UnLtd India Incubator & Hub evaluation summary findings
1. CONSULTING EXPERTISE | INNOVATION AND IMPACT | DEVELOPING MARKET INSIGHT
UnLtd India
Evaluation of UnLtd India’s Incubator and The Bombay Hub - Summary
Conducted: Sept-Oct 2011
Published: March 2012
2. Scope and objectives of this report
• UnLtd India was set-up in late 2007 with a mission to support and foster the
development of a “social entrepreneurship” movement, both by helping develop social
entrepreneurs and publicising this approach to driving change
Context • Management have largely concluded the phase of setting up the organization and
developing their model, and are now preparing for the next phase of growth, which will
include geographic expansion
• UnLtd India’s management has commissioned an external evaluation to assess to
what extent UnLtd India fulfils its mission, and identify areas for improvement
• Evaluating UnLtd India’s social incubator (“the incubator”) from origination and
selection to incubation (financial and non-financial assistance)
Scope
• Evaluating The Bombay Hub’s (“the Hub”) support for social entrepreneurs and how
it aligns to UnLtd India's mission and vision
• Evaluation of Social Mash-up, Bootcamp and other associated UnLtd India activities
Out-of-
• Detailed review of strategies for geographic expansion and domestic fundraising, both
Scope
of which are currently under development by management
• Conduct an impact assessment of the incubator and the Hub
• Develop a Monitoring and Evaluation Framework using the outputs from the
previous stage, and benchmarks from comparable incubators throughout the world.
Objectives UnLtd India management can continue to use this framework to measure, manage
and improve its effectiveness going forward.
1
3. We have evaluated UnLtd India against four key areas
• Is UnLtd India addressing important and genuinely unmet needs for its target
Relevance users?
• Have Incubator investees and Hub members created impact? If so, to what
extent can this impact be attributed to the Incubator and the Hub?
Impact
• Has UnLtd India induced impact through broader demonstration and
mobilization effects?
• Does the Incubator/Hub provide services that are useful to investees?
Effectiveness
• Is the Incubator/Hub achieving desired outcomes?
• Are the Incubator and Hub efficient from a financial and operational
Efficiency
perspective?
2
4. Relevance: UnLtd India targets an underserved part of the ‘social entrepreneurship’
landscape in a highly differentiated way
The Incubator targets an important and underserved part of the ‘social entrepreneurship’
landscape in a highly differentiated way
Is the Incubator • UnLtd India has the only incubator in India with financial and non-financial support for all types of
addressing social entrepreneurs from the very earliest stages of development
important and • The Incubator meets the key needs of early stage enterprises, including financing, which innovators
genuinely unmet state is the most important and hardest to find
needs for its target • UnLtd India’s targeted mentorship and guidance appears to be stronger than other incubators,
users?
according to social entrepreneurs
“Community-based” individuals from lower socioeconomic backgrounds are less likely to be
selected by the Incubator to receive support – they are also least likely to be able to find support
elsewhere
Is the Hub The Bombay Hub provides a low cost serviced office for social entrepreneurs, and is a platform
addressing
for broader collaboration amongst them; there are few alternatives
important and
• The Bombay Hub serves a critical need for social entrepreneurs, by offering flexible low-cost
genuinely unmet
packages, competition in Bombay is limited but increasing
needs for its target
users?
