One-line solution summary:
A digital platform that gives MSMEs the ability to participate in private and public procurement processes, and win.
Pitch your solution.
Public & private-sector procurement together account for a very sizeable percentage of the global economic output, with Governments alone spending $9.5 trillion each year procuring goods and services ($820 billion in developing countries). Despite MSMEs accounting for over 98% of businesses, they are not winning bids; with only 1% of procurement worldwide won by women.
Our solution seeks to increase the share of both public and private sector procurement opportunities won by MSMEs by mitigating the information, finance, regulatory and capacity barriers that have perennially hampered their ability to win.
By enabling MSMEs to win more bids, Scale will facilitate the economic inclusion of these previously disadvantaged groups. Research shows that MSMEs winning one bid per quarter results in firms experiencing growth for at least 2 years with 93% of growth in new hires coming from individuals who were either unemployed, in the informal sector, or outside the labour force.
Film your elevator pitch.
What specific problem are you solving?
Business around the world is conducted through procurement, the act of formally obtaining goods or services. Formal procurement techniques and methods involve complex rules, paperwork and documentation.
Efforts by MSMEs to participate in formal procurement have been hampered by barriers including limited information about upcoming tenders; time constraints in preparing their bids; not getting feedback after evaluation to know what went wrong in failed bids; finding tender procedures too complex, and lacking tendering skills in general. These have resulted in poor quality bid submissions leading to very few MSMEs winning bids.
Studies and Reports by World Bank, Chatham House, International Trade Centre (ITC) and Donor Committee for Enterprise Development (DCED) show that Public and private-sector procurement together account for a very sizeable percentage of global economic output, with Governments alone spending $9.5 trillion each year procuring goods and services ($820 billion in developing countries). Despite women-owned businesses making up more than 40% of the world’s MSMEs, only 1% of public procurement tenders are won by women with youth and PWD owned businesses faring much worse. In Kenya, MSMEs win less than 5% of tenders set aside for them owing to this cumbersome and difficult to navigate bidding processes.
What is your solution?
Scale is a bid management platform that provides MSMEs with an end-to-end digital bid preparation process, enabling them to apply for and win more bids.
Scale transforms how MSMEs prepare bid responses by helping them minimize the chaos made by manual paperwork, shortening their bidding lifecycles, reducing bidding errors, lessening their workload on bids, keeping their bidding processes accurate and consistent and reducing their overall cost of bidding.
Scale helps MSMEs through:
Getting them procurement ready by ensuring they are always ready to take advantage of tender opportunities through the bid document management system and providing a step-by-step guided bid response test process to build their capability and readiness.
Increasing their procurement specific Skills and Experience through learning by doing by providing; tender specific checklists to guide bid responses, procurement FAQs and tips, pre-bid verification to ensure that all bid requirements are in order before submission and post-bid evaluation to get them to understand why they failed in their bids hence improve in subsequent bids.
Motivating them to take advantage of Procurement Opportunities by providing free tender opportunity notifications, reducing the time, cost & complexity of bid preparation, and providing educational and best practices content.
Who does your solution serve, and in what ways will the solution impact their lives?
Scale is targeting Women, Youth and PWD-owned businesses in Kenya, with the aim of growing to East Africa and ultimately across Africa. Through our partnership with the National Treasury, we are starting by onboarding the over 114,000 certified disadvantaged businesses (48,000 Women, 61,000 youth and 5,000 PWD) owned.
We’ve worked with these disadvantaged businesses over the past 3 years to understand their needs. In engaging them, we used a process called Human Centred Design (HCD) in conjunction with IDEO.org, a nonprofit design studio that designs products and services alongside organizations that are committed to creating a more just and inclusive world.
Throughout our inspiration, ideation and implementation processes, we have continually engaged them through dozens of surveys, phone interviews and physical meetings. Guided by the HCD process, we tested ideas with them, sought feedback on our various prototypes, co-created the messaging, user flow and designs, and continued to test the Pilot with them.
Still getting built and modified collaboratively, Scale answers the question we still pose to users: “How can we enable you, as a woman, youth and PWD business owner, to win more bids?" with the ultimate goal of helping them win more bids.
Which dimension of the Challenge does your solution most closely address?
Enable small and new businesses, especially in untapped communities, to prosper and create good jobs through access to capital, networks, and technologyExplain how the problem, your solution, and your solution’s target population relate to the Challenge and your selected dimension.
Two-thirds of jobs worldwide are created by MSMEs. Procurement presents a huge opportunity for MSMEs to grow. Scale is designed to ensure that MSMEs can apply for and win more bids. The DCED report (2017) shows that SMEs winning at least one contract in a quarter leads to larger increases in firm size for younger firms with 93% of growth in new hires coming from individuals who were either unemployed, in the informal sector, or outside the labour force. Every bid that is won through Scale creates jobs and entrepreneurial opportunities. We track every job created through scale.
Who is the primary delegate for your solution?
Marvin K. Tumbo
What is your solution’s stage of development?
Pilot: An organization deploying a tested product, service, or business model in at least one communityIn what city, town, or region is your solution team headquartered?
