Next, we're going to go through a few different revenue stream options, some of which involve a third party payer and some of which use your same end-beneficiary with some modifications. These include data, consulting, distribution channels, due diligence, subscriptions, education and training, revenue sharing, insurance, and leasing programs. First off, are you utilizing your data? Companies large and small throughout the globe are monetizing and selling data. Sometimes this has privacy issues and unintentional effects which you should absolutely consider. But often the collection of data can be an excellent way for an entity to improve the quality of their offering as well as create a revenue stream. For instance enterprises that allow customers to pay with their cellphones collect data on the frequency of the payments, the timing, the regularity, or other data points. On a micro scale, these data can create a credit history for an individual that may not have a bank account. On a macro scale, these points can paint pictures about how the local economy works. Both the credit history and the insight into the local economy might be of interest to funders, both could be beneficial to the end users of the enterprises. Next up, consulting. Similarly to creating data, your organization might have developed a speciality that other organizations would be willing to pay to have you help them develop. mothers2mothers, a nonprofit that works with mothers with HIV AIDS, has grown to work across the African continent and has become very successful at building systems to help it operate efficiently and cost effectively including impact measurement, and now earns revenue from development organizations paying it to help other local nonprofits build similar systems. One thing to consider around consulting is that the most effective way to use it as a revenue stream is to have it work towards your impact thesis i.e. work towards the outcomes you're trying to achieve. In this way, it can lead to scale without an organization growing itself. Otherwise, if it is unrelated to the core of the organization, it might result in mission drift. Another related option is around due diligence. Are you working with local organizations or entrepreneurs that funders might be interested in funding or that corporates would be interested in putting into their supply chains? Funders generally spend large amounts of money sourcing and diligence in their deals and investments, and corporates can spend a great deal finding SMEs to work with. Both spend considerable amounts helping these SMEs and investments become investment ready or supply chain ready. If your organization is already working with potential opportunities, you should consider creating a revenue stream around your diligence, investment readiness or business development. Edge growth, an SME funder here in South Africa, uses business development funding from corporates to work with dozens of SMEs and help lower its own costs around finding investment opportunities. Education and training for individuals can also be an excellent revenue stream. If upscaling individuals is part of your program or an output you are working towards, it can be beneficial to think about other segments of the population you can work with or ways of capturing value from those further up the value chain. For instance, if you are working with unemployed youth, you could have agreements with the employers to pay a success fee of some kind when they hire them or when they've been working there for a certain amount of time. You could also look at how you can provide training to new employees that might be at risk within organizations. This type of training could be paid for by the employer and work towards your goal of keeping youth employed as well as creating a revenue stream for your organization. Almost all corporate, governments and nonprofits put aside funding for training from the lowest level all the way up to the top tier of the organization. So, it's worth thinking through ways you can reach your mission and create a revenue stream through education and training. Now selling subscriptions might sound like just another way of saying that you are selling a product, but the way you sell something can be as important as what you sell. In November 1996, Vodacom in South-Africa became the first network to introduce prepaid mobile in the world. At the time, it had around 500,000 subscribers. Today, it has over 65 million. Now you could argue that the growth of cell phone market was responsible, but in other markets, those with bad credit scores struggled to get cellphones and never mind those without bank accounts. By creating an option for customers to prepay for their mobile service, Vodacom opened up a whole new market in Africa. How could you think about creating a payment option for your good or service or project? They will be flexible and accessible and even responsive to the market you are trying to serve. Off Grid Electric has done this through solar as a service, allowing people to pay for solar energy as they use it instead of upfront. The next option to think about is insurance, Organizations across the world use insurance as a way to protect themselves from fluctuations in payments, unexpected events, and catastrophes. Now, what if you could use insurance as a revenue stream for your project? Lumkani is doing just that with their fire detectors for shocks in informal settlements. Individuals or their employers pay for insurance premiums. If their shack burns down, the insurance company pays out a policy. The insurance company is able to insure the shacks because Lumkani has proven that their fire detectors lower the risk of the shacks burning down. Now instead of risk sharing, have you considered revenue sharing? Azuri Technologies, a pay-as-you-go solar company, has partnered with TV content providers Zuku in Kenya to create a pay-as-you-go satellite TV package that targets households without electricity in the Kenyan market. In this partnership, Azuri has connected Zuku with the customer they would not typically be able to reach, and both entities share the revenue from distributing this TV content. Finally, have you considered leasing? If you could access the capital to buy a building, a piece of equipment etc., could you lease part of it that you weren't using to help others? Will this help smaller organizations access opportunities they wouldn't otherwise be able to? Ikamvayouth received a loan from one of its funders to buy a building to houses offices in. The building they had bought was purposely too large for their staff. So, now they rent out the remainder of the space to like-minded organizations. This creates a revenue stream for the organization as well as building their sustainability. They no longer have to worry about their rent increasing every year, and in some point in the future, when they pay back the loan, they will own the building outright. In the US, an online platform MachineryLink Sharing enables farmers to rent out their equipment such as tractors to other farmers. This way, owners generate revenue from their equipment when they're not using it and other farmers can avoid buying expensive equipment that they don't use very often. The goal of introducing all of these different options is for you to think through and evaluate which ones apply to your estuary and potentially to even create new categories. The next video will take you through different types of funding we should think about, matching with these revenue streams and assets.
