More Than Home Building: Understanding New Story’s Success
Stay On Target: Four Fast Takeaways
- Culture matters. A healthy culture provides psychological safety, allowing ideas and creativity to flow. Investing in people and a companies culture is essential for innovation.
- Innovation. Problems exist when known solutions are not good enough. It is risky and plenty of things won’t work as expected. The potential for failure or set backs is hard for some organizations to stomach.
- Math is your ally. The importance of understanding key metrics like “cost for successful outcome” help inform decision making. Which mechanisms drive the cost, speed, and quality with which you can positively impact the lives of others?
- Work backward. If you find your nonprofit stuck in traditional ways of thinking about a problem, begin by looking at the specific pain-points for both donors and those you seek to help and reverse-engineer the solution.
How do you house one million people by 2030? You change the game.
With 3 billion people, or 40 percent of the world’s population, projected to need affordable housing by 2030, the issue of global homelessness demands attention. Yet, the sheer scope of the problem seems incredibly daunting. Many nonprofits have sought to find solutions without lasting success.
As the name suggests, New Story, a pioneer nonprofit in global housing solutions, aims to change this old narrative. Albert Einstein’s adage “we cannot solve our problems with the same thinking we used when we created them” rings true for this nonprofit. Founded with the realization that traditional home-building methods would not solve the issue of global homelessness, New Story uses innovative thinking and streamlined processes to build homes around the world in cost-effective, sustainable ways.
Creating a New Story
After visiting Haiti in 2014 and witnessing the inadequate living conditions years after the devastating 7.0 magnitude earthquake, Brett Hagler felt compelled to act, as he explains in the powerful video “Crazy Until It’s Not”. While other charities have done and continue to do excellent work in terms of disaster relief, Hagler sought a nonprofit that combined technology and transparency to provide long-term solutions to the growing housing crisis across the world.
With this mindset, Hagler founded New Story with Alexandria Lafci and Matthew Marshall. As entrepreneurs with a desire to serve families and communities struggling with insufficient housing, the co-founders applied to Y Combinator, a start-up accelerator, becoming one of the first charities to do so in 2015. With the seed funding from Y Combinator, the team was able to gain incredible momentum. In 2014, New Story built 16 houses. While working with Y Combinator, the nonprofit has funded over 2,300 homes at about 6,000 dollars per home and created 26 communities in multiple countries.
Understanding Pain Points
New Story recognizes that a home is not simply a physical shelter, but “a chance for a better education, more career opportunities, thriving health, and more.” The interconnection between poverty and homelessness makes this issue a complex one. Handling such a challenge required moving away from traditional thinking about housing.
Many nonprofits have sought to tackle global homelessness, but they often run into several stumbling blocks. As New Story’s Chief Technology Officer (CTO) Morgan Lopes explains, “housing is a complex industry”, citing high costs, long build times, and unpredictable outcomes. These challenges stem from a number of factors, including governmental red tape, bottlenecks accessing land in various parts of the world, and a lack of vetting and working with local partners that can lead to low-quality houses built for those in need.
In addition to the problems that arise from constructing homes, New Story recognized that many charities lack the transparency donors are looking for. Often, their money seems to disappear into a “black hole,” as Hagler explains in a podcast with Y Combinator. Donors want to know where their money is going and see the impact their dollars are making.
Understanding these pain points was the first step in solving the issues exposed by them. The question remained, how?
Of donations go directly to building homes
Homes have been funded since 2015
Harnessing a Start-Up Mindset
Understanding New Story as a “start-up charity,” as Hagler calls the organization, emphasizes the importance of an entrepreneurial, tech-savvy mindset that allows this nonprofit to approach the issue of global homelessness in a novel way. As Lafci and Hagler note, “thinking bigger” helps guide New Story’s process of reverse-engineering solutions to big problems by breaking down the issue and executing at a highly effective level.
Lopes explains that being both efficient and effective is key to New Story’s goal of putting 1 million people in homes in the next ten years: “Combining progressive housing with creative financing and a demand-driven model, we are constantly decreasing the cost per person served and increasing the speed we can work.” A willingness to try novel approaches allows for lower costs with greater efficiency.
“Ending homelessness is expensive,” Lopes recognizes. “By driving down the cost and increasing speed, we increase the confidence and consistency with which more families get safe homes.” Additionally, New Story works to cut through red tape with a “permissionless” model to speed up the process and impact the greatest number of people. Finding new ways to work with communities without getting bogged down in bureaucratic bottlenecks helps decrease costs while allowing the nonprofit to operate in a highly efficient way.
