How to track the social impact of your early stage startup (health tech edition)
A quick 3-step process
If you’re in the early stages of scaling a startup, chances are you’re not generating much revenue yet. So how can you convey the positive social impact of your business to the outside world, especially investors? It’s incredibly important for you to begin thinking about a framework to capture your startup’s impact.
There is so much literature out there today on how to measure the social impact of a company, a community organization, a nonprofit and the like. The Global Reporting Initiative Standards (provided by the Global Reporting Initiative) and the Sustainable Development Goals (designed by the United Nations) are just two of them. Here is a good blog that breaks down various frameworks in more detail.
However, for early stage startups, all these established frameworks and metrics can be overwhelming! Here’s a quick 3-step process that can help track the social impact of your early stage startup, so you can share some details in your next board meeting!
1. Have a clear problem and solution
This is obvious and it sounds like clickbait, but hear me out. The first (and most important) step is to develop clarity about the problem that you are solving, and the solution you provide. This is so incredibly important because you can’t justify the impact of a made up problem or offer a solution that isn’t actually a solution.
Here’s an example of a complete problem-solution set for a healthcare-focused startup.
Problem: So many people struggle with anxiety.
Why is this a problem? According to the AADA, “General Anxiety Disorder affects 6.8 million adults or 3.1% of the U.S. population, yet only 43.2% are receiving treatment.” According to an article published by the International Journal of Psychiatry in Clinical Practice, “Untreated and/or undetected anxiety can have negative consequences including disability, reduced ability to work leading to loss of productivity, and a high risk of suicide.”
What is the solution? We built a therapy app called NoMoreAnxiety.com that matches you with a local therapist specialized in treating General Anxiety Disorder.
Why is this a good solution? NoMoreAnxiety.com can help normalize anxiety treatment and democratize access to therapists via an app. Focusing on a mobile app in addition to a web app allows people to find help on demand, no matter where they are.
By answering these questions, you can begin to lay out some Key Performance Indicators (KPIs) to measure the impact of your proposed solution.
2. Identify some KPIs and put them through the SMART filter
SMART Filter
KPIs should be SMART. Smart means:
S = Specific
M= Measurable
A= Attainable
R= Relevant
T=Time Bound
How to Measure Impact
Milestones vs Change
Most impact-based KPIs for a startup are either a measure of milestone and/or change. This means that startups are tracking counts/values of something (milestones), or a change in something (change).
In the Health Tech sector, examples of a milestone KPI and a change KPI are shown below:
Applying this to our example of NoMoreAnxiety.com, a milestone KPI may be the total number of unique therapy sessions completed this quarter. A change KPI may be the change in satisfaction level of a person who undergoes therapy over the course of 6 months.
Individual vs Aggregate
When tracking your impact KPIs, you’ll also need to decide if your metrics will be tracked at the individual or aggregate level. Individual KPIs are a measure for a single person/instance, while an aggregate KPI combines individual KPIs.
Allow me to show two examples:
HabitTracker is a productivity app that allows you to create and track your habits. By logging in the completion of your daily habits, you can track your progress towards your desired goal. An example of a KPI includes things like “Go to the gym every day for a week” or “Walk 50,000 steps a week.” From the perspective of the user, these KPIs are tracked at the individual level — the KPI is unique to you and only you. Because tracking steps and logging gym attendance are values (ex. # of steps completed, Y/N counter), they can be considered milestone KPIs.
On the other hand, BetterHelp, an online therapy platform, publishes their impact by tracking KPIs focused on aggregate level change in thoughts. In their own words, BetterHelp “monitor(s) utilization rates, access mutual stressors, review satisfaction surveys/scores with…access to aggregated level (non-PII) reports.”
This means that BetterHelp uses an aggregate, change-based KPI, measuring collective satisfaction (change in thought) of its users over time to convey the impact that the platform as a whole has on improving the outcomes of the people that it serves. Consequently, BetterHelp may present their impact with statements such as, “based on our survey results, 85% of the users of our app saw at least a 50% reduction in depressive thoughts over the course of 6 months.”
Keeping all of this in mind, as you define the KPIs for your startup, you will want to be able to answer these questions:
Going back to our example for NoMoreAnxiety.com, if one of your KPIs is the number of unique therapy sessions completed, it may look like this:
Which quarter is this update for? Q3 2022
What KPI are you tracking? Number of unique “first time” therapy sessions completed on the platform
What is the value for this quarter? 150 first-time sessions (with a goal: 150 in Q3 2022)
What is the annual goal for this metric? 500 first-time sessions
Is this metric a milestone or change in thought/behavior? Milestone
Are you tracking at an aggregate level or individual level? Aggregate
Assuming that your startup tracked this way for both Q1 (50) and Q2 (100), you can then make a graph like this:
And confidently make a statement like this:
“NoMoreAnxiety was able to achieve on average 83% progress across all of our milestones in the third quarter, with an average cumulative completion of 73% towards the fiscal goal.”
3. Choose your strategy and stay consistent
Do you track milestones, change, or both? Are you tracking KPIs at an individual level or at an aggregate level? Some early stage startups opt for case studies and testimonials (individual), while others collect survey results across an entire population (aggregate). Some startups choose milestones (such as the number of users onboarded to your platform) while others opt for change (such as the impact the use of a platform/service had on a person’s health condition over time).
Regardless of how you choose to present the impact of your startup, it’s always better to stay consistent in how you track and present your KPIs. To show repeatability, storing impact data in a database (even if it’s as simple as a google sheet) is important so that later you can run deeper analytics.
This easy 3-step process will help you consistently track and demonstrate your startup’s impact, both for investors and consumers.
Thank you for reading! Feel free to visit my website at https://www.ayaspencer.com to learn more about my work.
If you are an impact driven startup, let me know of some ways that you track impact and why! If you are an impact driven startup looking to fundraise, send us a pitch at kaporcapital.com/pitch.