Nairobi, KenyaWhich of the following categories best describes your solution?
A new application of an existing technologyDescribe what makes your solution innovative.
At the core of Scale is our Human-Centered Design approach which allowed us to work with our target audience, MSMEs, when we just had an idea. Over the years, these MSMEs have been front and centre in helping us design and develop Scale with their challenges, needs and proposals in mind. What therefore makes Scale unique is the degree to which we went to immerse ourselves and test our ideas, designs and prototypes with MSMEs to ensure that our solution is and remains consistent with their ever evolving challenges, values, experiences, and needs.
In comparison to our competitors, our strength lies in our primary focus to build bespoke solutions specifically for MSMEs who continue to be sidelined by developers of procurement solutions. Existing solutions by competitors only focus on sms/email alerts, not systems, as shown:
TendersKenya: provides suppliers with alerts on available tenders at a fee.
TenderSoko: provides suppliers with alerts on available tenders at a fee and (on a needs basis) manual training at any additional fee.
mTenders Africa: provides supplier management services to the procuring entities. They do not provide a solution to suppliers.
Tendersure: provides bid management solutions to procuring entities. They act as agents to charge suppliers who want to access opportunities and then split this fee with the procuring entities.
Scale cost-effectively facilitates learning-by-doing, helping MSMEs minimize the chaos made by paperwork, shorten bidding life-cycles, reduce bidding errors, lessen workload on bids, keep collaborative bidding processes accurate while reducing the cost of bidding preparation.
Describe the core technology that powers your solution.
Scale is a LAMP-based platform; meaning it uses Linux, Apache, MySQL and PHP. We have changed and built its operation to incorporate a lot of other elements and services, and modify the approach to existing ones for it to work optimally.
PHP is the main programming language used across the entire platform. Using it we developed our own extended framework, dubbed Aristotol, to boost Scale’s performance in user management and content handling events.
PDF Object is a JavaScript utility for embedding PDF files into HTML documents. Scale adopted this open source technology and built on it a robust back-engine for handling PDF previews and display across different devices.
jQuery is an integral part of accessibility and functionality of the platform. We have built on its technology to make things like HTML document traversal and manipulation, event handling, animation, and Ajax much simpler. It also supports searching, remote data sets, infinite scrolling of results as well as the drag ‘n drop feature.
Python is the additional scripting language that we use to automate the execution of special tasks to keep the Scale's system processes running efficiently. The optimal performance of essential background processes such as populating open bids, merging and generating PDF files and system back ups depends on these scripts.
Scale servers run on Linux which we continuously optimize to improve reliability in network throughput. This has been set up to run on a distributed infrastructure that separates the code and data files to optimize on performance and security.
Provide evidence that this technology works.
The widely popular LAMP stack is a set of open source software used for web application development, named as an acronym of the names of its original four open-source components: the Linux operating system, the Apache HTTP Server, the MySQL relational database management system (RDBMS), and the PHP programming language.
As a solution stack, LAMP is suitable for building dynamic web sites and web applications. The following are five popular web tools that were initially built (or currently running) using LAMP:
WordPress is the world’s most popular web-based application, with more than a third of all modern-day websites reliant on it and some way, shape, or form.
Facebook is by far, the world’s most popular PHP-based application built on LAMP. Back in 2004, Zuckerberg developed his product using a traditional LAMP stack but eventually, the company developed its own tools that allowed it to optimize processing power as the number of users grew.
Wikipedia is an engine that must not only withstand a lot of reading, but constant editing. At its core is an open-source content management system for wikis called MediaWiki that is built using PHP.
Slack, the work-focused chat tool, uses PHP on the server side due to the positive properties of the PHP environment and the high-cadence workflow it enables.
Please select the technologies currently used in your solution:
What is your theory of change?
Scale’s intended impact is job creation through the economic inclusion of MSMEs in procurement. This entails MSMEs applying for and winning more bid opportunities, experiencing growth, translating to Job Creation.
Working backwards from our impact, we mapped the changes that need to happen by identifying the reasons why MSMEs are not winning bids and developing our long-term outcomes to showcase the different areas in which change could occur.
In order to contribute to our impact, the long term outcomes of Scale are:
MSMEs increase their procurement specific skills and experience.
MSMEs become more procurement ready
MSMEs become more motivated to take advantage of procurement opportunities.
We have also worked backwards and plotted the preceding stages in greater detail, considering what changes need to happen before our long-term outcomes can occur. Our intermediate outcomes are therefore as follows:
MSMEs increase their procurement specific skills and experience
MSMEs have greater confidence in applying for tenders
Increased knowledge of procurement requirements
Awareness and Access to Procurement Opportunities.
MSMEs become more procurement ready
MSMEs prepare better Tender responses
MSMEs gain relevant practical procurement experience and know-how
MSMEs increase their basic skills of procurement
MSMEs increase their knowledge of procurement documentation and certification
MSMEs get better awareness of the procurement process.
MSMEs become more motivated to take advantage of procurement opportunities.
Increased awareness of the benefits of procurement
Awareness and access to financial exemptions and preferential policies
A simplified, cost-effective and efficient bid preparation process.