3
5. Impact: UnLtd India's Incubator has created social impact by accelerating the growth of
social ventures and helping them make valuable connections
The social entrepreneurs supported by the Incubator have created significant social impact. The
Have Incubator incubator typically accelerates their growth
investees created • Current and former investees will have reached nearly 4.2 million end beneficiaries by end of 20111
impact? If so, to and have created 3,200 jobs1
what extent can • 91% of surveyed investees2 believe the incubator has positively impacted their organizations
this impact be
• 52% of investees2 raise additional finance and 48% receive additional non-financial support;
attributed to the
Incubator? additionally 68% of investees2 believe being an UnLtd India investee facilitates the sourcing of
follow-on financing
Has the Incubator The Incubator grows a pipeline of potential candidates for other impact investors. Furthermore,
induced impact UnLtd India investees have successfully encouraged other entrepreneurs to start their own
through broader ventures
demonstration and • Peers and later stage investors believe UnLtd India generates a pipeline of investable social
mobilization initiatives; UnLtd India acts as an intermediary by letting others know about these investees
effects? • 50% of UnLtd India's surveyed investees2 have actively encouraged others to become
entrepreneurs
1 Analysisexcludes the following organizations due to insufficient data: Toy Bank; Eco Leadership Program for India; Milaap; SMV Wheels and Denny
John
2 Based on UnLtd India current and former investee surveys – sample = 25; UnLtd additional data capture from current and former investees – sample =
64; Dalberg analysis 4
6. Impact: Current and former investees will have reached nearly 4.2 million end
beneficiaries by end of 2011
INDICATIVE
94% generated by 1
2011 year-end estimates investee (FUEL); 236k
end beneficiaries
otherwise
End beneficiaries
4,197,000
reached
Given that UnLtd India's investees
and UnLtd India itself are early stage
Jobs created 3,200 to date enterprises, these figures are likely to
grow1
Total funding raised
from sources excl. Rs. 10,80,00,000; [US$ 2,160,000]
UnLtd India
Additional funding Average: Rs. 14.5; [US$ 0.29]
raised per UnLtd India Average after excluding top 5
Rupee invested organizations: Rs. 5.5; [US$ 0.11]
Source: UnLtd India current and former investee surveys – sample = 25; UnLtd additional data capture from current and former investees – sample =
64; Dalberg analysis
1 Analysis excludes the following organizations due to insufficient data: Toy Bank; Eco Leadership Program for India; Milaap; SMV Wheels and Denny
John 5
7. Impact: The Bombay Hub has made significant social impact by accelerating the growth
of social ventures and helping make valuable connections
Have Hub Hub members generate impact through their social ventures. The Hub helps them make
members created
connections that advance their ventures’ growth
impact? If so, to
• Hub members have generated economic activity employing over 300 individuals by the end of 2011
what extent can
• 71% of members with initiatives report making connections through the Hub that
this impact be
have made a demonstrable difference to their organization, such as through making connections
attributed to the
Hub? with organizations which they can collaborate with, or finding clients
Has the Hub On a broader scale, the Bombay Hub raises the profile of social entrepreneurship in Bombay, but
induced impact
to a limited extent
through broader
• While 90% of surveyed members believe the Hub has accelerated the development of the social
demonstration and
enterpreneurship sector in Mumbai, most of these individuals believe this impact has only been
mobilization
slight
effects?
6
8. Effectiveness: The Incubator’s personal development support is effective but investees
believe funding is insufficient. Sourcing of investees has improved, but some channels
lack depth
Of the Incubator’s activities and services, investees find the personal coaching and mentorship to be
the most valuable. Investees believe that the Incubator provides a significant opportunity to develop
important networks, but find its financial support insufficient
• UnLtd India offers a very broad menu of non-financial levers of support – all of which investees find to be
Does the Incubator
useful
provide services that
are useful to • Investees have found the networks, going through the selection process, and moral support to be the
investees? most useful services provided by UnLtd India
• UnLtd India's personal coaching appears to be the most highly valued offering
• Investees believe that even though it meets a gap in the market, the total amount of financial assistance
provided by the Incubator is insufficient – this reflects management’s intention to provide some financial
support at an early stage of development, but not to provide a standalone level of financial support to
every investee
The Incubator has been particularly effective in developing the networks and leadership qualities of its
investees, and has exceeded its targets in supporting investees graduate from ‘Level 1’ to ‘Level 2’
support
• At least 70% of respondents report progress in all aspects of personal and professional development
• 57% of respondents have already derived a tangible benefit from UnLtd India's network; over 90% of
respondents believe there is opportunity to make such relationships
Is the Incubator • Graduation from Level 1 to Level 2 has risen significantly this year, resulting in cumulative rate of 12%,
achieving desired surpassing Management’s 10% target
outcomes?