While also finding creative solutions to homelessness, New Story has made a promise that 100 percent of donations go directly to fund projects instead of overhead costs. A group of investors called “The Builders” donates money for operational expenses so there is no confusion for other donors about where each dollar they give goes. Furthermore, donors can see the direct impact their money makes through updates about the home-building process and videos of the family when they move into their home. Showing donors exactly how their money impacts real people highlights their role in ending global homelessness, an effective donor retention strategy.
Instead of following traditional home building methods and nonprofit operations, New Story relies on a start-up mindset to solve problems in an empathetic, highly effective way, but this way of thinking is not without risk.
Lopes reflects, “There is no growth without discomfort and tension.” Innovation cannot blossom without testing solutions in a transparent, thoughtful way and continuing to build on the momentum generated. Studying lessons learned from five years operating, the New Story team constantly strives to find new solutions to specific problems instead of using a one-size-fits-all methodology.
In 2018, New Story partnered with ICON, a construction technologies company, to print a 3D home in Austin that became a tangible proof-of-concept for a 50-home community in Tabasco, Mexico. ICON’s Vulcan II printer can print 3D homes in less than 24 hours, using a cement-based mix called Lavacrete and producing zero waste for a faster, more sustainable process than traditional home building. Other innovations besides 3D printing include EcoBlocks and Cool Roofs, which will feature as part of New Story’s Innovation Village of 500 homes in Nacajuca, Mexico.
In addition to using revolutionary technology, New Story further innovates by getting the local community involved in the entire process. By partnering with governments and other nonprofits with proven track records of success, New Story can make decisions with instead of for a community. Getting the families for whom the homes are built involved in the design process allows for buy-in and community sustainability. Using local materials and labor both reduces costs and adds to community buy-in, ensuring these homes are actually lived in and used instead of abandoned after a year or so due to a lack of understanding of the local needs and wants.
Lopes recognizes that the willingness to experiment and try new things “is risky and plenty of things won’t work as expected” and that some organizations fear “failure or setbacks.” Yet, a spirit of innovation and creativity is crucial for solving constantly-changing issues. For this reason, among many others, Fast Company recognized New Story as one of the “Most Innovative Companies” in the nonprofit sector in 2017 and 2019 as well as the architectural sector in 2020.
Sharing Best Practices
Using a Create-Prove-Share model, New Story develops innovative housing solutions, demonstrates the scalability of said solutions, and works with governments and other nonprofits to accomplish the goal of creating sustainable housing for people around the globe.
In the spirit of transparency, New Story’s Housing Innovation Toolkit (HIT) breaks down best practices specific to ending global homelessness into three key components: tracking impact, ensuring long-term success, and meeting growing needs.
As a data-driven start-up, New Story created its own survey software, Felix, to track the impact that the housing projects made on the families the nonprofit aims to serve. New Story emphasizes the importance of data because “understanding key metrics like ‘cost for successful outcome’ help inform decision making,” Lopes explains. Creating and sharing an app with governmental agencies and other nonprofits illustrates New Story’s commitment to sharing best practices in order to solve the problem of homelessness around the world.
New Story credits Lean Participatory Design with the long-term success of their building projects, since gaining the input of the people living in the houses helps ensure that these structures will not be abandoned soon after being built due to lack of understanding the needs of the families and the community. As part of the “permissionless” model, these families live in and own both the homes and the land on which they are built, fundamentally changing their life situation. Unsatisfied with the lasting solutions alone, New Story went a step further by creating a course about Lean Participatory Design. This course was designed to show other organizations how to include local populations in building projects to ensure their efforts are both effective and useful.
While innovation is crucial in meeting growing needs, collaboration also plays an important role. Instead of keeping certain best-practices secret and trying to do everything in-house, New Story works closely with other nonprofits, NGOs, housing organizations, governments, and the local people to accomplish the collective goal of ending global homelessness.
Writing Your Own Story
New Story illustrates how to take a for-profit mindset of disruptive innovation and harness this thinking to solve the issue of global homelessness. If you find your nonprofit stuck in traditional ways of thinking about a problem, begin by looking at the specific pain-points for both donors and those you seek to help and reverse-engineer the solution. In doing so, you can give more people than those traditionally served greater access to your services and cut costs for more effective operations.
However, your organization doesn’t need to focus on housing to benefit from the best practices shared by New Story. Consider how your organization may make a larger, more lasting impact through collaboration and sharing best practices. By truly listening to and understanding the needs of the people your nonprofit wishes to serve, you can actively work to ensure lasting, more permanent solutions. And whether your nonprofit uses surveys or another method, collecting data is the first step in understanding how efficient and effective your organization is and should inform how your organization functions.
By Elizabeth Rubenstahl