reference guide

The Y Solve Invention & Innovation System Reference Guide introduces the foundational concepts, principles, and terminology that shape the Y Solve Invention & Innovation System. While many of these terms are widely used and may appear familiar, their deeper meaning—and their implications for how organizations create value, make decisions, and prepare for the future—are not always fully understood.

Introduction

This guide provides investors with clear, accessible explanations and the context needed to understand how these concepts inform Y Solve Invention & Innovation System's thinking, portfolio companies, frameworks, and approach to innovation.

Designed as a practical resource rather than an exhaustive glossary, the guide can be consulted whenever additional clarity or context is needed. It will continue to evolve as the Y Solve Invention & Innovation System. While many of these terms are widely used and may appear familiar, their deeper meaning—and their implications for how organizations create value, develops, its applications expand, and new concepts emerge.

Together, these entries establish a shared language for understanding the ideas that connect our work and help distinguish the broader innovation system it is building.

Algorithm

An algorithm provides a repeatable method for determining what to do, how to do it, and—when applicable—what to do next based on the information available.

Purpose of an Algorithm. The primary purpose of an algorithm is to convert information into a consistent decision, action, or result.

An algorithm can be used to:

• Analyze information and identify patterns or relationships.
• Solve a defined problem through a repeatable process.
• Make decisions based on specified conditions or rules.
• Automate tasks that would otherwise require human intervention.
• Predict potential outcomes using available data.
• Optimize decisions by evaluating alternatives against defined objectives.
• Adapt actions when inputs or conditions change.
• Create consistency by applying the same logic across similar circumstances.

In an organizational system. For the type of organizational systems you’ve been developing, an algorithm can be understood more broadly as a logic mechanism that connects information, conditions, decisions, and actions.

This distinction is important: an algorithm is not necessarily the solution itself. It is the logic or method used to determine how a system responds to particular conditions.

That makes an algorithm particularly useful within our Adaptive and Intelligent Operating System and 931 Logic System. It provides the repeatable logic for interpreting changing conditions and determining appropriate responses while allowing the system to incorporate new information and feedback.

B Corp

A B Corp, or Certified B Corporation, is a for-profit company that has been assessed and certified by B Lab for meeting standards relating to social and environmental performance, accountability, and transparency.

The core idea is that a company should use business as a force for positive impact while remaining commercially viable.

Key characteristics

• Purpose beyond profit – considers social and environmental impact alongside financial performance.
• Stakeholder orientation – considers the interests of employees, customers, communities, suppliers, and the environment, not only shareholders.
• Accountability – adopts governance and accountability mechanisms intended to embed its broader purpose into business decision-making.
• Transparency – undergoes an external assessment of its impact and publishes information about its performance.
• Continuous improvement – certification is not simply a designation; companies are expected to maintain and improve their impact performance.

B Corp vs. Public Benefit Corporation

These terms are often confused:

B Corp = certification

A company becomes a Certified B Corp through B Lab’s certification process.

Public Benefit Corporation (PBC) = legal corporate form.

A PBC is a corporation organized under a state statute that permits or requires it to pursue specified public benefits alongside shareholder interests.

A company can therefore be:

• a PBC but not a Certified B Corp;
• a Certified B Corp but not a PBC; or
• both.

Enabling Solutions

Our companies that provide Enabling Solutions use Systems Thinking to help organizations understand and navigate the transition from Industry 4.0 to Industry 5.0.

Rather than treating technological, organizational, workforce, and strategic challenges as isolated issues, Systems Thinking enables organizations to understand the relationships and interdependencies among them. This provides the foundation for identifying root causes, designing solutions that fit the organization’s broader system, and adapting those solutions as conditions change.

The objective is not simply to help organizations adopt new technologies. It is to help them develop the capabilities, operating models, and organizational conditions necessary to create and sustain value in Industry 5.0—where technology, people, organizational performance, and societal value increasingly operate as an interconnected system.

Note.

Y Solve Lab year 1 batch 1 companies that deliver Enabling Solutions: 

Acumyn, Ally Intelligence, Dyalogue, Edyson Pioneering, Grayl AI, Optivity AI, Possibyl, and Theya AI

Other year 1 batch 1 companies:

Carbon Y, Greatyr, Salyence, and y-Catalyst 

Fiduciary duty

Refers to a relationship in which one person has a responsibility of care for the assets or rights of another person or entity. Directors, trustees and managers of foundations and endowments owe fiduciary duties to the organizations they oversee, similar to the duties of directors at for-profit companies.

Humanistic Capitalism

An economic framework in which markets and competition remain important mechanisms for creating value, but economic activity is intentionally designed to advance human well-being, environmental sustainability, and broader societal value—not simply financial returns.

Traditional capitalism tends to emphasize:

Humanistic Capitalism expands the equation:

The important distinction is that financial performance remains necessary, but it is not the sole measure of success. Human and societal value become integral to the economic system rather than treated as secondary benefits.