Learning from experience has resulted in the Incubator revising its investment targets and improving
its sourcing strategy
• The current sourcing process is robust; one in five applicants is selected
• UnLtd India has decided to become more selective, based on what it has learnt on sourcing good quality
investees at Level 1 and Level 2
• However, there are still some concerns on generating a pipeline of candidates that has the diversity of
backgrounds that UnLtd India is targeting
7
9. Effectiveness: The Hub’s office space effectively provides basic office space and a
network to its members; however, members seek better facilitation of the network
Does the Hub
Members come to the Hub for an affordable, collaborative office space
provide services
• 100% of members believe the Hub offers reasonable or good value for money
that are useful to
• Members report liking working in a collaborative office space with other entrepreneurs
investees?
The Hub effectively serves the basic needs of its members. The Hub does not help
members collaborate effectively
• ~60% of respondents said the quality of the space is good / very good
• While members are satisfied with the quality of peers at the Hub, they believe the Hub
Is the Hub could more actively facilitate networking
achieving desired
outcomes? The Hub is not operating at maximum capacity and is not effectively using all
possible channels to grow.
• The Hub has a capacity of ~70 members, but average membership has only been
around ~40 members
• Current members found out about the Hub through existing personal networks, not
directly from the Hub or the media
8
10. Efficiency: While UnLtd India's donor funding comfortably meets the needs of the
incubator, overhead costs remain high and the Hub is currently not yet financially
sustainable
UnLtd India has been able to comfortably meet its fundraising needs, but its sources of funds are largely
dependent on four main donors
• UnLtd India spends about 60-70% of the income raised in a given year, allowing it to roll over significant
amounts of funding for future years. The organization has enough funding to keep operations running
through 2012
UnLtd India has spent 46% less than budgeted during FY10/11 largely due to slower than planned growth,
however is on course to spend 10% less than budgeted in FY11/12
• Lower quality of investees, large staff vacancies and decreases in event scope are the primary reasons for
underspend in FY10/11
Are the Incubator and The high-touch and city-based nature of UnLtd India's incubator results in relatively high overhead costs
Hub efficient from a compared to other NGOs, which are often field-based
financial and • At 25% of total costs, administration and fundraising costs are higher than sector norms of ~21%
operational • UnLtd India's salaries tend to be higher than local NGOs, which is partly explained by its relatively high-
perspective? touch and city-based model
• Rent is the second largest non-grant component of expenses for UnLtd India; however the rate paid is
competitive compared to alternate locations in Bandra and Downtown Mumbai
From a financial standpoint, the Incubator is scalable as the marginal cost to UnLtd India of having an
additional Investee is negligible
Taken as a standalone entity, the Hub is currently not yet financially sustainable
• The Hub makes a loss of Rs. 18,00,000; [USD$ 36,000] and is unable even to cover direct costs, before
allocating any of UnLtd India's central overheads
• This is due to several factors, including underutilization, inefficiency in pricing, and high allocated overhead
(rent and UnLtd India management)
9
11. Recommendations for the incubator (1/3)
How it may improve the incubator Challenges and Risks
• Impact: The incubator’s impact is to a large degree dependent on its ability to source and
1 select candidates for whom it has great significant additionality. A Head of Outreach could
directly source and develop the necessary relationships to bring such candidates, It may be difficult to find an individual
who is capable of forming and
Employ a particularly community-based entrepreneurs, into the pipeline.
maintaining the relationships required
Employ a
dedicated • Effectiveness: As UnLtd India's outreach strategy becomes more targeted and results-
to achieve the desired composition of
dedicated Head
head of driven, it will be helpful to have one person manage / track the sourcing and selection
investees. Additionally, the cost
outreach
of Outreach process. Furthermore, this individual could be responsible for developing channels for
burden may be difficult to justify
effective community-based outreach.
unless UnLtd India expands into
• Efficiency: One person managing / tracking the sourcing and selection process would also multiple regions.
free up time and resources for the current Associates to focus on the growth and needs of
current investees, and would streamline their responsibilities.
