Soushiant Zanganehpour (@soushiant) is a social scientist and serial entrepreneur with a long history of working to solve problems at the intersection of public policy, business, technology, and systems change.
In 2018, he founded Swae, a platform to help organizations create idea meritocracies by sourcing, evaluating, and improving ideas from all people in the organization, to lead to higher quality decisions with greater buy-in.
Prior to Swae, Soushiant led a global impact strategy consulting firm and was a director at the Skoll Center, a global epicenter for social entrepreneurship. He’s been a board member of Harvard Business Review’s advisory council, as well an advisor to numerous other startups, as well as having been an adjunct professor or guest lecturer at the masters level at multiple universities.
In this conversation, Soush and I:
- Talk about the origin of Swae and how to connect your personal narrative to a problem to create emotional buy in
- how to think about systemic problems and intervention design
- we explore Swae as an in-flight case study of how to think about and design interventions for the big systemic problems that we care about
Soushiant is one of the best systems thinkers and most passionate social entrepreneurs that I know and in this conversation, I think you’ll see why.
Without any further delay, enjoy learning about solving systemic problems with social entrepreneurship with Soushiant Zanganehpour.
SCROLL BELOW FOR LINKS AND SHOW NOTES
- Soushiant Zanganehpour – (@soushiant)
- email Soush at: soushiant [at] swae [dot] io
- Swae, Soushiant’s company
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- “If” – Rudyard Kipling poem: “If you can meet with triumph and disaster and treat those two imposters just the same…”
- Principles, by Ray Dalio
- Companies / Orgs
Andrew: Soush, my friend, welcome to the show. How are you doing today?
Soush: I’m great, man.
Andrew: Thanks so much for being here, and you know, at first off, I just have to say what a treat it is for me to have you on the show. You know, you and I have been friends for years now and always just have the most fun, epic, wide-ranging conversations where it’s always like, [00:02:00] I don’t even know what we’re going to get into, but I always know it’s going to be good, and I’m going to be glad that we had that conversation. So real treat for me to have you here, and I appreciate you taking the time.
Soush: Buddy, I’m so honored to be on the show. It’s come a long way since you’ve first started thinking about it a couple years ago, and I’m excited to share our story.
Andrew: Well, why don’t we just dive right into it? So, we’re talking today about Swae, about your company and sort of getting into it as an example, that’s in-flight about how does someone who is very caring, who very much cares about the world and wants to see the world get better, actually do something about it?
Right? We have lots of systemic problems. You’ve spent a career studying said problems, and that brings you up to where you are today. So, why don’t you, just for the listener, why don’t you just give a quick explanation of what is Swae? And then we’ll talk about how did it come to be.
Soush: Very concretely, what Swae is, is a platform for idea management for the [00:03:00] collection of ideas from a group of people and for a collective decision-making process. Companies, cities, organizations, they deploy Swae to try to collect the best ideas for some of the more complex problems they have. Swae helps them create a competition to select the best ideas from it.
You do this through a number of ways. We use some AI algorithms to help people improve the presentation and communication of their idea. And then, we use different voting mechanisms and other kinds of collaboration tools to help filter the quality of the ideas. The combination of these things helps an organization deploy the platform and sort of sit back and wait for the best ideas to bubble up through this process. And what happens is, usually, the ideas that survive the process, have a lot of their biases removed, [00:04:00] have a lot of their risks identified, and have a lot of popular support before they reach a decision stage.
I think that the natural segment of this is like, “Why?” Like, what are you trying to do with this? We think that the traditional process for decision making, which is usually expert-driven, closed, top-down, hierarchical kind of process, is super-efficient. But, it’s filled with a lot of cognitive bias, and this cognitive bias leads to, you know, groupthink and a number of other things that impacts the kind of decisions we make, and impacts the morale and engagement of people inside the organization that are part of the process. These two things are cancers for any kind of organization, whether it’s a government entity or you know, a high growth company, making decisions a different way.
This kind of bottom-up [00:05:00] competitive way allows you to deal with the bias problem and the disengagement problem at the same time while giving you efficiency. So, that’s what we’re trying to do.
Andrew: Thanks for that, sort of setting that context for me and for the listeners. So, if I’m understanding you right, really what you’re trying to do, is you’re creating an idea marketplace, right? You’re creating a very inclusive and equitable idea marketplace within any organization, and it sounds like the reason that’s important is because most organizations are very top-down hierarchical, centrally controlled, and really don’t give all the people in those organizations a chance to actually, really fully contribute their ideas, and have those be considered on par with the idea of a senior stakeholder.
Soush: Hundred percent. The only difference is, we add a lot of metrics to ensure that the ideas that make it are worth the time of those that are considering it. It’s not just a PR exercise, it’s actually a useful strategic exercise for any organization.
Andrew: I [00:06:00] actually want to go into the backstory of this. Because, this is where you are today, but I’ve had the kind of privilege of seeing, you know, the behind the scenes stuff for the last couple of years. So, I’d love you to talk a little bit about how you settled on this, on working on this idea. Because I know it’s gone through quite a few evolutions. It has kind of some deep roots in your personal history in terms of why this moves you so much.
Soush: Yeah. Okay. We could go really deep on this, or stay like, you know, at the 10,000-foot stage. Let me go back five years, and then we can go back to my early childhood after that. Look, this started, for me, in 2013, 2014. I used to be a director in a large foundation in the UK, in Oxford, and I was in charge of strategy.
