There are infinite opportunities in technology. Earlier this year, we published an article on important lessons for tech entrepreneurs. You must go through it to learn some pertinent insights. In 2020 we published an article titled innovative tech business ideas for Africa. It is still relevant today, and in it, I hinted at what we are discussing today. Today we are delving into starting and running a tech hub. A tech hub is a community or collective that facilitates and promotes innovation for tech-based enterprises. Our specific focus is innovative ways to make money as a tech hub. In other words, here are business models that you can adopt for a tech hub:
Sponsorships
This one is quite straightforward. A tech hub can seek to get sponsorships from individuals to corporates. This has many opportunities because of what prospective sponsors seek to achieve. For instance, many companies or organizations are keen on giving back or impacting economic development. Due to the importance of technology, they would consider bankrolling worthy causes in that space. A tech hub would be something they would gladly sponsor.
Aside from financial support, it could also be material support. Building social capital is also involved, which translates into revenue at some point. So much we can talk about here, but the basic idea is that sponsorships are one of the ways. Often if sponsorships are tapped into well, a tech hub can offer all or most of its services free. Thus when you see free services offered by a tech hub, chances are sponsorships are at play.
Monetizing Networking Services
A tech hub by virtue of its DNA, is mostly concerned with networking. , it strives to create networking opportunities for startups. That is why you usually find that tech hubs have a network of various stakeholders and shareholders relevant to the startup culture. It is typical to find tech hubs organizing events or initiatives to bolster networking. You will also find that tech hubs usually provide co-working spaces. Such spaces are central to creating networking opportunities. For prospects to access these services, they would have to pay something. Packages may vary, of course. For example, fees may be once-off as per event or service or in the form of subscriptions.
Consultancy Services
This one entails a tech hub offering consultancy services to entrepreneurs and startups at various stages. Broadly this can involve providing business and management consultancy services. Countless possible services can be offered under this banner. Examples of services to offer our business development, digital marketing, administrative support, virtual assistance, research, data analytics, general advisory, coaching, mentorship, training, and so much more. You may know about incubators and accelerators – these are consultancy services a tech hub can provide. Lots of revenue prospects for a tech hub are there in offering consultancy services.
Facilitation Model
This one can take many forms, but it is basically about getting a cut from facilitating key processes entailed in startup development. One of the most common ones is to secure funding for a startup or to link up a startup to an investor. The tech hub would make money from what are termed success fees. Here is how it works: suppose a startup is looking for debt or equity capital. Let us suppose that it needs US$13.5 million. A facilitation fee can be, for instance, 5 percent.
If you (i.e. the tech hub) manage to help the startup secure that capital, you get 5 percent of US$13.5 million as your success fee. That would be US$675 000. That is just one way, of course. Money can also be realized by facilitating or overseeing a startup’s exits or general capital management. At times there may be funds set up for certain causes, and a tech hub can get paid for managing it. It can even facilitate partnership deals, sponsorship deals, etc. The possibilities are endless.
Start Own Startup(s)
This, again, is straightforward, and almost any tech hub can employ this business model. However, it takes a lot of work. This one involves a tech hub starting and building a startup or startup. This means over time, the profits realized will be from the operations of the startup(s) in question. A tech hub operating for some time can transition into this.
The beautiful thing about these five business models for tech hubs is that you are not confined to just one. One tech hub can adopt all five business models. It would be strategic to find a way to use all 5. It does not matter where your tech hub is; these are the five innovative ways to make money.
