Strive Community Innovation Fund: Data for Market Access
Today, Strive Community launches its second Innovation Fund. Up to $1 million is available for digital and data-first solutions that support the growth of small businesses with fewer than 10 employees. Building on the success of our first fund, the objective of this round is to pilot and learn from innovations in two focus areas: Environmental Sustainability and Data for Market Access.
Successful applications will each receive up to $150,000 to develop and test their solutions over a 12- to 18-month period. The Fund is open for applications until May 26, 2023. Visit our website for more information on what we’re looking for and how to apply.
This blog is one of two that will explore our priority topics and their applicability to small businesses. Here, we focus on Data for Market Access. To read about our interest in Environmental Sustainability, click here.
Using data to enable small businesses to reach more customers
Small businesses account for up to 70% of global jobs and 50% of GDP. It is paramount that they are supported in their recovery from COVID-19 as they adapt to changing market dynamics. Digital technology was critical for the survival of many of these enterprises during the pandemic, enabling them to continue serving and reaching customers. Both the OECD and Cisco found that around 70% of small businesses increased their use of digital trade as physical trade declined during this period. Moving forward, digital channels can accelerate small business recovery, if prioritized. In fact, e-commerce is projected to grow by 60% between 2022 and 2026, reaching $5.4 trillion in sales (see below).
Equally relevant to small businesses is the social commerce opportunity. Making up an increasingly important subset of e-commerce, social commerce encompasses sales made within social media platforms, notably Facebook and Instagram, among others. It offers customers a more interactive and engaging shopping experience. By some estimates, the global value of these social commerce purchases will reach $2.9 trillion by 2026 — over half of all digital purchases.
Digital transformation has propelled small businesses to engage in these online marketplaces. Doing so has also led to the modernization of their wider business processes and operations. Importantly, this rapid digitization has drastically increased the amount of data available on these enterprises. Properly leveraged, this data can be a powerful tool to reduce overall costs, increase sales, optimize pricing strategies, boost decision-making efficiency and even prevent fraud.
Through our Innovation Fund, we are interested in supporting data for market access solutions that leverage this increasing amount of data to enable small businesses to more effectively engage in online marketplaces, reach more customers, and increase revenues.
What are we looking for?
We are seeking solutions that support small businesses to grow by:
1. Helping small businesses tap into the power of their own data to make better decisions
For example:
- Marketing analytics data can be used to create more accurate customer profiles and optimize advertising strategies. This can boost customer acquisition and retention via timely and personalized discounts or promotions.
- Transaction data can be used to improve sales forecasting and inventory management. This can both prevent stock-outs and increase short-term liquidity by not overstocking.
2. Using data to develop or access a product or service
For example:
- Marketing analytics data can also be used to offer third-party promotions for a commission or monetized to sell advertising space to other firms seeking to target similar customers.
- Leveraging transactional and operational data to provide businesses with advice on how to improve their cybersecurity.
3. Using data to help offline enterprises reach more customers
For example:
- Boost Technology, an existing Strive Community grantee, uses WhatsApp to support informal, offline retailers across Africa to grow. They make use of these small businesses’ transaction data to provide real-time insights via a conversational commerce experience. This form of digitization can improve operational efficiencies, unlock access to financial services, and reach more offline customers.
4. Helping women-led businesses increase engagement in digital marketplaces
For example:
- Women’s World Banking found that almost two-thirds of Indonesian MSEs are run by women. However, there will be an annual market loss of $11 billion if the e-commerce gender earnings gap is not reduced. We are interested in solutions that disaggregate data to build more evidence on the needs and preferences of women-led e-commerce entrepreneurs.
To summarize, we are seeking to fund digital-first solutions that support the growth and financial resilience of small businesses by using data to reach more customers. We are looking for:
- New products, features, services, and business models, not scaling-up business-as-usual solutions and excluding the development of training content.
- Organizations with an existing track record of working with small businesses (fewer than 10 employees), not entirely new entities.
- Solutions that have potential for impacting small businesses at scale, not those which are highly sector or market specific.
Visit our website for more information on Strive Community and the Innovation Fund, including how to apply, along with eligibility and selection criteria. Applications close on May 26, 2023.
