Originally published on the Stanford Social Innovation Review
Although the World Resources Institute reports that low-income segments represent a US$ 5 trillion global market, entrepreneurs catering to low-income markets find that developing scalable business models is often complex and risky. There is often little or no existing infrastructure, and since India is a vast country, the culture changes every 100 kilometers. As a result, innovative business models that take into account challenges related to distribution and educating communities, for example, are important.
Early-stage enterprises that have high-potential ideas often lack the support required to develop and refine such innovative business models. These entrepreneurs face seemingly insurmountable resource constraints such as information asymmetry, sporadic support of varied quality, and limited budgets.
The Indian startup ecosystem, where Ennovent, works to accelerate innovations for low-income markets, is still in its nascent stages. As a result, investors seeking to fund early-stage enterprises have little appetite for risk. Where investment is probable, the provision of capital is often contingent on startups refining their business model or even their overall approach. This renders non-financial resources—such as mentorship, expert guidance, and access to industry events—essential for entrepreneurs.
Accessible and affordable non-financial resources, however, are scarce, especially in India’s small towns and cities, where many entrepreneurs with innovations for low-income markets are often based. As a result, many high-quality entrepreneurs are unable to engage with thought leaders and mentors, and cannot access the support required to effectively tailor their business models for low-income markets
Also, learn more about how Ennovent Startup Services is working with early-stage enterprises and mentors to accelerate innovations for low-income markets.