Activity 4.2 E

Explore business models

The resources and exercises in this activity will help you explore business models with the potential to transform the way your solution is delivered, ensuring sustainability and scalability.

Next Activity 4.2 F

In the introduction to this guide we talk about products and services as the focus of innovation activity. However, the business model that supports a product or service can also be the subject of innovation and should be given consideration from an early stage.

An innovative business model has the potential to transform the way a product or service is delivered, ensuring sustainability and scalability. In this activity we point you towards a number of different tools that you can use to explore your business model.

Understand the market

For any innovator it is important to understand how the industry and market for a proposed solution is structured. Whereas the private sector is demand driven, the humanitarian sector is generally ‘supply driven’ with much of assistance being in the form of humanitarian aid.

Consequently, the users of your innovation will often not be the purchasers of your innovation. These purchasers are likely to be humanitarian organisations or humanitarian donors. You therefore need to consider how to maximise the ‘value’ for both your users and target group and the ‘purchasers’ of your solution, and understand how your potential purchasers make their decisions.

Think about whether the current market is for a ‘public good’ (one which the state or donors provide) a ‘private good’ (one which individuals and organisations pay for) or a ‘social good’ (one which currently nobody pays for, but where value is still created and exchanged for free based upon social capital). If you are hoping to sell your solution directly to people affected by crises, it is critical to understand their means to pay and any ethical implications.

Take a look at our briefing on the Humanitarian Architecture to understand the key actors who might purchase your innovation. Fifty-eight percent of all relief efforts (measured by spend) are provided by a small number of multilateral organisations, primarily seven UN agencies, along with the International Red Cross and Red Crescent Movement (Elrha, 2018). The following resources are also helpful for understanding the humanitarian marketplace and ways of financing humanitarian innovation.

Further inspiration

EMMA, Emergency Market Mapping and Analysis Toolkit
A useful resource to understand local markets for your solution or the alternatives that are currently being used

UK Government, Humanitarian Innovation Finance Case Study
A report on financing for humanitarian innovation

New Financing Partnerships for Humanitarian Action (ODI)
A research report looking at different finance mechanisms for humanitarian action

The Business Model Navigator is a good source of inspiration based on research into categorisations of business models that enables you to explore 55 basic business models that can be used on their own or in combination with each other. It comprises four main areas:

Who? The target for the solution
What? The solution itself
How? Creation and delivery of the solution
Why? Creation of revenue

An unpublished review of the 55 business models by Gray Dot Catalyst found that only a few are currently used in the humanitarian sector but over 30 of the models have potential for adaptation and use by humanitarian organisations.

St Gallen // Business Model Navigator

Social Business Model Canvas

Difficulty: Medium

Participants: Innovation team

Time Estimate: 2–3 hours (with regular review)

Location: Meeting space

Strategyzer’s Business Model Canvas is a popular tool for developing new business models, made up of nine ‘building blocks’ to be completed that together form the foundation of a business model. Within each of these building blocks there is scope to be creative, and changes in any one of these blocks can have a significant effect.

The Business Model Canvas is designed for the private sector, and this is reflected in the language. A key difference for the humanitarian sector is the need to identify different ‘customers’, which might include communities affected by crises, humanitarian practitioners and/or funders.

Tandemic’s Social Business Model Canvas is an attempt to recreate the Business Model Canvas for social enterprises, adding in boxes to disaggregate funders (customers) from users (termed beneficiaries). It then divides the value being created for both the funders and the users, as well as providing a place for the impact measures to be articulated.

We recommend that you first familiarise yourself with the original Business Model Canvas and how to use it as there are extensive instructions provided by Strategyzer. Once you have familiarised yourself with using this tool, you can use that knowledge to develop a Social Business Model Canvas if you feel it would be useful. The following video by Strategyzer is a good starting point:

It is vital that you don’t complete the canvas once and then keep is as a static resource. It should be used as a way to continually develop and explain your business model, using sticky notes and drawings to describe your ideas. You should also aim to understand and show how elements in each of the building blocks relate and drive each other.

Strategyzer // Business Model Canvas Tandemic // Social Business Model Canvas

Further inspiration

I Burkett, Using the Business Model Canvas for Social Enterprise Design
Guidance on using the Business Model Canvas with social enterprises