Today, Dolph talks about a different kind of MVP with Ann Mei Chang, author of Lean Impact: How to Innovate for Radically Greater Social Good. Ann Mei draws upon the work of Eric Ries in defining and optimizing the Minimum Viable Product approach when tackling issues for the betterment of our world.
(2:00) Dolph accidentally skips words when he reads(!)
(3:55) How California nonprofit Code for America used the MVP approach
(6:25) “The Amazon of Lower Africa”
(9:09) The Grand Master Plan – why it’s the best thing since sliced bread – or is it??
(10:33) How to fail small
(14:45) The Build—Measure—Learn Feedback Loop
(17:50) Orangutans – A Love Story
(22:19) 1200 words now, the beach later
(24:24) Catalog dreams dashed
Lean Impact: www.leanimpact.org
Ann Mei’s book is available at Amazon and at brick-and-mortar bookstores
Read the Transcript for Episode 106 Below or Click Here!
Transcript – Episode 106 – Lean Impact with Ann Mei Chang
Dolph Goldenburg: Welcome to the Successful Nonprofits™ Podcast. I’m your host Dolph Goldenburg, and we are bringing you an incredible conversation about lean impact with Ann Mei Chang. Ann Mei is a 20-plus year veteran of Silicon Valley. She was the Chief Innovation Officer for USAID. I assume maybe that might’ve been under a different administration, and she has done some incredible research in putting together the book Lean Impact, which really talks about how social organizations, nonprofits, B-Corps, social entrepreneurs, etc. can innovate to build a better society without having to spend a fortune doing it. I wanted to have Ann Mei on the podcast today because I really think, especially in the nonprofit sector, we often have, as [Robin Leach] would say, champagne dreams, and a beer budget to get there. I think Ann Mei is going to help a lot of small and medium-sized organizations figure out what they need to do to have a greater impact. So, cue the music and welcome Ann Mei Chang.
Hey, Ann Mei, welcome to the podcast.
Ann Mei Chang: Thank you so much for having me today.
Dolph Goldenburg: The first term that I saw in your book that was new to me was ‘MVP,’ and like most people, when I read sometimes, I accidentally skip words. I thought it stood for most valuable player. I had to go up one paragraph to see, and I think it’s minimum viable product.
Ann Mei Chang: Yes, exactly.
Dolph Goldenburg: Explain that.
Ann Mei Chang: MVP is a term that Eric Reese used in the Lean Startup, which is a book that came out almost ten years ago and really captured some of the best practices of innovation in Silicon Valley. At the core of Lean Startup is this idea that we waste a lot of time, money and resources failing big that we put all of our eggs in one basket, spend a lot of time planning and designing and building infrastructure and so forth. There are so many things that could go wrong that by the time we ship, there’s a good chance we’re going to fail. The idea of an MVP is to [peel] that back, to try and find the smallest thing that you could build as a prototype or as a proxy that will help us learn much more quickly because if it takes us years to develop something and then anything goes wrong, we will have lost it on time and money.
If we try something small, even on the order of a day or a week and learn something that can help us refine our product or service or recognize that we’re headed completely in the wrong direction and kind of reboot ourselves before we’ve spent a lot of time.
Dolph Goldenburg: I know that you had conversations with over 200 social sector organizations before you sat down to write this book. Can you give an example or two of where an organization used a minimum viable product successfully?
Ann Mei Chang: Sure. One organization that I think took a classic MVP approach is Code for America. They are a nonprofit here in California, and they recognized that in California, only about a third of people who are eligible for food stamps weren’t actually receiving those benefits.
As I looked into this issue, they discovered that one of the challenges was the complication of applying for food stamps, that the form that you have to fill out online includes 200 questions and takes 45 minutes to complete. Half of the people abandon this form. So, they thought they could do better. Getting a state government to change a form certainly would take a long time, you know, going through all those processes. So, they thought that maybe they could build a better form and better process and then use that to kind of move into the official form. Their suspicion was that you didn’t actually have to get all the fields in the form correct because, you know, you submitted the form and then afterward you’d go in to have an interview. So, what they thought they’d try out doing is set up using a standard web form product that costs them no money.
An alternate form with just 18 essential fields and then set up some ad words to be able to get people, direct people to this forum, had people fill it out, and then somebody would manually take the responses of those forms and type it into the real form. Then they would see if those forms are successful. This was something that, you know, only took like a week or something to set up. It was very simple and cost almost no money, but they were able to find out that these forms ended up being successful. People got called in for interviews, and the rest of the information got put in through the process that way. With very little money, very little time, they were able to validate that this was a path that would work before they spent the months and hundreds of thousands of dollars potentially building up a whole system that could automate this.
