No19 - SEPTEMBER 2017

LABEX ENTREPRENDREpublications

UBERIZATION: WHAT ARE THE CHALLENGES TO ENTREPRENEURIAL SUPPORT?

LabEx Entreprendre will again participate in the upcoming Pro’créa Congress, this time addressing a hot topic: uberization. This notion, although somewhat unclear, seems to be ushering in a new era. Uberizing is an innovative use of digital technology that is changing the balance of power and prompting the rethinking of business models and practices. Uberization is a large-scale phenomenon that is affecting sectors from transportation and accommodations to banking and legal services. But to what extent is entrepreneurial support affected by uberization? How might we need to rethink this industry? What tools and practices will be needed to deal with the changes in the business startup-business buying market?

This new edition of Pro’créa intends to provide some answers to these questions by enabling entrepreneurship professionals to interact with experts and, it is hoped, coproduce new solutions or new tools adapted to this new context. The purpose of this special issue of LabEx Entreprendre Publications is twofold. First, it explores the phenomenon of uberization in the incubator industry and, second, it presents ideas for incubator adaptation. In other words, the goal will be to show how professionals can rethink business models and their support practices with regard to the challenges of uberization. We begin with an overview of the incubator industry to date and then make recommendations on the possible adaptations that take uberization into account.

1. LabEx Entreprendre received government funding through the Agence Nationale de la Recherche under the “Investissements d’Avenir” program; reference: ANR-10-LABX-11-01.

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Entreprendre et innover durablement

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LABEX EntreprendreUniversité de Montpellier

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Université de MontpellierUniversity of Montpellier

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ENTREPRENEURIAL SUPPORT AND UBERIZATION

For the last ten years, the incubtor industry has un-dergone major transformations, in large part due to economic, technological, sociological and political upheavals, and these changes have been echoed in the work of LabEx Entreprendre (2014) and Pro’créa.

1. Context of uberization in the incubator industry

Incubator professionals are facing major transformations, mainly reflected by cuts in funding, the increasing use of digital technologies, and a transformation of the profiles of business creators and buyers.

Funding cutsAlthough the NOTRe law has given greater power to the French regions in terms of economic policies, it has also reduced funding to local governments. This is likely to affect the resources allocated to incubators. In this context of territorial reform, are regional funding mechanisms for business startups and ownership transfers at risk? It is time for entrepreneurship service providers to rethink their business models and especially their value proposition.

Increasing digitalizationThe transformation brought about by the digital tech-nologies has influenced the incubator industry, ena-bling the design and dissemination of new tools. The French Entrepreneurship Agency has been at the forefront with a platform that is useful for business creators and the professionals who support entrepre-neurs, including those buying existing businesses. Most professionals today have developed tools gea-red toward e-support (online business plans, virtual support, MOOCs, etc.), and this change is easing the entry of new actors whose practices and business models are based on uberization.

A transformation in the profiles of business creators and buyersThe profiles of creators and buyers are changing, and they have new expectations for support services.

• In the area of business creation, entrepreneurial profiles are diversifying across the segments of society: stay-at-home moms, neighbors, seniors, students, migrants, the physically disabled, etc. These entrepreneurs also express shared aspirations (LabEx Entreprendre Publications, 2015). They prefer, for example, shorter support periods so that they can enter their markets more quickly, following the logic of lean startup. They also rely more heavily on their peers, particularly within the framework of social networks and mentoring, for getting advice and gaining access to important networks and new forms of financing, like crowdfunding.

• In the area of business buying, profiles are also changing (Rapport Dombre-Coste, 2015), with younger buyers, more women buyers and new types of buys (e.g., SCOPs). Compared with the traditional buyers, these newcomers bring new expectations and new behaviors, especially in their search for targets, and tend to rely more on digital tools.

In this context of change, how best to support entre-preneurs has been called into question. The current actors and the new entrants are developing new tools and new practices that suggest the uberization of support services.

