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