Dolph Goldenburg: That is really cool. Have you got another example?
Ann Mei Chang: Well another example I might use is if I go over all the way to Africa, sort of the other extreme, some people say, “Oh MVP. That only works here.”
Dolph Goldenburg: I have to tell you that’s why I asked you that question because I’m like, “Okay, I can totally see how that works in the tech world, but I have a difficult time seeing our does elsewhere.” So, I’m so glad you’re going there.
Ann Mei Chang: Great. Well, so, um, there’s a company in Kenya called Copia Global. They’re trying to be like the Amazon of rural Africa, really trying to provide people who are low-income who live in remote rural areas with a far wider selection of consumer goods and they have access to. So, um, what they wanted to do is setup a catalog for those of us who are old enough like the Sears Roebuck catalog in order all sorts of stuff from, but they weren’t sure if people would order from a catalog or the kinds of things they want to order from and whether, you know, the local agents would sell from the catalog. So again, rather than building up a fancy catalog, building warehouses and infrastructure and transport and all that kind of stuff, they decided to run an MVP. Their MVP consisted of the CEO going into the local supermarket and taking pictures of the products that they thought people might like. They just took pictures, pasted them into a catalog, made like five copies of them and went out to some of these villages and gave out catalogs to a few potential agents and looked at what happens.
When somebody places an order, the agent will call them up and said somebody wants whatever it is. The CEO would go to the store, pick it up and manually take it to that village. So, certainly, this is not something that would ever scale, but it allowed them again in the course of just like a week or so to get something up and running and to learn. What they learned in this process Is one that people would order from a catalog. One, there are things that they wanted to order. Two, they got a better idea of the kinds of things that people would want to order. And three, they learned something that was surprising, which was that the kinds of agents that they thought would be most effective at selling, which are people who are already running these kiosks, actually turned out to be the worst agents because these people already were carrying inventory and wanted to sell the inventory they already had on hand. The better agents turned out to be people who had complimentary businesses like a hair salon that was having customers come in, and while they were waiting in line, they could order products, and it was an additional stream of income. Again, just in this very short, very cheap MVP, they learned a ton of things that helped inform how they move forward with their actual business.
Dolph Goldenburg: So, I was smiling so much when you were talking about him going to the store and buying what people had ordered because it reminded me maybe two, three years ago… I read the autobiography of the person who started Zappos, and that’s what he did was. He went to the shoe store and took pictures of shoes and put them online. Then if I ordered a pair, he would go to the shoe store and buy them and give them to me. His point was “Yes, we lost money, but we proved that there was a demand for it, and then we could go sell that to investors.”
Ann Mei Chang: Exactly, and that’s something we don’t do very often in the nonprofit world. In the nonprofit world, there’s a tendency (and in my experience) for people to want to spend a lot of time upfront planning in detail what their design is, what their plan is in part because if we’re applying for grants, that’s what foundations require us to do, to tell them what our grand master plan is and why it’s the best thing since sliced bread. We come up with these grand master plans, and then if we get a grant, then we’re really held accountable to execute on that plan. I’ve heard sad stories of nonprofits who have applied for grants and successfully gotten those grants by selling their grand master plan and discovered that it didn’t work. They were already sort of committed to doing it, that it was too painful to do something different. So, they felt like they were just trapped to continue doing something that really didn’t have the impact that they were hoping to. This is where an MVP can really help even before submitting a grant or before starting a big endeavor to better understand how we can not only avoid failure but how we can maximize the benefit of what we’re doing.
Dolph Goldenburg: It’s interesting that you say that because a lot of funders also kind of punish failure. If you have a good idea and if it fails, they might give you a second shot, but a third or fourth shot is unlikely.
Ann Mei Chang: You know, I would say that is probably the case, but I would, I would qualify it. It’s the case if you fail big, meaning you take a big grant, you promised the moon and the stars, and then you fall flat on your face. One of the things that really enables innovation is for us to look at how to fail small. I think one of the things that I really encourage nonprofits to do with sometimes they think we’re just asking for too much money. I was looking at your website and the idea of Successful Nonprofits™ and what does success mean? I think a lot of times because we know we live in the capitalist world we live in, we think that success means we raise the most money possible. What I would say that success really means is having the greatest impact possible.
