SpendHack 2018 - Australia's first UnMarketplace for Impact!
Idea title: SpendHack 2018 - Australia's first UnMarketplace for Impact!
One Sentence description: An eco-system level event to accelerate the development of capacity and capability for 'Good Procurement' through buyer-supplier collaboration and data-driven insights.
Addressing topic: Social Procurement Challenge
Team members: Matt Perfect
Provide an overview of your solution and how it solves the problem along with a short description of your inspiration behind the idea:
The inspiration for this idea came from a social procurement marketplace where I witnessed a ‘Good Procurement’ opportunity emerge from a conversation between a procurement manager and a social enterprise. The procurement manager said upfront that he did not need the service the social enterprise was selling, but he asked if some of their workforce could be retrained to provide a service he did need. The social entrepreneur felt that they could and they negotiated.
We know that Australia’s $600Bn procurement spend represents the biggest opportunity for the growth of social enterprise (Social Traders). However, despite a massive rise in the number of social enterprises and increased appetite from government and corporate ‘Big Spenders’, the total share of ‘Good Procurement’ is only a fraction of a percent. A major reason is a mismatch between the service offerings of social enterprises (often promoted as niche products and services) and the stated requirements of Big Spenders (often requested via highly specified tenders). In other words, many social enterprises are selling stuff that Big Spenders don’t want. (Note, at times this mismatch is more a matter of perception than reality and a social enterprise may well be capable of servicing an unexpressed need of a Big Spender).
SpendHack will therefore help the sector to build the right capacity and capability by addressing a key problem for ‘Good Procurement’: “How do we get impact-oriented entrepreneurs (before they have fully developed their service offering) collaborating with Big Spenders (before they have fully specified their tender requirements)?”
SpendHack will be a unique, independent, ‘UnMarketplace’, bringing together impact-oriented entrepreneurs (prospective suppliers) AND Big Spenders (prospective buyers). Crucially, neither will be there to buy or sell, but rather to learn, share, co-create and validate scalable businesses that meet real procurement needs while addressing social and environmental problems.
Describe your solution in detail, providing a high-level business plan addressing how you would implement your solution:
SpendHack is designed to be a flexible and collaborative event-based solution that can be run once or repeated, e.g. on an annual basis. It will act as a catalyst within the ‘Good Procurement’ eco-system in the following ways:
- Raise the profile, awareness and understanding of ‘Good Procurement’ through media interest in an innovative, world-first event
- Engage a larger share of procurement professionals, who are seeking more meaningful personal and professional development opportunities from their career
- Engage a broader audience of impact-oriented entrepreneurs (including experienced professionals) seeking to de-risk their ventures by testing and co-creating ideas with prospective customers
- Generate new, data-driven insights from interrogation of Big Spender data (with appropriate controls for security and confidentiality)
- Facilitate greater knowledge-sharing, understanding and trust between eco-system participants, including intermediaries
- Uncover opportunities to build viable, scalable businesses that meet real business needs while addressing social and environmental problems
- De-risk ‘Good Procurement’ for Big Spenders by allowing them to engage early and influence the development of suitable enterprises to meet their requirements
- Create a solid pipeline of ‘Good Procurement’ opportunities to be developed and brokered through existing intermediaries (e.g. Social Traders, The Difference Incubator, Social Ventures Australia etc.)
SpendHack will be developed and delivered within the 6-month support period offered by the Social Procurement Challenge, including:
- Stakeholder engagement to validate and refine the concept and incorporate market feedback
- Develop and execute a marketing campaign to generate awareness and build a sales pipeline
- Sales execution to secure partners using a standard, tiered event-partner model (Platinum, Gold, Silver etc.) offering different price points for different levels of benefits (including brand exposure, procurement team development and the opportunity to influence/ sponsor early-stage enterprises)
- Program design using best-practice principles for collaborative (non-coding) hackathons
- Pre-event education to prepare participants for success, including setting rules and expectations, fostering a collaborative dialogue that explores problems rather than jumps to solutions
- Data analysis including synthesis of spend data from Big Spender partners to provide fact-based insights and stimulus for entrepreneurs, subject matter experts (e.g. intermediaries) and procurement participants on event day
- Event day planning, logistics and execution
- Event day facilitation including multiple collaboration sessions, guest speakers/facilitators to inspire and guide participants
- Event day showcase to enable Big Spenders to award provisional contracts (subject to satisfactory completion of pre-requisites, including successful completion of an appropriate development program provided by an intermediary or the Big Spender)
- Post event follow-up to shepherd successful enterprises into an appropriate development program under sponsorship of one or more Big Spenders (who may elect to collaborate to develop an enterprise for multiple contracts)
The key differentiator for SpendHack when compared to existing marketplaces is the focus on procurement collaboration with early-stage enterprises. Traditionally ‘Good Procurement’ has operated as a two-sided marketplace, where impact-oriented entrepreneurs develop businesses and procurement professionals develop tender requirements in isolation. By the time the participants engage, there is little opportunity for either to influence the other which results in the mismatch previously described.
SpendHack is also designed to be an eco-system level intervention, meaning it does not compete with existing programs offered by intermediaries, but supports them by generating qualified, sponsored enterprises to participate in their programs.
