When Silicon Valley developed its model of entrepreneurship support in the 1990s and 2000s, it was designed for a specific kind of venture: a technology company with the potential to grow exponentially, attract risk capital and disrupt an existing market. The accelerator, the pitch competition, the investor readiness programme and the cohort-based incubator were all built around this model. They assume that entrepreneurs are working toward rapid scaling, that their primary funding challenge is convincing investors rather than accessing working capital, and that the most valuable support they can receive is strategic and externally oriented rather than operational and embedded.
Over the past two decades, this model has been imported into entrepreneurship support in low-income countries across Africa and the Middle East, largely unchanged. Development partners and entrepreneurship support organisations (ESOs) have adopted the language, the metrics and the programme structures of Silicon Valley acceleration and applied them to populations of entrepreneurs whose situations are fundamentally different. The result is a growing misalignment between the kind of support that programmes offer and the kind of support that most entrepreneurs actually need.
The source of this misalignment is a category confusion that is rarely examined directly. The Silicon Valley model was built for startups. But the majority of entrepreneurs receiving support from development partners in low-income countries are not startups. They are innovative SMEs: small and medium-sized enterprises that develop or adopt new products, services, or business models to address local and regional challenges, that grow incrementally rather than exponentially, and that require a fundamentally different kind of support to do so effectively. Treating these entrepreneurs as if they were startups, which is what much current programme design implicitly does, leads to training that does not fit their needs, metrics that do not capture their progress and resources that do not address their actual constraints.
This paper makes the case that the distinction between startups and innovative SMEs matters more than the development sector currently recognises. It explains what the distinction is and why it is so frequently overlooked, it describes what each type of entrepreneur actually needs and it presents evidence from entrepreneurship support programmes in Burundi, Nigeria and the Palestinian Territories showing that programmes aligned with the dominant venture type in their context consistently outperform those that are not. The practical implication is direct: development partners and ESOs that want their programmes to be effective need to understand which kind of entrepreneur they are working with before they decide what kind of support to offer.
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