Sometimes, that means we need to start smaller. That if we have a new solution that if we think it’s worth taking some risk to come up with a much better solution than exists today, either it’s more cost effective, more scalable, works better, then it’s something that people want more. Those are things that we need to take some risks to experiment with. When we’re in those early stages, we don’t want to go out to tons of people because then we might fail big and we might ruin our reputation. If we place a smaller [bid] and ask for a smaller grant, then we’ll have a little bit more flexibility to experiment, sort of take a few steps toward, see if it works, [refine] the idea. Then once we have more confidence that we’re on the right track, we can then go bigger.
Dolph Goldenburg: I assume that that’s also probably having a conversation up front with your funder saying, “We’re asking for a little bit. We assume there’s going to be some failure, but we’re going to have some good lessons and we’re going to iterate pretty quickly” so we’re going to say, “Okay, we know going to fix A and B and X and put it back out there and see what happens.”
Ann Mei Chang: Exactly. I mean I think there are a few different ways that you could approach funders on this. One is to ask for a smaller grant and say, “Hey, we want to experiment with something. Can you give us a smaller, more flexible grant so we can run these small experiments?” The other is sometimes funders just have, you know, they just don’t have the capacity to give smaller grants. So, one of the things I’ve also encouraged nonprofits to do is look at within a larger grant, carving out an innovation window. In your grant proposal that could either be five or 10 percent of the whole grant and just like you meant [to set] aside, a little bit of money for [M and E] and set aside a little bit of money for innovation and say, “Hey, what 90 percent of the money we’re going to give you exactly what you asked for, and with five or 10 percent of the money, we’re going to try some other things that may make the rest of the 90 percent work much, much better.” That’s a good bet that’s worthwhile. That can either happen sort of alongside and parallel throughout the whole grant process or it can be an upfront period of time where you say, we’re going to take three months, six months, a year, depending on how long the grant is to say, “We are going to try 10 things first,” and actually, one of the organizations I interviewed did just this, you know, “We’re going to try 10 things first, and then we’re going to see which ones work best. Then we’re going to carry those through for the next three years.”
Dolph Goldenburg: What a really amazing and very good idea. This was maybe a year, 18 months ago on the podcast, but we spoke with someone where the organization made the intentional decision to close like two-thirds of their programs to focus on the one-third that was really successful. They’re like, “Okay, we’ve looked at everything and these-two thirds while they make us feel good, aren’t doing anything. So, we’ll get a close them and work on expanding what we know is doing well.”
Ann Mei Chang: That’s fantastic. I think we need to do more of that. Again, I think we focused too much of our notion of success as a nonprofit on how much money you have raised and how many people we reach. At the end of the day, neither of those two metrics are very meaningful. What really matters is how much impact are we making? Impact is measured by two dimensions, that depth of impact. How much bang for buck we’re getting for each person reach? Second is the scale of impact. How many people are we able to get to? By experimenting with different approaches, it allows us to maximize for both the depth and the breadth of our impact so that when we do scale, we can make a much bigger impact.
Dolph Goldenburg: Talk to me about that evolution process. Once you get that first MVP, minimum viable product, out there, and you get some initial data, what about the evolution process?
Ann Mei Chang: Yeah. So, to put the MVP in context, Eric talks about in the Lean Startup, this notion of a build, measure, learn feedback loop. That’s kind of at the core of what lean startup is about. And this may sound a little fancy, but really build, measure, learn is essentially the scientific method, an entrepreneurial version of the scientific method, meaning that what we’re trying to do in innovation is not… people often mistake innovation as… coming up with a big idea that no one’s ever thought about. I think it’s very rare [inaudible] that’s how innovation shows up. Innovation is much more about this build, measure, learn feedback loop of how quickly you can take a germ of an idea and iterate to test it and learn from it and refine it and improve it so that it becomes something that’s wildly successful.
The way the MVP fits in is that when you have an idea of potential solution, rather than trying to perfect it in on paper or in your conference room, go out and try it, right? Have a hypothesis of what are the things that have to be true for this idea to succeed or one of the things that might cause the idea to fail, and you might have a number of hypotheses, and then you test it with by building an MVP, then measuring the results of what’s the data that you get back from them, then learning and based on the results, either doubling down or tweaking what you’re doing or recognizing that you’re on the wrong path altogether and you need to pivot.
