Impact startups — a broad category of businesses working towards having a positive social and environmental impact — face a unique set of challenges.
When it comes to global social issues like improving access to education or stopping fake news, it’s crucial impact startups are able to spot problems, like school drop-outs or falsified articles, quickly before they happen, and personalise their solutions to those who need help most.
And as government — and public — buy-in is often necessary to their success, proving that they’re actually doing some good is no small task.
We spoke with some of the leading impact-driven startups and organisations about how they’re using data to measure success, get their projects off the ground and drive positive change.
Data helps identify intervention areas
Nesta, a UK-based innovation agency for social good, helps startups use data to maximise impact and effectiveness by identifying areas of intervention. It also recently announced its new 2030 mission-driven strategy, which focuses around three pillars: giving every child a fairer start, helping people live healthier lives and building a more sustainable economy.
Last month, it published the FutureFit report, in partnership with Google, which studied how the UK’s education system worsens socioeconomic inequality.
“It's not a [random] lottery, who ends up with poor exam results at the age of 11, or 14, or who drops out of school altogether. With a wealth of data on [education] issues, and our ability to process it, we’re now able to do that targeting and early intervention much better than before,” Ravi Gurumurthy, Nesta’s chief executive, told Sifted.
With a wealth of data on [education] issues, and our ability to process it, we’re now able to do that targeting and early intervention much better than before.
By using data from the European Statistical System, Nesta found that not only were there huge disparities in adult learning across the UK’s regions and social and economic groups, but the rise of the service economy has worsened inequalities. This kind of research is key to informing public policy around education, and preventing inequality from getting even worse.
Data has also been crucial in the fight against fake news. Logically, a UK-based anti-misinformation startup, combines AI and machine learning to identify fake news in the ‘pre-virality’ stage. The content is then passed to a team of highly trained fact-checkers, who verify it.
Edie Millar, deputy editor at Logically, told Sifted: “Preventative action is key. Once content has gone viral, a lot of the damage has already been done. AI allows us to ingest large amounts of information, triage content quickly and predict whether or not it has the potential to cause real-world harm before it actually does so."
AI allows us to ingest large amounts of information, triage content quickly and predict whether or not it has the potential to cause real-world harm before it actually does so.
By using data-driven AI to catch falsified news stories before they go viral, Logically’s clients — social media platforms and governments — can intervene and remove the content.
Data helps personalise intervention
Ultimately, social impact is about people — and every person comes from a different background with different needs. Personalisation is a key part of developing social programmes and matching resources with needs more accurately.
“Different things might work for different people in different ways,” Gurumurthy told Sifted.
Nesta runs the CareerTech Challenge, an innovation programme run in partnership with the UK’s Department for Education which develops new solutions encouraging precarious workers — such as low paid workers, or those without a degree — to upskill and retrain online. Data-driven personalisation is key to making sure these solutions reach the right people.
“A testimonial might encourage certain people to apply for a job, or a grant might help others with their transport costs. You want to understand what works for each individual person, depending on their characteristics,” Gurumurthy says.
Data personalisation is especially important in the case of adult illiteracy — around 6m adults in the UK have low-levels of literacy, making the UK one of lowest-ranking developed nations.
Citizen Literacy App, a Glasgow-based startup, aims to close the adult literacy gap through a data-driven smartphone app, which was developed as part of Nesta’s CareerTech Challenge.
The app allows learners to practice basic literacy exercises, personalised to their needs, John Casey, elearning technologist for Citizen Literacy App, told Sifted: “We use (anonymised) data to record the journey of learners in the app. We build up a profile of each learner, and each cohort of learners. We then try to interpret that data in a number of different ways, identifying who might need more help and who is completing exercises and tasks quickly,”
Data helps measure success — and shows where course correction is needed
While all startups are held to the scrutiny of stakeholders, social impact startups fall under extra pressure, especially when tied to the public sector. Proving their efficacy is key to not only securing funding, but also gaining public trust and support.
According to Gurumurthy, a problem for many social projects is that efficacy is often only determined after a project is finished — and data isn’t always enough.
Gurumurthy told Sifted in November that sectors like healthtech and edtech need to prove their impact by providing the “highest standard of evidence… It’s not good enough to have just data on before and after [the experiment], because the impact could be attributed to something else.”
If companies give a perspective about their environmental performance that is inaccurate, this is really scary because if this goes into the mainstream it becomes a standard that we’ve defined as acceptable.
Lubomila Jordanova, cofounder and CEO of sustainable business platform PlanA.Earth and cofounder of Greentech Alliance, said not following proper scientific methodologies while measuring the success of sustainability projects, for example, can be disastrous: “If companies give a perspective about their environmental performance that is inaccurate, this is really scary because if this goes into the mainstream it becomes a standard that we’ve defined as acceptable.”
Yet for many impact startups, data can show the effectiveness of an ongoing programme, and point to where course correction is needed.
AI-powered career coach Bob UK, which won last month’s Nesta CareerTech Challenge, uses open data on the labour market to help job seekers find employment and provide data-driven career advice. It was developed by non-profit Bayes Impact, and partnered with social enterprise ACH (formerly Ashley Community Housing) to provide employment support to refugees in the UK.
Bob UK also uses data collected from users’ job searches via their app to measure the career coach’s effectiveness. “Data allows us to gain a quantitative measure of the social impact ACH is having,” Tom Dixon, senior project officer at ACH told Sifted. “This quantitative data also provides insights into which areas of work are benefitting users the most.”
The more a user uses the app, the more the app becomes tailored to their specific needs, and readjusts career advice accordingly.
Citizen Literacy App likewise uses data to give users feedback at specific points throughout the literacy programme. “We’ll be using the data and looking for patterns. For example, in the final assessment we give them feedback on how they’ve done suggestions on what they should do next,” Casey tells Sifted. “So if someone does poorly at a certain kind of spelling, we can suggest that they go back and repeat some of the lessons from a previous unit.”
By determining which specific areas a learner needs to work on, Citizen Literacy App can keep learners engaged and prevent them from becoming frustrated — or falling behind.
Nesta has announced its new mission-driven strategy, which focuses around three pillars: giving every child a fairer start, helping people live healthier lives and building a more sustainable future where the economy works better for people and the planet. Read more about Nesta’s Strategy to 2030 here.