2. The uberization of entrepreneurial support: new tools and practices

Uberization affects both businesses that are created and those that are bought; however, it is expressed with a different intensity in each situation.

Uberization of support for business creationUberization is characterized by new actors, original forms of support and new economic models.

• New actors have taken an interest in the industry. They come from the private sector and sometimes from such traditional professions as banking, consulting, law or chartered accounting. They tend to develop specific support tools. For example, some law firms have created tools for startups. Some of these newcomers are startups themselves, but they are also large groups (Renault, Orange, etc.). The world of education and research is also increasingly investing in entrepreneurial support. For example, the Ministry of Education has invested in 14 organizations for the acceleration and transfer of technologies (www.satt.fr) and the PEPITE initiative dedicated to student entrepreneurship. Many schools and universities have also set up their own support structures that look very much like incubators.

• New forms of support are appearing. Today, there are 188 business accelerators in the world (www.seed-db.com), with dozens of them in France. Coworking spaces are also developing very quickly, and France alone has 467 (www.coworking-carte.fr) and nearly 500 FabLabs or makerspaces (www.makery.info). These new spaces promote proximity and original forms of peer support. Paradoxically, the digital world has made it possible to create new forms of proximity by promoting the creation of communities, and one might reasonably speak of e-support here (Messeghem and Sammut, 2013). This type of support manifests through social networks and instruments such as massive open online courses (MOOC) (Verzat et al., 2016).

• In France, private and hybrid economic models now compete with the 1,458 public incubators (LabEx Entreprendre, 2014). These models are based, for example, on capital investment in the supported

LABEX ENTREPRENDRE publications

companies. Large companies also enter into contracts to partner with and support startups, whether or not these are from spin-off programs. Workspace rentals to entrepreneurs have also become part of the new value proposition.

Uberization of support for business transfersWith the arrival of new actors and new practices, support for buying existing businesses has also been affected by uberization. However, the effect is less strong than for business creation.

• The new actors in this type of support service also come from traditional sectors (lawyers, notaries, chartered accountants, etc.). The novelty is the emergence of technology startups that offer platforms for linking business sellers and buyers. Employers’ and professional unions are also involved in innovative support projects. The cooperative movement is notably very advanced in this area.

• The new forms of support for business buyers are increasingly moving toward e-support to take into account the new practices of the buyers and sellers. This type of support is often designed by private actors to facilitate meetings between the buyers and sellers in the manner of dating sites, using artificial intelligence to optimize the matching of compatible

parties. Other digital tools are likewise spreading, notably serious games. These games offer support in the form of scenarios to guide buyer and transferors as they move through the process.

The uberization of support for business creation and buying raises several points:

1. The increasing variety and number of actors may saturate the entrepreneurial support industry and cause a breakdown in the value chain, which would reduce the visibility of the actors;

2. The rising number of actors creates greater competition for public funds and reduces the prospects for collaboration;

3. The spread of new tools and new practices may be accompanied by a lack of adaptation on the part of the traditional support professionals, therefore raising the question of skills management;

4. These new uses tend to call into question the viability of the various public, hybrid and private economic models.

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REFERENCES • Bakkali C., Messeghem K. et Sammut S. (2010), « Les structures d’accompagnement à la création d’entreprise à l’heure de la gestion des compétences »,

Management & Avenir, 9 (39), p. 149-162.• Dombre-Coste F. (2015), Favoriser la transmission d’entreprises en France : Diagnostic et proposition, p. 96, Rapport remis le 7 juillet 2015 à la demande du

Premier Ministre.• Labex Entreprendre (2014), Le Livre Blanc sur Les Structures d’Accompagnement à la Création d’Entreprises en France, Panorama des Structures

d’Accompagnement en Termes de Management et de Performance, p. 162.• Labex Entreprendre Publications (2015), L’accompagnement face aux transformations de l’écosystème entrepreneurial, Novembre n° 12.• Labex Entreprendre Publications (2016), Exploration de l’écosystème français de l’accompagnement entrepreneurial, Avril n° 14.• Messeghem K. et Sammut S. (2013), « L’accompagnement entrepreneurial », Le Grand Livre de l’Entrepreneuriat, sous la direction de Catherine Léger-Jarniou, Dunod.• Verzat C., Jore M., Toutain O. et Silberzahn Ph. (2016), « Apprendre par soi-même l’entrepreneuriat via un MOOC », Revue Française de Gestion, 257 (4), p. 33-52.

