The Argidius Foundation released a report this month exploring how peer-to-peer business networks can help entrepreneurs. The report, developed along with Dalberg, focuses on entrepreneurs at small and growing businesses (SGBs) in emerging markets, i.e., those with commercially-viable business models with five to 250 employees led by entrepreneurs with the ambition to grow their companies.
The report examines two organizations that use network-based approaches for supporting SGBs. Both CEED Moldova and Enablis Senegal serve member entrepreneurs and have achieved strong results. Member revenue growth was higher than OECD benchmarks, the cost-of-delivery per job created by members was much lower than other types of interventions, and the organizations spent significantly less per member than other programs that serve SGBs.
Though the report’s focus is on emerging markets, it has broad implications for programs and decision makers beyond Moldova and Senegal. The approaches used by the two organizations that are profiled point to a number of smart practices that other entrepreneurship support programs can utilize, including:
- Careful Selection: CEED and Enablis select entrepreneurs, not companies, based on their founders’ values. These include ambition, openness to sharing and learning, and passion.
- Qualified Staff and Needs-Based Programming: The staff of both organizations are deeply connected to an existing local entrepreneurial community and are able to leverage those resources to help members. They offer ongoing (rather than time-bound) programs in a tailored manner and informed by member feedback and third-party evaluation. Importantly, programs looked for staff who have entrepreneurial experience themselves; a practice that parallels the recommendations in Endeavor Insight’s recent report on fostering productive entrepreneurship communities.
- Trust Building: Trust is needed at every stage of entrepreneurial growth from building a partnership between two founders to hiring qualified talent (especially as the company grows beyond hiring friends and relatives). Evidence is mounting to show that support organizations that can foster higher levels of trust within their business networks have better outcomes for entrepreneurs.
The report also provides a useful segmentation for entrepreneurial businesses, differentiating between high-growth companies and more niche or livelihood sustaining business models. The distinction between these different types of companies, along with their potential for impact and the services they need, is one that needs to be better appreciated by more organizations working to support entrepreneurs.
The full report can be accessed here.
Contributed by Leah D. Barto