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Writer's pictureStewart Severino

Nonprofits using Lean Startup for growth?

The nonprofit sector, despite its altruistic motivations, still grapples with the universal entrepreneurial challenge: delivering the right product to the right market. Or, as some would say, value.


One popular method that addresses this challenge in nonprofits is the Lean Startup approach for growth. While it offers valuable perspectives, it also comes with critical flaws.

The Lean Startup method advocates for entrepreneurs to develop a "minimum viable product" (MVP) quickly, test it in the market, and learn from the feedback. The idea is to iterate, and pivot based on real-world data, reducing the risk of building something that nobody wants. This method has served many startups well, yet it does carry a fundamental flaw. It asks practitioners to hypothesize the market, the product, and the customer needs all at once, which can lead to an indefinite loop of iterations without reaching product-market fit.

In contrast, the JTBD approach -a method dating back to the late 1960s- urges entrepreneurs to address one variable at a time, starting with the market. In this context, a market is defined as a "Group of People" with a specific "Job-to-be-Done". The next step is to uncover the unmet needs within this market and define them as the measurable outcomes customers seek. Only then should one conceptualize the solution. The JTBD method emphasizes a clear understanding of the market and the customer before jumping into solution development, reducing the risk of misdirected efforts. Marketing traditionally jumps at the front of this process with segmentation, felt needs, and brainstorming.

Applying these methodologies to the non-profit sector brings unique implications. Non-profit organizations (NPOs) serve diverse stakeholders, including donors, volunteers, and the beneficiaries of their programs. Therefore, understanding and addressing the different "jobs" these groups need to be done is vital for their success.

In the Lean Startup method, NPOs would start with an MVP—say, a new program or a fundraising initiative. After launching, they collect feedback, iterate, and pivot based on the responses from their stakeholders. While this approach can be effective, the risk lies in the potential misalignment of needs among various stakeholder groups and the possibility of getting stuck in a recursive iteration loop without clear market understanding. This method also drains resources through iterations.

On the other hand, implementing the JTBD approach means that an NPO first identifies a specific group (donors, volunteers, beneficiaries) and the job they need to be done. For example, the job of donors might be "effectively contribute to a cause I care about." The NPO would then uncover the unmet needs related to this job, like the need for transparent reporting or meaningful engagement. Only after this groundwork would the NPO develop a solution—perhaps a new donor engagement strategy or a revamped reporting system.

This systematic approach helps NPOs to align their initiatives more closely with their stakeholders' needs. It reduces the risk of developing programs, services, or fundraising campaigns that miss the mark, ensuring more efficient use of resources. However, this approach may be more time-consuming initially in market research.

Both the Lean Startup and JTBD methodologies can offer valuable insights for NPOs. The Lean Startup's iterative process allows for quick adaptation and learning, while the JTBD approach ensures a solid understanding of stakeholders' needs before developing solutions. To leverage the strengths of both, NPOs may consider combining them, using JTBD for initial market research and need identification, and Lean principles for subsequent development and refinement of solutions. In this way, NPOs can engage more effectively with their stakeholders, improving their ability to fulfill their mission and achieve a greater impact.

Stewart Severino


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