This document outlines the agenda for Day 3 of a workshop on social innovation. The day includes sessions on the three strands of value in social entrepreneurship, social business models, and experimenting with social impact through experimentation and randomized controlled trials. Participants engage in activities to practice applying a business model canvas to social ventures and planning experiments to measure social impact. The document emphasizes testing interventions rigorously through randomized experiments to identify what programs and approaches are truly effective at creating social change.

1. Making social innovation work
Day 3
Edward Gardiner

2. Day 3
09.30-10.00 Recap on Day 2
10.00-10.30 The three strands of value
10.30-11.30 Social business models
11.30-12.00 Break
12.00-13.00 Experimenting with social impact
13.00-14.00 Lunch
14.00-14.30 Feedback and discussion
14.30-15.30 Activity: Business model/Measuring
15.30-16.30 Activity: Planning for the future

3. The three strands of value

4. Entrepreneurship
The pursuit of opportunity
beyond the tangible
resources that you currently
control.
Emphasis on opportunity
recognition, committing to
the opportunity, gaining
control over resources.
Often focuses on
breakthroughs and new
needs.
Social
entrepreneurship
Innovative, social value
creating activity that can
occur within or across the
non-profit, business, or
government sectors.
The drive is to create social
value, rather than personal
or shareholder wealth.
Often focuses on serving
basic, long-standing needs
more effectively.
Stevenson (1983), Austin et al (2006)

5. IDEO

6. Shift Design (2014)

7. Theoretical differences
• Market failure: emerge when there is a social-
market failure, i.e. commercial market forces
do not meet social need.
• Mission: creating social value for the the
public good vs. creating profitable operations
resulting in private gain.
• Resource mobilisation: ability to access
financial resources and capital markets.
• Performance measurement: measuring social
impact is harder than tangible and objective
financial measures.
Austin et al (2006)

8. Austin et al (2006)

9. Social business models

10. Design Council

11. Nesta

12. Strategyzer

13. Tandemic

14. Big Society Capital

15. Acumen

16. Gov.uk

17. Different legal structures
UnLtd

18. Types of business model
• Fee for service: Sell a good or service
directly to beneficiaries.
• Connector: Help facilitate trade
relationships.
• Intermediary: Help beneficiaries distribute
to an expanded market.
• Cross-compensation: Sell a good to one
group in order to subsidise another.
• Hybrid: Sell a good to one market in order
to support beneficiaries in another.

20. M-KOPA Solar (fee for service)
• Founded by Nick Hughes, Chad Larson and Jesse
More in 2011.
• Customers pay a deposit of $35 and then pay $0.5 per
day for a period of one year to own the solar system
using M-PESA.
• $200 device includes two LED bulbs, a flashlight,
rechargeable battery and adaptors for phone charging,
and is charged by a solar panel on the roof.
• Meant for off-grid customers using kerosene lamps.
• Connected over 500,000 homes to affordable solar.
• Current customers projected to make USD$375m
savings over the next four years, and enjoy 62.5
million hours of kerosene free lighting per month.
M-Kopa / Acumen

21. Kiva.org

22. Kiva.org (connector)
• Founded by Matt Flannery and Jessica Jackley in
2005 following a trip to Uganda.
• They met many entrepreneurs who wanted to
share their stories with friends and family.
• Mission to connect people and provide
entrepreneurs with dignity and respect.
• Local microfinance institutions worked with
entrepreneurs to get their business on Kiva’s
website. Investors anywhere could choose
entrepreneurs to loan money to.
• Over $1 billion lent, lenders and entrepreneurs in
150 countries worldwide.
Aaker & Chang (2010)

23. Social Innovation Lab
Marketing platform
development
Entrepreneurs in
developing
countries
# of entrepreneurs
$ lend
$ repaid
# dependents
Create jobs, reduce
poverty
Borrower
Family of
borrower
Well-off individuals
who are socially
conscious
Service
Kiva.org
Repayment risk
Managing
risk
Managing
platform
Screening MFIs
Optional donations
Collecting loan
capital
Proving loans
Kiva.org platform
Local MFIs
Payapl
Donor network
Brand
Financial ability to
start business
Promote market
based solutions to
povertyLocal microfinance
institutions