• Effectiveness: Entrepreneurs have identified developing sector-specific knowledge (and Difficult to find individuals with the
2
associated networking) as a key need; alignment of associates with certain sectors would combination of skills needed for more
Assign allow them to offer more targeted advice to their investees. Additionally, there are substantial general coaching as well as a sector
Assign
associates to
associates to benefits to the continuity of personal coaching relationships, which can get lost if an expertise.
sectors, rather
sectors, rather investee graduates to the next level. It may be difficult to find staff capable
than levels
than levels • Efficiency: By developing sector expertise, Associates should be able to achieve faster of changing style to cater to level 1,
turnaround of investee requests – such as for subject matter information or searching for versus Level 2 & 3 needs for a given
specialist business support – leading to lower time investment for such requests. sector
• Relevance: Social entrepreneurs state business support and advisory services are key
3 needs. While UnLtd India already uses partners to deliver quality training at low/no cost, a
Increase use larger pool of partners could be assembled to increase the range of technical and hard
of partner Maintaining a large pool of high
business skills training, in areas that may be highly relevant to specific thematic areas (e.g.
organizations quality and dedicated partners will
working with Teach for India on pedagogy) , or in particular skills (e.g. procurement) that
to deliver require more resources.
may be highly relevant for a subset of investees
specialist
training • Effectiveness: A larger pool of partners could be assembled and better managed to
increase the quality of technical and hard business skills training.
10
12. Recommendations for the incubator (2/3)
How it may improve the incubator Challenges and Risks
• Effectiveness: UnLtd India investees that have been assigned a mentor or advisor state
4 May be difficult to recruit and manage
that this is extremely effective in supporting skills development and broadening their
several external advisors
Link every networks. Management aim to create an environment where such relationships can occur
investee to an based on mutual interest, independently of direct intervention. As a result, most of these
Very early stage investees may not
external relationships had been formed in an ad-hoc and opportunistic manner. Given their reported
be able to fully benefit from
advisor/mentor value from investees and other incubators, a greater focus on intervening to foster such
mentoring, leading to challenges in
relationships may improve outcomes for investees.
maintaining mentor / advisor
• Efficiency: Greater use of advisors and mentors can reduce associate time spent, such as
relationships
in identifying experts.
5 • Relevance: Social entrepreneurs report that learning from the experiences of their peers is
beneficial, as investees often face similar challenges. While peer learning is already
Facilitate more considered a key area of strength for UnLtd India, there is a general demand for greater
Some investees might find it difficult
learning frequency for this, given its ability to provide highly relevant advice
to carve out time to advise other
between • Effectiveness: By increasing the frequency of peer learning events and mandating more
entrepreneurs, given their own
investees support from “senior” investees to more “junior” ones, investees are able to increase
demanding responsibilities.
benefits that they typically derive from each event, in the form of sharing best practices and
lessons learned. Some UnLtd India investees have demonstrated a keen interest in “giving
back” to UnLtd India in the form of advice and mentorship for newer entrepreneurs.
6 • Relevance: Investees have widely varying requirements for financial assistance, with those
that need to grow and develop typically needing the most funding. Building in flexibility over
Offer more
flexible the amount of financial assistance provided to investees would therefore better match the
Can create significant management
amounts of needs of growing enterprises.
complexity and confusion for
funding to • Effectiveness: Since the financial support provided by the incubator is typically lower than
investees and donors, making it
investees investee needs, many investees seek additional financial support. While collaborating with
harder to manage their expectations.
other providers of support to obtain financing can spread the risk of exposure to a given
investee for the incubator, it may also increase risk by creating an additional burden to raise
further funding rather than developing their venture.
11
13. Recommendations for the incubator (3/3)
How it may improve the incubator Challenges and Risks
7
Codify
Codify internal
internal • Efficiency: Management and Incubator staff have accumulated a wealth of knowledge Can be difficult to get the team to buy
knowledge on
knowledge on about investees’ sectors, business support providers and networks. Associates frequently in and imbed new working practices,
partners,
partners, have to recreate or repeat research and assistance provided, due to a lack of organised as benefits from populating
support
support central knowledge management. Such tools will reduce time spent repeating work, and will knowledge management tools are not
providers and
providers and become critical as the organization grows and potentially expands to various locations. immediate, while the burden is
key subject
key subject
immediate
matter
matter
8
Track Key
Track Key • Efficiency: While Associates offer a wide range of services to all the investees in UnLtd Measuring and tracking KPIs are
Performance
Performance India's portfolio, there is currently no formal system in place to measure and track their time time-consuming, and may distract
Indicators
Indicators
allocation and performance. Instituting systems to monitor this can support more efficient day- from focusing efforts on the investees
(KPIs) of
(KPIs) of
to-day management of the team.
