Editor’s Note: This post was originally featured on Light Up Africa’s blog and is being syndicated here.
As the program manager of Impact Engine, a 16-week venture accelerator that supports for-profit businesses making the world a better place, I’m often asked about the criteria for accepting entrepreneurs into our program. There are four main categories we look at when evaluating a potential company for Impact Engine:
- Concept – Is the idea viable? What’s the unique value proposition?
- Entrepreneur – How determined in the entrepreneur? Do they have a thorough knowledge of the subject matter? Are they coachable?
- Profitability – Does the idea rest on a sound and sustainable business model?
- Potential for Impact – How many people could benefit from the product or service?
This last criterion is probably one of the hardest to judge, especially in an industry that’s still sorting out how impact should be measured. To be taken seriously, impact entrepreneurs need to communicate their value beyond the warm-and-fuzzy stories. They need hard numbers. With every product sold, how many people are impacted? And it’s important to think about both the positive and negative impact your product can have on a community. (TOMS shoes learned this the hard way.)
These are tough questions to answer, which is why the Impact Engine team spent a lot of time debating impact vs. influence during last year’s application process. We eventually decided that, in most cases, influence was greater than impact. By that, I mean, what’s your company’s potential to disrupt an industry despite lower impact numbers? Is your idea a game-changer?
I was reminded of this while listening to coverage of the American Airlines/US Airways merger on NPR. Just last month antitrust regulators at the Justice Department blocked a merger between Anheuser-Busch InBev and Grupo Modelo. The reason? Grupo Modelo may be a maverick. A maverick is a company that generates healthy competition through product innovation and/or cheaper pricing, essentially forcing other businesses in the same space to innovate.
This plays out a little differently for impact entrepreneurs but the idea is basically the same: Could your organization’s idea or business model encourage others in your industry to change for the better? Here are just a few examples of this playing out in the impact space:
Big-time Maverick: Warby Parker
Approximately one billion people don’t have access to affordable eyewear. What’s more, the eyeglasses industry, “is controlled by a few large companies that have kept prices artificially high, reaping huge profits from consumers who have no other options,” says Warby Parker, a certified B Corporation that’s disrupting this market. Warby Parker provides accessible eyeglasses at extremely affordable prices compared to the competition. The company has also distributed over 250,000 pairs of free eyeglasses through its “Buy a Pair, Give a Pair” program. While Impact Engine is often skeptical of B1G1 models, Warby Parker goes beyond just dumping free products onto underserved populations. Instead, they’ve partnered with the non-profit organization VisionSpring to train men and women entrepreneurs to sell glasses to their community. Warby Parker is a great example of a company that’s influencing an industry and making a large impact in the world.
Local Maverick: Academy of Global Citizenship
AGC is a charter school located in an underserved community on the Southwest side of Chicago. The school believes in a holistic approach to education that includes nutritionally balanced meals, daily yoga practice, gardening, and eco-friendly practices, in addition to a traditional education. Students are taught to evaluate how their decisions affect the world around them. This approach has resulted in more engaged students, parents, and community members. What’s more, AGC is attracting the attention of CPS officials, the United Nations Foundation, the White House, and school leaders from all across the world, despite their small school size of only 300 students. They’ve been a real game-changer amongst educators.
Maverick in the Making: Pangea Payments
A graduate of Impact Engine (like Light Up Africa), Pangea provides affordable financial services for the global underbanked. Roughly 2.5 billion people in the world do not a relationship with a financial institution, and traditional money transfer services often lack transparency and come with predatory fees. Pangea is on its way to disrupting the money transfer space by making financial services more affordable and accessible through retail, web, and mobile. As the company progresses, this could be huge for the payments space.
For all of the above organizations, influence (or potential influence) is more important than the number of people actually served. After all, if you can disrupt an industry, you’ll create the biggest impact of all.
Starting May 15th, Impact Engine will be looking for more mavericks to join our program. Sign up for our newsletter to stay informed.