Systemic Venture Framework

Why we need new frameworks

In the past 40 years, there has been nothing short of an explosion of social enterprises seeking to have a positive impact on society. According to the Global Entrepreneurship Monitor (GEM) in 2015, one-third of all new ventures created around the world were done so primarily for a social or environmental purpose as opposed to a commercial aim.

But despite the growth of social enterprises, we face serious challenges in building a truly sustainable society. The World Economic Forum recently noted: “There is no future for business as usual — we are reaching irreversible tipping points for nature and climate, and over half of the global GDP, $44 trillion, is potentially threatened by nature loss.”

Why hasn’t the explosive growth in social enterprises led to a better outlook for society? One of the challenges we see is that many social enterprises focus on the “less bad” solutions or on addressing the symptoms of a problem rather than the root causes.

At Metabolic Ventures, we believe that addressing our shared societal challenges will require evolving our thinking for how we build mission-driven enterprises. For that purpose, we have been working on frameworks that help us understand what it means to build not just ventures that are helpful, but ventures that are working to transform the system they are working within to be fundamentally more regenerative by design.

Systemic Venture Framework (SVF)

What it is

Metabolic Ventures has developed the Systemic Venture Framework (SVF), which acts as a qualitative lens through which to design, support, assess, and improve ventures that aim to create transformative impact.

Having worked at the intersection of systems thinking and high-impact venture building, as well as assisting the transition of organizations in many different sectors and industries, Metabolic looked to uncover the key approaches and criteria that more transformative enterprises have in common. We also spent two years mapping out what we believe are the key initial components of an enterprise that has the long-term potential to create significant positive change.

The SVF includes 20 building blocks, and it guides entrepreneurs through key questions that should be answered to effectively construct each block. The framework can thus be used as a design tool, providing the parameters we should be aiming for when designing a transformative venture in the early stages.

Potential vs. actual impact

It is key to note that the SVF considers systemic impact potential.

Typical impact assessments that attempt to quantify actual impact do so by measuring lagging indicators. These are often quantitative, but nevertheless use direct output metrics — how much CO2 has been saved, how many jobs have been created, how many people have been trained, etc.

However, systemic impact takes a significant amount of time to prove out and can be difficult to measure, particularly for early-stage ventures. As an example, you could probably calculate Tesla’s CO2 impact, but could you quantify the effect they have had on the automobile industry? Although quantitatively measuring outcomes is also important, and we need to improve how we are able to capture the indirect — or systemic — impacts an organization is having, we cannot possibly wait 10–15 years to understand a venture’s impact on the overall system. We need early ways to assess the potential of a venture to have large-scale, systemic impacts.

Potential and qualitative impacts are not a unique way to judge a venture in the early stages. Most investors will say they look first and foremost at the team, which is both a leading indicator of success and highly qualitative. Leading, qualitative indicators are thus effective (and accessible) tools to help us make educated assumptions about a venture’s future potential.

What it includes

The SVF includes four top-level categories:

Each category has a number of criteria or sub-objectives that dive into more specifics, with 20 in total. And each of those has a number of questions that help guide entrepreneurial teams to do the thinking necessary for an intelligent and holistic design of a high-impact venture.

To explore the full framework and understand how it can be applied, visit Metabolic Ventures’ full article here.