Andrew: Was it Skoll?
Soush: Yeah, this was at the Skoll Centre. I was head of strategy and operations there. And this was a center focused on social entrepreneurship. Investing in up and coming venture [00:07:00] ideas, investing in research, convening different stakeholders to rethink what business does in today’s world.
Andrew: It’s a very kind of multifaceted function. A lot of different programming and a lot of investment into different things. So, the strategy development process and the budgeting process were always like, sore points for me. What I saw happen in an organization that’s supposed to bring about all this good was that there were a lot of really important decisions driven down through the organization from the board. Or from a couple of very senior members that had very little consultation and very little scrutinization. And so, what would happen is they wanted program managers to implement some of these ideas, without having their say or buy into their execution. What do you think is the result of that?
Andrew: Well, yeah, what [00:08:00] I imagine is when things are just getting handed down like that, like orders, I mean, people are going to be pretty, probably disengaged and they’re like, “You know what? Clearly, you don’t really care that much about what I have to say. You’re just telling me, you’re treating me, like a cog in a machine or like, you know, an automaton, and you just want me to do your bidding.”
Soush: Yeah. I mean, certainly, that’s how people do disengage. They feel like it’s tokenistic, the type of engagement that they’re offered, they don’t have a chance to scrutinize the assumptions of any of these programs. They certainly don’t have a chance to contextualize what happens with those programs.
So, what happened was not only did people disengage, and we lost a lot of productivity and morale and these types of things, but the outcomes of the programs that we were trying to, you know, implement were going in the wrong directions because we didn’t have on the ground data. So, this was super frustrating for me.
I put a really big strategy document together. And I sort of went back to present how [00:09:00] things could be if we considered other options. And I got a really, really negative response from some of the directors, some of the more senior folks there. Saying like, “Why are you questioning our logic?” And I wasn’t dissenting. I was trying to make sure that we had our bases covered, that all the biases I thought were there were addressed. Or I was trying to address my own biases through this process. From there came the idea, “Okay, how could this whole process be different?” We’re going to spend four or five million pounds a year on a number of programs. How could we have hit the targets better? Could various members of the organization put proposals together anonymously? And could they have edited those ideas with the help of AI? And through a collaboration process, could those ideas have gotten better through collective scrutiny? And could the best ideas have gone to the board blindly for the [00:10:00] board to decide, “What is the best set of options we have?” Not just, “What does Mr. X think or Mr. Y think?” That’s where the idea came from.
Andrew: It sounds like what you’re really trying to create is, to quote Ray Dalio, “An idea meritocracy,” right? Where it’s really about the ideas, not who happened to say the idea.
Soush: One million percent. I had no idea who Ray Dalio was, I didn’t know what idea meritocracy was, and I was pitching Swae to Tim O’Reilly at Aspen. I was invited to the Aspen Ideas Festival as a scholar in 2017. And he got off the stage, we had a conversation, and he’s like, “Dude, you’re building idea meritocracy. Like, do you know Ray Dalio and Bridgewater?” And I’m like, “No.” He’s like, “Go read his book, you know, he operates the whole company based on this. And he credits a lot of the very important investment decisions that they made, as well as the operational policy decisions they [00:11:00] made based on this principle, this cultural principle of competition around the best ideas.”
Andrew: Yeah, and just for the listener, for anyone who’s not familiar with Ray Dalio and Bridgewater, that’s basically the most successful hedge fund ever. Ray Dalio and Bridgewater have been just staggeringly successful. I mean, this is the guy on the shortlist, the head of every world bank called Ray Dalio when they’re trying to figure out what’s actually going on.
And the book that we’re referring to is his book from, I don’t know, two years ago or something? A couple years ago called “Principles,” which is amazing and an absolute must-read. And anyways, what Soush is pointing out here is that the idea of an idea meritocracy is one of the foundational things that Ray Dalio credits with making Bridgewater so successful. So, anyways, keep going, Soush.
Soush: Yeah. So, where, you know, going back a little bit to the personal history, where this made a really strong connection was, I grew up in a very political environment. [00:12:00] At the age of five, not by choice, really, but by a circumstance. But at the age of five, my parents and I left Iran because of the revolution and because of how bad the living conditions and situation was there. This was towards the tail end of the Iran-Iraq war, so you can imagine eight, nine years of war, solidified, extremist kind of hardline government, very repressive social policies, and very little upward mobility. My parents smuggled us out of Iran, my brothers and I, and we ended up in Canada. And from that point on, I became maybe unconsciously at that time, but more consciously as I got older. Very, very sensitive to abusive power. It’s an allergy. I can’t stand it. If I see it happening in certain places, particularly at a systemic level, I react, very kind of, not nicely [00:13:00] towards it. So when I saw this happening inside the workplace, that this was, you know, we’re enabling processes that lead to abuse of power.
That the abuse of power is a consequence of these processes. I thought, “How could that be different?” But where I got very excited was, my God, what I’m experiencing inside the workplace and what I’ve experienced inside the workplace for many years, whether it was at management consulting firms, at research institutes, and think tanks, to working in the foundation, is similar to what I’m seeing happen in our public spaces with our democratic institutions. Right now, inside our democracies, inside our cities, our only engagement options are to protest, vote, or disengage. These three kind of binaries in a world where information and expertise are [00:14:00] so distributed and nuanced. These three options seem like just the wrong set of things that we should have on the table if we’re trying to make smarter, more nuanced, cost-effective policies and solutions that have the highest uptake.
