What Social Impact Is…and What It Isn’t
It’s time for a conversation about what social impact is — and what it isn’t.
Breaking news for all of you tech entrepreneurs who think your app that brings a burrito to my door a little faster “changes the world”…it doesn’t.
And guess what? That photo sharing app, which makes it a little easier to filter your selfie? Nope that doesn’t really change the world either.
So, what does?
I believe a company or an investment does not create social impact unless it meets the following three criteria:
1. It addresses a pressing social or environmental problem. This does not include increasing the efficiency of business. That is an important undertaking, but just because it is important, does not make it a “social impact.”
2. The impact must be measurable. Vague notions of a company or an investment being “good” do not cut it anymore. The world’s many problems require specific solutions, and if you can’t measure the impact of the solution that probably means you aren’t achieving an impact.
3. The impact must be intentional. If it isn’t, there is no way for investors or donors to evaluate the impact.
Valuation does not equal social utility. Let’s admit it — a lot of things that are valuable financially in our society have little meaningful social utility. The market capitalization of World Wrestling Entertainment is $1.67 billion. Get my point?
Congratulations on being able to view your meal in augmented reality before it comes to your table!
Great news! A robot can now bring your pizza instead of a person!
You built and married a robot wife? Hope you live happily ever after!
But let’s reject the notion that any of these things “changes the world” or has any meaningful — positive — social impact.
Some of our greatest minds are focused on building companies that may create wealth but create little meaningful impact.
We need to stop pretending that this helps us address the problems we face.
Let’s be more rigorous when deciding whether a company “changes the world” — and lets celebrate the entrepreneurs who tackle the things that matter.