Business Analytics Toolkit

7.2.1. Funder-Designed vs. Your Own Business Model

There are two scenarios for setting indicators and performance metrics for a tech hub: either your funder proposes a comprehensive business model including indicator templates and measurement plans, or you as the aspiring tech hub-lead develop the business model and indicators yourself.

At the outset, you need to assess the basic requirements that your funder sets. For instance, infoDev has experimented with different approaches to business model design and indicator selection for its tech hubs, depending on the project context (see box 10). Your funder may give you a specific implementation and business model, including indicators, or if they may expect you to develop the business model and indicators from scratch.

If you design your own tech hub business model, identifying performance metrics should be part of your business model design before you pitch the model to your funder. infoDev has published the Business Model Toolkit for mLabs, which takes you through all the steps necessary to design a comprehensive strategy and value-creation approach for a tech hub that can be tried out in the market. The following presupposes that you have run through this exercise and already have a good idea of the market conditions and your goals, strengths, and weaknesses.

If you advance in your application for a tech hub grant, you will usually co-develop your performance metrics with your funder. As you progress through the stages of a tech hub funding application process, you will collaborate more and more with your funder to further develop your business model, including your business analytics approach. For instance, for an infoDev mLab or mHub grant, you might suggest a crude list of indicators during the expression of interest phase, and then advance with detailed indicator lists, definitions, and targets based on the feedback received from infoDev when you submit your application to the call for proposals. During this process, you should see your funder as your partner, and both parties will benefit if you are transparent about any concerns or constraints that you anticipate.

The co-development process should be interactive, but your funder will usually have some basic requirements. As described in section 6, your value proposition will need to fit in with your funder's impact model. In the example case of the Digital Entrepreneurship Program, the overarching goal is to find, nurture, and help accelerate high-growth potential mobile applications enterprises. Many services and activities that tackle early-stage innovation gaps are possible under this umbrella - from community- building and ideation events to intense accelerator programs that emphasize one-on-one business mentoring and equity investments. At the same time, the program's focus on growth-oriented entrepreneurship clearly frames the metrics and evaluation approaches that are relevant to assess its effects, and suitable mLab or mHub business models will usually pursue one or a combination of the three business model approaches of Network Building, Skill Development, and Start-up Creation (see box 7).

 

7.2.2.Implementation Quality/Output Indicators

You will need to track a set of core implementation indicators, measuring to ensure that your tech hub is on par for service efficiency, effectiveness, and quality. There are several basic measures that indicate whether your tech hub is functioning at a good standard. This list of measures should be easy to track as it relates mostly to basic records of your activities and tracked client participation. In an impact model, these measures would be called output indicators, which reflect your funder's direct accountability towards their own donors. Mostly, these indicators do not by themselves imply that you are providing value for your clients: instead they track that you are implementing of the services, rather than their effects on the clients. As an example, table 1 summarizes the output indicators that infoDev usually expects mLabs and mHubs to track. Even though these indicators seem basic, infoDev requires mLabs and mHubs to keep consistent records and report back at regular intervals. This will be true for other funders too. The appendix includes detailed definitions of some the indicators.

Getting the mLab or mHub up and running	Building capacity to deliver	Delivering services
Business/implementation model/plan developed/co- developed and revised with infoDev (infoDev template or own)	Number of partnerships with financial and non-financial service providers.	Number of businesses/entrepreneurs receiving services: different levels/kinds of support, increases in the volume of services over time.
Number and type of consortia/partnerships formalized to deliver the  business/implementation model/plan	Amount and type of financial and non-financial contributions (human, in kind) secured/committed from partners for additional support of businesses/entrepreneurs (equivalent to resource leverage by mLab or mHub, unless implemented services uniquely benefit non-entrepreneurial stakeholders)	Volume of seed funding from mLab or mHub received by businesses/entrepreneurs (if applicable)
Development of sound and robust governance structures for the mLab or mHub (for example, advisory board set up)	Institutional capacity established (for example, functional reporting and governance processes)	Number of businesses/entrepreneurs reporting satisfied or very satisfied with mLab/mHub services
Locally relevant results framework and performance monitoring frameworks developed and in use by mLab or mHub to collect and share data and lessons.	mLab or mHub manager/staff's use of gained implementation knowledge.	Number of knowledge sharing events and knowledge products developed.
Institutional capacity established	mLab or mHub manager/staff's changes in implementation capacity (self-rated)	Number of media appearances
		Enabler cost to sustainable revenue ratio