So, I made this connection in my mind that the problem I’m seeing in the workplace is similar to the problem I’m seeing in our democracies, is that we have an organizational paradigm that’s mismatched for the era that we’re living in. For the communication era, for the cultural era, for the technological era that we’re currently living in and that we’re going to be experiencing. And this gap is getting wider and wider every year. That deficit, I would say the governance deficit or the expectation deficit is getting wider and wider, and it’s leading to more and more frustration, more and more apathy, more and more populism [00:15:00] as a result of it. I got super excited thinking, “Look, Swae can be a solution, a systemic solution to changing how these institutions function and eventually replacing the middlemen, replacing the need for politicians, replacing the need for having a representative that reflects four or 500,000 people’s interests for four years in a very non-nuanced and accurate way. Use a system like Swae, not necessarily Swae, but a system like Swae to create a constructive competition and constructive input into all the tools that we need.
Andrew: And I’m so grateful you kind of gave that backstory because it made sense to me in a way that it hadn’t before. Right? And I’ve known you for a couple of years. ‘Cause when we first met, you were the governance guy, right? You were obsessed with governance, and you know, I’ve always known you to be someone who thinks very, very deeply about [00:16:00] systemic issues. Particularly, as you said, the abuse of power and knowing your personal history. But, it’s really interesting for me to understand the through line and the connection to, oh, okay. It’s kind of the same paradigm. It’s the same model happening in our organizations that you were originally frustrated by in our political systems in our society. Actually, if I recall correctly, that Swae started, but more on the, you were trying to, I think originally solve more of the, like, actual governance side issues outside the workplace. Is that right?
Soush: Yeah, yeah. A hundred percent. I think that it was initially directed towards getting broader input and sort of changing the policymaking process. That was the first intention, and then you sort of scale it down to, “Well, what is a small enough reflection of a policymaking process that’s distributed and has wide input and a competition?”
So, we decided to focus more on smaller organizations and companies, because [00:17:00] it’s still a proof of concept for us. If we can make it work inside a homeowner association, for example, which is a micro version of a governance environment, or inside a nonprofit, that’s doing an annual general meeting, or inside a large company trying to collect the best ideas for innovation decisions. We’re still trying to prove the same concept, that this process can produce worthwhile investible ideas. And maybe, outperform the experts that are in charge of certain needs, certain types of decisions.
Andrew: Yeah, a hundred percent. And I love the, you know, if you zoom way out and look at your strategy here, you’re basically saying, “Okay, we can do this in the workplace and scale to bigger and bigger companies.” Well, every company, every organization is kind of like a mini-society. And if you can build the model up over time, you know, there is, I can imagine a future where it’s possible.
We could have something like [00:18:00] Swae for doing this type of massively inclusive participatory idea, proposal, and decision making at a societal level. Like, you know, to what you alluded, you alluded to something I’ve heard other people talk about, which is like, “Hey, let’s get rid of representative democracy.” Like, let’s, you know, that was a system designed at a time when communications infrastructure and mass education were at radically different levels than they are today. Let’s just do away with the system and have direct voting, for example. So it’s interesting to see that that could be a possibility.
Soush: It could be. I have my reservations around like getting rid of the system altogether and like replacing with direct voting. I think you still have the cognitive bandwidth problem. There’s a very, very good Ted Talk by a fellow named Christopher Hidalgo or Chris Hidalgo. He spoke last year or the year before Ted around AI to replace politicians. And in his first lead up to his solution, he lays out the structural barriers of direct democracy and liquid democracy and a few other things. And it’s [00:19:00] people’s time, people don’t have the time to invest in reviewing 15 proposals a day or 15 bylaws or whatever. So, we need to leverage these tools to help us, you know, make better use of our time and apply our judicious functions in more specific and useful ways.
Andrew, I want to go back to one thing. I think you alluded to all the different ways this problem could have been solved. You knew me as the governance guy in SU. my obsession was trying to find all those questions I kept asking, all the interrogation I would do of all the speakers that would come to SU or folks, I was trying to put the puzzle together as like, “What is the most systemic intervention that we could make to really change this paradigm, that really changed the system?” Because all the other people that I’ve seen try are doing things that are very marginal. [00:20:00] And they’re doing things that I don’t think will make much difference to the size of the problem that we’re seeing.
So, organizing clever campaigns to get millennials to vote more, or other people to vote more, I mean, great, sure, people should be more civically engaged, but it doesn’t solve the problem that your set of engagement options are still one or two binary choices. This is inappropriate for today’s world. It doesn’t work.
It’s not fit for scale. And so, I can’t get behind, you know, a company that wants to only get people to vote more. It’s just, it doesn’t make sense. Like, let’s build the infrastructure of tomorrow. Because it’s needed, not because it’s hard, and we’re not there yet.
Andrew: That’s a perfect pivot point. Cause you’re one of the best systems thinkers that I know. And I’d love to talk, I’d love to dive into that. You know, I love what you just said in [00:21:00] terms of, you were sitting there over and over trying to put the puzzle pieces together about, “What is this system? What are the levers? Where are the intervention points? And like, which thing, you know, if I can only do one thing, which thing is going to be the one that makes the biggest difference? I would love to hear you talk about how you do that. Because that is a skill set that I think you’re uniquely gifted at. And so, I would love to hear you share, kind of the way you approach a problem that way. Because I think a lot of people listening to this show, we all see there’s all these big issues in the world. We all have our favorite ones that we really care about and want to work on, but I think a lot of us get stuck on, “Okay, I see, you know, inequity in power structures or I see unconscious bias, you know, rampant in the world, or I see fill in the blank here, what I do about it? How do I start to approach that systemic problem?” So how do you approach that?
