Open-Source Business Models
Our idea is a social enterprise that tackles the problem of inclusive economic development. We will deliver a platform to individuals and local organisations, that offers a structured startup program, a database of validated business models and local support structures. This combination of elements will lower barriers to entry for potential entrepreneurs and entrepreneurs and improve startup success rates, thereby creating inclusive wealth and jobs.
Source : http://ccistudentcenterblog.files.wordpress.com/2013/12/open-source-innovation.jpg
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We face three interrelated problems;
- The rate of job creation cannot keep up with the increasing number of youth entering the workforce.
- We have increasing inequality
- In many parts of the world, the barriers to creating job creating enterprises are too high.
A solution needs to:
- Accelerate job creation.
- Create wealth for the individual rather than the corporation.
- Lower barriers to entry for potential entrepreneurs
To do this we have an integrated product offering;
A Structured Startup Program
A Database of validated, innovative business models
Local Support structures
How did we get to this Solution?
Speaking with users, secondary research and organisations in this space.
A structured startup program:
Starting a business is hard and currently there are very few organisations, easily accessible to township entrepreneurs who offer a structured startup program.
This is also a necessary condition for successful implementation of the business models (As we learnt from a potential user)
A database of validated, innovative business models:
Generation Enterprise have found, similarly to South Africa, that many businesses that start are copycat businesses, causing market saturation. This is a method to introduce potential entrepreneurs to new, validated business models, improving their job and wealth creating potential.
This also could be a cheaper alternative to the franchise market for entrepreneurs. Cheaper both in set-up costs (Lean startup methods) and cheaper ongoing “franchise fees”.
Local support structures:
Are key for the continued success of entrepreneurs post-program, as the network lowers the risk of failure and creates a supportive network to act as a safety net if entrepreneurs face setbacks.
How it would work;
There will be 2 major user groups, individuals and organisations. They both could either want to use an individual service or the combination. For some narratives, see
If you are an aspiring entrepreneur, you can access the platform yourself, online, or head to a local internet cafe or organisation to access it (Can have an offline version too). Once individuals have signed-up they will start going through the startup program. First will be validating an idea (Individual Passion, Capability and Market opportunity), then Validating Demand, Setting up an MVP, achieving Stability, then Scaling.
The database of business models will be searchable on a number of criteria including, but not limited to;
Ease of setup
Prevalent local industries (i.e. agriculture, finance, mining, manufacturing, retail)
Type of municipality (Urban, Peri-Urban, Rural)
Size of City/Town
The business models will be packaged with the start-up process in mind and contain;
- The business model canvas (Lean and Full)
- Possible MVP's
- Financial requirements and models
- Skills and knowledge requirements
- Examples of success and failures
The local support component will either link individuals to local organisations or other entrepreneurs and provide them with a format to setup a support forum. In time we could look at adding education components for the continued business operation.
As an entrepreneur moves through the stages, they will be assisted to provide feedback into system, thereby improving the offering.
We are currently exploring options by using;
- Access to Finance
- small % of revenue/profit from successful businesses
- Nominal, individually tailored, upront fees + one of above
- Subscription model from local organisations to use the platfom
To start, we are working with local entrepreneurs who are wanting to start businesses, to better understand the best process for them. To build the database we can find existing entrepreneurs in these markets and provide them an incentive to join, as well as work with experienced organisations.
To understand the progression of the idea from start to finish, the shifts can be found in the updates below in chronological order.
Aditya and I have started working on some narratives as well as the user experience map. At the moment, we are refining the target user so we can complete some lightweight experiments.
Our initial thoughts on target user are high-school students, or post-school unemployed youth. I think we may need to define our user by experience level rather than education level, or maybe some combination of both. If you want to get involved, or add some thoughts, feel free to add them below.
Aditya and I had an interesting chat on google docs (hangouts wasn't working) we have decided to progress the idea together, but focus on tailoring the idea to each of our contexts. This will be tougher, but we realise the project will better for it.
We will both have some narratives up in the next 12 hours or so. And then start expanding on the user experience.
We had a great google hangout today. Both on the same page, excited we are through to the refinement stage and excited to see where we can take this. Unfortunately I (Simon) am away for the next week and will most likely have very limited access to internet. We have uploaded an experience map, not the prettiest thing, but functional. download and make some comments, it would be appreciated. Aditya will answer and comments we receive and spend the week speaking to users to validate and adapt our current plan. I have set-up some focus groups for when I return to Cape Town (8 September).
If you are in the contributing mood, it would be appreciated if you could talk to potential entrepreneurs and current entrepreneurs.
From potential entrepreneurs we want to find out how they would want to interact with this sort of platform and where they need support to become entrepreneurs.
From existing entrepreneurs we would like to know whether they would want to contribute their business model and what they would need in return. As well as, what would they need at the different stages of starting their business.
Simon is back from holiday in Botswana and had an awesome time. Aditya spent the week contacting organisations in New York and is waiting to hear back from them by the end of this week.
