 All right, so I've been coming to SoCAP for years and for years I keep hearing the question How do we measure impact? But I'm going to step back a little bit further and ask a bigger question And I'm going to ask the question of how do we measure impact across an entire portfolio of companies? so our run fledg fledges the conscious company accelerator and we have 39 graduates in our in our portfolio we invest in in all of our companies and and 38 of these companies have different business models. There's two cook stove companies and then everyone else does something different So how on earth do I add cook stoves with goats? With fruits and vegetables with recycling cotton and recycling you know lots of other things. How on earth do we do that? well One place we can look is the gears rating system so Fledge is a certified B corporation. We have a gears rating as do lots of companies and when you look at that rating system from the inside out what you find is that It comes up with a number, but the numbers aren't addable the numbers aren't averageable So for instance here are three impact hubs Fledge operates inside impact hub Seattle. It's awesome. We have the highest score We also partner with impact hub San Francisco, which is pretty close and impact hub Boulder So three impact hubs three of the same companies doing the same business model with three different scores And these scores what's interesting is Our hub in Seattle isn't 13 percent better or more impactful or anything Than San Francisco. It's not 13 more of anything than San Francisco It's just slightly higher because we do a little bit more on that rating system So while the numbers are nice in comparison from year to year Within the company. They're not comparable between companies and they're not averageable and they're not additive and whatnot So then we can turn to iris Iris is a great set of standards. It's 488 ways to measure the impact of your particular company And so I picked out three of these from their catalog just to see what it was like So energy saved affordable housing and school enrollment. That's very indicative of the kind of portfolios that that many of us build So how do you add energy saved in school enrollment together? Well, that's an unsolved problem in the iris system, right? What the answer is is You just add you just talk about all of them one after the other So in my portfolio, how many cook stoves did we did we sell and how much cotton have we recycled and and and and add But they don't add together So to answer this question, I had an epiphany at the end of last year I had the epiphany that we're looking at the problem Too close too close and too down into the details that we need what we need to do is step back 10,000 feet and worry about it at that level Right and the result is a book I published earlier this year called the pinch. Oh impact index The pinch. Oh impact index First and foremost thinks about the problem of impact across the entire scale of everything that is possible to do an impact In both for-profits and non-profits And that scale is humongous if you think about all the problems of the world And yet we're going to squeeze it into a an index of one to seven And i'm going to walk you through what these what these levels are So a p1 right p for pinch. Oh one one for the first number in the index Is anything you've done that does some good in the world? So this is anything from you put one solar panel on a roof to You've you've started an organic farm to One school enrollment and so forth Right any one any hundred any thousand any million things you've done That have just done that one solution but haven't yet continued on to make systemic change So p1's down here p2 is way bigger p2 is you've made systemic change in the world So whatever you've done whether that's Created a system where solar panels will then show up on every house in the nation eventually That's systemic change That's change where we're getting rid of all three stone cooking in the world because we found a solution that everyone can afford and adopt That's systemic change right that's a p2 in this level Because some systemic changes are bigger than others and a p3 is solving world hunger Right so again I'll stick with my my examples of cook stoves. That's nice if we got a cook stove in every house that burned half the fuel That would be awesome But people would still not be able to cook meals on it who didn't have food And if we solved the problem of world hunger completely on this index that is a p3 And you can see that's there's a big gap there a big big scale But p4 gets bigger because p4 is global poverty So if no one is poor on the planet everyone has at least enough money for food and shelter and so forth That's a bigger problem than solving world hunger. That's a p4. It keeps getting bigger five is world peace And by now you might be wondering how on earth it gets to seven Six is universal happiness six is what I call a really good day on star trek So six we're way up here somewhere Six as you go to the wall you ask for whatever you want and it gives it to you Right, so any any material needs are taken care of any spiritual needs are taken care of everyone on the planet Is happy think about gross national happiness the answer is yes At p6 and there's one more level. I need the chair for that which is p7 way up here Which is universal enlightenment everyone is the Dalai Lama All right, and if anyone has anything better than that's awesome. Let's make a p8 All right, so at that