Impact Reporting and Investment Standards (IRIS)

A common reporting language for impact-related terms and metrics.

Public benefit company

A Public Benefit Company (PBC) is a for-profit company structured to pursue financial returns while also creating a defined public benefit. Rather than treating social or environmental impact as separate from the business, the company incorporates that benefit into its corporate purpose.

A PBC therefore operates with a dual objective:

Create economic value + create public benefit

Critical characteristics:

1. Defined public benefit. The company identifies one or more specific public benefits it intends to promote.
2. Profit remains important. A PBC is a for-profit enterprise. It can generate revenue, earn profits, attract investment, and distribute returns to investors.
3. Stakeholder considerations. Directors generally have a legal framework that allows—or requires, depending on the jurisdiction and governing documents—the consideration of broader stakeholder interests when making corporate decisions.
4. Accountability. The company can be held accountable for pursuing its stated public benefit, rather than merely using social impact as a marketing objective.
5. Long-term value creation. The structure is particularly suited to companies seeking to integrate financial, human, social, and environmental value into their business model.
   

A Public Benefit Company is a corporate structure for implementing the principles of our notion of Humanistic Capitalism at the enterprise level.

Humanistic Capitalism provides the economic philosophy; the PBC provides a legal and organizational structure through which a company can pursue both economic and public benefit.

Logic Model

A Logic Model is a structured representation of how an organization’s resources and activities are expected to produce specific outputs, outcomes, and impacts.

It provides a practical way to show the relationship between what is invested, what is done, what is produced, and what changes as a result.

Basic Structure

Purpose

The purpose of a Logic Model is to make the operating logic of an initiative visible and measurable.

It helps answer:

What are we putting into the system, what are we doing, what does it produce, and what changes should result?

Logic Model vs. Theory of Change

They are closely related but serve different purposes.

Logic Model = What connects to what

It provides a structured representation of the program or solution.

Theory of Change = Why the connections should produce change

It explains the causal reasoning, assumptions, relationships, and conditions underlying those connections.

Systems Thinking

Definition

Our companies that provide Enabling Solutions use Systems Thinking to help companies navigate from Industry 4.0 to create value in Industry 5.0. 

Systems thinking is an orientation and discipline for understanding how parts of a system interact, influence one another, and collectively produce outcomes. Rather than treating a problem as an isolated event, systems thinking examines the relationships, dependencies, feedback loops, structures, and conditions that contribute to the problem or outcome.

Purpose

The purpose of systems thinking is to understand the system sufficiently to address underlying causes and improve outcomes without creating unintended consequences elsewhere in the system.

It helps an organization move from:

“What is the problem?”

to:

“What relationships and conditions within the system are producing this outcome?”

and ultimately:

“What changes to the system are most likely to produce a better and sustainable outcome?”

Benefits

1. Identifies root causes. Looks beyond symptoms and immediate events to uncover the conditions and relationships producing them.
2. Reveals interdependencies. Shows how changes in one part of an organization can affect other functions, people, processes, or outcomes.
3. Improves decision-making. Provides a broader basis for decisions by considering multiple variables and their interactions.
4. Reduces unintended consequences. Helps identify second- and third-order effects before implementing a solution.
5. Creates more effective solutions. Solutions are designed around the system generating the problem rather than simply treating its symptoms.
6. Supports adaptability. Organizations can recognize changing conditions and adjust their responses rather than relying on fixed solutions.
7. Connects strategy to execution. Helps ensure that strategy, people, processes, technology, resources, and incentives reinforce one another.
8. Builds organizational capacity. The organization becomes better able to understand and address future challenges rather than repeatedly depending on external answers.
   

A useful distinction

Systems thinking is not a solution. It is a way of seeing and understanding the system so that better solutions can be developed.

A simple model is:

This is particularly important for complex organizational problems because an answer may address what is visible, while a solution must address what is producing the outcome.

Theory of Change

The non-profit sector is one of our target markets for our Enabling Solutions product. We find that there is often a lack of foundational theory of change work that has been done. This has a number of consequences when the non profit is trying to raise funding in an environment of increasing competition for philanthropic capital. 

A Theory of Change (ToC) is a structured explanation of how and why a set of actions is expected to produce desired outcomes and ultimately create a defined impact.

It connects what an organization does to the changes it expects to create:

Purpose

The purpose of a Theory of Change is to make the causal logic behind an initiative explicit. It helps answer:

“If we do this, why should we expect it to produce that result?”

A strong Theory of Change identifies not only the intended pathway to impact, but also the assumptions, conditions, relationships, and external factors that must be present for that pathway to work.

Venture philanthropy

Venture philanthropy is the application of venture capital principles and practices, such as long-term investment and capacity building, to not-for-profit organizations. Venture philanthropy assists nonprofit organizations in the plan, launch and management of new programs or social purpose enterprises.

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