In this lecture, I want to talk about testing your assumptions. So, let's suppose you've been cultivating your purpose and you've really gotten excited about this idea, this new world of business and you're thinking, "I want my work and my business to help overcome a significant social or environmental challenge in my community or the world. So, now what?" So, I've suggested a critical next step is testing your assumptions. So, entrepreneurs are often advise to test their assumptions, and usually it's, hey, you need to prototype your products, you need to begin with a lean startup, you need to make sure there's actually a market for your products and services. The customers actually want what you're producing. It's a little different when it comes to purpose-driven businesses. All of that is still important, but it's also going to be very important to test your assumptions about the larger problems and solutions that you're considering about how you're going to achieve your purpose. So, why is this so important? Why is it important to test your assumptions about these problems and challenges and solutions? Well, it turns out it's easy to go after the wrong problem. You make an assumption about what the problem is and in the process you get the problem wrong. So, you don't actually solve the real problem. You may do no benefit. You may waste a lot of effort. In some cases, you can actually cause harm, you can certainly cause cynicism and hopelessness. So, it's important to get the problem right and understand as much as you can about the challenge you're trying to solve before you start actually doing it. To drive home this point, let me give you some examples of the kinds of problems that purpose-driven companies and leaders are trying to tackle. They may be trying to improve sanitation in the world's worst slums. They may be trying to create job opportunities for people who have been chronically unemployed. They may be trying to provide lighting to people who have no electricity. They may be trying to prevent unwanted pregnancies. These are complex problems, and to make a real difference, you need to test your assumptions about those problems. Do I have the problem right? To give an example of why it's so important to test one's assumptions and how much you can learn in the process, I want to talk with you about Doug Rauch, the founder of a remarkable business called Daily Table. So, Doug Rauch is the former president of Trader Joe's, a very successful chain of grocery stores across the United States. When Doug retired from Trader Joe's, he knew a few things. He knew he wanted to make a difference in the world and he knew that a lot of food in the United States and around the world goes to waste. A lot of food gets thrown away that's perfectly safe and should be eaten. In fact, about 40 percent of food in the United States goes uneaten. It's thrown out before it's actually gone bad, think crackers, bread, juice, canned soup. A lot of it is thrown out because it doesn't look pretty. So, tomatoes that aren't perfectly round, apples with a few bruises, lettuce leaves that are just a little too short. All of that food actually doesn't get sold and doesn't get eaten. That's a lot of healthy food, good food going to waste. So, Doug knew a few things, he knew he wanted to make a difference in the world, and he knew that a lot of food goes to waste in the United States. He also assumed a few things and it turned out he got some of these assumptions wrong, and we'll talk about that. So, he assumed that many Americans are hungry and that they literally can't get enough calories to eat on many days. He assumed that if you get more food to food banks and other organizations, like churches and community centers, they give food away to people, you could solve the problem. But, Doug was really smart about taking the time to study the problem before actually launching his new company, The Daily Table. What Doug did is he spoke with experts. He read up on the problem. He spoke with members of the community. He visited the community and spoke with the people who wanted to serve and benefit. In the process, he learned a lot that challenged his assumptions. So, one of the things that's advised for people as they test their assumptions is actually write them out as hypotheses. So, one of Doug's was, many Americans are hungry. On many days, they can't get enough calories to eat. Well, turns out that's not exactly right. There are not many Americans who are hungry in the sense of starving, but there are many Americans who are food insecure. They can't get access to healthy food. They can't afford healthy food. They worry about how can I pay for healthy food, how can I feed my children, and pay my other expenses. So, the problem isn't so much calories. They can get enough calories. They can't get healthy food. In fact, this problem of food insecurity is actually associated with obesity in the United States. They can buy cheap and lousy food that's not very healthy for you, but they can't afford healthier food. So, it's not so much that people are hungry, but they're food insecure. Doug learned that. Another assumption Doug had was that, you could just get more food to food banks and charities, you'd solve the problem. As he spoke with food banks he learned, that's not exactly right. Food banks don't usually would need more food. They really especially need fresh produce and vegetables. So, that's what they had trouble getting and providing. At the same time, Doug learned, people don't really like going to food pantries to homeless shelters and the like. They don't love to go get their food there because there aren't a lot of choice over what they eat there, what they're given. The food, they may be given a big sack of potatoes, for example, or some food that's difficult and time consuming to prepare, and