In this post, Lizan Kuster (from Habitat for Humanity’s Terwilliger Center for Innovation in Shelter) provides important insights into the role and importance of accelerators. Maybe more significantly, though, is the influence well-run accelerators have on relational networks and the competitive landscape. While the author starts with the more immediate effects of a business rolling out innovative products, systems thinkers are starting to realize that the more important disruption is likely to come from the building of more trusted and robust social networks around entrepreneurship and innovation. In particular, the efforts the author discusses related to mentorship and peer-to-peer networks, when they take hold, provide the foundation on which many market systems start to shift toward being more value-based. More specifically, the discussion around improving markets would benefit from an understanding of competitive landscapes and how entrepreneurial networks can shape the way society favors or not certain market behaviors. In this context, while critically important for entrepreneurs to deliver value to owners, staff, suppliers and most importantly customers, they also, along with other market actors, have to intentionally push changes in the market system to push/force other firms to compete on valued delivered. For on going benefits to accrue to low income communities over time, there will need to many cycles of entrepreneurs harnessing new technologies to deliver real value.
How accelerators’ growing focus on mentorship can benefit the whole housing sector
Many entrepreneurs get their jumpstart through an accelerator program, compressing strategic business lessons into a few months. Accelerators have become an essential avenue for startups to connect with investors and funds that allow them to scale their businesses.
For impact-focused accelerators like Habitat for Humanity’s ShelterTech, building a supportive entrepreneurial ecosystem is particularly critical to the program’s goal of fostering successful, disruptive housing innovations. In designing the ShelterTech program, the Terwilliger Center knew it was critical not only to connect startups with peers and funders, but also with experts and mentors from a wide range of sectors and business expertise. The benefits of mentorship for start-ups are well established – one survey found that 70 percent of small businesses that receive mentorship survive more than five years, double the survival rate of those who do not.
But bringing mentorship into social-impact accelerator programs does not just benefit the startups. Corporations, foundations, and other ecosystem partners have much to gain, both directly and from the stronger and innovative markets that these partnerships help create.
Gaining energy from an entrepreneurial approach to problem-solving
Mentorship enables companies to have personal and unique insights into new markets, as well as access to emerging disruptive technologies that can lead to new businesses or open new avenues for innovation. The Hilti Foundation and Dow are two of the partners helping mentor the current ShelterTech accelerator cohorts in Southeast Asia and the Andean region of South America. As Johann Baar, member of the executive board at The Hilti Foundation, explained, mentors from the Hilti Group are “excited to learn from the startups because the way they drive innovation is probably a little bit different of how an established enterprise, like Hilti, drives its operations and its business.” He also added that this is a learning journey for the mentors, giving them new opportunities to apply business solutions from their daily work.
This new energy and learning opportunities are also what motivated Nataly Acosta, a Marketing Manager at Dow based in Brazil, to volunteer as a mentor for ShelterTech’s Andean Region. Acosta is mentoring Terroformaciones, an Ecuadorian startup founded in 2020 that produces eco-friendly bricks made of stabilized soil and cement, which are more cost-effective and earthquake resilient than traditional ceramic bricks. Being a ShelterTech mentor gives Acosta a different lens through which to observe how the market is changing, and Terroformaciones’ experience shows both the challenges and opportunities of a different market segment. As she explains, “it is valuable to understand what startups’ offer the market because it might also influence our business. I also look at how they are building networks and addressing new challenges for the sector.”
Peer-to-peer learning with other firms in the ecosystem
Just like the startups, ShelterTech mentors also benefit from peer learning and discussions as members of the accelerator’s entrepreneurial ecosystem through community events, resource sharing and networking. Furthermore, startups are paired with multiple mentors, which enables more robust conversation and insights for everyone involved. Acosta, for example, is one of three mentors supporting Terroformaciones, with other mentors representing different industries and areas of expertise. "The benefits are mutual. It has been valuable to connect with other professionals in the group,” Acosta says. “It is nice to learn what other people within the value chain think.”
With COVID-19 normalizing digital community and work-from-anywhere tools, the potential for connection and peer-to-peer leaning is endless. Mentors for the current ShelterTech cohort span four continents, bringing global insights to the startups and each other. Peer-to-peer learning can extend beyond a time-bound mentorship program, to productive business relationships. A strong entrepreneurial network and digital community engagement spaces can help ensure continued meaningful connection.
Building better functioning markets
Each of the ShelterTech startups focuses different aspects of housing innovation, all in service of a lofty but critical goal: creating better housing opportunities for the 1.6 billion people globally who live in inadequate shelter. These families spend more than US$700 billion per year on housing yet are severely underserved by global housing markets.
By supporting social-impact accelerators, corporations and foundations can help expand and strengthen the markets providing critical products and services to these communities. According to Baar, for the mentors, “it’s not just about business, it’s about the social impact that they want to create through supporting these startups.” One of the most exciting aspects of supporting the ShelterTech accelerators is the opportunity to “think about how, besides setting up a proper business, can I make sure it also creates the best impact.”
The sentiment is shared by Acosta: “by supporting the startups you are not just supporting a business, but a venture that is solving a global problem. So, you are having more impact that way.” Over 100 startups have already joined the ShelterTech accelerator program, going on to find international acclaim and pilot trailblazing technologies in their local markets. Through its current cohorts, ShelterTech has engaged almost 50 mentors to support 20 startups across ten countries and has already secured around 800 hours of mentorship, providing the jumpstart that these ventures need to answer today’s most pressing shelter challenges. Through engagements like these, organizations at all stages can contribute to fostering more inclusive housing markets that better meet the needs of low-income households.
The MSDHub Blog Series is authored by respected implementers and donors of market systems projects globally.