Since its creation three years ago, the Inclusive Business Accelerator (IBA) community has grown considerably. With over 4.500 individual users and a growing number of ventures, advisors and investors profiled on the online platform, the launch of the new IBA Foundation comes at the right time. This new entity will make sure that all relevant IBA Assets remain accessible for members of the global community.
To make this possible, we developed a new business model, based on the principles of a ‘network organisation’. We envision to bring together people, organisations and resources from all parts of the global inclusive business community. Working together in a network improves the quality and the quantity of results and spread responsibilities by allowing individuals and groups to contribute ideas, expertise, and resources. Organisational members, so-called ‘IBA Network Partners’, will pay an annual licence fee to become part of the IBA Network organisation. In next month’s blog we will explain in more detail how this new business model works and how you can join the network.
MDF West Africa
Last two weeks (Nov 9th to 16th) our newest IBA Network Partner, MDF West Africa, organised an induction workshop and an IBA Toolkit Training for their group of advisors in Accra, Ghana. MDF WA has recently launched their new business unit, the ‘IBA Hub Accra’, to organise projects and programs on inclusive business in Ghana and surrounding countries.
Core part of these projects and programs is the support of advisors to inclusive business entrepreneurs. This is where the IBA Toolkit Training comes in; in order to prepare its staff and network of associated advisors well, MDF WA invited the IBA Team to host a training on the Inclusive Business Toolkit (only accessible for IBA Advisors and Network Partners). The Inclusive Business Toolkit is built around the business model canvas and provides numerous useful tools for business development, such as customer segmentation, value proposition, marketing and distribution and risk analysis.
IBA Toolkit Training
Most of the 12 advisors that participated in the IBA Toolkit Training were already experienced BDS providers, with extensive experience in supporting entrepreneurs in agri-business and WASH related sectors. They also already had some experience in and knowledge of certain tools, including the business model canvas. Their expectations of the training ranged from learning more about service delivery making use of the toolkits, and understanding the value of the IBA Network, to finding out how they could get more inclusive business related assignments (potentially through the IBA Hub Accra).
During the standardised training, as the one held in Accra, advisors work in three groups on the same fictional inclusive business case (PlasTake). The fictional company, producing and selling fencing poles made out of recycled plastics, is told to aim at targeting a new customer segment in low-income rural landowners. Thus, the participants play the role of IBA Advisor to tackle specific issues the entrepreneur is struggling with.
By actively using 10 different tools throughout the 3 training days, advisors learn how they can use and combine these tools to support their service delivery. Important lesson is that these tools must be used as a means to an end, so as an instrument to reach a certain goal, but filling out a worksheet is not a goal in itself.
Starting point of the IBA Toolkit Training is the customer. Advisors dive into customer characteristics and desires to find out how PlasTake can best target low-income rural landowners. Firstly, they define the potential, accessible and served market. Secondly, they give their customer a face by designing a persona, and finally they design a new value proposition for the customer.
Feedback from participants after the initial training day in Accra focused specifically on the first assignments; making an estimated guess of the market size was considered a difficult but necessary task. Most participants indicated, that they would use this ‘napkin exercise’ when next engaging with a client targeting a new market.
Day 2 in Accra evolved around building marketing and distribution models, and defining key activities and resources. An important part (and USP) of all standardized IBA Training packages is offering real-life cases and best-practices that help to make a tool or subject more tangible. Especially considering marketing and distribution models for the BoP, the hands-on experience from BoPInc and other designers of the toolkits play a key role.
Rural distribution models
Advisors in Accra did have experience with, for instance, rural distribution models and upcoming mobile payment models like M-Pesa. Yet, during the reflection of the day they stated that gaining better understanding of the underlying principles of these models, and access to best-practices, added great value to their service delivery. Another interesting discussion between participants during the reflection session ran around the question whether they should see themselves as partners or as subcontractors.
As an advisor you are hired to tackle a certain barrier, but you need to position yourself as a partner. The conclusion however, was that in the business model canvas the position of an advisor is under resources and costs, not under partners.
The last day of the training (Day 3) again started with an overview of best-practices, but in this case highlighting innovative revenue models targeting the BoP. Models like Pay-As-You-Go, fractional ownership, razer and blade, and Robin Hood were explained in detail. Followed by another ‘napkin exercise’ intended to support PlasTake by making calculation of the expected costs and revenue with its new low-income target group.
The three groups made use of the insights generated in previous assignments and started counting, which ended up in fierce debates on the way forward. Defining the main cost drivers and revenue streams was not too difficult, but arriving at an estimated guess of the amounts linked to costs and revenues was a challenge.
The estimations of costs and revenues were linked to the final pitch assignment. Advisors needed to define whether PlasTake had a business case for their new target customers and what the company needed as initial investment capital. Participants could choose the audience of their pitch themselves; i.e. impact investor, venture capitalist, donor fund, etc.
This target audience defined where they needed to focus on in their pitch; on the commercial returns expected or rather on the potential impact? Before going into the pitch, some examples of the South African Dragon’s Den were shown, to give examples of bad and good pitches. All the three pitches turned out successful, but the winning group chose to target impact investors and asked for a small start-up capital in grants (to organize trainings for sales-agents) and a loan to increase their production capacity. The amounts were realistic and the calculations were done in a very detailed and coherent way.
By the end of the third day, the facilitators referred back to the expectations the participants formulated on the first day. Participants especially regarded the tools to calculate market size as well as costs and revenues as useful. Also being part of a global community of advisors, entrepreneurs and investors appealed to them. This enabled them to get more assignments, learn from others, get insights from different markets and models, and increase the impact of their service delivery.
MDF WA’s objective was to create a pool of high-quality advisors that can be leveraged for projects and programs on inclusive business. That goal was certainly achieved; the group of advisors trained in Accra is definitely capable of adding value to the development of a company that targets low-income groups in Ghana and other West African countries.
The involved advisors will become part of the global network and get the opportunity to become IBA Certified Advisors by reporting three times on their service delivery to inclusive business entrepreneurs. The IBA Hub Accra will play a pivotal role in matching the advisors with inclusive business entrepreneurs, thus enabling the IBA Team to curate the quality of the provided business development support.