Interactive resources for incubators and accelerators
Interactive resources for incubators and accelerators
Interactive resources for incubators and accelerators

Design for Scale

This section looks at how to define market opportunity and value proposition for growth (and match your customer needs). It provides different approaches to exploring your scaling product offering and techniques for testing your scaling pathway, as well as looking at how to design elements of your scaling model to offer strategic competitive advantage and resilience as you grow.

Strategic Choices

It is worth thinking about the business models that are already out there in the world and testing them for our accelerators and incubators.

Are there already business models that we could draw on that would give us some ideas for how else we might be able to scale? Are we doing everything we can to enter new markets in the right way? Think with your teams – are you using the right business model for scaling?

Reflection

Many of the techniques that we can use for one scaling pathway will also still have value for others.

We still need some of those business basics in place knowing our metrics and having good strategies written down in business plans in order to get investments.

For example:

  • Can you ensure you reach low-income clients at an affordable rate because you’ve cross-subsidised your fee-for-service work too?
  • Have a marketplace going on alongside/buy-one-give-one with different sponsors?
  • Do you use multiple business models at the same time to keep viable?
  • Do you have a good national model, that you are able to replicate?

TOOL / EXERCISE

The ‘Kernel’ of Good Strategy

  • 1.

    Diagnosis – Understand the problem / opportunity

     

    – Define it

    – Take advantage of it

    – Understand if you have solved that problem

  • 2.

    Guiding principles – Keeps you focused on your unique solution/set of products

     

    – Don’t get distracted by other things to make money

  • 3.

    Coherent Actions – Leverages your competitive advantage

     

    – What things are you doing together that leverage your competitive advantage

    – Check your if your business plan’s strategic objectives are coherent/work together

  • 4.

Understanding the Key Mission

Take a step back and ask “Who is my organisation serving? Why?”

Think of who your primary customer is and the multiple other customers around the primary customer. Are they:

  • Responsible for the monetisable model, or
  • Influencers of the customers who pay/use the service, or
  • Internal customers: facilitators who take your content out

Reflection

There is a value proposition to build around the primary customer that you serve now.

You need to convince, influence and excite them about the product or service that you are offering.

Creating a Value Proposition

  • Value Proposition

    We sell A (product/service) to B (customer)

    B (customer) has a problem.

    And it is C (problem).

    We solve C (problem) through D (solution).

    We are different because E.

Build a value proposition for every person who you see you as a customer/consumer of your product/service.

Create a profile for each of them that states:

  • Who is this person?
  • What is the problem that we are solving for them through our product/service?
  • How is our solution addressing their main pain points?
  • What is the competitive differentiation? Why us? Why not go somewhere else?

After defining a value proposition for every customer/consumer of your content, we can now look at various opportunities to scale with that particular customer/consumer.

Some questions to think through when scaling your organisations:

  • What is your organisation’s North Star impact? Why is this the most important thing for you to measure?
  • How does this impact drive your organisation’s growth?
  • How will you measure this?
  • How does this data relate to outcomes for your customer? What does this mean in terms of what your customer sees/needs to do?
  • What actions by your customer would grow this impact?

TOOL / EXERCISE

Strategyzer’s Value Proposition Canvas

  • 1.

    The Value Proposition Canvas is a good tool for understanding your customer, what jobs they need served and what are the gains and pains that they have.

  • 2.

    Precisely define your customer profiles

    Identify your customer’s major Jobs-to-be-done, the pains they face when trying to accomplish their Jobs-to-be-done and the gains they perceive by getting their jobs done.

  • 3.

    Visualise the value you create

    Define the most important components of your offering, how you relieve pain and create gains for your customers.

  • 4.

    Achieve Product-Market fit

    Adjust your Value Proposition based on the insights you gained from customer evidence and achieve Product-Market fit.

  • 5.

    Look at your scaling product. Interrogate your opportunity to support that customer with what you have. This may be different to the original proposition of your incubator or accelerator.

  • 6.

    Source: Strategyzer

Assessing the Market

  • Current Revenue

    What is the revenue you are currently making?