Dolph Goldenburg: Internally, what are some of the objections that staff teams kind of hear when they’re in that process. For example, whether they are just launching their first MVP or bringing it back and saying, okay, we need to tweak it or double down…
Ann Mei Chang: One of the big challenges is that we don’t like to ask ourselves the hard questions. I think we’re all in this space because we want to make a difference. Whether it’s because there are real needs out there and we just feel pressure to get out as soon as possible and do something or because our funders are pushed pressuring us to do something or ourselves are just driven to do something, there tends to be a little bit of a RA-RA culture. We are doing good. We’re pumping everybody up. We don’t like to say, “Hey, is this really working as well as you think?” I think one of the big objections is even asking others or yourself the hard questions. Is this really working? Is it working as well as it possibly could? Is it working better than everything else out there? One of the things I talk about in the book is this idea that we tend to fall in love with our solution rather than falling in love with a problem. A big mindset shift is to really fall in love with the problem. What is it that you’re trying to do? Hold onto your solution more lightly because it may or may not be the best way to solve the problem?
Dolph Goldenburg: I know you had over 200 conversations [in] writing this book, like what was your most interesting conversation? You don’t have to use the name of the organization of the person’s name, and we won’t try to figure it out.
Ann Mei Chang: Trying to think of what I would characterize this most interesting because there are so many interesting conversations, and they were all different in different ways. One that I thought was fascinating just along this line of falling in love with your problem is there’s a woman I talked to named [Kennary] who loves orangutans, and she wanted to preserve the habitat of orangutans, particularly in Indonesian Borneo. Normally if you think, hey, I want to preserve habitat, you run a conservation project, but instead of kind of going ahead and doing that, she went to Indonesian Borneo, lived among the communities there, and listened to them and try to understand what was going on there. Why, why were people cutting down the rain forest? What were they doing accomplishing by that? What were other alternatives? What she found out was that one of the biggest drivers of deforestation was that when somebody in the family would fall ill, and there were no health clinics in the area.
They’d have to raise rent vast sums of money for them to provide transport to get them to a hospital and also to pay the hospital fees in the city. The only way they could raise that money quickly was by cutting down trees. Instead of starting at conservation project was actually start local health clinics, the community health clinic to provide healthcare for people so that they wouldn’t have the need to send someone to a far-off expensive hospital. As a result, and including some other things they did, they really dramatically reduced the number of families that are cutting down forests.
Dolph Goldenburg: That’s really cool. It reminds me, I recently was at an admittedly it’s campaign thing, but I was at a campaign event for Eric Adams who’s running for mayor of New York in 2020. He said that part of the issue is the departments within New York City are not talking to each other. As an example, the Department of Health, which runs your local health centers and clinics and that kind of thing, might schedule child wellness visits during the school day. So, then kids might miss school. If you asked the Commissioner of Health in New York, they say, “Oh, well what I’m concerned about is these children’s health, not how are they get educated.” The Department of Education might feed these kids really unhealthy lunches. When you ask the head of the Department of ED, “Why are you doing that?” that person might respond, “Well, I’m not responsible for their health. I’m responsible for educating them,” which is kind of what I hear you saying. There is also like, “Do you know, how are these issues intertwined? What’s the intersectionality of the issues? Is there a different way to approach it?
Ann Mei Chang: Yeah. Again, I would encourage people not to make it just an intellectual exercise, but this is part of why we want to run experiments is to say, “Hey, if we think that doing this thing, I’m just going to make kids healthier, is it actually making them healthier or is there something else going on out there that I’m not aware of that might actually interfere?” We aren’t working in nice sealed boxes that are isolated from the rest of the world. We’re living in a messy reality. That’s where experiments can come in and show you what really happens in the real world versus what happens on paper on our desks.
Dolph Goldenburg: In writing this book, did you approach anyone who was just not willing at all to talk to you? They’re like, “No, I’m not going to talk.”
Ann Mei Chang: Well, I think the people who weren’t willing to talk to me just didn’t return my emails
Dolph Goldenburg: That that’s kind of a rude way to say I’m not willing to talk. Wow. Really?
Ann Mei Chang: Then you have plausible deniability. Like it went to my spam folder or something.
Dolph Goldenburg: Nothing like that. That’s certainly true. Are there other challenges that you ran up against as you were writing this book?
Ann Mei Chang: Well, uh, certainly, I had never written a book before. In fact, I’m not sure I wrote anything longer than a blog post before. So, this is a pretty big leap. For me sort of having in the last ten-plus years, have my work life largely booked back to back in meetings every half hour sitting down, the interviews were lots of fun. I learned a ton of stuff, you know, I was talking to people getting out there, but when it came down to sitting down and writing the book itself, that was tough. I had not been in a situation for ages that I was just sitting by myself at my desk, you know, trying to produce words. I think that was the toughest part of the process for me.
