Digital innovations—such as mobile money, digital health, virtual learning, and smart agriculture—have been transformative in developed and emerging economies alike. And they will be an essential catalyst for achieving the United Nations’ ambitious Sustainable Development Goals (SDGs) by 2030.
Indeed, the Global e-Sustainability Initiative found that digital access and digital solutions will be vital ingredients for success across the 17 SDGs, from conquering poverty to feeding the planet, to extending quality education to the world’s children.
The global development community directs significant development and impact funding toward developing new digital innovations. Yet, traditional development funding does not typically support scaling proven models. This has led to hundreds of failed digital solutions that do not durably meet their impact goals because they lack the funding or revenue generation to sustain or grow over the long term.
7 Keys to Launching a Sustainable Business Model for Digital Innovation
If you are a digital innovator, your sustainable business model is key—you need a smart, strategic plan for launch, impact, and long-term financial sustainability. Resonance has worked with partners on a range of digital innovations—including the health supply chain solution OpenLMIS, the land governance tool MAST, blockchain innovations, and catch documentation and traceability technologies—at various stages in the solution lifecycle.
Based on our work growing and advising impact-oriented digital solutions, we see 7 keys for moving from sustainable business model design and innovation to successful launch and long-term sustainability.
1. Practice Inclusive Design
A digital innovation—like any solution to a complex problem—needs to be in synch with the challenge it was created to solve, its target users, and the local environment in which it’ll operate. These variables can differ starkly from place to place, and a slickly designed tech solution that fails on these fronts will not thrive.
For this reason, inclusive and human-centered design must be built into digital innovation. This means building in feedback loops and co-creation with target users, designing with their needs explicitly in mind, and taking the time to map and understand the local landscape. By doing these things, solution designers are more likely to create innovations that are realistic, sustainable, and genuinely useful to the people who count.
2. Understand the Value of Your Product
At the heart of designing an appropriate sustainable business model for a new digital innovation is understanding the product’s unique value proposition—or the value you’re hoping to deliver to the customer who buys or engages with your solution. Said another way, what is the ‘unfair advantage’ that your product has—when compared to your competition—that will make a customer want to engage with and continue to use your solution? To hone your exact and specific value proposition, you should engage in ideation and testing with different target customer sets, to map:
- What specific need does your product fill for different customer types?
- What is the “user journey” that target customer types will need to take to successfully engage with your product?
- Does the potential value outweigh the cost or effort for the customer—and is it sufficiently more attractive than the other available alternatives?
Your value proposition will have significant implications for how you define your product, which customer segments you target, the channels you will use to reach the customer, and your revenue model.
3. Know Your Early Adopters
For a digital innovation to be successful, you need customers and users to be willing to invest in and try out your product for the first time. The technology adoption curve is a good model as you consider how to convince these initial customers, or early adopters, to recognize the product’s potential and engage. A successful launch does more than just reach your target customer base; instead, it transforms early adopters into believers, with a stake in the long-term success of the solution.
How to do this? Start by understanding who within your target customer base might be willing to take a risk to switch to or try out a new solution, as well as the incentives that may be needed to get them there. You will determine successful incentives based on the needs and desires of the target customer, but these incentives might include pricing discounts, dedicated early-adopter support, and insight into the product development process.
4. Create a Platform That Will Grow with Your Customers
Given the interconnectedness of today’s technology landscape, any digital innovation will need to plan for interoperability—or your solution’s ability to seamlessly exchange data or coordinate with other software applications or platforms—to ensure both customer uptake and longer-term relevance. Prior to launch, you should map your target customers’ relevant existing systems, processes, and technologies.
What systems will your digital solution most likely need to interface with? A thoughtfully designed application programming interface (API)—or the set of definitions and protocols that let your tool communicate with other products—grounded in an understanding of the desired user experience can promote user uptake and drive growth within the solution’s ecosystem.
5. Partner Across the Local Ecosystem
It’s important, too, to understand how your digital innovation integrates with the wider local ecosystem. Start by mapping the other solutions, organizations, or systems that already exist to address the challenge you’re trying to solve. Through this exercise, you’ll likely discover a wide range of relevant local—and non-local—players who may be important to engage as partners, allies, or critical stakeholders.
Innovations that are isolated and out of touch are likely to fail. By taking the time to craft a solution that is well-integrated with the local system—with the backing of informed local partners and influential gatekeepers—you have a greater chance at long-term success.
6. Tap into Innovation Funds
Digital innovators need seed funding for upfront costs and product development while they test and hone their solution. The global development community invests in impact-driven digital solutions, but this funding is most often tied to 5-year project cycles—a timeline that is often mismatched with the needs of the product lifecycle.
One promising alternative: Open innovation competitions, such as USAID’s Development Innovation Ventures (DIV) or the Bill & Melinda Gates Foundation’s Global Grand Challenges, provide funding and guidance for innovators to test and implement creative solutions to global development challenges, setting selected digital solutions on a path to scale.
7. Speak the Language of Your Audience(s)
A successful product launch means speaking to and convincing a variety of different key stakeholders, including your customers, users, channel partners, corporate partners, donors, and investors. Each of these groups will have a different motivation or decision-making process driving their involvement with your product.
For example, a donor might need to be convinced of your product’s expected social impact while a corporate partner may need proof of potential business impact and returns. Especially for an impact-driven solution, an entrepreneur’s ability to strategically adapt and tailor messaging is a critical asset for partnership, growth, and long-term sustainability.
Launching a Sustainable Business Model for Your Digital Innovation
New digital innovations are driving social impact and opportunity across almost every industry and sector, from global health to supply chain sustainability to education to agriculture. As mobile phone access and internet connectivity continue to grow worldwide, digital innovation is a source of significant market potential in emerging markets.
Seizing this potential—for impact and for growth—demands not just a bright idea but a sound, sustainable business model. To be “sustainable,” we’d argue that innovative new solutions must not only be financially viable—they must also reflect inclusive design, take a collaborative approach, and be intelligently integrated with local systems.
By ensuring solutions are built to last, global changemakers can better wield digital innovation to solve big problems and promote sustainable impact.
This blog was originally published in March 2021 and has been updated for accuracy and current best practices.