RECOMMENDATIONS FOR ADAPTING TO UBERIZATION

After reviewing the determinants and consequences of uberization in the entrepreneurial support industry, we suggest some lines of thinking that may remedy the problems. Four recommendations related to the industry, the stakeholders and the practices are offered based on LabEx’s in-depth study of these issues (LabEx Entre-prendre, 2014, LabEx Entreprendre, 2016).

1. For a labeling system in entrepreneurial support

Uberization has meant the arrival of many new actors and a diversification in the support models. However, the effectiveness of these new actors and models has not always been demonstrated. This situation creates a form of information asymmetry that can harm the market for entrepreneurial support. Labeling the types of sup-port structures may be a way to guide aspiring entrepre-neurs. It would help to ensure the quality of support and better identify the respective competences of each type of structure. The labeling system could be built through the collaboration of networks, agencies like the French Entrepreneurship Agency, and stakeholders from the worlds of education and research.

2. For a global value chain of entrepreneurial support

Today’s entrepreneurs require ever more specialized and diversified expertise, especially in relation to the com-plexity of their projects. Not all support structures pos-sess all the skills required to meet their clients’ needs. One solution might be a value chain built by the profes-sionals, with support provided by generalists and spe-cialists according to the need. Such a value chain would enable business creators and buyers to follow a “support path” adapted to the specificities of their projects. The use of digital technologies would facilitate the implemen-tation of this action.

3. For certification of the support professionalsThe diversity of actors and practices also raises the question about the competence of the support personnel (Bakkali, Messeghem and Sammut, 2010). Entrepreneu-rial support is not a regulated profession and there is no certification system, even though specialized diplomas

are now offered, such as the Master’s Degree in Entre-preneurial Support from the University of Montpellier. Yet, reflection on competency benchmarking and, looking farther into the future, more effective ways to manage jobs and skills becomes even more important in an ube-rized world. Certification would enable organizations and professionals to manage their competences by adap-ting the knowledge, skills and attitudes of support staff members to the needs of the entrepreneurs. In addition, this would give other stakeholders, especially funders and entrepreneurs, the assurance of staff professionalism.

4. For new market-driven and innovative business models

Uberization has prompted a rethinking of the skills and practices needed to provide quality support services, and adapting to an uberized world will require considerable means. However, the cuts in public spending have meant that fewer resources are allocated to traditional incuba-tors, which now need to rethink their business models. In particular, they need to rework their value proposition by demonstrating their ability to generate new resources. In this context, it seems particularly important to raise pri-vate funds and/or bill for new services that entrepreneurs are willing to pay for. Beyond rethinking the business mo-del, incubators need to fit into a culture focused on the market and innovation if they intend to sustainably adapt to the phenomenon of uberization.

Conducted by : Dorian Boumedjaoud, Amandine Maus, Karim Messeghem, Sylvie Sammut and Christina Theodoraki, with Marie-Hélène Girbau-Grimoin and Yann Papastratis.

KEY POINTS TO REMEMBER

1. The uberization of entrepreneurial support can be explained by public funding cuts, advances in digital technologies, and a change in the profiles of busi-ness creators and buyers.

2. This uberized support landscape is characterized by new actors, new forms of support and new econo-mic models.

3. Four solutions for adapting to the uberization of en-trepreneurial support are emerging: the labeling of structures, a global value chain of support, certifica-tion for support professionals, and business models geared toward the market and innovation.

For information about our activities: www.labex-entreprendre.frContact: +33 (0)434 432 311

E-mail: labex-entreprendre@umontpellier.fr