Trojan horse model of social enterprise: Achieving product-market-impact fit
Realising Impact at Scale is the raison d’être of most social enterprises. To achieve this, social enterprises need to actively seek out not only product-market fit but more importantly product-market-impact fit.
Social enterprises frequently need to engage and satisfy multiple stakeholders including donors, investors, government agencies, purchasers, users and end beneficiaries. Often, users are not actual customers, and beneficiaries are not primary users of your product or service. Given this wide gamut of personas, it could get arduous for founders and leaders to balance all of the associated motivations — some aligned, many misaligned.
So how could an early stage social venture reach impact goals while achieving scale and also managing different stakeholder expectations? We propose the Trojan Horse business model that has worked well for us at AcceleratED in Ethiopia.
Understanding Varied “Customer” Motivations
Our mission at AcceleratED is to rescue teachers and students from boring, scary and ineffectual classrooms. Currently our team directly works with over 200 teachers positively impacting over 4,000 students across 100 classrooms. We are growing rapidly and are projected to work with 2,000 teachers and 40,000 students in the next 3 years by 2020.
Our implementation model typically has 3 major steps:
- Sell our learning model to school owners or school management and identify cohorts of teachers to work with.
- Provide carefully designed learning inputs for teachers including trainings and mentorship, lesson plans and activity kits, student assessments and learning analytics.
- Closely monitor data (more details in an upcoming post) and upsell other services to school management.
Consider a very simple use-case of working with one private school. Our team has to manage 4 major stakeholder hierarchy levels.
- School owners are the purchasers,
- school principal and management are the enablers,
- teachers are the users of our learning inputs and finally,
- the students are our key beneficiaries.
Each hierarchy level has motivations that drive adoption of our learning model. Our team has managed to unravel and understand some key motivations as described in the below exhibit through innumerable interviews, conversations and sales meetings.
The Trojan Horse: Positioning your product/service to cater to all stakeholder levels
Product Market fit according to Marc Andreessen “means being in a good market with a product that can satisfy that market”. Eric Reis defines it as “the moment when a startup finally finds a widespread set of customers that resonate with its product’.”
For us to achieve quick product/market fit, our team could design a service that would cater to the most influential stakeholder: the purchasers (school owners) and help them market their school better to parents. But this would not necessarily help us attain our impact goals. On the other hand, we could develop an app or deploy an existing solution that can work in the classroom to only address student learning. But then, finding willing buyers for this would be non-viable.
Instead of wrestling with these diverging motivations, we incrementally developed our now flagship program, TeacherPD, that fulfils predominant concerns of all major stakeholders. TeacherPD is our take on teacher mentoring and development. Selected teachers undergo rigorous training in essential pedagogical concepts ranging from active learning to positive student psychology over a period of 8 weeks. Teachers are supported and coached throughout the school-year by our team who conduct regular classroom observations to ensure application of the new pedagogical concepts in the classroom. We record and analyze this data over time and support teachers with targeted feedback. We also facilitate peer-learning sessions among the teacher group to ensure widespread adoption of best practices.
The program resonates well with school owners, as it is is quite visible and easily marketable to parents. Teacher trainings in every school are moreover mandated by government regulations and schools are rated on number of hours of PD that their teachers receive. School admin and teachers as well give us great ratings because TeacherPD not only solves most of their pain points (needs) but also caters to a few of their ‘wants’. The Net Promoter Score (NPS)for this program is currently at 94%. Teachers across schools in many countries do not react well to external classroom observations. In our case, teachers urge us to make surprise classroom visits as they want to demonstrate our trainings in action.
Within this very easily understandable and visible program (and price) we embed many of our less “marketable”, yet extremely critical functions like classroom observations, improved lesson plans, activity kits and high-quality tests and student learning analytics. All these “under-the-hood” functions have little appeal to school owners who focus on the “big-picture” of earnings and profitability. Nevertheless, these functions ensure us to achieve not just product-market fit — but also product-market-impact fit.
