Two weeks ago, The Shaftesbury Partnership participated in the launch day of this year’s Big Venture Challenge. We met 40 ventures selected by UnLtd for their potential to deliver social impact at scale. Shaftesbury Partnership works in partnership with UnLtd to support the award winners in increasing their networks and access to resources and markets – a key element in helping them achieve their potential for growth and sustainability.
Understanding the Market
During the day we ran a series of short workshops to analyse the markets in which these ventures operate. This is important, and often difficult, for two reasons:
1. Social Venturers are innovators, and many of their ideas and propositions identify gaps in the market – which is another way of saying the market is immature, doesn’t exist, or where currently there is market failure.
2. In start-up phase, Ventures sell almost exclusively to early adopters. If they are to scale, they need to reach out to a wider audience, and that often requires significant changes to their marketing and sometimes entire business model.
To address these challenges, we worked with groups of Ventures to build up a model of the structure of their markets. This is a big topic, including market size, competition, role of intermediaries, and “buying influences” i.e. what’s important to the buyers and how they make decisions. We were only able to scratch the surface, but we still gained some valuable insights.
One of these is the role of intermediaries. We see successful engagement with intermediaries as critical to Ventures’ success in getting to scale. All large markets have intermediaries that bring together buyers and sellers. Examples include estate agents in the housing market; prime contractors, which are supposed to help smaller social enterprises engage with government programmes such as transforming rehabilitation; and crowdfunding sites such as zopa.
But there are also informal intermediaries which offer appealing and often more cost-effective ways for ventures to grow. Peer-to-peer professional networks, for example among headteachers, can be invaluable ways of getting word of mouth to spread. There is no better salesperson than a satisfied customer! And many ventures are adept at using media - both traditional and social – to promote their ideas and offers in extremely cost-effective ways. And sometimes advocates and champions can be found in the most unexpected places.
But what struck me was the variety of markets that these ventures were operating in, and therefore how different their business strategies would have to be. To give two examples:
For most ventures in the primary education / early years space, parents and families are the key decision makers. For them, informal influencers such as mainstream media and organisations such as mumsnet are important to understand and to engage with.
By contrast, other ventures seek to engage with Local Authorities, which are complex organisations with very distinct cultures. From personal experience I know the authorities of the adjacent boroughs of Lambeth and Southwark couldn’t be more different! In these cases a much more bespoke and strategic approach is needed.
Trying to do too much
And here is the sting in the tail. Several ventures would like to engage with both of these groups. Gaining real competency with these two different groups is very demanding and requires extraordinary capacity and agility. As such it is highly risky, and difficult to scale.
So as we support these Ventures we expect them to discover where their real opportunities lie, then to focus on that market, which will help them to achieve their vision for impact at scale.