25. Ten Thousand Villages
(intermediary)
• Non-profit fair trade organisation founded in
1946 (one of the largest and oldest).
• Markets crafts made by disadvantaged
artisans from over 30 countries.
• Over USD$140m has been earned by
makers who would otherwise be unemployed.
• Income earned by the producers helps to pay
for food, education, healthcare and housing.
• Price mutually agreed with upfront payment,
builds long term partnerships, ensures good
working conditions, emphasise reuse/recycle.
Ten Thousand Villages

27. Ziqitza (cross-compensation)
• Mumbai and other cities in India lack reliable
ambulances or emergency services.
• Ziqitza Health Care Ltd founded in 2005 by group of
young professionals, providing 24/7 call centres and
ambulance tracking.
• In Mumbai, operates a sliding price scale that depends
on a customer’s ability to pay and circumstance
(accident victims travel for free).
• ZHL operaties 980 ambulances across five states, has
served over 2 million people, has been awarded $80m
in government contracts.
• Was the first ambulance services to arrive at the Taj
and Trident hotels during the Mumbai attacks in 2008.
Ziqitza / Acumen

29. Hot Bread Kitchen (hybrid)
• Founded by Jessamyn Rodriguez. Bakers in
training programme launched in 2007, and HBK
Incubates launched in 2011.
• Employees, mostly low-income immigrant women,
bake bread inspired by their countries of origin.
• They learn job skills that can lead them to
management positions in the food industry.
• Bakery is widely acclaimed for its innovative
selection of international breads.
• 65% of operating budget is funded by bread sales
and kitchen rental. Philanthropic support makes it
possible to provide industry-specific training.
Hot Bread Kitchen

30. Other models
• Add ons (e.g. airlines)
• Advertising (e.g. online publishing)
• Auctions (e.g. eBay)
• Bait and hook (e.g. razors, coffee makers)
• Franchise (e.g. TED talks, restaurants)
• Freemium (e.g. mobile gaming)
• Long tail (e.g. micro-breweries)
• Low cost (e.g. airlines, credit cards)
• Subscription (e.g. health clubs)

32. Break

33. Experimenting with social
impact
How experimentation can be used to
understand what works (and improve
what doesn’t)

34. Three types of question
• Descriptive: describe what is going on or
what exists.
• Relational: look at the relationships
between two or more variables.
• Causal: determine whether one variable
causes or affects one or more outcomes.

35. “In the 20th century, randomized, controlled
trials have revolutionized medicine by
allowing us to distinguish between drugs that
work and drugs that don't work. And you can
do the same randomized, controlled trial for
social policy. You can put social innovation to
the same rigorous, scientific tests that we use
for drugs.”
Esther Duflo
Abdul Latif Jameel Poverty Action Lab
TED (2010)

36. First principle of science
To demonstrate whether an activity causes
an outcome to occur, you need to provide
evidence for two statements:
1. If the activity is given, then the outcome
occurs.
2. If the activity is not given, then the
outcome does not occur.

37. Treatment group
Control group
Drug
Placebo
time
1. RANDOMISE 2. IMPLEMENT 3. MEASURE
BETWEEN GROUPS
WITHIN GROUP
Sample

38. Strength of conclusion
Intervention
What you do
Observation
What you see
Causes
Alternative
causes
Alternative
causes
LAB ENVIRONMENT

39. Is random
assignment used?
Randomised or
true experiment
Is there a control
group or multiple
measures?
Quasi-experiment
or matched trial
Non-experiment
Yes No
NoYes

40. Who are the sample?
• Citizens, staff, customers, volunteers,
managers, people.
• Is it a natural experiment or will you
need to provide an incentive to
participate?
• Do you have enough people or will
there be a cost of recruitment?
• Are they representative of the
population?

41. How will you randomise?
• Assign individuals, clusters, locations
or areas.
• Is it possible to randomise individuals
or cluster to different groups?
• Is it possible to personalise what
individuals or clusters receive?
• Will different groups know what the
other groups are getting?

