Articulating an impact thesis
Introduction
What is it and how does it align with traditional venture building?
Many startups articulate a vision, mission and roadmap to achieving those. An impact thesis articulates what the social or environmental problem is that’s being targeted, what the solution might be and the potential outcomes of addressing the problem. It outlines a set of assumptions to be tested which if they hold true would create impact (e.g. Oyster’s impact thesis). Impact theses will likely be iterated several times over a startups journey (much like commercial assumptions).
How does it drive impact?
Having a clear articulation about how you think impact will occur makes it easier to identify which assumptions need to be tested. It also makes it easier to generate learning and iterate the model over time if impact outcomes are not being achieved.
How does it drive commercial value?
Being clear what impact the company is trying to achieve helps to align stakeholders with the company’s purpose. Key stakeholder groups with clear commercial value include top-tier talent that is seeking more meaningful work; investors that are looking for mission aligned business models to invest in; and regulators keen to ensure that future companies do not cause harm.
In practice
What does good look like?
A good thesis should answer the following questions (in line with the theory of change framework):
Problem: What is the social or environmental problem you're trying to solve (problem statement)
Activities/inputs: What will you do to contributing to solving it and why will this solve the challenge (ideally backed up with evidence)?
Outputs: What will your activities achieve?
Outcomes/impact: What outcomes does that create in the world? (it's helpful to organise this using existing frameworks (UN SDGs, IMP's five dimensions of impact, etc.)
Unintended consequences: What are the risks?
This will likely be a lot of information. It's helpful to try and keep this as clear and tight as possible (as you would a traditional pitch deck) and focus on what are the key assumptions you need to validate over the next 6-18 months to build conviction that the solution you're working on will create impact. The use of as much evidence as possible helps to differentiate an exceptional thesis from an average one.
Some examples:
Last updated