Soush: I don’t want to stay too abstract. And I think, you know, smarter people than I do for sure. Partly who I am [00:22:00], and the things I care about drove me to more macro issues, issues of inequity, issues of social justice, and these issues are not, they don’t happen at a micro-level. They’re the result of, like, large policy decisions. They’re the result of power structures. They’re the result of framing. They’re the result of very, subtle things that you need some training in to be able to identify. So, I think my training as a political scientist, I mastered in public policy. I studied policy, in my, you know, in my bachelor’s degree. Combined with my business training as an entrepreneur, as well as a management consultant or a strategy consultant, helped me use different cognitive tools to be able to, you know, segment a problem into its different parts. And then be able to attribute “Well, what is a driving function of this problem? And what are the sort of noise of this problem? “What’s like the two or three really, [00:23:00] really big issues here, and what isn’t?” So you, you’re making a lot of assumptions, you’re dissecting things, you’re doing a lot of that work in your head with slides and other sorts of stuff. But where I think I got better at it was in my job, while I was at the Skoll Centre, and when I left, and I started my own boutique impact advisory practice, I had a client that wanted me to help them find the best social ventures, addressing systemic problems around the world.
They organized a million-dollar competition where they were giving out non-dilutive capital to these social ventures. Social ventures that were actually designed to try to intervene and change a system. So, I looked at like 600 ventures a year, pretty deeply in 27 countries. And I got a sense from this, it’s like the patterns to look for when I [00:24:00] was reviewing these types of ventures and also like how they fit with a system.
Andrew: So, just to clarify, when you say a social venture, what does that mean?
Soush: It means a company that’s trying to solve a social or environmental problem through an enterprise model. Not through a non-governmental model, not through a social movement, they’re trying to do it through the marketplace. They’re selling a good or service, and they’re using that money to fuel the growth and expansion of the company. They go by social ventures, impact ventures, there’s a lot of interchangeable names for them.
Andrew: What’s an example of that and what, you know, what are some of those patterns?
Soush: I know we’re still a little bit abstract, so I’ll get to the concrete stuff in a second. So the way I looked at these, these issues was like, “What is the entrepreneur trying to solve? What problem is the entrepreneur trying to solve? The acidification of oceans, excess plastic, in our waste systems, you know, food waste, what are the systemic problems, the externalities that [00:25:00] this entrepreneur is trying to build a venture around us all?” So you’re like, okay, cool. Like he or she understands the problem or has a good grasp of the externality and what leads to that externality. Okay? What is the venture that they’re building that’s going to upend this externality or absorb the externality?
Andrew: Clarify, one thing. When you say the word externality, what do you mean?
Soush: So, it’s an economic term. It means like if you have a business activity, it creates some outcomes. We call those externalities. They can be positive in terms of excess profits or, you know, benefits to a community, or they can be negative. It could be excess waste pollution, things that are not captured by your business operation.
Andrew: I see. So, it’s sort of like the second and third-order effects of whatever you’re doing?
Soush: Absolutely, yeah. And so, when you’re looking at systems change, you always want to look at the unintended consequences that the venture or that industry or system did not account for, that’s kind of [00:26:00] spilling over into society. Climate change is a very good example of the externality of the system of capitalism.
It did not account for this. It’s now gotten to a stage of systemic risk, existential risk to humanity, and the levels of pollution in the oceans. Like a whole bunch of these types of things are externalities of like incomplete systems.
Andrew: Great, keep going.
Soush: So, the entrepreneur is like, I’m going to solve the, you know, waste in the excess amount of plastic in the waste stream problem. And she’s like, “Okay, sweet, like, that’s a great thing to do. How are you going to do that?” Oh, you know, we’re going to turn, the plastic bottles, we melt them down, and we turn them into bricks, and then we sell those bricks as materials to the construction industry. Without looking at the unit analysis and cost of how can you do that effectively at a [00:27:00] price point that is more competitive than brick or whatever the current status quo is, you look at like how much volume can this person actually absorb this problem? If he’s identified or she’s identified, the problem as like, you know, there’s like a million tons of excess plastic waste per year. You calculate that at a 10-year horizon, that’s like 10 million tons of excess waste. And his or her projections are like, “Well, through our process, we are going to displace 50 tons a year growing at our growth rate of 20%.” This is an insignificant dent on the problem. If you, as an entrepreneur, are trying to solve that problem, maybe this isn’t the best intervention. Maybe an intervention that can actually displace 50%, 60%, 70% through some other process. Forget about turning it into bricks, think about art, think about, [00:28:00] I don’t know, think about a movement. Think about something else, because the goal is not to have a business that survives, it’s to solve this systemic problem.
So that’s how I started thinking about systems problem. It’s like, do the interventions and their potential impact actually absorb the size and scale and growth rate of the problems that we’re seeing?
