Review: Challenges And Opportunities Of Incubators In West Africa: A guide to understanding support structures for entrepreneurs in West Africa (PART 4)

UNDERSTANDING SUPPORT STRUCTURES’ VALUE PROPOSITION

This week, we are going to take a deep look at the nature of Support Structures to give us a better understanding of their value proposition. Entrepreneurship support structures have multiplied across the African continent in past decade.

Despite being a relatively new development in Africa (compared to the rest of the Western world), these Support Structures play a vital role in the development of the entrepreneurial ecosystem.

Differentiating Support Structures

Support structures help thousands of entrepreneurs by providing different types of support for businesses in diverse stages of development. It is important to be able to clearly distinguish between the various types of support structures and their target audience. Written below are some broad classifications.

  • Pre-incubators are the support structures that target people who have a business idea and intend to create a company but who haven’t taken action yet.
  • Incubators and Startup Studios help the founder of a company evolve and advance to being a real entrepreneur in action.
  • Business Nurseries, Accelerators and Business Hotels help business that are up and running to address the needs of their maturing startups.
  • Collaborative Spaces (Innovation Spaces, Co-working Spaces, Fab Labs, etc.) are accessible to everyone at any point in the life cycle of their project or company.

Support structures can also be differentiated by their approach to the services that they provide as written below.  

  • Structures with a strong dose of personalized support: incubators, accelerators and startups studios.
  • Shared structures offering services to companies: nurseries and business hotels.

”Third place” type structures: open spaces favoring the exchange of ideas, skills and resources for entrepreneurs and/or innovators.

Understanding Various Value Propositions

Different support structures offer a specific range of unique services that depend on their objectives, financial buoyancy, technical and human resources, target audience and network.

For this section, we will be using Incubators as a case study because they represent the support structures that offer the widest range of services to businesses at the early stage.

This phase is often fraught with pitfalls and therefore the stage where founders and teams have the strongest need for advice and services.

It should be noted that the frequency and quality of services should be evaluated on a case-by-case basis and will vary significantly depending on the support structure’s experience and maturity.

  • Advice

Personal or collective support is an important incubator activity designed to help entrepreneurs succeed in their business venture and avoid the classic pitfalls. This support can take various forms (training, masterclasses, workshops, mentoring, etc.) but must above all allow founders to develop essential skills in legal, commercial, marketing and financial matters.

An entrepreneur must learn to master all these components if their business is to succeed. Once the business is up and running and the entrepreneur is somewhat seasoned, advice is then geared towards business development and/or fundraising.

  • Work Space

Entrepreneurs need a conducive and affordable place to work, furnished and equipped with a good and reliable Internet connection, meeting rooms and basic office equipment.

More than just physical space, incubators provide a place of mutual learning for founders, new startups and businesses. It is in environments such as these that business startup ecosystems are built. Young entrepreneurs come together to work, exchange and collaborate, while big companies discover innovators and investors identify businesses with potential.

  • Network

In the life of an entrepreneur, meeting potential customers, identifying experts and partners and sharing each other’s ‘experiences is a vital part of the journey.

Incubators are helping a growing number of entrepreneurs expand their network by organizing events such as innovation contests, pitch competitions, hackathons, seminars, etc.

All of these represent opportunities for entrepreneurs to build their network and increase their visibility.

At events like these, budding entrepreneurs discover the universe of entrepreneurship for the first time.

Sometimes they meet their future co-founders, develop a new business idea and meet mentors who will follow their progress and advise them in crucial decisions they will make for their startup. These events also raise awareness about innovative entrepreneurship and can spark people’s interest and desire to start their own business.

  • Funding

Another important and vital expectation entrepreneurs have of incubators is to help them secure financing for their ventures.

This often represents the greatest obstacle for entrepreneurs, particularly at the beginning of their journey (i.e. before being able to realize their first turnover).

This challenge is only reinforced in the field of innovation, which is synonymous with potential, of course, but also with risk.

Incubators therefore act as intermediaries. They support entrepreneurs in their search for funds from banks or investment funds, helping them to build their profiles to make them investment-ready in order to give them every chance of success. At times, incubators also support and even physically accompany clients during appointments and negotiations to secure financing.

Choosing A Support Structure As An Entrepreneur

Entrepreneurs can benefit from the services of one or more support structures at different points of their entrepreneurial journey. In order to do this, these startups generally need to apply to the support structure. After this, the support structure goes through a selection process. Selection processes differ depending on the nature of the support structure and their specific needs and/or criteria.

Generally speaking, support structures consider the following types of businesses:

  • Attractive: in terms of their value proposition on the market and the skill profile of the startup to be incubated;
  • Innovative: in terms of products, services or management;
  • Impactful: in terms of value creation, as well as social and environmental benefits

Just as no two support structures are the same, each entrepreneur has a unique business idea. It takes time to evaluate the advantages and disadvantages of joining a particular structure, depending on the entrepreneur’s needs and the services they can access. In return, support structures also reserve the right to be selective in order to maximize their success rate. Next week, we will examine SPECIALIZED SUPPORT STRUCTURES as we take a look at the types of support structures that have specific characteristics that are made to meet specific needs