I recently joined MassChallenge as a judge and mentor. A few months ago, just before the COVID-19 outbreak in Israel, I reviewed dozens of startups and had to rate them based on predefined criteria, recommending some of them for the program and ruling out others.

One of the questions the applicants needed to answer was about the impact their startup has already made. I was surprised to see that only a few of the startups actually answered this question with a relevant answer. Most of them answered a very different question, that is not the one they were asked.

It’s About Outcomes, Not Efforts

When you are asked about impact, you are asked about results. However, most of the companies answered the impact question describing their efforts. In other words, they talked about what they did, but not about the results that they achieved by doing so.

In business, results are almost the only thing that matters. So if your efforts didn’t yield the outcome you were expecting, you don’t get points for trying. For an accelerator program application, the price you pay for not showing impact is relatively low (worst case you won’t get accepted). But making an impact is what your company is here for, and if you fail there you have much more than a program application at risk.

Note: the term impact doesn’t only apply to companies who strive to make the world a better place. The definition of impact is “a strong effect on someone or something”. It’s relevant for any company out there. 

So why do so many companies fail at answering the impact question? 

It could be because as a young startup they haven’t yet achieved a meaningful impact yet, but from my experience, in most cases, it’s because they don’t know what impact they are aiming for.

It sounds irrational – how can you build a company if you don’t know what impact you want to make? But when you dive into it, you realize that it’s not that simple. To understand impact you must see your business from a purely external point of view, which is hard to do when your business is what you do all day long. It is much easier for all of us to talk about ourselves and what we do, as opposed to getting into someone else’s head and think about what they got out of our actions. It’s true in relationships as much as it’s true in business.

The good news is that it is like a muscle you can train, and by doing so it becomes easier over time and practice. To set expectations, note that I said easier, not easy 🙂

Here are a few practical methods to understand and focus on impact instead of effort:

Understand the Desired Impact in Advance

Before you talk about the impact you have achieved, think about the impact you would like to achieve. Free yourself from the constraints of what you can do or already have done. It will help you to understand what an ideal impact would look like. You can always make compromises later based on your real achievements.

Focus on quality, not quantity. That is, think about the parameters in which the impact would be expressed, not the specific amount of impact you want to make. For example, if your product is helping marketers produce relevant content faster, your impact can be higher speed without compromising quality. How much faster, and what exactly does “not compromising quality” mean is a second-order question (which you need to answer nonetheless, but it’s best to answer it after your first-order definition is clear).

Forget Everything You Know

To keep your external perspective intact, you must (temporarily) forget what you already know about the ins and outs of your product and business. You should literally train your brain to not use insider information. 

Initially, you might want to write down your thoughts, and afterward read them and delete anything that relies on internal perspective which you should currently put aside. It’s easier to do it in two phases since it allows you to keep a single perspective (first external and then internal) at any point in time. Thinking from the two perspectives simultaneously is much harder without former practice. 

Another trick which I sometimes use is calling aliens for help. To make sure you are not using any internal knowledge, take someone who is extremely far from what you know – an alien for example. They are not familiar with anything happening here or earth, and thus they can only observe results that exist somehow. What would you want the alien to tell their friends about your product? What would they see in the world when your product is in use?

Talk About It With Your Spouse/Kid/Grandma

Explaining your product or business to someone else who doesn’t understand your technology forces you to think in terms of value. In fact, the least they understand what you are doing, the better for you for this exercise. 

The question you need to answer when talking to them is “what will happen (for your users, your customers, or the world) as a result of your product or service?”. Explain it to them WITHOUT explaining your product or technology. Talk about the problem and the outcome, not about the process or product. In many cases, if you follow this route, they will ask you questions that will reveal the product eventually (the how). But these questions would only come once they understood the problem and the resolution.

To keep your external perspective intact, you must almost always talk to someone external to your company.

Now that you understand what the desired impact is, and you can explain it in detail, go ahead and measure it. Measure what you have already achieved, and set goals for what you haven’t already.

Either way, when asked about impact, talk about impact. Even if you haven’t achieved significant results yet, it’s better to explain your desired impact and how you are going to make it, than to answer a completely different question.

Good luck to all the MC2020 finalists, may we all make a great impact in everything we do!