Andrew: What I’d love to know a little bit more about is the way you deconstruct problems. Right? Cause what you just said makes a lot of sense, right? Once you have this great understanding of the problem space of the impacts going on, then you can be very discerning about your choice of intervention, right? You can say, okay, this problem is, you know, whatever, 10 million tons of plastic a year, it’s growing at 10%. The solution I’m looking at here is only going to handle 50 tons a year growing at 20%. Okay, you know, projected into the future. When do those lines cross? It’s too far, it’s too, you know, it’s too slow. It’s not going to work. This is the wrong choice of intervention. [00:29:00] But what I’m really curious about is the process you go through to get to that level of understanding, right?
That reflects a deep situational awareness and understanding of the ecosystem. So, talk to me a little bit about how you did this, whatever the last time you did this with. Let’s say it was Swae, or whenever you last went through this process yourself, can you talk me through that process? Like what did you actually do?
Soush: It comes to the example. There are a few that I could give, but this one, I had a lot of deep kind of say in. When I, we had a venture fund at Skoll, where we made very small 20-30,000 pound investments into ideas, stage social ventures that were trying to solve systemic problems. We had a couple of guys, an astrophysicist, and an investment banker, come and pitch us on an idea to solve climate change through the reforestation of the world. So, they come to us, and they start laying out the problem. Each year, we [00:30:00] lose about 9 billion trees a year due to factors such as deforestation, fire, climate change, human activity, and consumption. Year on year, this is growing at a growth rate of like 25%. So, 9 billion the next year, is like almost 11 billion, the year after that, 13-14 billion, and, and and. So, on the flip side, we’re only replanting about 6 billion trees a year.
Soush: I actually think the number was higher. It was something like 15 billion was the loss.
And we were only planting 6 billion a year. And of the 6 billion that we do plant, the survival rate to maturity of those trees is something around 30%.
Andrew: Wow. We have a net loss of like, 13 billion trees a year, in this model.
Soush: Times that by 10 years, right? This is a big fucking problem, right?
Soush: So you’re like, okay, you got my attention. So, [00:31:00], how are you going to plant the deficit? How are you going to solve this deficit? And you know, this is where the range of interventions comes from. Someone can come and say, we are going to start a company that for every tree you buy, we will plant a tree for you. Or for every product you buy from us, we’re going to divert 50% of our revenues to planting trees. We’re a social venture. So you’re like, “Okay, well, let’s actually put some numbers behind that and see what is the net impact of that? How much of this problem are you going to be able to displace? Can you eclipse this problem through this intervention? Or is it just a meaningless, social-like PR kind of positioning? So, these guys come to us and say, “We’re inventing a technology. We’re combining some technologies together to replant trees at a much faster rate than has been planted through the hand process, or through the flyover [00:32:00] and seed bombing process.
We’re going to use drones, like a BB gun, like a paintball gun, with pre-germinated seeds and with a swarm of drones, we can plant 300 trees per hour, per drone, and if you do the math, and combine like 50-60 drones, we can get up to a billion drones a year with 50 drones flying autonomously in a swarm setting.
And you’re like, “Okay, sure. You have like production problems, you have to have all those seeds germinated, and there’s risk of survival and all that stuff. But like, holy shit, this could work.” Right? There are technical issues now to solve. There isn’t a design problem anymore, right? The design of the intervention is suited to the size of the problem. Okay? There’s a proportionality there.
Andrew: Basically, the design of the intervention is matched to the scale of the problem.
Soush: These guys [00:33:00] wanted to use drones to replant trees. They had many technical problems to go through. We did fund them, and after I left my role officially, I joined the advisory board. And remained on the advisory board to help them actually build a company. They’ve gotten to, I think, Series A now, in funding.
Andrew: What was the company called?
Soush: It was called Biocarbon Engineering. And they rebranded and restructured under a subsidiary company called Dendra Systems, and they’re still trying to solve this problem of deforestation through the intervention that they’re going through. I think that there are business model challenges now with how do you get companies to finance this? And not just become another NGO.
Andrew: Yeah. How do you make the whole puzzle of the business work?
Soush: Yeah. That’s a whole other problem, right?
Andrew: That’s a whole other problem. So, let’s go back upstream, though, to the intervention design, like we were talking about there. Because this is an area that is way [00:34:00] overlooked in the conversation, I think. We have a lot of great stuff in the conversation about, like, designing business models.
I mean, go look up, you know, for the listener, go look up customer development and lean startup and like there’s tons. But this area, where we’re talking about now upstream, there’s not a lot here, so that’s where I want to go deeper. I think you’ve done a great job explaining kind of the way of thinking. Like, the kind of thinking you’re doing is really the systemic thinking about like, “Okay, what is this problem? And is this thing we’re thinking about doing, is it a big enough thing? Is it going to actually help at all? Or is this really just window dressing?” What tools do you use? Like how do you concretely do this?
Soush: So, it’s a great, great question.
Andrew: Tools is the wrong word but like methodologies.
Soush: Yeah, like, what’s your dissection process? Yeah, what’s your dissection process? So, it’s been a very haphazard combination of existing tools. From learning how to write investment memos, which have a very clear structure where you’re trying to do a lot of [00:35:00] logical narrative building, to doing root causes analysis, which is a whole other framework of looking at outcomes and then trying to go back to root causes, from doing logic models, which are based on if-then statements where you have a visual logic model of like, you know, “This is my starting input. This is what I put the input in. This is what I create. These are the intended, like first-order outputs of it.
This is the second order outcome of it.” Once you visualize that, then you can start to see where the dependencies are, where the assumptions are from one stage to another, and where the gaps of logic are. So I use a bunch of different tools. I wouldn’t say, like we have like a business model and as for systemic thinking. Like it doesn’t exist, you got to put a bunch of things together so that you have a clear picture of like, “What is the theory of change here?”
