eBusiness Weekly
Nokuthula G Moyo-Muparuri
The last two articles have been discussing start-up ecosystem mapping, the definition, the purpose, process and recommending how each of the ecosystem actors should play their roles effectively.
There are many ways of mapping a start-pp ecosystem. This article is going to discuss a start-up ecosystem canvas.
A start-up ecosystem canvas is meant to help start-up leaders map their local ecosystem in a framework that makes it more transparent and inviting for start-ups.
The canvas has categorised the start-up process into stages. At each stage the canvas provides a roadmap for the ecosystem leaders to provide resources to help start-ups.
The article discusses the following; the components of the start-up ecosystem canvas; the stages of the start-up ecosystem; the supporters; the outputs; using information from the mapping exercise; ecosystem mapping tools; and lastly gap analysis and policy recommendations.
The components of the start-up ecosystem canvas
There are two major components of the start-up ecosystem canvas and these are stages and the supporters.
The stages involve the categories in which a start-up goes through. These are; the idea stage; the launch stage; the growth stage and the outputs/enterprise.
The supporters include evangelists; Government, talent and the success stories. It is important to note that the canvas is not meant to provide a rigid roadmap for entrepreneurs to build a company, rather it is designed to provide a logically organised map of local resources to help entrepreneurs in their journey.
Stages of the start-up ecosystem
The idea stage
This is where new and early stage entrepreneurs get inspired, learn the basics and best practices of building technology companies, develop their skills, validate their ideas with experts and begin to build their team and product. In order to inspire start-ups, media and inspirational events are required.
Start-up media provides centralised local start-up formation listings and news.
These can range from things like local start-up blogs, and event listing services, newsletters, Facebook groups or LinkedIn groups.
Inspirational events are the events that welcome people into the start-up community and inspire those with ideas to think about launching a company, such as university event series, idea fairs and inspirational meet-ups.
To educate start-ups during the idea stage, best practices, training and feedback is required. Best practices events are more about knowledge sharing and learning the start-up best practices. They serve to educate rather than inspire.
With the idea in hand, bootcamps and training programmes that provide feedback can help aspiring entrepreneurs build and validate their ideas. For example, start-up and leadership bootcamps being introduced by Midlands State University.
Ideas need validation. Team formation and building minimum viable products is required at this stage.
Team formation for start-ups is key. This section should include resources that specifically facilitate networking and early stage team building.
Building the first product budding entrepreneurs can get help building their minimum viable product and first versions of their product through many resources and the most common one include Hackathons, builder focused events and workshops.
The launch stage
Entrepreneurs establish and formalise the company, develop their product, get feedback from customers and prepare for the next step. The launch stage begins with establishing a company. Resources are required for this.
This includes resources to help entrepreneurs set up the legal and financial frameworks for their companies, like local law firms and banks that specialise in addressing the unique challenges of start-ups.
The start-ups require workspace at this stage. Co-working and flexible workspaces can provide a good breeding ground for new companies.
These resources are usually provided by incubators, start-up centres through the programmes that they establish to attract start-ups.
As the start-up is developing, it needs other resources to formalise their operations. As a company and team begin to grow, they often need resources to help them more formally setup their infrastructure, accounting, HR, production etc.
These will be provided by the Incubators and start-up centres. The start-up needs to prepare for seed funding at this stage. Seed funding is a big milestone for most start-up teams, and many ecosystems have advanced events and mentorship programmes to help teams prepare for seed funding.
In preparation for launching start-ups need to plan for pitching their ideas to prospective investors. They also need seed accelerators to scale them up. Whether a company goes through an accelerator or not, they often need a way to present their company to a large number of angel investors in order to garner a large seed investment.
Growth stage
Here a start-up proves their utility, receives recognition and scales up. This usually requires funding and other resources to drive growth. During the growth stage the start-up is recognised.
They need to network with investors and have major local media channel champion their companies.
