu­tion) and the tar­get group (who ben­e­fit from the solu­tion). This dis­tinc­tion is par­tic­u­lar­ly rel­e­vant for social enter­pris­es and impact star­tups, as those who ben­e­fit from the solu­tion are not nec­es­sar­i­ly those who pay for it.

Prac­ti­cal exam­ples:

Cus­tomers and tar­get group are the same
An app to sup­port peo­ple with depres­sion: The users of the app pay for access to the func­tions and at the same time ben­e­fit direct­ly from the ther­a­py tools, mood track­ing and sup­port net­works on offer. In this case, the pay­ing cus­tomers are also the ones who expe­ri­ence the pos­i­tive impact of the solu­tion(tar­get group).

Cus­tomers and tar­get group are dif­fer­ent
A com­pa­ny that man­u­fac­tures sus­tain­able water fil­ters for devel­op­ing coun­tries: In this case, the cus­tomers are aid orga­ni­za­tions or gov­ern­ments that buy the fil­ters. How­ev­er, the tar­get group is the peo­ple in the tar­get regions who gain access to clean drink­ing water thanks to the fil­ters. In this case, it is not the direct users who pay for the solu­tion. This is done by a third par­ty in the inter­ests of the tar­get group.

Tar­get group is inte­grat­ed into the val­ue chain
A cof­fee com­pa­ny wants to sell fair­ly pro­duced and trad­ed cof­fee in Ger­many: It there­fore pays atten­tion to eco­log­i­cal­ly sus­tain­able cul­ti­va­tion meth­ods, fair work­ing con­di­tions (liv­ing wage, occu­pa­tion­al health and safe­ty, etc.) and sus­tain­able trans­porta­tion routes that are as short as pos­si­ble. The impact is there­fore cre­at­ed along the val­ue chain; the cus­tomer in Ger­many pays for the prod­uct.

If none of the mod­els apply
Think about how you can achieve impact. This can be done, for exam­ple, by mak­ing a fixed dona­tion and coop­er­at­ing with one or more NGOs. How­ev­er, make sure that your prod­uct or ser­vice meets high sus­tain­abil­i­ty stan­dards .

The dia­gram shows var­i­ous ques­tions that you can ask your­self in order to devel­op ini­tial ideas for a busi­ness mod­el. Your busi­ness mod­el can also com­bine sev­er­al strate­gies.

Match the solu­tion with the cus­tomer’s needs

The Val­ue Propo­si­tion Can­vas tool helps to ensure that your solu­tion is a good fit for your cus­tomers. It con­sists of two parts: the cus­tomer side and the offer side. You’ve already worked through the cus­tomer side when eval­u­at­ing your prob­lem, tar­get group and stake­hold­er analy­sis if you achieve the pos­i­tive impact direct­ly with your cus­tomers.

If you have rec­og­nized in this chap­ter that your cus­tomers are a third par­ty for achiev­ing your impact, fill out the val­ue propo­si­tion can­vas again for the cus­tomers. Now devel­op the offer side. This includes:

  • Prod­ucts and ser­vices: Write down what you offer. Include all ele­ments that your impact start­up pro­vides, includ­ing non-mate­r­i­al val­ues such as sup­port or com­mu­ni­ty.
  • Prob­lem solvers (pain reliev­ers): Show how your solu­tion can solve the prob­lems of the tar­get group. Make sure that the pain reliev­ers are tai­lored to the prob­lems (pains) described and focus on solv­ing the biggest prob­lem.
  • Gain Cre­ators: Describe how your solu­tion will make the tar­get group hap­pi­er. What are the ben­e­fits? Make sure that the gain cre­ators are not only func­tion­al, but also appeal on an emo­tion­al lev­el to cre­ate stronger tar­get group loy­al­ty.

At the end, you com­pare both sides. The val­ue propo­si­tion can­vas is an iter­a­tive tool that should be reviewed and adapt­ed again and again. This ensures that your solu­tions are effec­tive.