scale Um, there really isn't any difference between selling a few cooks those and putting a few kids in school and And cleaning up this and cleaning up that they're all down at the p1 level Which may sound kind of silly, but it's useful Because now I can say that within my portfolio. I have let's say three p1s And I can add them together So what you find out is when you think about it at this scale That you that the range of impact is actually a logarithmic scale And we're kind of used to that but we don't remember what a logarithm is because they didn't teach it to us It was like seventh grade. We learned logarithms Here's how it works each one of these levels is a thousand times bigger than the level before and so you can think of it Is there's units hiding underneath each level? It's a thousand units for p1 and a million for p2 and a billion for p3 and so forth In English it makes it makes a lot of sense because each one of these levels has a name Right hundreds thousand millions billions and so forth. So what you do to add them together Which looks really complicated, but it's not that complicated excel will do this for you as you figure out How many units it is you add those together you take the logarithm of that And that's again one calculation in excel and it gives you a number So three p1s together is a p 1.16 So you can see we have fractions here. We have decimals. We have some details Right and here's how you do it in excel. You just put the put that formula in an excel and it will spit you out the p number Now the next epiphany as i'm working through this problem earlier this year is look, we can do the same thing for Damage we can do the same thing on the negative scale And I won't walk you through all of them because it's I won't walk you through all of them because it's kind of obvious p negative 1 is driving a Prius It's doing less bad in the world Uh and a p negative 7 is the end of the universe It's kind of symmetric So, you know the oil companies and all their damage would be like a p negative 2 And once you have that idea now you can do net impact with this measurement Now you can take let's say a public company that has some good parts and some bad parts to it and add those together So for example really quick two p ones and a p negative 2 Well when you do that math you get a p negative 1.99 Right because a p negative p 1 is a very small compared to a p negative 2. It doesn't really move the number very far All right, lastly the other epiphany when working through this is that Often we mix up the difference between what the potential impact is and the actual achieved impact And in fact there's three levels What is potentially achieved by this idea? One of the fledglings is going to recycle cotton There's a humongous change in the world That potential is huge, but that company that one company is not going to recycle all the cotton in the world That's unlikely, but the potential of that idea is huge The intention of that company Is to recycle a large amount of cotton to make systemic change in the world where cotton is as recyclable as paper and plastic and and metals Right that's a p2 on this level just be clear and how far have they gotten so far well not very far Right, they're a very new company and so they've achieved very little And so the way you add this together is on the achieved side So you make you make it clear when you're doing the addition whether you're working on potential Intended or achieved and on the achieved piece you add one more factor And it's limited you can either multiply the number by 0.01 percent 1 percent 10 percent 50 percent or 100 Are you just starting? Have you done a little bit? Have you done a wee bit? Are you halfway through or are you all done? And you imply that to the units And what you get when you look at my 39 fledglings is an actual number So our intended impact of those 39 companies is a p 2.005 And our achieved impact to date Is p 0.695 Which okay, that's a small number. We can call it in baseball terms. We can call out a 695 sounds better Um, but the key is I have a number assigned to my portfolio And next year I expect that number to get bigger And in 10 years when some of the companies have died and some of the companies have achieved more I expect that number to get bigger And so now there exists a way to say this portfolio has an impact of a certain number And at least within that portfolio, that's a trackable number Across portfolios Maybe we're looking a little bit too far away 10,000 feet is too far and the numbers aren't quite Comparable, but at least we can certainly tell a p 1 from a p 2 or p 1.5 from a p 2.005 right pretty clear So that is the pin show impact index in a nutshell And one final word is we're honored that this name come from Well, I was standing at a very unique university. It's called pin show university up in bainbridge island, washington Standing next to giford pin show who's the founder of the school who let us name it name the school after him Let us do it. He didn't want us to want us to do it And he was talking about an idea that he's been batting around for 10 years when I had this just incredible idea that I can solve your problem giford I can solve the problem of the hapo dammo index, which I won't tell you about it's in the book And then had those one wonderful moments were two seconds later. I said, oh my god If I can solve that I can solve the problem of measuring impact across a portfolio And sat down wrote the book and named it after him So thank you