Many ecosystems have ways to connect professional investors with founders like events, groups and associations. Major media can play a role in the start-up ecosystem as well by providing exposure for companies to mainstream audiences.
Funding is required during the growth stage. Angel investors and venture capitalist support is required at this stage. These investors focus on the seed stage. Venture capitalist typically participate in the series A stage and beyond such as institutional venture funds.
During the growth stage start-ups need infrastructure and they also require support to expand into other markets. With capital in hand, a start-up will often need to invest in infrastructure to grow.
This includes expenditure like office space, HR, business insurance and more. In many cases, capital rich start-up will also look for new areas of growth, such as new product lines or international markets. Consultants, corporate accelerators and growth accelerators typically can help provide assistance in local markets.
The supporters
To facilitate the start-up stages every ecosystem needs strong supporters like evangelists, government and talent.
Evangelists are people that have taken a leadership position in a community by frequently speaking at start-up events, leading or mentoring various start-up programmes and generally paying it forward. The evangelists are the successful entrepreneurs.
The Government’s role is facilitated through public organisations that ensure there is local economic development.
The government should not drive a start-up community, but they can play an important support role via policy, funding, events and more.
This can include the Chambers of Commerce, Ministers of Industry and Commerce, Finance, Agriculture, Energy, Mining, Transport and Infrastructure and public innovation organisations.
Supporting organisations act like the feeders to a start-up ecosystem but not the leaders.
Talent from local universities and employers can have a large impact on a local start-up ecosystem by attracting, developing and retaining a high-quality pool of local talent. Local universities include colleges or universities. Local employers include major companies that employ a large work force.
The output: success stories
When you add up all the start-up stages and supports hopefully the output, is successful home-grown companies. Depending on the maturity of a given ecosystem this could include home grown companies that have achieved significant milestones like raising institutional funding generating significant revenue, employing a large work force or achieving liquidity.
Using the information from the mapping exercise
Mapping the startup ecosystem is a fundamental step in gaining a comprehensive understanding of its dynamics and potential. By visualising the interconnectedness of various components, one can uncover valuable insights that contribute to the ecosystem’s growth and development. The benefits of mapping are as follows; A startup ecosystem comprises a complex web of entities, such as startups, investors, incubators, accelerators and supporting organisations.
Mapping these relationships provides a holistic view of how each component influences and depends on others, fostering a collaborative environment for innovation; through ecosystem mapping, leaders can identify the key stakeholders of their start-up ecosystem.
This empowers policymakers and stakeholders to target resources effectively, addressing gaps and fostering an environment where startups can grow.
With extensive data at their disposal, they can highlight success stories, key achievements and the unique advantages the ecosystem offers.
This data-driven promotion captures the attention of investors, entrepreneurs and talent looking for promising opportunities. Investors and skilled individuals seek solid evidence of a thriving start-up ecosystem before committing their resources.
By using data to illustrate growth trends, funding opportunities and successful outcomes, start-up leaders can build trust and attract valuable investments and talent to their ecosystem.
Analysing the data collected from mapping the startup ecosystem is a critical phase that turns raw information into actionable insights.
Through the application of statistical tools and techniques, one can extract meaningful patterns and trends that inform strategic decision-making. By objectively interpreting the data, hidden patterns and trends can be revealed, leading to informed decision-making.
Leveraging data insights enables strategic choices to enhance the startup ecosystem’s growth, including identifying investment opportunities and optimising support programmes for increased success.
Ecosystem mapping tools
Measurement is an important activity that helps in informing technical, business and administrative decisions.
One of the most popular approaches to simplifying measurement is to employ dashboards. Dashboards are tools that provide reporting on data through visualisations and aid in informed decision making and monitoring of organisations.
In a start-up, dashboards play an especially important role in surfacing real-time metrics. This information is essential for helping the executive team make real-time decisions.