42. What are you testing?
• New intervention versus nothing,
current practice or different variations.
• Is there existing evidence to support
what you’re testing?
• Is the intervention an incremental
change or a radical new approach?
• Are you testing proof of concept or the
final version before scaling up?

43. What are you measuring?
• Attitudes, experiences, decisions or
actions.
• Psychological scales, surveys and
observation.
• Are they subjective or objective
measures?
• Are they direct or proxy measures?
• When will the measures be taken?

45. 61m person experiment in social
influence
Context
Voter turnout is significantly correlated among
friends, family members and co-workers,
although anecdotal accounts suggest that online
mobilization has made a big difference in recent
elections, a meta-analysis of email experiments
suggests that online appeals to vote are
ineffective.
Method
• 18 yrs who accessed on 2 Nov 2010.
• A: Social (n=61m, message, poll
information, counter and button, friends).
• B: Informational (n=600k, as above, no
faces of friends).
• C: Control (n=600k, no message).
Bond et al (2012)

46. Incentives for immunisation
Context
Every year an estimated 2 to 3 million people die
from vaccine-preventable diseases. A lack of
understanding of the benefits or even suspicion
are possible reasons rates remain low in India.
Cash incentives are effective but too expensive.
Can small incentives have a big impact on
immunisation rates?
Method
• Clustered randomised controlled trial with
174 villages in Udaipur, India.
• Intervention A (30): mobile immunization
team conducted monthly camps.
• Intervention B (30): same but parents also
offered 1kg of lentils each time.
• Control group (74): nothing.
Banerjee et al. (2010)

47. Reducing aggression in A&E
Context
Violence and aggression towards frontline staff,
including 59,000 physical assaults, is estimated
to cost the NHS at least £69 million a year in
staff absence, loss of productivity and additional
security. How can better visual communication
reduce frustration, anxiety and abuse towards
staff?
Method
• Pre/post, matched controlled trial across
four NHS Trusts in the UK.
• Pilot sites (2): signage and people project
design solutions implemented.
• Comparative control sites (2): no design
solutions implemented.
Design Council / Frontier Economics (2014)

48. The questions shape the answers
• How short was
Napoleon?
• Should concerned
parents use infant car
seats?
• Where do you enjoy
drinking beer?
• Do you always eat
breakfast?
• How would you describe
Napoleon’s height?
• Do you think special car
seats should be required
for infant passengers?
• What do you normally like
to drink?
• How many days a week
do you eat breakfast?
Survey Monkey

49. Correlation ≠ causation
Intervention
What you do
Observation
What you see
Correlation
State of the world
Not what you do

50. Tyler Vigen

51. Tyler Vigen

52. Regression to the mean
A statistical
phenomenon that if a
variable is extreme on
its first measurement,
it will tend to be
closer to the average
on its second
measurement, and
vice versa.
Research methods knowledge base

53. Extrapolating beyond data
xkcd

54. BBC News

55. OK Cupid

56. Netflix

57. Debunking some myths
1. We don’t necessarily know ‘what works’
2. RCTs don’t have to cost a lot of money
3. There are ethical advantages to using
RCTs
4. RCTs do not have to be complicated or
difficult to run
Test, Learn Adapt (Cabinet Office)

58. Lunch

59. Feedback and discussion

60. Discussion

61. Business model canvas

62. Strategyzer

63. Activity

64. Measuring what works

65. Three types of question
• Descriptive: describe what is going on or
what exists.
• Relational: look at the relationships
between two or more variables.
• Causal: determine whether one variable
causes or affects one or more outcomes.

67. Activity

68. Planning for the future

69. Project premortem
1. Leader informs the room that the project has
failed spectacularly.
2. Everyone independently writes down every
reason they can think of for the failure (especially
things they ordinarily wouldn’t mention).
3. Leader asks each team member to read one
reason from his or her list. Everyone states a
different reason until all are listed.
4. After the session, the project manager reviews
the list, looking for ways to strengthen the plan.
Klein (2007)

70. Activity