Innovation Conversations #2: Annika Small, co-founder, CAST

boy in VR headset - Innovation Conversation with Annika SmallI worked with Annika Small back in 2007, when she was CEO of Futurelab, and knew that finding out about CAST would be a really interesting conversation. I was particularly struck by CAST’s emphasis on making sure that innovation is embedded in an organisation’s business model from the start, as well as the idea that today’s employees are looking for a more values-driven type of employment.

Annika, you are one of the founders of CAST — the Centre for the Acceleration of Social Technology. Can you tell me a bit about it, and how it came to be?

The idea came from when I and my two fellow co-founders were at the Nominet Trust. Essentially the Nominet Trust awards grant funding to organisations seeking to address complex social challenges with technology: early stage ventures that have a proof of concept but no customer base, but that are trying to generate social change. These ventures are often not yet sustainable and need grant funding to keep them going.

We felt at the time that there were two significant gaps in the market: the first one being support for early stage ventures that didn’t yet have steady revenue streams, so weren’t attractive to the standard venture capitalists, but that needed more money to become sustainable than grant funders typically provide . We saw that many organisations are at risk of falling off a cliff because it would take them at least five to seven years to become sustainable, realistically more like seven to ten years, and that just isn’t feasible on grant funding. So there is a real need for patient capital.

The other gap involved working with social organisations that already had established routes to market, such as large charities. It’s often assumed that large organisations find it hard to innovate, but we wanted to test whether that is true, and whether it would be possible to help large established charities to innovate with technology.

How did you get started?

We ran a pilot for an technology accelerator for charities, which helped them to develop new digital products and services. We have also worked closely with tech accelerators and social investors to support early stage tech for good ventures to develop and grow.

Drawing on our experience over the last 18 months, we’re now focused on two key things: firstly we’re supporting charities across the UK to better understand, use and innovate with technology. This includes a Digital Fellowship for charity leaders to improve their understanding of the potential of technology; Fuse, a three-month accelerator, for charities to develop new digital products and services; and a design service that supports charities to better define the problem that they are seeking to address and how tech might help. We currently have a waiting list of more than 150 charities seeking support in building their digital capacity.

Secondly, we are in the throes of raising a post-seed/pre-revenue fund for early stage ventures. These ventures need to have enough about them in terms of team, proof of concept or established partnerships to warrant an investment of around £100–250k, typically structured as a loan or part loan part equity.

Why do you think charities have been so keen?

I think the key is that charities increasingly know that they need to wake up to digital — their end users are expecting digital-first solutions, and there is also huge potential to change their own business model to be revenue-generating and reduce their reliance on grant. I think the future is really bright when it comes to rethinking how charities understand and use technology — not only transforming their service delivery but offering some far more savvy approaches to fund-raising by using digital effectively.

How do you work with the charities?

We work with them in two main ways — the first is our Digital Fellowship programme for charity leaders. This is a 10-week course that helps leaders understand the processes around technology innovation, as well as looking at case studies, and testing out ideas. It’s complete immersion in the world of digital, and it ends with a design sprint, working with developers and coders, to build some of the ideas that have come out of the course.

The other way we work with them in through Fuse, our non-profit digital accelerator, which helps charities to build scalable, user-centred, digital services. This programme is a big commitment for the charity, as it requires them to commit one member of staff four days a week for three months. We’re also trying to work out a way of making this programme more suitable for smaller charities, who can’t afford to commit a member of staff for that long. For example, what would more of an online accelerator look like — would that negatively impact the quality? Could the design sprints be spread out further over time? Or could smaller charities band together in some way?

Having said that, we set Fuse up eighteen months ago and there has been a huge appetite for it from charities — but we’re keen to make sure that every charitable organisation interested, whether large or small, can benefit.

Is there a danger that innovation is a bit of a bandwagon right now, and that organisations feel they ought to be doing it without really knowing why?

Absolutely — it is a bit of a fashionable buzz word, and that bandwagon thinking does happen to some extent in charities, although probably less so than in the private sector. This is one of the reasons why we put integration front and centre in everything we do — the organisations we work with are all committed to integrating the work they do with us into their business model. That avoids the innovation being separate to the core strategy and instead embeds it across the organisation.

We are careful to ensure that there is buy-in at every level, from the board and senior management to the frontline staff, and that the right people are involved from the start. Often, organisations will offer up their digital manager or their web manager, but that’s not always the best idea because the whole point of innovation is that you don’t start with the technology: you start with a problem that needs solving. So the person who takes part has to be someone who really understands the challenges of the organisation and can help define the problem to be solved, but also someone who can take the work back into the organisation and make change happen — embed it, rather than being asked to ‘do innovation’ in a corner somewhere.

So what happens next — when organisations emerge from the Fuse programme?

We’re really keen to make sure that there are options available for organisations to fund the next step. They’ve got a prototype, they’ve put it through its paces and we don’t want to lose that momentum. So we’re talking to a number of the larger funders, the ones who recognise the need to fund digital but are not quite sure how to do that. Organisations that have been through the accelerator programme are a better bet for them than untried ideas, they’re more likely to be to be robust.

There’s already some good examples of ideas that have come out of the Fuse accelerator. One was developed by Breast Cancer Care to address issues around breast cancer, both in those who have been diagnosed, or who are being treated, but also those who have survived it. A huge part of that challenge was the sense of isolation, and not being able to interact with people who had similar experiences. Breast Cancer Care has developed an app that makes it easy for those experiencing breast cancer to connect.

Similarly, Oxfam wanted to address issues relating to the increased demand for food banks. In fact, when we dug into the problem with them, it turned out that the real problem was the fact that more and more people are on the cusp of food poverty: the ‘just managing’ people that Theresa May has spoken about. When those families experience any kind of financial shock, it can tip them into food poverty. So during their Fuse programme, Oxfam developed a tool to help people save money, and to be more transparent about how they save.

The key to success in both these examples is that the organisations had good access to their users to engage with testing and development as well as Board approval and buy-in from the start.

Do you think there is more interest in this type of technology for good, in social enterprises these days — or do you think it’s always been there?

Deloitte recently carried out some research on millennials, about what they wanted from their lives, and found it was much more about making a difference than about making money. They want a sense of purpose. Even if they want to work for a large commercial organisation, they are keen to ensure that the organisation has a certain set of values, and are interested in making a difference in their communities. At CAST, we have worked with some corporates to help them develop some programmes around that — for example, large technology companies allowing their talent to volunteer at Fuse. It’s more meaningful for a computer programmer to help develop an app that supports some of the most vulnerable in our society than to paint a wall in the local community centre.

Lots of technology entrepreneurs are looking at social challenges, and some of the drivers are quite pragmatic. It is increasingly the case that entrepreneurs are seeking to make a profit with purpose, and that’s fantastic. For me, a big bugbear is when people make a huge pile of money through a purely commercial enterprise and then do some philanthropic work — without detracting from some of the amazing philanthropy out there, you have to wonder how much this ‘giving back’ is just replacing what was taken along the way. Why not be socially conscious all the way along while still making money?

The other aspect that’s driving change is the sharing economy and different ways of organising resources. People are becoming more comfortable seeking services from networks and collaborations, and you can imagine offshoots of some of these becoming collectives of local economies. That would be using technology to do something really social.