Creating a Model for the Economic Recovery by Carol Lauffer
If you’d like to view the companion webinar and presentation by Carol Lauffer, click here.
The pandemic and its economic impact will require that your Entrepreneurial Support Organization (ESO) recalibrate. To prepare for the upcoming recovery, your ESO (e.g. accelerator, incubator, coworking space, hub or other type of entrepreneurial support program) must start to plot the path forward.
To begin the process, consider the following:
Will your ESO’s mission be a fit for the new normal, or will adjustments be required? Your mission may not change; however, now is the appropriate time to discuss and reconsider with your board and stakeholders. Have new needs surfaced among entrepreneurs and small businesses that are not currently served in the community? At the same time, the pandemic will alter the ecosystem. Have ESOs in your region closed their doors, leaving some entrepreneurs without the vital resources that they will need to assist with recovery? Have new opportunities emerged?
Should your ESO be a generalist, or have a focus? Will a broad need for assistance exist among entrepreneurs and small businesses that can be best addressed by serving a wider audience (i.e. the “generalist” approach)? Alternatively, diversification of industries can be an effective recovery strategy. Therefore, should your ESO target a particular industry cluster? For ESOs that already have a cluster focus, should the targeted cluster change or a new cluster be added? A cluster focus not only leverages community strengths, but also is an efficient use of limited resources and budgets (which are expected post-pandemic).
What is your target market and market segments going forward? The types of members or users that your ESO has been serving may change as we undergo economic recovery. The new normal may reveal new, untapped market segments that need your service offering, and therefore, present opportunities to expand your membership base. Consider the types of entrepreneurs and small businesses that are not being served, including life cycle stages (ideation to development to startup to second stage), clusters and industries, geography (e.g. expanding your reach further into the region, or shrinking your reach, or perhaps focusing on neighborhoods in need), and diversity and inclusion. Think about displaced workers who may choose to pursue a business idea. Also, assess the ongoing needs of small businesses, from restaurants to retail and service, which have faced shutdowns. To the extent possible, consider your target market both short and long term.
What are the needs of the newly identified target market segments and members, and what type of service offering will they require? First, the needs of your current members may shift as they move from crisis to recovery mode, and your service offering may change as a result. Then, newly targeted members may have different service needs than your current membership. In addition, the entrepreneurial ecosystem will change, as some ESOs exit the market and others shift their focus and activities either due to budget issues or rethinking their mission and services. Will unmet needs result, creating new opportunities for your ESO to offer new or modified services? Consider not only the content that would be offered, but its delivery. How will virtual delivery impact your ESO in the long term, from one-on-one mentoring to events? Will the number of online educational events increase in order to offer accessibility? If your ESO hosted larger community events such as hackathons and entrepreneurship weeks in the past, will those events be replicated online, or will a completely new approach be required? Beyond the services themselves, your service offering may require the addition of a different ESO model—accelerator, incubator, coworking, makerspace, hub, or other—to best serve the new market segments. At the same time, work with your partners—and perhaps identify new partners—to ensure that your service offering is not redundant, and limited resources and budget are used efficiently.
How will your facility operate and serve members in the future? A lot has been written about social distancing in shared work facilities and members’ comfort level with returning to shared space, so I won’t duplicate it here. Think in terms of specialization and community. Specialized facilities that offer wet lab, prototyping, processing and manufacturing will continue to attract members and usage, because they can’t be replicated at home. Community, peer-to-peer connections and a sense of belonging are critical member benefits of accelerators, incubators and coworking, and will eventually attract members back to your facilities, but for now, must be fostered online.
With reduced funding and operating budgets, how will you effectively serve new member segments and provide new services? Be opportunistic. Funding opportunities (e.g. CARES Act, foundations) will arise from time to time. Be prepared with new program ideas to be funded. Also, bootstrap your ESO: reduce costs, renegotiate contracts, partner with other ESOs, etc.
What’s next? The questions here are designed to begin the process of recalibration. Conducting a market opportunity assessment and then generating a new business model will help your ESO to carve out a critical role in your community’s economic recovery. Contact me for advice on what’s next and the path for your ESO.