Soush: What is the [00:36:00] size of the problem that you’re trying to address? What is the growth rate of the problem? What are the contributing factors to that problem? Like, what is leading to the growth? And then once you have that picture on like the left side, the input side, then it’s like, okay, the intervention, like, what is the design of that intervention?
Andrew: How could that meet or eventually eclipse the growth rate? When, you know, are they using technologies that scale, effortlessly like exponential technologies? Or is this superhuman, human labors-intensive kind of thing? Which leads you to a marginal cost of delivery, and you know, whether this thing will ever meet the potential of solving the problem at all in the future or not. So, point is, I use a bunch of tools. Those tools help fill a number of puzzle pieces to give me a clear picture of the problem. And then…
Andrew: What tools did you use to do this for Swae?
Soush: I used a logic model. I did [00:37:00] primary, secondary research to try to put some numbers around the effects of the problem. Like the effect of apathy, the effect of disengagement, the hard costs of the bad decisions, or biased decisions. We did surveys to try to understand, of all the options that are given to people, which ones are they more likely to get excited about? So there’s yeah, similar types of tools that I used before, research, cognitive tools, logic models, root cause analysis, is another one. So, at the end of the day, I’m making a bunch of assumptions too. Around what I think is the most appropriate or most effective intervention for the problem.
Andrew: When you say logic model, is that like the logic model framework from, I think it’s the Kellogg foundation?
Soush: Yes, yes. Yes. It’s from the Kellogg Foundation, they did a great job in the past, trying to kind of explain this in [00:38:00] some kind of guide. What I did with that, is I turned that into a workshop. And I used to give this workshop twice a year to leaders in a kind of head of impact or CEO, Executive Director of different Foundations across the Middle East.
I worked with the Gates Foundation to deploy this workshop to them so that they would be able to scrutinize and sort of more accurately quantify the impact pact of the programs that they were running, to see whether they’re on track, not on track, like whether they’re using the right metrics. If the intervention was doing the things they wanted to or not, so, yeah. Kellogg model is great, and there’s many different ways to use it.
Andrew: Yeah, no, I love that. Is that workshop online anywhere? That people can go check out?
Soush: No, it’s not, it’s an in-person two day, very kind of interactive process where like each [00:39:00] individual foundation leader, can either take their set of programs or they can take the entire thesis or mission of the foundation and start to build a logic model. And so, we work together to apply the Kellogg framework to the way that they’re thinking about their impact.
And then, we poke holes into it. We try to help them find the right metrics, help them decide the right cadence of measurement and the right process for measurement. So that they have a better sense of what the hell they’re doing. And whether it’s leading to the, like, this is the thing, like people that are in the space are not here because it’s a job, they’re here to change something.
They’re here to irreversibly change something. There are problems in the world that need to be eradicated, right? So, these tools help us audit how closely we are [00:40:00] to designing them in a way that leads to irreversible change. Otherwise, like, go get a job, go do something else.
Andrew: Yeah, there’s a lot of easier ways to spend your time.
Andrew: Hundred percent. Yeah, and for people who are interested in going a little deeper on that logic model, I was trying to think of, “Why did that sound so familiar?” And, it reminds me, it just occurred to me, it was because there was an entire podcast episode that was built on that.
So if you go back, check out the Josh Seiden episode, we’ll link to all this stuff in the show notes. And Josh wrote a book called “Outcomes Over Output,” and the logic model that we’re talking about here is actually one of the core inputs to that entire way of thinking. And it’s really a very concrete way, whether you’re doing this in a business or more systemically in a social venture like we’re talking about in this conversation, that’s a really good resource for thinking strategically, like we’re talking about here.
Soush: One other example I wanted to give you, Andrew, two minutes tops, was during the year-long kind of search [00:41:00] and diligence process of the 600 or so ventures I looked at. There were a handful that stood out, but one in particular, you know, about colony collapse and the issues that our honeybees face all around the world. Correct?
Andrew: I’m loosely familiar with it, yeah.
Soush: Yeah, so colony collapse is a phenomenon where honeybees are sort of going out to pollinate a particular crop of land or they’re out in the wild. And they come back with airborne diseases or bits of fertilizer that leads to basically cancers. Yeah, they spread within the colony very quickly, and they happen so quickly that the farmers are not able to respond in time.
So, it’s like getting stage four cancer and not having any of the warning signs in advance. A lot of the popular methodology, well, with popular research tells you, like, if you can catch the symptoms of colony collapse earlier, like at stage one, you can use fertilizer [00:42:00] and other sorts of interventions to limit it. And the success rate is like 90%, but most people don’t see it, and so all your colonies end up, like, you lose 70% of your colonies year on year. Which, do the math, like, we’re in deep shit, like in 10 years, we may not have honeybees maybe sooner, five years. So there’s the problem, there’s the framing of the problem. There are a number of contributing factors to colony collapse. How are you going to solve this problem? Are you going to create a more effective or friendly fertilizer? So that it doesn’t kill bees? Is fertilizer the number one contributor to colony collapse? Or is it climate change? Is it ecosystem degradation?
Like, the cocktail that leads to colony collapse is hard to disaggregate and hard to appropriate, like which one is the leading factor? But we know it’s a combination of those things.
