A Business Model Canvas for Humanitarian Innovation
It is undeniable that innovations designed for people in humanitarian crisis need to be financially sustainable. It is a hard truth to swallow but, the fact that these assets and services are designed to serve a segment of the population that is experiencing critical need, doesn’t exclude them from the need to be financially viable. How to achieve viability is one of the hardest stages of innovating in this sector. After years of advising innovators in this area, I believe the solution lies in the ability to generate pathways for growth that serve as a compass for decision making leading to adaptations. I have developed a Business Model Canvas for Humanitarian Innovation that has equipped a variety of innovators with the ability to imagine adaptable business models as they start to dip their feet into the real world of business. I’m sharing it here it in the hopes that it can inspire others who might be stuck in the pathway to viability.
The problem of viability
Humanitarian innovations are usually born in a highly subsidised environment. There is usually a grant that works as seed capital and, if you are lucky, subsequent grants that continue to find the development until the service or asset is ready to be deployed. When an innovation has reached maturity, because it has been tested in a variety of places or with a certain number of people, humanitarians immediately start to focus on scaling understood as vertical growth.
Scaling is only for the bravest humanitarian innovators because it comes with a series of difficult realisations:
The first is that the great majority of donors who funded the start of the idea are not willing to act as investors to support the growth of the project into fully fledged viability. There are some exceptions to this, like Innovation Norway scaling grants, but in general, a traditional donor is not usually going to pay a humanitarian start-up to figure out how to grow. Finding capital at this stage is very hard.
The second uncomfortable realisation is that the ways in which humanitarian products can be financially sustainable is uncharted territory. The tools and models from the commercial world that seek to generate financial return from customers don’t translate well. The users of humanitarian innovations tend to be people in dire need with no ability to pay and their customers (be it donors or humanitarian agencies) are usually more interested in investing in business as usual. It is a tough market to crack into and the models to emulate are not a good fit.
The third realisation is that the law is usually a hurdle that sometimes ends up discouraging the transition into viability. Humanitarian organisations spend enormous amounts of time trying to navigate questions of ‘profit’ within local charity regulations and multipage donor agreements. Most donor agreements preclude the agency from generating profit from their funding. The question of whether a group of humanitarian entrepreneurs can set up a ‘spin off’ for productive asset or service developed within an agency is usually so complex that it is impossible to keep up with momentum.
The solution: unlocking new pathways for viability
Can your canvas really solve the problem of humanitarian innovation scale? No. This is a systemic issue intimately linked to the very foundations of the business model of aid. The canvas can contribute to unlocking important flows within the system.
I designed it based on the hypothesis that the system is currently dysfunctional because it lacks imagination to generate new ideas and pathways for growth. The lack of ideas is symptomatic both on the innovators and the funder’s end. I believe that, if humanitarian innovators can stop obsessing about scale understood as vertical growth and think about viability in a different way, in terms of depth of change, they will eventually generate the new business models they need to operate in this market. At the same time, if investors are able to understand these models in a way that is familiar to them, perhaps they can imagine new ways of financing the growth of humanitarian innovations.
So, without further ado, here is the canvas.
A few notes on the tool:
This canvas is the result of practice. It is an amalgamation of the different components and structures of other business model canvas that are useful for the specifics of humanitarian innovation. In this sense, the components are not novel, the curation of them is.
The novelty is the route I propose to navigate the canvas. The route follows the thinking of innovation and has proven in practice to be compatible with systemic thinking. The route also produces connections between elements that should be important to the humanitarian world. For example, it invites the user to consider not only what problems are we solving for users, but also what problems are we creating for them. Is using our solution taking away from them the opportunity to use something else that is perhaps better or cheaper? It also pushes the person navigating the canvas to consider the difference between the people who experience the problem and those who are willing to pay to solve it which could be anyone who cares about the issue, not only traditional donors.
This canvas is meant to be a compass not a bible. It is built to encourage pivots, changes and adaptations. It is meant to be used as an organised space where you document the strategies you will try and go back to see whether they are useful. The canvas has a special section dedicated to success metrics for the whole model to understand whether the engines we have designed for the creation, delivery and capture of value are working. So, fill in the canvas with pencil and be prepared to erase and revisit often.
The canvas is a tool to think but also to pitch. The Strategizer Business Model Canvas from which a million iterations have sprouted is probably one of the best-known tools in the commercial world. By using an iteration of it, I hope it enables humanitarian innovators to tap into language and concepts that potential investors are familiar with.
So please download it and use it. A high resolution image is available here.
If you’d like more specific information on how to use each section of the canvas or how to facilitate a group workshop please get in touch at paulagilb@gmail.com
I continue to stress test the canvas against different innovations and would really appreciate to know how you’ve been using it. If you learnt something new please drop me a line.
The canvas is free to download from Medium, if you liked it, please buy me a coffee. https://www.buymeacoffee.com/paulagilb
