Over time, we realized that if you want to get to real scale, two questions really matter: 1) Who’s the doer, and 2) who’s the payer?
Thinking about the doer is simplified by the fact that there are only four choices:
- You: running an NGO or business that gets impact to scale through growth or leverage
- Lots of NGOs: replicating your model
- Lots of businesses: replicating your model
- Governments: delivering your model through programs and policies
They’ve all got pluses and minuses, like this:
- You: Having full control over replication means that you can deliver a complex model at high quality. Building and growing a really big organization is a pain in the ass, especially in a dysfunctional funding market.
- Lots of NGOs: Plenty of bandwidth there, and it shifts fundraising off your back, but NGOs are notoriously bad at implementing other NGO’s ideas.
- Lots of businesses: We’re not interested in one-off businesses—it’s industries that solve problems. Capital remains a problem: Mainstream investors won’t touch most of this stuff, and impact investors are way more risk-averse than the name implies.
- Governments: They have big bandwidth, lots of resources, and a mandate to serve—and they’re probably the only way a lot of basic service solutions will scale. They are often inefficient, inconsistent, and corrupt. Have fun.
That’s it. Pick one, and pick it early: A model will only scale if it is designed with the doer in mind. Got one? OK, now pick a payer at scale. Conveniently, there are only four them as well:
- Customers: revenue from product sales
- Taxes: revenue raised by governments
- Big Aid: multi- or bilateral revenue from rich governments to poor governments; sometimes delivered straight to the doer, sometimes delivered via government
- Private philanthropy: from Gates to the individual small donor
Once you’ve picked your doer and payer, you’ve got the context you need to think usefully about the scalability of your model. Three questions:
- Is it cheap enough? This is about cost-effectiveness—the cost-per-unit impact—but it’s also about the price the payer is willing to pay.
- Is it simple enough? If your model is complex and requires ninja-level execution, then you’re going to be doing it yourself.
- Is it adaptable enough? Cookie-cutter solutions don’t work very often. The best models use a systematic process to generate locally appropriate solutions.
So if you’ve picked your doer and payer at a million beneficiaries (and sometimes there can be more than one of each, but it is usually better to design around one), and think you’ve got something scalable, try this: Pick the next order of magnitude from where you are now, lay out your doer(s) and payer(s) for that, then do the same for the next order of magnitude. What emerges from that is the outline of a strategy to get to scale—and the chance to assess whether you’ve got a solution that can make the trip.
The above is an edited excerpt from from an article originally published on Stanford Social Innovation Review. You can find the original piece here.