Andrew: Yeah, it’s hard to break it down.
Soush: Totally. So, it’s also inappropriate, I think, to focus on that as your intervention. [00:43:00] People look at, “Well, how do we increase the number of bees? Or how do we increase their survival?” So again, different choices, different interventions. Someone can say, you know, “Buy honey from us, and we create more beehives with every honey that you buy.” Like the Tom’s model for shoes. Cool idea, easy to understand from a marketing perspective, but like, is that effective? Are you still, are you addressing the reason why they’re dying? By just having more bees? No, and like, unless you’re able to create so many that it outpaces the death rate, you’re never going to get ahead of the problem. So, I saw a venture that really blew my mind. They had re-engineered the actual beehive and installed a number of motion sensor cameras. They installed a number of other types of cameras that would, and it also link this to a database where they fed an AI, 250 papers that looked at different behaviors of [00:44:00] bees. Looking for anomalies in those behaviors. So, whenever there was an anomaly, so like the bees would enter the hive, it was a smart hive. The bees would enter the hive. And usually, when there is a problem with a bee, when someone has stage one symptoms of colony collapse or cancer, they start to act funny. They go in corners. They do things that they normally don’t do. And all the scientific papers tell you about what those behaviors are. So, when this happens, these cameras and the AI system can identify, where in the hive this is happening, which set of bees they take screenshots of, they sent the screenshots to the farmer. So, the farmer could come and intervene at like the earliest stages of detection. And based on their hypothesis and stuff like that, they could reverse the death rate from 70% loss to like a 10% loss. And so, the other [00:45:00] things are like, you know, these exponentials and the, you know, doubling and accelerated rate of returns and all that stuff, the cameras are getting cheaper, the AI is getting better, the cost is becoming lower year on year because they’re on exponential growth curves. Now, you don’t need to worry about fertilizer or a two for one model or whatever. You just need a smarter detection system combining these technologies together. That’s what I’m talking about when I’m looking at systemic solutions to systemic problems.
Andrew: Yeah, I think that the other thing I’m hearing is, there is that there isn’t always one solution to systemic problems, right? The same way that a systemic problem is so big and you have to break it down, right? You have to kind of unbundle this thing and into its constituent parts. And then, it’s almost like to solve a systemic problem, you have to kind of break it down into all the contributing factors and then potentially go after all the contributing factors, right? Which is like, you have to say, “Okay, you know, [00:46:00] there’s ten things that actually contribute to this symptom that we call the systemic problem.” But, if you go to your point about root cause analysis, “You know, there’s actually ten contributing factors here, and these are the biggest two. So, the biggest thing that I can do to have an impact on this overall symptom is to handle this contributing factor and designed for that. Knowing that’s not the whole solution, but that’s an important piece of the solution and being okay with that. Because it’s like, what I see is a failure mode that I’ve fallen into before, and I think a lot of other people fall into, is we get so caught up in the whole problem, that we try to boil the ocean. And, like, that’s a phrase for a reason, because it doesn’t work.
Soush: Hundred percent agreed. And I think this is a common human trait. These problems are so multifaceted and so big that you can get lost in them, and you can get overwhelmed by them. And so you sort of focus on things that are a little bit more tangible, a little bit easier to touch. But ultimately, probably has very little like long-term [00:47:00] impact on the actual problem that you’re trying to solve. Which kind of brings me back to Swae. I think you alluded to like, you know, “What’s the intervention, or what are the things you considered? What are you trying to do?” Look, we may not succeed. We may not lead to this paradigm change in how we organize, but my bet, that I’m betting on is that if we can prove this to some of the best companies in the world, that this process outperforms the other way of doing things, or is as good as the other way and gives you all these other benefits. Then we’ll have normative narratives on our side.
Andrew: You’re building evidence.
Soush: We’re building evidence, and we’re building excitement about this, right?
Andrew: So, let me ask you this. How do you know if it’s working? Like what’s your metric?
Soush: There are a bunch. We look at very quantitative things like the number of ideas that were generated, like a side by side, you know? The old way of doing things versus this new way. Like, a number of ideas, throughput of ideas, [00:48:00] a number of decisions made, value of those decisions. Against the cost of the platform. We look at engagement rates, daily active, monthly active, weekly active users compared against the previous way of doing things. We then also do like qualitative surveys on levels of trust, levels of productivity, levels of satisfaction, those types of things, to help show that people like when people feel respected, they contribute more.
They contribute that extra discretionary effort when they feel like the process is fair and merit-based, that’s transparent. It’s not some backdoor stuff going on. So, we have a bunch of metrics that they do that, but, so I don’t lose this point for us, look, if we can nail the normative narrative, once people found out that Uber works and Uber can be better than the taxi system, no one was like, “Oh, well, you know, that was interesting, let’s go back to the [00:49:00] taxies.” Then it became an enormous battle between the status quo in the future. Which will carry out for 10 years until that old way is just no longer economically viable or culturally viable? I think we’re going to do the same thing over this period of time.
There are a number of startups like us that will work on this problem of upgrading the way that we make decisions, upgrading the way we organize our institutions and companies. And we’re going to win the normative battle through proving it works in the best places, and then people will just expect that this should happen in other places that are more meaningful, like cities like their governments, like, you know, their homeowner associations or student, parent-teacher boards or places where real decisions really, really matter and input and inclusivity really, really matters.
