The bootcamp constitutes stage three of YBI’s Pilot on Business Model Innovation for Sustainability and Scale, led by Ian Gray and supported by our partner Accenture. This pilot was launched in October 2019 in response to YBI members’ desire to diversify their revenue streams and reduce dependence on grant finance to ensure their programmes are financially sustainable in order to maintain and scale their services. Over three days, Ian worked with the member representatives to help them identify business model innovations to be tested and design first tests.
We spoke to Ian about why it is important for YBI members to innovate their business models, what challenges they face and how the pilot is helping them.
Why launch the Business Model Innovation for Sustainability and Scale Pilot?
Several members are currently looking to develop a more sustainable and potentially scalable business model. The pilot is helping them to think that through: In terms of what's possible, in terms of innovating their business model and how they might test those ideas.
Why is it important for YBI members to innovate their business model or explore new business models?
Often, members want to diversify the revenue streams of their business model. Particularly, when their goal is to secure income in addition to existing grants or donations, in order to make their revenue model more sustainable. Others want to really think about their value proposition - what it is that they're offering not only for the young entrepreneurs they work with but also for other potential customers. For example, thinking about how some of the skills, capacities and capabilities that they've built up in their programmes could be deployed to support more young entrepreneurs or other sectors. Or thinking through how the same value propositions offered to different customers could provide a cross-subsidisation model, such as freemium, buy-one-give-one, or robin hood business models. There are several different ways in which members can innovate their business models and various reasons to do that, but I think for this cohort, the overarching one is really to diversify their income.
What is the biggest challenge for participating members in innovating and scaling their business models?
The biggest challenge for any social impact organisation wanting to innovate their business model is trying to balance the social impact side with the financial side. There are methods and strategies that you would use in the private sector that you might think aren’t ethically responsible or aren’t contributing to social impact. So, getting that balance right is one big challenge. Another challenge is that people find it hard to think differently. All of us are like that. In this programme we are using tools and approaches that help members think differently. I think that can be quite difficult for some members, because If you're used to delivering a programme a certain way, stepping outside of your comfort zone and asking fundamental questions about your programme and approach is a difficult process for anyone.
How is the pilot helping members overcome those challenges?
The way we run the pilot is new to several members as we are taking a lean entrepreneurship approach of iteratively testing their business model ideas. This gives us structure and helps members understand the key questions they want to find answers to as they test their business models. We are moving away from a methodology where you write and implement a business plan based on an idea, towards testing a new business model or a service area in multiple ways before investing significant sums of money in setting up a new service or part of your organisation.
Member representatives shared their reflections of the bootcamp:
“It's been an enlightening three days. The bootcamp has helped me rethink if what we're doing currently is sustainable, if it is something that we can keep doing for the next six months or even 10 years. We will hand down this new knowledge to our entrepreneurs as the new way of doing business models. This experience is going to move from FATE Foundation to thousands of young entrepreneurs in Nigeria.”
Mariam Decoco, Finance & Admin Manager, FATE Foundation (Nigeria)
“Participating in the pilot helps us innovate and scale our business model so that we can support more young entrepreneurs in other regions of Armenia. The bootcamp has helped us prepare our next steps for creating a business model that generates income through our ongoing support services component.”
Hasmik Sevumyan, Economic Development Project Officer, Jinishian Memorial Foundation (Armenia)
“At the bootcamp, I learned that there are many ways to maximise the impact of organisations. It made me confident that we as Fundación Paraguaya are flexible and creative enough to revise our business model if we start thinking as entrepreneurs ourselves.”
Mayrha Benegas, Training Coordinator, Fundación Paraguaya
Over the next four months, members will put the tests they designed at the bootcamp into practice, with support from Ian Gray and the YBI network team.