Check the impact poten­tial of your solu­tion ideas using the impact lad­der

To be able to work in an impact-ori­ent­ed way, you need an impact log­ic that describes the path to the desired impact. The impact stair­case helps you to clear­ly for­mu­late your mea­sures and goals. It shows the indi­vid­ual stages — from the inputs (resources), through the activ­i­ties, to the results and long-term effects. Try to fill the impact lad­der from top to bot­tom.

Mod­el vari­ety

There are alter­na­tive impact mod­els such as IOOI log­ic, The­o­ry of Change, LogFrame and the impact chain. In this play­book, we work with the chain of effects.

1. fill in the impact stair­case for your solu­tion ideas

Now it’s time to check whether your solu­tion ideas can solve the social prob­lem you have iden­ti­fied and achieve the desired impact . To do this, go through the impact lad­der for your ideas. Let’s start with step 1 of the impact lad­der:

Stage 1: Activ­i­ties take place as planned (out­put)
Deter­mine which spe­cif­ic mea­sures or activ­i­ties are nec­es­sary for your solu­tion idea. These also belong to the out­puts and are the basis on which you build the next steps. Ask your­self:
What spe­cif­ic activ­i­ties do we need to car­ry out?

Stage 2: Tar­get group reached (out­put)
Deter­mines how many peo­ple from your tar­get group you can reach with your solu­tion. This is also one of the out­puts and is an impor­tant key fig­ure for eval­u­at­ing the suc­cess of your project. Ask your­self:
How many peo­ple from our tar­get group do we want to reach with our solu­tion?

Step 3: Tar­get group accepts offers (out­put)
Define how the tar­get group should accept and use your solu­tion. This step is cru­cial to under­stand­ing the impact of your solu­tion. Ask your­self:
How should the tar­get group react to our offer and make use of it?

Stage 4: Tar­get group changes their aware­ness or skills (out­come)
Describe what new knowl­edge or skills the tar­get group should acquire. This change in aware­ness or skills devel­op­ment is one of the out­comes that you can mea­sure in order to track progress. This is where the impact begins. Ask your­self:
What spe­cif­ic knowl­edge, atti­tudes or skills should the tar­get group devel­op?

Stage 5: Tar­get group changes its actions (out­come)
Deter­mine what new behav­ior the tar­get group should exhib­it. This behav­ior is an impor­tant step on the way to your desired out­come. Ask your­self:
What spe­cif­ic actions or behav­iors should the tar­get group change?

Step 6: The tar­get group’s liv­ing sit­u­a­tion changes (out­come)
Describes how the tar­get group’s liv­ing sit­u­a­tion should improve in con­crete terms. Step 6 of the impact lad­der is the out­come of your work. To be able to for­mu­late it accu­rate­ly, ask your­self:
What spe­cif­ic improve­ment in the tar­get group’s life sit­u­a­tion do we want to achieve?

Stage 7: Soci­ety changes (impact)
Define your long-term goal or the desired impact in soci­ety. This is where the pos­i­tive change you want to achieve belongs. Name this impact clear­ly by ask­ing your­self:
What long-term change in soci­ety are we striv­ing for?

When the effect stair­case is in place, you can con­sid­er what resources, means and inputs are required to car­ry out the planned activ­i­ties. These include finan­cial resources, per­son­nel, mate­ri­als and tech­no­log­i­cal resources, but also knowl­edge and net­works.

One impact stair­case per tar­get group

Have you real­ized that there are sev­er­al tar­get groups for your solu­tion? Then it’s best to build a sep­a­rate impact stair­case for each tar­get group and take a close look at the point at which the dif­fer­ent impact stair­cas­es inter­lock. How­ev­er, try to con­cen­trate on as few tar­get groups as pos­si­ble — oth­er­wise your impact log­ic will lose its sharp­ness.

Next chap­ter: Test­ing solu­tion ideas

Anoth­er impor­tant step has been tak­en: You have devel­oped inno­v­a­tive solu­tions for your prob­lem and built an impact stair­case.

To check the solu­tion approach­es, we rec­om­mend test­ing your ideas with the tar­get group. We will do this in the next chap­ter.