H&D Partners

Recipes for disaster: Why entrepreneurship support programs fail?

From a direct observation of our global experiences, we know by now that there are many diverse factors that can impede the successful running of an entrepreneurship support program and that can have a negative effect on its performance in a local context. The ones that follow are some of the most frequent, although by far not the only ones!

One of the most frequent issues that we come across has to do with Money, or better, the lack of it, or even better, the lack of a continuous and reliable mix of sources of income that would allow the development of a longer-term vision of an entrepreneurship support program as well as its continuous deployment. An insecure budget does not allow for strategic operations to take place. Entrepreneurship support programs and services run occasionally: if funding is available the program runs, if not, it shuts down until the next round of funding arrives. Hence, business models of incubators, accelerators and support programs are not steady enough and, especially in developing economies, they rely too much on single-revenue stream models (e.g., donor-funding) that are risky, do not allow to focus on strategic objectives and tend to favor quantity over quality.

Then there is the GIGO Rule (Garbage In – Garbage Out), which applies in our industry, as in any other industry: a poor pipeline impedes the creation of solid outputs (startups and entrepreneurs in our case). The importance of developing a solid pipeline is often underestimated. The paramount importance of the first phase of the entrepreneurship support value chain, outreach, and of the selection process that will decide who to admit to a program, are too often forgotten. We need to constantly remind ourselves that without proper sensitization, none of the goals of an entrepreneurship support program will be met.

We have then witnessed many cases of programs that are incapable of delivering value because they have not succeeded in setting up the right partnerships in their local ecosystem. Business support organization often fail to recognize that the overall entrepreneurship support value chain cannot be delivered alone and therefore do not engage in collaborating with other organizations that, if properly networked, can add much value to the local entrepreneurs. It is indeed a nonzero-sum game, where a functioning ecosystem that is centered around the needs of the local entrepreneurs creates higher value for the entrepreneurs than the simple sum of its parts. Moreover, we have seen many programs that fail to build a proper network because they follow priorities that do not relate directly to the needs of entrepreneurs while traveling their startup journey. More attention to the needs and challenges of the local entrepreneurs should be provided all along the way. Knowing the target user of the services, should be the “north star” of any program.

Finally, programs fail to deliver because they are not able to attract, retain and train talent in deploying the services entrepreneurs need. Expertise, although maybe hard to find, is crucial and retaining it becomes a must if your goal is to shine among your local ecosystems. Program directors often fail to recognize that it is not just about hard skills but about soft ones as well. Coaching, mentoring, and generally talking to entrepreneurs at any level requires a staff that is capable of exuding confidence (through the deployment of class-a technical services) and at the same time have those attributes that create harmonious connections, where people are willing to engage.

These are just some of the ingredients that when meshed with the others, produce the perfect recipes for disaster. We at H&D Partners are set to help you to avoid them and to design effective user-centric sustainable programs that will efficiently serve your target entrepreneurs.

Giordano Dichter

September 2022




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