they may feel ashamed and embarrassed. So, there are a lot of things that Doug was learning that didn't quite fit his assumptions and he considered various options and thought, "Well, having to solve this problem, maybe I just should try to change government policy, for example, change the food stamps program in the United States." As he talked to experts they said, "Doug, Doug, don't try to solve government policy. You're not a lobbyist. You don't know that. What you know is retail. Do retail." Ultimately, what Doug has done as has created this remarkable innovation called the Daily Table. It's actually a non-profit, so that other companies can donate food to the Daily Table. It's operating in a poor community outside of Boston, Massachusetts. It opened in June, 2015. The plan is to open other additional stores, and it is a store that sells healthy food as cheap or cheaper than fast food like McDonald's. It also has a lot of prepared meals kind of "Grab and Go" meals for people who lead busy and stressful lives, and the food is cheap. So, how cheap? We actually called the Daily Table and asked well, what does it cost for a dozen eggs? Yesterday, a dozen eggs at the Daily Table costs 99 cents. If you look at other stores around the community, a dozen eggs is going to cost twice that, three times that or even four times as much. Here's how Doug describes the purpose of the Daily Table. At Daily Table, we believe that delicious, wholesome, and affordable food should be available to all. We're on a mission to help communities make great choices around food by making it easy for them to choose tasty, healthy, convenient, and truly affordable meals and groceries, and we do this in a respectful manner that honors our customer, engendering dignity. So, pulling together some of those lessons from Doug's example and best practices, here's how I encourage you to test your assumptions. First, write your assumptions down, what are your hypotheses? We talked about Doug's hypotheses. Many Americans are hungry, that's an example. Then, test your assumptions. How do you do that? You talk to experts. You ask professors and researchers "Hey, do I have this right? Do I understand the problem? Am I missing something? What are common misconceptions about the problem?" Professors, researchers, people who really know the problem, they'll tell you. It's important to dig into the research. What is rigorous research actually tell us about these problems? What is it that we're not understanding? One of the things that often comes up in research is that subgroups of the population are different, maybe urban areas are different from rural areas, maybe children are different from teens, are different from adults, are different from the elderly, maybe regions of the country are different. So, it's important to dig into the research literature to know what's the nature of the problem and what's been tried and has it worked. You also want to consult with leaders who work and live in the communities that you're trying to serve. What do they think the problems are? What strategies do they recommend? What ideas have others tried, but it turned out that those ideas failed? Last and absolutely not least, really important is talking with your target audience, the people whose lives you hope to improve, and what would make a difference in their lives? What would be ideal? What sounds most appealing? What sounds insulting or patronizing? Doug learned a lot from talking to folks in the communities where he ultimately opened the Daily Table, and he learned about what sounded appealing, dignity, choice, and what sounded insulting or patronizing. Of course, at some point, you need to come on to actually piloting your strategy, knowing that you're going to make adjustments even with all the work that Doug put into creating the Daily Table, he's still learning, and changing the model as they continue. So, I would say the last point is test your impact strategy, pilot the project, and then try, try again. It's going to be important to revise it. Then, I think one more point that's really important to make about testing your assumptions, and that is the recognition that enduring problems are usually multidetermined, which means they have many cases, they're complex problems. So, when you set out to solve a complex problem, if you think you have found the simple, easy answer to a complex problem, you probably haven't because most of those really complex problems, they don't have simple solutions. So, returning to the example of Doug Rauch and The Daily Table, as Doug dug into the problem of unhealthy eating in poor communities, and this notion that food that would otherwise have gone to waste could be beneficial, he learned a lot about what were the causes of unhealthy eating in poor communities. He learned, for example, it wasn't just a lack of grocery stores, and it wasn't just limited availability of healthy fruits and vegetables, and it wasn't just the cost of such food, and it wasn't just residence lack of time to prepare food, and it wasn't just their experience, their limited experience preparing and eating some healthy kinds of foods, and it wasn't just the insult to dignity and choice that they felt when they went to soup kitchens in community centers. It was all of those things, and Doug went about trying to solve all of those with his innovation. So, again, I encourage you as you explore your purpose, to test your assumptions. Start by writing down your hypotheses, then talk with experts, read research reports, talk with community leaders, talk with recipients, the folks who are actually trying to help, and be prepared to try, try, and try again. To help you test your assumptions, we've created a worksheet, which will allow you to explore those assumptions, test your hypotheses, think about how you would do that.