The outcome from SpendHack will be ‘sponsored’ enterprises that can move into existing development programs offered by intermediaries including Social Traders’ Crunch, TDi’s Two Feet, Social Ventures Australia Contract Readiness Centre and other programs such as Big Spenders’ own in-house development/accelerator programs.
Sponsorship will include the award of a provisional contract (subject to terms) and support from the awarding Big Spender(s) to participate in a development program. Support will likely include financial support to cover the costs of participation as well as mentoring and guidance through the development of the enterprise.
Outline the budget required to achieve the ambition of your idea:
SpendHack will be self-funding through partner investments/ticket sales and the majority of costs are variable (i.e. the more partners/ participants sign up, the greater the revenue and the greater the costs).
The $25,000 prize money will cover the initial fixed costs to develop and market the event, namely:
- Program design and development (consultancy): $15,000
- Marketing (branding and artwork): $5,000
- Contingency (additional resources/ expertise): $5,000
The other major costs will be event costs e.g. venue hire and catering which may be provided ‘in-kind’ by partners or funded through ticket sales.
Partnerships are critical for a stronger idea and delivering a solution. Who are the key stakeholders within your idea? Is your solution the result of a collaborative approach? If not, are you looking to bring other partners along:
Key stakeholders within this idea are Big Spenders (government and corporate), impact-oriented entrepreneurs and intermediaries. Bringing these stakeholders together in an independent, collaborative forum will promote ‘co-opetition’ that will lead to greater value creation than can be achieved by any of the stakeholders working alone or in siloed partnerships.
As an experienced facilitator and ‘connector’ in the procurement space I will bring networks and expertise in community building, program design and sales. I will be seeking to collaborate with others who can bring their expertise and networks in areas such as impact-entrepreneurship, marketing and event management, crowd-sourced innovation and hackathons.
To strengthen the likelihood of success, a broad foundation of evidence is critical. What’s the evidence base that points towards your solution being a success? Is your solution addressing an unmet gap in the market:
Thomson Reuter’s research ‘The best place to be a social entrepreneur 2016’ ranked Australia 2nd (its best result overall) in ease of selling to the public, but only 17th in ease of selling to business and 32nd in ease of selling to government! Is it any wonder that most social entrepreneurs are developing niche products and services targeted towards consumers???
SpendHack addresses a very real unmet gap in the market: the creation of more business-to-business social enterprises. Before investing time, money and energy in building capacity, we had better make sure it is the right kind of capacity!
Who are the key beneficiaries of your solution:
SpendHack will benefit all stakeholders in ‘Good Procurement’ in the following ways:
- Intermediaries will have a strong pool of qualified impact-oriented entrepreneurs with the financial resources and clarity to fully and successfully participate in their programs
- Enterprises will have the support and engagement of at least one sponsoring Big Spender customer committed to their success
- Big Spenders will be able to engage early to support and influence the enterprise to ensure they are building the right capacity to meet their procurement requirements
- Impact Investors will be able to increase their deal flow in scalable, validated business models that can demonstrate traction with Big Spender customers
Do you have funding partners interested in your idea:
Somewhat. I have discussed this high level concept with Big Spenders, intermediaries and impact-oriented entrepreneurs who have enthusiastically encouraged me to submit the idea to the Social Procurement Challenge. As yet no one has expressed an interest in funding it (although in fairness, I haven’t asked!)
Describe your most successful experience executing a solution to a problem:
In a previous role as Head of Roundtables and Forums for The Faculty, I led a team responsible for connecting Chief Procurement Officers and Future Leaders in Procurement to knowledge networks and events. The Faculty Roundtable was and still is, one of the most highly regarded leadership development programs for Australian procurement leaders.
One particular problem we faced during my leadership, was engaging a new generation of emerging leaders, while maintaining our existing strong relationships with senior leaders of the profession. The emerging leaders, many of whom belonged to the Millennial generation (Gen Y), had very different needs, aspirations and learning styles to the incumbent leaders who were mainly from the Baby-Boomer and Gen X generations. As such, they struggled to engage with our programs which presented a risk to the long term viability of the program and the development of the profession.
Our solution was to develop a new forum, “Future Leaders in Procurement” (FLiP), which was complementary to our existing Roundtables and CPO Forum, but allowed us freedom to experiment with newer, more innovative formats. We launched digital products such as webinars and online discussion forums, and adapted the format of our live events. We engaged more relevant speakers and delivered topics in a way that both informed and inspired Future Leaders to see the real potential of their careers in procurement, including the opportunity to drive social change.
I learned from this experience that, given my age, I am fortunate to sit on the ‘bridge’ between the Gen-X and Millennial generations. From this unique vantage point I realised I could play an important role in the progress of the procurement profession towards a more sustainable future. A future that was both relevant to business and meaningful to society. Ultimately this led me to found my own business focussed on Impact Spending.
It is this experience and energy that I will draw on to ensure SpendHack successfully delivers on its ambition to accelerate the development of capacity and capability for ‘Good Procurement’ in Australia.
Optional visual/picture/infographic that demonstrates your idea:
Idea Opened: 11:07 AM, Friday 03 November 2017
Idea Closes: 06:00 PM, Friday 03 November 2017
Time to go: Closed