Dolph Goldenburg: What was your discipline? What specifically did you set up or create so you were able to sit there and write?
Ann Mei Chang: Well, a friend of mine who actually is an academic and writes a lot gave me a tip that, that really helped me, and it was very simple. She said to set a target number of words each day that you’re going to write and measure how many words you’ve written. When you’ve done that, you can reward yourself. So, I set myself a target of writing 1,200 words a day that were, reasonably polished, not like a complete mess of notes, but something that like you could read. Each day I’d get up, go to my desk right until I got to my 1,200 or so words and then try to reward myself in some way. In fact, for a month of the time I was writing the first draft in the last month where I finished the book, I actually rented an apartment in Hawaii. I sat every morning and wrote, and then when I was done, I got to go to the beach.
Dolph Goldenburg: What a great incentive. It’s like sit here this morning and write, and then you get to do something amazing in paradise.
Ann Mei Chang: Yes, exactly.
Dolph Goldenburg: 1,200 words. This, of course, this hit me, and I like math. 1,200 words are roughly about how many printed pages in a book?
Ann Mei Chang: I have no idea, but the book itself is about 75,000 words. If you do the math, I don’t know how many days that comes out to, but it took me about three months to write the full first draft of the book.
Dolph Goldenburg: But you got to spend a third of that time in Hawaii.
Ann Mei Chang: Yes.
Dolph Goldenburg: That’s pretty awesome. That’s pretty awesome.
Ann Mei Chang: It turned out to be good motivation to sit down and do my writing every day.
Dolph Goldenburg: Nice. Before I let you go, and I kind of feel like I just asked you a great Off-the-Map question. I’ve got to ask you an Off-the-Map question. There were a lot of things I was thinking about asking you because I know you’ve been to all seven continents. By the way, for my 50th is one, I’m going to hit Antarctica, and then I’ll be able to say that as well. Thankfully I’m only a couple years away so it will still be there when it comes to 50.
I thought about asking you about travel, but you mentioned the Sears catalog and like you, I grew up in a world where the Sears catalog would come. I thought about when I would think about what gifts I want in December. I would get the catalog out of the drawer of my parents’ kitchen and go through it. So, if you can remember, what is the thing that you always wanted in the Sears catalog, but you never got?
Ann Mei Chang: Oh, I don’t remember what I wanted, but I never got. I remember the huge Sears catalogs and dog-earing the pages, but I think I blocked out whatever I never was able to get. I was a geek as a kid, you know. I ended up going and studying computer science. Probably a lot of the things that I dog-eared were like erector sets or scientific kits or computer things
Dolph Goldenburg: I thought it was a little bit of an unfair question because as I was asking them, like, “Dolph, you don’t remember what you wanted to never got from the Sears catalog. Why would Ann Mei?” So, it’s totally an unfair question; I was just curious about that. As an aside, as Ann Mei and I are recording this, I think its been just a day after Sears announces they’re going bankrupt. It’s interesting that we have a conversation about Sears and their glory days.
Well, Ann Mei, thank you so much for coming on the podcast. I definitely want to make sure that our listeners know how to get ahold of you, or they can go to www.leanimpact.org to find out about the book. It was published on October 30th. We’re recording this in October, but it’s not being released until well after October. On her site, of course, you can find out more. You can buy the book. You can also get the book on Amazon and if you are one of those folks that still supports Brick and Mortar retailers, you can probably walk into your local bookstore and get it as well. Ann Mei Thank you so much for joining us.
Ann Mei Chang: It’s been my pleasure. This is a lot of fun.
Dolph Goldenburg: Grateful thanks to Ann Mei Chang, the author of Lean Impact for being on the podcast today. If you missed URL, I’m not sure how you could because it’s pretty much the same as the name of the book, www.leanimpact.org, but If you missed it or can’t remember it, you can go to www.successfulnonprofits.com to get that in our show notes as well as probably some links to some of the things that we discussed today. Thank you so much for tuning into the podcast today. Every single week we get more and more downloads because people like you are subscribing, rating and reviewing the podcast, so if you have not already, go online and subscribe, rate and review in your podcast streamer of choice. That is our show for this week. I hope this week’s episode has you with some information to help your nonprofit thrive in a competitive environment.
(Disclaimer) I’m not an accountant or attorney, and neither I nor the Successful Nonprofits™ provide tax, legal or accounting advice. This material has been providing for informational purposes only and is not intended or should not be relied on for tax, legal, or accounting advice. Always consult a qualified licensed professional about such matters.