Kudzai M Mubaiwa The Hub

An innovation hub must build an ecosystem around itself before building the same for its clients. Every space must develop partnerships with institutions and individuals that can add value to it.

A Business Model Canvas (originally proposed by one Alexander Osterwalder) must be created for it too, clearly detailing the hubs key activities towards achieving its value propositions, the key resources required to fuel those activities and the partnerships that can be leveraged to acquire the resources or enable activities.

In our context, they tend to be referred to as stakeholders. Other aspects of the canvas will look into customer/client issues – such as the preferred beneficiaries, how the space will interact with them, both to bring them on board and to keep them as well as to attract the best innovative individuals.

Finally, it will look to the costs related to the selected model and the revenue streams to keep it going.

Hubs demand this of their client’s and tend to neglect to develop one for themselves, yet many of them will begin as start-ups themselves, trying to find their niche in both services and products offered and specific “customers”.

This summary of a business model is an excellent guiding visual tool that can continuously be referred to and improved upon.

We will use the example of a fictional mixed use incubator to be set up in Chitungwiza, to serve the youth in that location. Here are the nine aspects to consider:

Value proposition

The questions to be asked here will be what problems are we helping to solve for the local innovative and entrepreneurial youth?

What are their needs? What specific products or services will we offer them? What are the features of these offerings?

We may then in response note down that we will offer a youth friendly physical workspace, centrally located/accessible to all local youth, with simple furniture, a consistent power connection, access to the internet, a structured entrepreneurship development programme, technical training courses, information on business registration, tax, intellectual property, funding and market linkages.

Customer segments

In this section we will detail the specific subjects of our space – in this case it is youth, whom we will define as per African Youth Charter as those aged between 18 and 35 years, inclusive.

We may further specify these to be particularly Zimbabwean nationals, who are permanently resident in Chitungwiza, and have an innovation or enterprise for which they have already created a minimum viable product or have some proof of concept.

Channels

This speak to how our chosen “customers” will want to be reached. We suspect issuing out a call that is broadcast via posters at the local high schools, tertiary institutions like the Vocational Training Centre (which can very well be the host), shopping centres, churches could be one way.

As could radio and TV adverts, roadshows and social media banners. Thereafter, after the first cohort, word of mouth should kick in and as per the McKinsey theory of change, at some point role models will emerge and other youth aspiring to follow the same path will seek out the incubator themselves.

Customer relationships

Once the initial clients have been brought in, there will be a need to create a community they feel they belong to, and there are a variety of tools that can be used.

The emphasis is getting, keeping and growing the client base. Being the digital age, both online and offline interactions are useful.

Consistent newsletters, online discussions, physical meet-ups, quarterly and annual events are all things to look forward to for a community member.

Key to these is the networking opportunity, the knowledge and information sharing, and of course the refreshments!

Key activities

The practical elements of delivering the value proposition are outlined here.

In this example we can include the client selection process, facilitation of training courses, the community engagement processes, facilities management and operations, the continuous research, networking and capacity building of incubator staff.

Key resources

The fuel for the value proposition activities are the resources, hence the operational staff, the physical space, the furniture and fittings, an excellent internet connection (otherwise we can stay home and use bundles), a dynamic capacity building program and institutional linkages to the national entrepreneurial ecosystem.

Key partners

Every space will have stakeholders who can actively contribute to its success.

In this instance, the local government will be important: on the intangible front as lead promoters of a homegrown economic development initiative and on the tangible – possibly providing a centre as a physical location for a hub.

Local youth serving organisations will provide the throughput of clients. Training organisations are important to offer the capacity building, internet service providers can sponsor with bandwidth, local businesses can assist with furniture, stationery, refreshments, event prizes, and cleaning materials, signage and branding services, as well as offer advisory services and mentoring as their founders become entrepreneurs in residence.

The community can donate skills and time for various things like creating an interactive blog, online marketing portal, and of course being the willing subjects of testing as innovations, products and services are developed locally; and ultimately be the first off-takers of local produce, products and services.

Other hubs will be important partners for continuous knowledge and experience sharing through exchange programs.

Revenue streams

Sustainability is an issue of great concern for almost all spaces. Various approaches can be used, such as running it as an entirely social enterprise with promoters who provide the funding or crowd sourcing various requirements in kind.

Some spaces let out office space, do consulting and research work, charge for some events, take equity in some clients’ successful enterprises. Others use a combination of all the streams of income.

Cost Structure

It is imperative that before a space starts, they resolve the issue of how they will fund operations.

In our own space, we have started the incubator as an additional spoke in the value chain wheel for the best projects we encounter as we go about our usual financial education/enterprise development trainings.

We have a lean team and we bootstrap as much as possible. We find the greatest value for our clients is the programme, the information, the accountability and the collaboration. We may get physical space in the coming year, but presently focus is on the capacity building for entrepreneurship for the start-ups and their owners.

Because of this inclination our cost structure is not weighed down by facilities costs. For the imaginary incubator in Chitungwiza, it will be ideal to keep the costs low, with as high an impact as possible. The simple question to ask is: what are the most important costs in our model.

Once all these aspects have been settled, the incubator promoters or managers can then approach listed partners, share their canvas and get the buy in they need.

The presence of a well thought out model is an important thing, as the potential partners can clearly see what is happening, who is benefiting, how they can be part of it for mutual benefit.

Even better is starting to enact the recorded activities, validating the model, then approaching partners only once you have gone full circle.

It is always more valuable to speak of experiences than to sell intentions in building an strong ecosystem around your space. In the coming week, we shall further unpack sustainability initiatives for innovation spaces.

Kudzai M. Mubaiwa is an economic development professional and managing consultant of Investor Saint (Pvt) Ltd, a financial education company. She is also a certified incubator manager and co-founder of iZone, a mixed use incubation programme that provides a platform for capacity building of youth and women enterprise owners in the digital age. She has participated in and presented at economic development and innovation/tech platforms in East and Southern Africa, Asia, North America and Europe. You can reach her via email on [email protected] or twitter handle @kumub

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