Andrew: You’ve really stoked my curiosity around this, I don’t actually know what it’s called, but this, you know, this almost like intervention [00:50:00] design, this systemic thinking, like all this early framing work, that is really what sets up everything that comes downstream. Is there a name for this? Like, if I want to go start Googling on this, like what should I search?
Soush: I don’t know. Like, I don’t know what it is, but I would probably look at like systems design first. There’s like Elinor Ostrom and a whole bunch of other people that have looked at systems and levers and systems change. Like a really scientific methodological way of looking at how to look at systems. There probably are a lot of systems theorists out there, organizational theorists in business schools, or in public policy schools, but there isn’t like a business model canvas for this. That you can just, like, find and fill out. But maybe we can create one, Andrew.
Andrew: Yeah, could be fun. I want to go ahead and start to close out here with a couple of rapid-fire questions. They are short questions that I like to ask everybody. So, the first one is what is a quote that’s important to [00:51:00] you? And what about it speaks to you?
Soush: It’s a quote on my arm. You can’t see it.
Andrew: I can see it’s tattooed, but I can’t read it.
Soush: Yeah, it’s a stanza from a poem from Rudyard Kipling. It says, “If you can meet with triumph and disaster and treat those two imposters just the same.” What this means, it’s an aspiration and something that I think I’m becoming much more grounded in as I mature, as I age. You know, I’m a dad, I have two girls. The world isn’t really just about me and my winning or my kind of validation, but there was a time where it was. Where I didn’t have the same responsibilities or didn’t have the same wisdom or understanding about how the world works. Didn’t have the same humility I would say about it. And there was a huge drive to try to be validated and to be heard and be right and do the righteous thing and all that stuff. And this quote, just sort of like, [00:52:00] transcended a lot of that, like whether you win, whether you lose, whether you, that’s not the point. The point is that you tried and also you were able to let go of all of it. Because it’s not yours, it’s, they are not your possessions. None of this is, you’re having an experience, and hopefully, the experience enriches you as a person and makes you a less possessive, less antsy, more balanced, more contributing person, so that quote speaks to me a lot.
Andrew: Thank you, thank you for sharing that. So at this stage in your life, it’s very interesting what you were just saying about, you know, there was an earlier phase where you were, you had very strong needs for validation, and to be right. And I think it’s stuff we all go through, but at this point in your life, like now, what does success look like for you?
Soush: I think a lot more of the same. You know? Like, I like [00:53:00] the life that we have and the design of it. Like we live more or less within our means, we have a two-bedroom condo, and both, you know, my two little girls live here. And, you know, me and my wife are here. So, the office is now here because of COVID. Like, maybe we’ll expand a little bit, outside of that, if things improve. If not, we’re remote, and we’ll do that.
Success means that I get to do this for the next ten years. And we incrementally build the normative narrative of winning, and of like upgrading, and each year there are gains that happen along that path, but it’s an irreversible path. There‘s no, “We help more people vote, or we got more people engaged in a shitty broken system.”
It’s like, no, we help people learn to be more self-managed. Learn to create ideas that really were the [00:54:00] right ones for their cities, for their communities, for whatever. Seeing more examples of that, more tangible examples coming out of Swae, having Swae be applied in more used cases, and eventually, in more government settings, that is success to me.
And hopefully, the benefits of that, the fruits of that are we earn a little bit more money. We have a little bit of a better life. I have a farmhouse somewhere in the interior or in Greece where I can just go chill out in and do work in and do retreats in. Paired to all this, I’ve been doing a lot of meditation over the past three years.
It’s a daily ritual for me now, and I’ve been starting to experiment a lot with psychedelics as well. For personal development, for personal growth, for seeing some blind spots that have been ingrained and embedded in me and I think making a lot more time for that over the years is what success or what [00:55:00] happiness kind of looks like.
Andrew: Soush, just in closing out, what would you like to leave the listener with?
Soush: Don’t be a bystander. There are so many things that will tell you you’re wrong. You’re going to look dumb. You should be worried about your image. You should preserve your social capital. Don’t say that, don’t do that. I mean, we’re living through a pandemic that has upended our entire global economy.
It’s gonna upend our political systems. The need for new solutions and new thinking is now and more than ever ever before. If you’re sitting on some ideas that you think the world needs, even if they’re as dumb as Swae or as impossible as Swae or some of the other ideas I mentioned, the replanting drones, or whatever. What they do is that they’re contagious.
That inspiration to try something disruptive and [00:56:00] evolutionary is contagious. We need a lot more of that. Our world needs better systems. Our world needs more ethics. Our world needs an integration of morality and technology. We can’t just go by the inertia we’ve had, please don’t sit around and consume the information coming to you, go contribute what the world needs.
Andrew: Beautiful. All right, and so for anyone who wants to reach out to you, get in touch with you personally, or with Swae, what’s the best way that they can do that? Where would you direct people?
Soush: They can email me. Soushiant [at] Swae [dot io]. Hit me up on Twitter. Hit me up over email. For any entrepreneurs struggling with some of these issues in their earlier stages that thinks that I can be helpful to them, please reach out. It’s our duty to reciprocate the efforts, and you know, service and whatnot that we’ve received.
And I’d love to help if I can, so please reach out and go after your [00:57:00] dreams. Go after your dreams. Don’t let dreams remain dreams. That’s the last thing I want to leave people with.
Andrew: Thanks so much for what you’re doing. Keep it up, my man.
Soush: Andrew. I love you, man. Thanks for the opportunity.