  • Target Market

    What is the revenue you might make from a target market you are currently thinking of capturing?

  • Serviceable Available Market

    Without significantly adding to your sales and distribution channels, what are the markets that you can directly service to so there could be another 40 customers of the same type in the same geographic region who you can target with the same sales channels.

  • Total Addressable Market

    If you were to expand your sales channels, with no constraints, what is the total addressable market you can capture? This will be all customers of the same demographic within the larger geographic region that is outside the city/state you are targeting.

  • Total Market

    What is the entire demographic who would benefit from your product or service?

What's in the Box?

What is it that you’re offering so it can be replicated or shared?

For incubators and accelerators this may fall into four broad areas:

  • 01.

    Products

    Products that other people can use, that will work for different cohorts (accelerators, pre-accelerators and post-accelerators) and develop leadership.

  • 02.

    Systems

    Systems for running your programs. e.g. making sure you are managing your different facilitator networks really well, booking systems on the website, systems for doing business development.

     

  • 03.

    Strategy

    Understanding the strategic value of structuring operations and processes for running an efficient business.

  • 04.

    Support

    Beyond products and content, you are focusing on delivering support to accelerators and cohorts.

Dimensions of Replication

  • Financial

    Funds out: Fee from a partner to run your model.

     

    Funds in: Securing funds centrally and putting them into an area

     

    Blend of both?

  • Control

    Flexible: Can you give a bunch of resources and tools that people can draw on and do it in their way in a certain place?

     

    Inflexible: Great model that has to be done in a certain way to really add impact value.

  • Business Model

    Charitable: Raising funds to make something work.

     

    Commercial: Selling and trying to stick to sales as a method and therefore have a commercial price point in each market.

  • Partner

    Individual: One person to facilitate your model in certain areas/responsible for sales

     

    Organisation: To take on your license or join your network so that you can draw on their organisational resilience and sustainability beyond the individual person.

     

    Both?

Replication Spectrum: Licensing Types

Several licence types can enable innovation with your scaling/replication model to make it affordable in different contexts. Or you could blend features of the above models.

For example, using a Perpetual licence perhaps with an additional small % fee annually based on revenue so you remain linked to growth of the licensee.

  • Perpetual Licence

    Authorisation to use a certain product version indefinitely after a one-off payment of a single fee.

  • Subscription license

    Continual payment of monthly or annual fees, with licensees only authorised to use content whilst paying the fee.

  • Consumptive license

    Licensees pay depending on the actual or predicted number of times they use something.

  • Sub-licensing

    Can one of your licensees then license your product on again to somebody else?

     

    There are dangers of allowing sub-licensing – particularly quality control, with increasing distance between you and the person delivering your content. While this can enable business development pace, quality and brand reputation may suffer, and it may undermine building a strong network or other factors of the OPEN framework.

Risk/Responsibility Considerations

  • Management

    What level of freedom does each license partner have for decision making? What level of reporting requirements are agreed – frequency and detail? What happens if certain milestones are not achieved by the licensee?

  • Marketing

    Are targets for business development agreed? Is the brand and communication resourced centrally or locally? How flexible are communication channels for local operation? Is the local operator responsible for sales or just delivery of programs?

  • Production

    How fixed is the production process for products (i.e. the coordination and delivery of your programs), or is it the outcome that’s important? Are minimum standards or targets for quality agreed and clear? Are you clear who is approved to deliver your programs?

  • Involvement

    Overall, how involved will you be in managing the ongoing performance and standards of your licensees? Do you want to have minimum standards that are consistently achieved before they gain the rights to scale further using your licence?

Licence features to consider:

Consumption: Limited/Unlimited

Exclusivity: Exclusive/Non-exclusive

Geography: Local/International

Time: Timebound/Non-expiring

Practical Tip

Whether you are scaling an organisation and building a network or you are licensing or franchising, it’s worth getting legal support.

This will help you to go beyond basic MOUs and into well-crafted, legal documents to serve you in your area.

Intellectual Property

How you replicate and how you give people other elements can make sure they stay with you.

People often focus on intellectual property and they make sure that they protect that when they are scaling. Entrepreneurs that have innovative tech/biotech could be under pressure to patent their product to secure investments.