Associates
Associates’
9
Maintain
Maintain
separate • Efficiency: The Incubator and the Hub are effectively run as independent organizations.
separate
financial Maintaining separate P&Ls for the two entities will increase the clarity around the financial No major risks or challenges
financial
accounts for
accounts for health of each of the respective arms of UnLtd India. identified
the Incubator
the Incubator
and the Hub
and the Hub
12
14. Recommendations for the Bombay Hub (1/2)
How it may improve the Bombay Hub Challenges and Risks
1
Increase Unclear what the likely yield (or
• Effectiveness: Most members and users heard about the Hub through cost per conversion rate) is for
member personal networks. Reliance on word of mouth marketing fails to exploit
signups by online marketing at this stage.
potential for growth and greater diversity in members available from using
developing a No evidence as yet that online
alternative channels. A standalone website (versus the current Facebook
standalone marketing would increase the
website and page) is a potentially low cost member acquisition tool.
diversity of members versus
online ads today.
2
Increase Forming and maintaining
awareness of additional partnerships will be
the Hub • Effectiveness: Other social incubators can be a channel for potential time-consuming. Not clear
through members; conferences focused on social enterprise are already used as a whether yield will justify
partnerships means for driving member sign-ups. Focusing on these two channels can investment in developing
with other
provide targeted access to a significant base of potential members. additional partnerships, or
incubators &
at
which partnerships to prioritise
conferences at this stage
3
• Relevance & Effectiveness: The Hub offers a diverse set of events, largely
Solicit regular chosen by the team without consultation on user or member preferences.
feedback from May require managing the
Incorporating feedback to better match user needs and preferences will expectations of groups of
members and
increase the relevance of the Hub to users.
listserv users / members with divergent
• Impact: Incorporating feedback to improve events and services can help
needs and interests.
increase the popularity of the Hub, thereby helping it to increase reach and
better foster a social entrepreneurship movement.
13
15. Recommendations for the Bombay Hub (2/2)
How it may improve the Bombay Hub Challenges and Risks
4
Directly • Impact: Connections made through the Hub significantly impact members’
Directly initiatives. Proactively encouraging interaction between members, such as
facilitate
facilitate Shifts attention of Hub hosts
collaboration an online collaboration marketplace for members, a “photo wall” to introduce from their core membership
collaboration
between members, monthly member lunches and ice breakers could increase the
between and event-related activities
members frequency / likelihood of making these connections by directly promoting a
members
more collaborative environment.
5 Requires thought around the
• Efficiency: The Hub generated a loss of c. Rs. 18,00,000; [USD$ 36,000] in future of the Hub and its role in
Consider FY10/11. Even if various levers (e.g. increasing membership, pricing and
Consider the growing UnLtd India
alternative
alternative more revenue-generating events) were improved simultaneously, it is
organization. Implementing
business unlikely that the Hub will be able to reach break-even profitability. UnLtd
business structural changes will be time-
models for the India could consider alternative business models for the Hub, including:
models for consuming and potentially
Hub aggressively pursuing financial sustainability by exploring more radical
the Hub difficult, depending on the
departures from the mission, such as increasing corporate memberships; to
complexity of the strategy
shifting to a donor-financed model.
chosen.
6
Maintain
Maintain
• Efficiency: The Incubator and the Hub are effectively run as independent
separate
separate
organizations. Maintaining separate P&Ls for the two entities will increase
financial
financial No major risks or challenges
accounts forfor the clarity around the financial health of each of the respective arms of UnLtd
accounts identified
the Incubator India.
the Incubator
and the Hub
and the Hub
14