We started putting some resources together and started working on a program/resoource structure. See it here
Simon is meeting with some potential users tomorrow, and hopes to start refining the user experience for a specific user after that.
Once we have completed our respective tasks we will start wireframing the website, probably early next week.
Spoke with a small business owner today who is looking for opportunities to start more businesses, currently he is only looking at traditional franchising. I pitched him this idea and what he found most alluring was;
1 - Lower upfront costs
2 - Guided Start-up process
3 - Validated business models for his area.
I realise from my conversations with him, that in the marketing of this we will need locals to spread the word and drive the adoption, both of the users and the contributers. These could be area managers and be based in local economic nodes and between the local business centres, chatting to existing and potential entrepreneurs.
We had our first Cape Town Meetup on Thursday evening and a couple people chose to contribute feedback on this idea, which I was very grateful for. Below is an image of what we came up with on the constraints, how to overcome the constraints and a potential MVP idea.
The major constraints were; Information and uncertainty overload, Take-up or user adoption and Tangible support
To overcome these;
Information and Uncertainty Overload
- Translate the platform into applicable local languages, this could start with the instructions.
- Ensure at each stage of the process the user is getting the right amount of information to move forward without being overwhelmed.
Take-up or User Adoption
- Partner with local organisations, hubs, incubators, business development centres to use as a channel. This was also the suggested MVP/Lightweight Experiment: Signing these organisations up.
Tangible Support- As the users progress through the start-up phases, ensure they are subscribed to a local peer forum, as well as suggesting local entrepreneurs who could become mentors/advisors.
What are the next steps for implementing this idea?
Working with target users who want to start businesses, to better understand the best startup process for them.
Planning and implementing a prototype database.
Developing a plan for the MVP.
Briefly describe a user scenario which illustrates the specific need that your idea is trying to solve.
Cape Town Narrative (User Description):
Sizwe is 22 years old and lives in Khayelitsha, Cape Town. Sizwe is bright and driven, but since finishing school he hasn’t been able to go to college or university because his parents couldn’t afford it. In the last 4 years, other than 6 months in an administration role, he has done some informal work like construction and working in his uncle’s shebeen (Township bar/pub), but the income is too irregular and he needs and wants make a better life for himself and his family. //
Sizwe, learning from one of his friends from school, approaches one of the many business skills providers, like Business Bridge, the Business Place and Shanduka , but they can’t help him without an idea as they only offer business development and education services for existing business owners. //
He hears from a friend at a skills provider about our platform and uses his local internet cafe to have a look. As he gets on to the website he is greeted by a home page with a teaser and the prompt to find out how it works. This simply explains how it works and what his next step is. //
The next step is for him to do an introductory survey which details his previous business experience, where he lives and his education experience. He understands that this is necessary to help filter ideas for him. //
Once the ideas are filtered on the system Sizwe is offered a choice of packages with the prompt of a commitment device. //
Sizwe follows the guidance in the package through the different stages of starting a business, as well as continues to, triggered by a proactive system, access advancing resources. He likes the guidance because it is simple to follow and helps him focus on the most important steps, whilst still doing it all himself. He finds the peer support, with both other local entrepreneurs and others on the platform, very useful. //
After a year of working on his business he has decided it is time to further his business knowledge so he can access more finance in order to grow his company. He has adapted the model significantly and has shared his learnings back onto the platform because he wants to pay it forward and help an entrepreneur, just like he was helped. //
New York Narratives Below (they were too cluttered together)
Complete a User Experience Map. This will help you visualize how a potential end user will interact with your idea. Once you have completed it, upload it using the Upload File button at the end of this form. PDF files preferred.
Who does this idea benefit, who are the main players and what's in it for them?
Potential Entrepreneurs - Highly supported during the startup stage.
Local Communities - Through economic growth from and job creation by the potential entrepreneurs.
The impact of job creation
Potentially financial reward (I think this can be profitable by providing access to affordable debt finance)
We get to do something really cool that could have an incredible impact.
How is your idea specifically increasing access to employment opportunities and pathways for young people?
It will help create employment, and because the youth make up the largest percentage of unemployed, the new jobs created will create opportunities for them.
It is also likely that, in the developing world, most of the the potential entrepreneurs will be youth.
What early, lightweight experiment can you try out in your own community to find out if the idea will meet your expectations?
Contributors: Determine what existing businesses would need as incentives to participate by asking them to participate.
End-users: Start with a focus group for potential entrepreneurs
What skills, input or guidance are you keen to receive from the OpenIDEO community to help you build out or refine your idea further?
- Helping to identify the constraints that need to be overcome
- Suggestions on the MVP
- General Idea Critique
- At some point we will need some Dev work done to create the platform (But that is still a way off)
- Someone with expertise in Social Finance to add their weight to the idea that you could be sustainable, perhaps even profitable, using access to finance as your revenue source?
- Anyone with local knowledge to critique the idea with your lens.
How do you envision your idea being implemented?
Keen to prototype it, find partners and pursue implementation