Comments on: Obsessive Compulsive Metric Disorder http://www.thinkchangeindia.org/2008/04/09/obsessive-compulsive-metric-disorder/ Tracking Social Entrepreneurship and Innovation in India Wed, 17 Mar 2010 08:32:23 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Vinay http://www.thinkchangeindia.org/2008/04/09/obsessive-compulsive-metric-disorder/comment-page-1/#comment-3321 Vinay Wed, 09 Apr 2008 19:29:40 +0000 http://thinkchangeindia.wordpress.com/?p=390#comment-3321 Shital, You bring up a good point with giving the actor the opportunity to elucidate their goals and judging accordingly. Unfortunately the article did not provide this information as the author left the fund anonymous. I would doubt, however, that the venture fund was created as a shell for the metrics. Instead I would guess that this fund may have been started by individuals trained in the conventional VC space that are now trying to apply identical investing and measurement practices in the social venture space. Although even that explanation is incomplete as co-investing is an established tool in the traditional VC field as well. What I find particularly interesting is that it would seem that the same complications and challenges associated with the creation of metrics for a fund would exist regardless of whether or not another investor is involved. The major hurdles here is how to measure the social impact of the investment itself, which would theoretically be the numerator. Infusing outside cash would seem to only affect one's denominator that will help determine the per dollar impact. Funds, unlike trials, are looking for ROIs that depend on the ability to scale up their investments. Unless the fund believe's that more money in this specific case would cannibalize the company in some way, more money should be encouraged -- which is why this approach makes no sense unless it is employed on a case by case basis. Shital,

You bring up a good point with giving the actor the opportunity to elucidate their goals and judging accordingly. Unfortunately the article did not provide this information as the author left the fund anonymous. I would doubt, however, that the venture fund was created as a shell for the metrics.

Instead I would guess that this fund may have been started by individuals trained in the conventional VC space that are now trying to apply identical investing and measurement practices in the social venture space. Although even that explanation is incomplete as co-investing is an established tool in the traditional VC field as well.

What I find particularly interesting is that it would seem that the same complications and challenges associated with the creation of metrics for a fund would exist regardless of whether or not another investor is involved. The major hurdles here is how to measure the social impact of the investment itself, which would theoretically be the numerator. Infusing outside cash would seem to only affect one’s denominator that will help determine the per dollar impact.

Funds, unlike trials, are looking for ROIs that depend on the ability to scale up their investments. Unless the fund believe’s that more money in this specific case would cannibalize the company in some way, more money should be encouraged — which is why this approach makes no sense unless it is employed on a case by case basis.

]]> By: Shital http://www.thinkchangeindia.org/2008/04/09/obsessive-compulsive-metric-disorder/comment-page-1/#comment-3322 Shital Wed, 09 Apr 2008 17:12:29 +0000 http://thinkchangeindia.wordpress.com/?p=390#comment-3322 Makes me wonder whether the metrics was just an excuse for the venture fund, but if the real reason was a lack of willingness to collaborate and deal with other partnerships. Unfortunately, this often happens with the clash of egos in the social space, even with a common goal. Related is a wider, and almost ethical, debate with the idea of randomized controlled trials (RCTs), which try control variables and also silo out impacts. Places like the Poverty Action Lab conduct these experiments and analysis in developing countries to eventually have a policy influence. But just like the example posted here with the venture fund, is it better to have a clear impact analysis, or to be more inclusive and have a potentially robust and widespread impact? In the case of the venture fund, I would say that openness, transparency, and a willingness to collaborate would be a more important first step, because they are not conducting a rigorous statistical analysis - they are probably just reporting to their stakeholders. With the case of RCTs, I would have to agree that for a sound scientific analysis, not everything can be included. Another sticky, case-by-case situation. Makes me wonder whether the metrics was just an excuse for the venture fund, but if the real reason was a lack of willingness to collaborate and deal with other partnerships. Unfortunately, this often happens with the clash of egos in the social space, even with a common goal.

Related is a wider, and almost ethical, debate with the idea of randomized controlled trials (RCTs), which try control variables and also silo out impacts. Places like the Poverty Action Lab conduct these experiments and analysis in developing countries to eventually have a policy influence. But just like the example posted here with the venture fund, is it better to have a clear impact analysis, or to be more inclusive and have a potentially robust and widespread impact? In the case of the venture fund, I would say that openness, transparency, and a willingness to collaborate would be a more important first step, because they are not conducting a rigorous statistical analysis – they are probably just reporting to their stakeholders. With the case of RCTs, I would have to agree that for a sound scientific analysis, not everything can be included. Another sticky, case-by-case situation.

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