For many of the things that we do as incubators and accelerators, the people who designed the programs are the ones looking at patents and getting the intellectual property (IP).

Reflection

It can be hard to ensure clarity in agreements when engaging other facilitators and mentors that have their own IP or bring their ideas to our program.

What is that intellectual property, where does it belong?

TOOL / EXERCISE

O.P.E.N.

  • 1.

    How do we go beyond IP? How can we be OPEN?

     

    The OPEN approach helps you to free people from thinking about how they possess the IP and getting them to stay connected to your overall scaling operation over time.

  • 2.

    Ownership

    Processes

    Enhanced Network

    Name

  • 3.

    With the OPEN framework, partners/facilitators/stakeholders that are paying to be part of your operation do not have to feel like they’re abiding by a certain set of rules which can become adversarial, overly transactional and commercial.

  • 4.

    SEA Example

     

    Ownership = local ownership, able to adapt to their local context – not reinvention.

    After three years if they’re entering their long term 20-year sustainable license agreement, they get some form of ownership over their international network.

     

    Processes = Replicable, proven processes.

    Leverage advantage on the trainings that SEA gives to facilitators.

     

    Enhanced Network = Added value of other partners.

    Shared knowledge from different partners around the world.

     

    Name = Brand, credibility, trust, reputation.

     

    Leveraging the brand in your own marketplace can give you a brand that allows you to:

    – operate in a different place/sector of focus

    – access another area

    – gain credibility e.g. impact hub

  • 5.

    Source: Spring Impact

Protection as You Scale

  • IP protection can just slow competitors down
  • IP can be a  distraction and a waste of time for you to try to protect your core product – they can find a workaround
  • Patents can be easy for other sectors e.g. tech design solution

So, how do we protect ourselves as we scale through our design?

  • Internal network concerns

    Recognise other things your network partners can benefit from by staying with your company instead of stealing and damaging their reputation.

     

    For example, an Enhanced Network where they are part of the facilitator team and gain something over time. This could be professional development or the fact that they are recognised as being part of the brand and network internationally.

     

    Make sure they value the brand network.

     

    Draft up good contracts to make sure that confidentiality or intellectual property is mentioned and make clear how they are benefitting e.g. by joining a collaborative network you can get stuff generated by others too.

  • Client network concerns

    Sometimes corporates might want us to design something for free that they can spread/make open-source.

     

    Select how much you offer them in the contract.

     

    Use the opportunity to add in a teaser for your own materials and create a pipeline towards what you do because you know you can offer a deeper and greater experience from that initial start. You have control

     

    Contracting? Set a cut-off time they can use the materials.

     

    Recurring license? Subscription model? Update + Retainer fee = long-term r/s with client, repeat customer, protect r/s.

Protecting Your Network Investment

Sometimes members of your network will drift away from the work and focus on other things. This can be for a variety of reasons, but it may be because there was a misalignment of expectations. Maybe there just wasn’t enough work for them to keep them interested. Or maybe it has nothing to do with the work, but is due to something else that is happening in their lives.

You can’t control how people will behave or respond to the work over time, but you can put measures in place to proactively support the interest and engagement in the work.

Practical Tip

  • Have one-on-ones with each network member
  • Don’t over recruit: bring in the right amount of people for the amount of work
  • Have other professional development programs to keep them engaged
  • Have exercises that help them communicate the trajectory of growth they want as facilitators
  • Plan for the next recruitment phase and include training
  • Accept that people will leave
  • Don’t be too dependent on a few facilitators: you need a network of people with different skills for different cohorts in different areas
  • Create a buddy system to keep people active and accountable

Resources

  • Social Franchising: Innovation and the Power of Old Ideas

    Research conducted by Spring Impact

    View
  • Social Replication Toolkit

    A toolkit on replication readiness from Spring Impact

    View
  • SEA Resources

    A range of documents from SEA International

    View & Download
  • Webinar: Design for Scale

    A webinar recording from the Frontier Incubators program, delivered by SEA

    Watch

Next:

Ready to Scale

How to prepare for the journey ahead