Social Finance Q&A

1.To which extent have you identified the root cause(s) of the social/environmental problem that you are trying to solve?

We're only starting to analyze this. Not at all . Partially. Almost. Completely.

2. Are you familiar with the concrete consequences of this problem (i.e. cost) for your target group(s)?

I have just a vague idea. We made a quantitative analysis of the current situation plus a rough forecast of the future. We made a qualitative assessment of the current situation. We completed a data set with future scenarios and probabilities. We prepared a detailed, quantitative analysis of present and future.

3. Have you identified the current gaps and deficits of competing products and services for your target groups?

Not yet. We completed an analysis of service shortfalls and excesses by each region in the target market. There is a qualitative assessment based on a few examples. We made an analysis of major competitor's service shortfalls and excesses. We prepared an analysis of average service shortfalls and excesses in the entire target market.

1. Does your solution offer a distinctive value add to your target group(s)?

We completed the competitive analysis and found that we have a concrete value add for each target group. We haven't finished the competitive analysis yet. Yes, we gathered examples of our competitive edge. I don't know. Yes, we analyzed the entire market and are sure to offer a clear value add.

2. How far have you come in describing the impact goal of your enterprise?

We built an initial Theory of Change. We described the impact on each target group qualitatively. We just started with it. We defined a clear impact chain along the entire product and service delivery process, including examples. We set up the entire logframe with input, activities, output and outcomes for each step in the process, including a complete documentation of examples.

3. ) Are you in a position to measure the impact and thus control the quality of your products/services?

No, why should we? Not yet, but we're working on defining impact indicators. Yes, all data for our impact indicators are available within the necessary time frame. Yes, the data for all indicators are available, but the data collection process still needs too much time and effort. Yes, our indicators for impact measurement are defined, but the necessary data are not sufficiently available.

4. Did you run pilots for your offering that are sufficiently documented?

No, not yet. Yes, but we're currently analyzing the pilot(s). Yes, we're in the middle of a pilot. Yes, the pilots are complete and we have adjusted our business model based on their results. Yes, the pilots are complete with documentation of actual achievements versus plan, but we have to define the implications on our business model yet.

1. Are your distribution channels clearly defined and manageable?

They are not entirely defined. No, not at all. We defined our distribution channels and supported this with process and service/product descriptions. We described the entire distribution process in detail, including marketing, customer acquisition and control mechanisms. We defined means and channels to distribute products and services, but the respective processes and control mechanisms are missing yet.

2. Is your organizational structure efficient?

Our internal processes and the ad hoc solutions still absorb a lot of time. No, currently there's no common ground in the team about our processes. Our internal processes are clearly defined, integrated and understood by the entire team so we can focus on our customers. We have defined common standards and our internal workflow is efficient. Yes, our core activities and support processes are in place, but our standards still evolve.

3. Is your team sufficiently skilled to meet the requirements?

No, but we're working on it. Our structured analysis of skills and requirements is complete and our team has all the relevant industry and product experience to fill all gaps. Partially; we have made a qualitative assessment of the gaps, and the management is able to compensate for it to some extent. No. Mostly; we made a structured analysis and are able to fill most of the gaps and secure the additional talent(s).

1. Is your organization fit for scaling?

No, not really. We started to prepare our organization for scale, but our internal structures are still tailored to our current size. We're getting there: our processes are standardized, central functions are poised for scale and workflows are defined. We're fully prepared for scaling: all functions, systems and divisions are in place for our next stage. This is not our focus now.

2. Did you define a growth plan for your offering?

We have a vision but without details or facts yet. Not yet. We made a draft plan for expanding products/services to new target groups and regions. We completed a detailed expansion plan with calculations of resources in each scenario as well as a timeline and short- to mid-term goals. We have a clear plan for expansion, including estimates of necessary resources based on different scenarios.

3. Have you prepared a cash flow analysis for your expansion plan?

We defined prices, income and costs, but we're missing some data yet. We're in the process of doing so. No, we didn't have time for this yet. Mission completed: all cashflows are planned in detail. All cashflows are calculated, but there are some additional regions/target groups/channels to be checked.

1. Have you clearly linked all of your income and costs with your activities?

No, this is still work in progress. No, why should I? Partially; approximately 50% of these cashflows have been linked to our activities. Most; we're at about 75% completion. Yes, completely. We identified all drivers of income and costs and are able to extrapolate our cashflows based on our activities and different scenarios.

2. Does your financial model sufficiently explain the link between growth and capital needs?

It's more or less based on our experiences. No, we haven't considered this yet. Mostly; the need for resources was not completely linked to its drivers so far. The financial model is 100% complete and supported by different scenarios, data and/or management assessments. Yes, we've identified all the drivers for resources and capital requirements, but need to support it with facts and scenarios yet.

3. Did you define measurable key performance indicators (KPI) for success and failure?

No, what is this? Partially, but our data are not sufficient yet. We're in the process of doing so. This is all set and done: KPI measurement and processes are firmly in place. Yes, we have a solid data set and measurement but need to define adjustment processes for deviations between actual and plan.

The Social Problem