 

7.2.3.Value Proposition/Outcome Indicators

In addition to implementation quality indicators, you will need to track a set of core value proposition/outcome indicators. Beyond your basic implementation quality, you will need to assess to what extent you succeed in offering the value proposition that you envisioned for your clients. In mLabs and mHubs, managers must track a short list of indicators that assess the effectiveness of their implementation, that is, the value created and the outcomes they contribute to.

infoDev has identified three separate approaches to mobile app enterprise support for tech hubs: Start-up Creation, Skill Development, and Network Building. Tech hubs can pick from an extensive list of services when they design their business model. But the Digital Entrepreneurship Program's experience with the mLab and mHub pilots has shown that some services have the potential to support mobile app enterprises directly while others rather serve to set the foundations for enterprise development in ecosystems with large gaps that prevent start-ups from emerging. Skill Development and Network Building were identified as crucial approaches, aside from direct Start-up Creation (see section 5. and box 7).

The core value proposition/outcome indicators that you will need to track depend on the approach that you pursue. infoDev's past experience has shown that for each approach - Start-up Creation, Skill Development, or Network Building - different sets of core indicators are needed to measure outcomes.

For instance, trainings implemented within a Skill Developer model might have substantial effects on mobile app entrepreneurship, but it might be impossible to link the indirect and long-term effects of trainings to typical Start-up Creation outcome indicators, such as increases in start-up revenues. The core lists of possible indicators are deliberately kept short, and you should be able to choose additional indicators that allow flexibility in your business analytics approach. The appendix includes detailed definitions of the Start-up Creator indicators.

Possible indicators for a Start-up Creator	Possible indicators for a Skill Developer	Possible indicators for a Network Builder
Additional sales revenue for businesses	Increase in skill level of businesses/entrepreneurs (self- reported, for example, measured in tests and through surveys)	Usefulness and outcomes of networking and community- building events as reported by participants (for example, measured through twice annual surveys)
Profitability of businesses, including changes over time	Increase in investment readiness of businesses/entrepreneurs (baseline measure at entrance and measure at exit, based on tool/scorecard, measures change against criteria at exit)	Number of registered/signed-up community members as a result of the activity of the mLab or mHub
Number of businesses who raised grants, early or growth stage finance, including amount of financing	Jobs/salaries/contracts obtained as result of the services as reported by businesses/entrepreneurs (for example, measured through surveys 6 months, 12 months, and 24 months after the support)	Increase in the linkages between organizations in the ecosystem as a result of the activity of the mLab or mHub
Number of digital products/services developed/improved	Number of digital product/service prototypes developed/improved
Number of users reached by developed/improved digital products/services
Number of new new direct jobs created by businesses

 

There could be additional indicators that your funders require you to track for specific service agreements or projects. The social impact potential of mobile applications is widely recognized, and international development organizations and institutional development funders are exploring approaches to stimulate inclusive and social mobile app innovations. This means that they might integrate additional indicators in their impact models to incentivize you to develop your services in a ways that they have greater potential to generate a specific type of social impact. For instance, infoDev together with the four mLabs and mHub Nepal ran the global mobile microwork challenge "m2Work," and many mLabs and mHubs have individually attracted social impact funding or run inclusive innovation competitions (see box 11).

Similarly, strengthening opportunities for women to close the gender gap in tech entrepreneurship is

Important for infoDev, and it has started to develop a women entrepreneurship agenda. infoDev will facilitate and sometimes integrate such initiatives into its core programming in collaboration with donor partners. In cases where infoDev provides you with funding to specifically implement services targeted at social and inclusive innovation, additional outcome measurement will become necessary. Given the broad variety of potential initiatives and focus areas, it is impossible to specify these indicators upfront, but infoDev and other funders will engage with you to develop a viable and useful indicator approach on a case by case basis.