Ecosystem mapping tools help institutions and individuals focused on entrepreneurship support to better understand the factors that influence the success and growth rate of entrepreneurs in a region.
The ecosystem mapping tools support ecosystem builders, incubators, and policy makers through the process of asking the right questions to see the progress of their start-up scene and develop well-grounded interventions to achieve systemic growth.
These tools are suitable for both early stage and more mature ecosystems, in emerging as well as developed economies. Other ecosystem mapping tools include ecosystem reports and visualisation tools.
Gap analysis and policy recommendations
Zimbabwe has an emerging start-up ecosystem. Based on this realisation it is important to focus most of the attention on ideation stage.
These policy recommendations are intended to provide a set of examples of policies that can be applied to support the ecosystems gaps and constrains being faced.
To build a community there is need to: Strengthen coordination among multiple stakeholders to support the growth of the ecosystem.
Ecosystem coordination increases the effectiveness of community-building events and connectivity among clusters.
There is need to build the capacity of mediators and networking assets to increase community and clusters. Networking assets and accelerators in particular, create clusters of connections, increasing the community and helping to expand it.
Networking assets are community building events, skills training events, collaboration spaces and networks of mentors. These mediators also serve to attract and train new talent to the ecosystem, expanding its community and the potential pipeline of indigenous start-ups.
There is also a need to create a network of incubators/accelerators with a clear focus on community building and skills training, and this will result in expansion of start-up clusters and diversification of the ecosystem across the cities. There is need to promote and support the ecosystem events as this will result in expanding the community.
To capacitate start-ups with skills, there is need to expand practical education in universities and through rapid skills training programmes and accelerators connected with public education programmes.
Public policies can catalyse and support both practical educational programs to address the skills gaps in ecosystems such as coding bootcamps and hackathons.
On supporting infrastructure, there is need to increase capacity building of mentors and foster the creation of angel networks.
There is need for capacitation of incubators and accelerators and facilitation the entry of international talent from the Zim Diaspora, for example mentors, entrepreneurs or capacity builders, into the ecosystem.
Support can also be provided to increase the capacity of managers and mentors through training and capacity-building programmes of accelerators and outside mentors.
Enhancing the management, operations, and practical training of these actors is key for the maturity of the ecosystem.
There is need to focus on managerial support and attraction of mentors with start-up and practical entrepreneurship and business experience as this is key to increasing quality of this support infrastructure.
In other countries, the government, jointly with the World Bank, have designed policy programs to provide support to accelerators through self-improvement plans that focus on quality.
A way to address the lack of experience and knowledge of mentors is to attract international talent with such practical acumen.
There are several support programs that can achieve this goal, ranging from events that gather international talent and connect it to the ecosystem to more structural programs.
On investment there is need to catalyse early stage financing and increase quality of pipeline investment.
Further support to address financial access and capacity-related challenges by focusing on building the investment pipeline is needed.
On constraints there is need to address processes constraints such as access to loans and funding.
Policies related to conducting business are regarded as constraints insofar as they are perceived to lack central coordination and/or do not facilitate the growth of entrepreneurship.
The overall rank for Doing Business in the Zimbabwe (140 out of 190 economies) confirms the need to improve time, cost and procedures for Start-Up and entrepreneurial activity. There has been an improvement in the ranking from 155 to 140.
There is need to iterate the policy approach as needed and address new gaps or growth hurdles as they arise. As the ecosystem grows and evolves into more maturity, new needs will emerge and other specific policies would be more applicable.
Nokuthula G Moyo-Muparuri is a lecturer at the Midlands State University in the Faculty of Business Sciences. She is also the Founder of the Institute of Applied Entrepreneurship. The mission of the Institute is Business Skills Development and Start-Up Ecosystem Development. The Institute has started an initiative of developing Start-Up Zim Chapters. This is meant to capacitate those who want to establish Start-Up Ecosystems in their Towns, Cities, Colleges and Universities. Those interested can contact the Institute on +263718747621.
