In this article, we share how we leverage on the 80/20 rule to create toolkits to help our portfolio companies overcome some of the challenges they might face in areas such as legal, impact measurement, finance, and content generation. In areas such as impact measurement, based on our observation, as many as 80-90% of social enterprises do not know how to measure their impact.
As we lend at scale, we are not able to be as involved in our portfolio companies as we’d like to. Together with our raised bar over the course of multiple borrowings that “pushes” social enterprises working with us to become more sophisticated in these areas, there is a need to support our many social enterprises in their journey in tackling these challenges.
When we did our research, we found that many current solutions in the market, while extremely comprehensive, were time-consuming, expensive, or required much other resources. It was impossible for us to implement any of these solutions to our own portfolio companies, much less help other social enterprises.
Instead, we’ve relied on the 80/20 rule (Pareto Principle). It suggests that 20% of one’s activities will account for 80% of the results. There is diminishing returns on the incremental time one put into most activities, but the initial energy put in yields disproportionately large results.
We asked ourselves if we could create toolkits to help social enterprises put in 5% to 20% of the effort but yield 40-80% of the results. Fortunately for us, many social enterprises are at 0% in some of the above-mentioned areas. This makes our job easy – creating toolkits that bring the social enterprise from 0% to 40-80%, and leave the tough job of bringing them to 100% to others.
For example, we challenged ourselves to create an impact measurement toolkit that could be completed within 2-4 hours and help our social enterprises think about logframes, longitudinal studies, and report their impact at market benchmarked levels. Our efforts resulted in the Givfunds Impact Measurement Toolkit.
Similarly, we have done or are looking to do the same for other important business aspects such as videography, legal, finance, and marketing.