In February 2011 the Young Foundation Ventures team were commissioned by Nesta to conduct the first comprehensive study of the state of incubators– organisations that support the dynamic and emerging sector of social ventures. Since then this report has contributed much to the development of new social investment initiatives, such as Big Society Capital and the new contract and investment readiness fund from The SIB Group. More importantly, it has helped define the space in which social venture intermediaries (SVIs) such as the Young Foundation work.
A lot has happened since the report was published and I thought it would be interesting to quickly reflect on its recommendations and see how things have changed, especially at a time when many new support initiatives are being developed and the sector is once again redefining itself.
The first place to look is at our own systems and processes. Over the past year the Ventures team has ramped up its effort to scale up social business ideas that work. Recent work in this area includes our Building Local Activism programme and our involvement in the Realising Ambition consortium, both of which have received support from the Big Lottery Fund.
This approach has in my mind, answered one of the critical questions posed in the report – which was how could organisations address the challenge of the ‘missing middle’ – a space where promising early stage organisations often get ‘stuck’ in their journey to achieve scale; a space where critical operational delivery, HR, legal and governance questions go unanswered; a space ultimately where growth stagnates.
We have of course achieved a lot of high-profile success in scaling social ventures ourselves, but our experience managing three funds in the field of education, health and youth leadership has not been without its challenges. Amongst the many lessons we learned was the urgent need to systematise ourselves and develop a standard, yet adaptable model of social venture support which would address the challenges we faced.
For inspiration, I asked the Ventures team to look for examples across the pond as well as nearer to home, as I wanted to share some of the learning we have gained from looking more broadly at the SVI landscape into enterprise incubators and accelerator programmes.
Recent research in the US and Canada supports the view that social ventures are thwarted from scaling up by a lack of strong networks and guidance from experts with specialist knowledge on operational procedures. Understanding the success of broad incubators such as MaRS in Canada alongside the methods utilised by the highly competitive technology incubator market in the US (YCombinator, Techstars, etc) we can see the instrumental value of several common factors involved in incubating or accelerating social ventures:
Mentorship and discussion opportunities with experienced entrepreneurs and business people give participants the opportunity to discuss specific problems and get the rare expert feedback they require.
Collaboration allows entrepreneurs to learn amongst themselves. Thoughts that come to them outside of defined workshop sessions or Q&As can be discussed and developed rather than being shelved for another day.
Be it a frantic weekend of development or several months of workshops and tutorials, focused time spent on intensive learning alongside peers encourages swift development.
Accelerators invest equity in the social enterprises they work with to promote a mutually competitive environment which is resourceful and cost-effective. Pitch days at the end of the programme give participants the opportunity to leverage significant investment from already interested parties.
On the Young Foundation Accelerator we have brought together these examples of international best practice to create an environment we hope will allow top social enterprises to flourish.