Impact at scale: are tech for good ventures at risk of mission-drift?
In a maturing tech for good ecosystem the question of impact validation is becoming increasingly important. While tech for good ventures have the potential to deliver meaningful positive outcomes at scale, evidence is needed to avoid ‘impact washing’. This risk is sometimes also called ‘mission-drift’ - the idea that, despite good intentions, as a company grows they move away from the initial problem they set out to solve.
At BGV, we believe that as our portfolio companies mature, so too should their impact practices. In our most recent Impact Report we shared an analysis for the first time to assess this hypothesis. The results are very promising. They show that there is indeed a positive correlation between the stage of a company and its impact management rigour.
Since 2017 we’ve used the Standards of Evidence framework to help us validate and understand our portfolio companies’ impact. By aggregating data collected on a company level basis across our whole portfolio we were able to identify trends across 90 active ventures.
The five levels of the framework denote a progression of evidence, with higher levels showing that there is more evidence demonstrating positive impact. The map shown below outlines each BGV portfolio company’s self reported level of evidence as of the 31st of December 2021. Through colour coding it also shows the proportion of companies within each level based on their stage of fundraising (representing their scale).
The map shows a positive correlation between the fundraising stage of the company and its impact management rigour. This performance is in line with BGV’s investment model that expects ventures to capture data using high-quality evaluation methods when they reach Series A. Indeed 100% of Series A+ ventures are at Level 3 or above.
Healthy Lives and Sustainable Planet ventures adopt sophisticated impact practices early on. Most ventures at Level 4 and 5 come from these two themes and some Healthy Lives pre-seed companies, such as Betwixt and IBS Coach, are outperforming evidence expectations for their stage. From our experience, this may be because startups in these themes need to go through rigorous regulatory approvals before they can scale.
Here we highlight examples of impact management practices displayed at each level:
Level 1: You can describe what you do and why it matters
Example: Taskher - graduated from the Spring 2021 programme; completed the impact measurement sprint.
Level 2: You capture data that shows positive change
Example: Club Soda captures data from participants throughout their Mindful Drinking course.
Level 3: You can demonstrate causality using a control or comparison group
Example: LettUs Grow conducted life cycle assessment studies to understand the impact of their product.
Level 4: You have one or more independent replication evaluations that confirms your conclusions
Example: Second Nature conducted multiple evaluation programmes confirming the efficacy of their digital diabetes-prevention programme.
Level 5: You have manuals, systems and procedures to ensure consistent replication of impact
Skin Analytics have processes and procedures for refining and optimising impact across new sites.
As more companies claim a positive impact, we think the most successful ones will be those who can prove it. This analysis paints a hopeful picture for both BGV’s portfolio companies but also for the wider tech for good sector. So long as a companies’ impact is innate to their business model, it looks like mission-drift shouldn't be a big risk.