Note: This post was originally released in Teach For America’s Social Innovation monthly newsletter

It happens in the world of social impact as often as it does in Silicon Valley startups: You come up with an idea that could change the world, and you pursue it with passion. You start talking to potential funders and applying for grants. Even worse – you may have already raised a large sum of money without even supporting your stakeholders. 

 

But you’ve bypassed a critical first step: You didn’t ask those you’re trying to serve if they would buy-in. Is your new product or service solving a key problem for your stakeholders or making their daily lives better? Were they part of the creation or design process?

 

It’s a problem borne of good intentions, so by no means are we trying to dissuade anyone from pursuing systemic change. We have just learned from experience that successful social entrepreneurs need to stay proximate to the change they’re seeking to make. 

 

We’ve helped 40+ organizations across 15 states — schools, nonprofits, and for-profit alike — build viable business models, assess product-market fit, and create a plan for their venture that prioritizes sustainability, as well as impact. In the programs we’ve piloted ourselves — such as the family empowerment initiative we’ve done in collaboration with a district and charter school in Charlotte, N.C. — we’ve conducted the same due diligence. 

 

And we can tell you, it works. 

 

Here are a few best practices we’ve collected throughout that work to help make your journey into social entrepreneurship a success. 

 

Speak with those you seek to serve. 

Sounds lofty but it’s really simple: You need to talk to your customers. For instance, if you’re building a tech platform focused on transforming schools, you need to talk to those schools and superintendents to understand if your platform solves an actual need, rather than a perceived one. Further – are Principals already being bombarded by too many tech platforms? 

• Suggested Action: Talk to 5 Principals in your local market. 

 

Understand your customers’ budgets.
You have to understand where your revenue will come from, and this goes for both for-profits and nonprofits alike. If you are designing an after-school program, for instance, you need to know if a particular school has the budget for such a program. If they do, how much is it? If the school you’re targeting can’t afford what you’re trying to build, perhaps you need to pivot the ask.  

• Suggested Action: Research and find three of your potential customers’ budgets (school, non-profit, etc.) to understand what’s feasible from their end and other funding options in the ecosystem.

Know the true costs of your business model.
You may know what it will take to develop your program or build your platform, but do you know how much it will take to keep your entire operation up and running? How much will you spend on salaries, systems, and support? Those costs will determine how much money you need to charge for your services, or how much you’ll need to raise from investors, donors or grants (after you already have earned revenue, of course). 

• Suggested Action: Build out a 6-month financial model to understand your true costs. These include: product/service development, stipends/salary, home/office rent, etc.

Start with one or two (paying) customers.
People are willing to do plenty of things for free. That’s why non-paying customers won’t give you an accurate indication of your potential success in the market. You need to find at least one customer who is willing to pay for your services or products to determine whether you have a viable business model. That will also serve as a springboard to pitch to larger foundations or investors, who will want to see product-market fit before contributing to your vision. 

• Suggested Action: Secure one paying customer (school, afterschool program, corporate partner). You can be flexible on the price point but find one person to pay for the services/product you are offering. 

Start tracking your data — early.
When you’re first starting out, it’s easy for anecdotes to define your success or failure. Someone raves about what you’re doing, and you use it as validation and fuel. But success is defined by consistent results, replicated over time. The only way to determine that is by tracking your data from the beginning, everything from financials to impact. 

• Suggested Action: Test your pitches. Test your price points. Test feedback from those you seek to serve. Test and track all of it.

Whether you’re building a business focused on financial gains or social impact, your goal is success, and the same basic rules apply. Don’t let the potential and promise of your vision cloud the pragmatism of your execution. After all, your impact only grows when that vision is built on a solid foundation, one that can withstand the stresses of iteration and scale. 

You want to change the world. Our advice: Do it thoughtfully. 

• Suggested Action: Get after it.

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Greg is a 2008 Teach For America Corps Member and taught high school science for three years in Charlotte, NC. He is currently the Founder and Principal of SchermCo, a social-impact implementation firm focused on organizational development and implementing solutions that drive real change in education. Reach Greg at greg@scherm.co to chat, connect, and discuss ideas.