THE BIG IDEA
Our organisation’s goal is to help as many entrepreneurs as possible to survive and then thrive as small business owners. Some of these small businesses will grow to support a handful of employees. Others will go on to build large businesses and unlock many jobs and real generational wealth.
In reality, early stage entrepreneurship is extremely fragile and it’s almost impossible to pick out which businesses will succeed and which will fail. This means that we want to open the playing field wide to accommodate new players, especially those from historically disadvantaged backgrounds.
Our ambition is to offer a high-quality, personalised level of support – at scale. Like any other social enterprise (or indeed any business) we have a finite budget and need to maximise our resources. This is no small task to accomplish! Any project with social impact at its core needs to have metrics and data to shape decision-making. Without this information, how do you know if you’re making an impact? What should you be doing more of, and sometimes more importantly, what should you be doing less? With a background in systems implementation and software development, I always envisioned a technology solution to support the Hub in delivery of support services.
Lynx is that solution. It amplifies our impact through improved measuring, monitoring and management. This project has been more than a year in the making with massive contributions from our partner Ironwave, Hub colleagues and constant feedback from entrepreneurs using the system.
WHAT CAN LYNX DO?
Lynx is an online SME support platform that connects our SME Development team to the entrepreneurs based on campus and Hub alumni still receiving services. Entrepreneurs can quickly and easily make requests for support together with contextual information for evaluation by our investment committee. We place no restrictions on the type of support requests filed – we do not want to impose our framework on what the business needs. With structured analysis of the stated need we can ensure we apply support resources to the right problem.
The symptom might be a cash flow crunch, but has all completed work been invoiced? What do collections look like? Is the delivery contract well-constructed – perhaps it should require work-in-progress payments on longrunning projects? In other words, the cash flow problem might be simply increased working capital needed for a growing business, but often it is not. We need to help the business owner solve the right problem.
Our purpose is more people working and earning – jobs. But of course, that requires increasing numbers of small business growing sustainably. We have three key metrics we track every month to see how we are doing against that purpose: monthly SME turnover; how much SMEs are spending on salaries and wages; and job numbers. Lynx has given us a seamless way to collect this data and to reflect trends and changes. The system also enables us to store and analyze the types of support we are providing, to whom, and how the business is doing in terms of growth and Rand value of jobs created as well as numbers of jobs at an individual business level and across the collective.
For sponsors, Lynx allows us to give them a real-time view into the impact of their funds and how we are applying them. Sponsors can log-in directly for a view of their portfolios, also seeing the needs and challenges. At their discretion, sponsors are able to become more deeply involved with the entrepreneurs they’re supporting. This type of potential dialogue is hugely valuable and the market intelligence gathered can also be beneficial to those organisations who provide products and services to the SME sector.
RESPONSIVE NOT PRESCRIPTIVE
We work with over 160 entrepreneurs based on campus – many different sectors and size of business are represented. We believe that entrepreneurs need different information and advice at certain points in their business. The right support at the right time is critical for business success. We try to offer this support and essential learning as and when it is needed. Our model is not built around numbers of entrepreneurs undergoing training.
Allowing open ended requests ensures we are responding to the SMEs’ perception of their needs.
THE HUMAN TOUCH
Technology should ultimately be the servant and not the master – nothing replaces the human touch. Having a strong, committed SME Development team means that we get to know the entrepreneurs and their businesses on a very deep level.
Entrepreneur confidence is an intangible but critical factor. High trust and understanding makes it easier for the entrepreneur to provide a true reflection of the issues and challenges at play.
Through a detailed needs analysis and an empathetic approach, our team is able to get to the root cause of an issue. For an entrepreneur to feel that they have a powerful team on their side is an enormous confidence boost.
People are complicated and the only way to understand them and their challenges is through developing relationships. This year, we appointed a team of Service Co-ordinators to manage small portfolios of SMEs. The concept is similar to that of a relationship manager in a private bank, and each coordinator is expected to have a deep understanding of each business and its particular challenges. These Service Co-ordinators champion the needs of their SMEs and motivate for investment of resources at our investment committee meetings.
This human touch is balanced and supported by Lynx, ensuring that strong relationships don’t equate to emotive decision-making. It’s proving a powerful combination.
WHAT’S IN THE PIPELINE?
We are constantly looking at evolving the platform, developing and testing new functionality. As the time goes by and the quantity of data we have grows, we will use machine learning to find patterns and the greatest points of leverage. We have begun talking to other SME support organisations and small business investors.
For example, some entrepreneurs may be based at Riversands but also receive grant funding. It is enormously helpful to grant making organisations and other supporters to be able to see the information we have on that business.
This is just one example of how we can mould Lynx to serve our needs, those of the support sector and of our entrepreneurs.