Our assumptions include the following:
MSMEs will respond to a platform and process that removes the complexity and cost of the procurement process (Feedback from our HCD Process).
When MSMEs win tenders, they will hire from individuals who were either unemployed, in the informal sector, or outside the labour force (DCED Report 2017).
Using Scale to apply for tenders will build confidence and increase the learning of the procurement process by doing.
When MSMEs start winning tenders, their experience will provide the track record to apply for even bigger ticket tenders (DCED).
Scaling to other developing countries will be easy once the model is successfully deployed in Kenya.
Select the key characteristics of your target population.
Which of the UN Sustainable Development Goals does your solution address?
In which countries do you currently operate?
In which countries will you be operating within the next year?
How many people does your solution currently serve? How many will it serve in one year? In five years?
From the beginning, we started by designing and building a repeatable engine for sustained exponential growth from the ground up. Our growth engine tracks Week-Over-Week and Month-Over-Month growth which will show the change in the value of our metrics (user growth, monthly revenue, active users, number of subscriptions, paid subscriptions, bids applied, bids won and other key metrics) as a percentage of the previous week’s/month’s value.
Scale currently has 350 MSMEs, recruited over a period of one month, whom we are piloting with. We have set a week on week growth target of 5% for the first 2 years, 3% for the third year and 2% for the fourth and fifth years. This translates to 4,214, 50,743, 229,126, 629,048, 1,727,001 MSMEs registered users respectively across 5 countries by year 5.
Kenya has 1,644,923 registered businesses (Jan 2020). Scale, through our partnership with the National Treasury, is initially targeting the 114,000 women, youth and PWD owned businesses registered as disadvantaged. By enabling these businesses to win tenders, we expect them to grow and employ more people, therefore transitioning from mostly micro (1-9 employees) to either small (10-49 employees) or medium (50-99 employees) sized establishments within the first 3 years of using Scale.
And while we are targeting businesses, our overriding KPI is Job Creation through the economic inclusion of these MSMEs. In this regard, we are also tracking the growth of these companies in terms of personnel over time.
What are your goals within the next year and within the next five years?
At project level, our overriding goal is to ensure that MSMEs win more bids resulting in job creation especially from the unemployed, the informal sector, or those outside the labour force. Further, there are qualitative effects related to job creation such as employability and enhancing employees’ skills.
Scale’s economy-wide goals are the indirect effects including externalities and spillovers that are generated by Scale’s linkages to the economy. These include indirect job creation and value-added to the economy as a result of MSMEs scaling up and being more productive. This will eventually include the induced effects on the GDP by MSMEs.
At market level, our goals are based on the potential transformations of the market generated by the catalytic effects beyond the Scale’s direct and indirect effects. Our market-level goals are achievable through:
Demonstration and replication effects which allow us to demonstrate the feasibility of our model in Kenya and replicate it across different jurisdictions as well as verticals, especially financial institutions.
Building skills and capacity that open the market to new opportunities by providing the requisite skills training, know-how and capacity both within Scale and through our partner network.
Promoting competition and triggering other market players to up their game; where incremental changes such as MSMEs participating more in procurement introduces innovations and efficiencies previously missing, leading to collective adoption of new business practices.
Putting in place enabling frameworks that include policy/regulatory reforms through provision of highly segmented data and analysis that influences affirmative action policies and fosters reforms.
What barriers currently exist for you to accomplish your goals in the next year and in the next five years?
The impact of Scale could be hampered by various barrier conditions brought about by the following:
Financial barriers:
Capital: The financial resources required to sustain Scale at no cost to MSMEs especially through the pilot and free trial period are punitive.
MSMEs Access to Financing: The cost of financing bids won by MSMEs have been prohibitive owing to the reluctance by financial institutions to finance contracts won by MSMEs.
Cost of Accessing Bid Opportunities: The upfront costs associated with accessing bid opportunities especially from the private sector are punitive thus discouraging participation by MSMEs.
Cultural Barriers
Time compression barriers: It takes time for learning to build capabilities especially given the procurement complexities and lifecycles; this lead-time cannot be easily reduced; neither can shortcuts reduce the time it takes.
Absorptive capacity: MSMEs ability to learn is a function of the level of their prior procurement knowledge; low levels limit their ability to absorb new and further procurement and business knowledge.
Market Barriers
Core rigidities: Core procurement practices retained and applied inappropriately become rigidities that have prevented procuring entities, especially Government, from going fully digital.
Complexity, embeddedness and stickiness: Company specific procurement practices are complex and so deeply embedded in situational contexts that cannot be easily or fully transferred from existing suppliers to MSMEs.
Organizational inertia: Deeply established practices (especially successful ones) resist change thereby stifling the use and development of new supply chains.
Legal Barriers
Digital bid submissions in developing countries are hampered by legal barriers that don’t recognise electronic signatures.
How do you plan to overcome these barriers?
Financial barriers:
Capital: We are bootstrapping while seeking grants and angel investments to cater for the initial 24 months of our operations.
MSMEs Access to Financing: Scale is in discussions with financial institutions to provide financing to bids won via Scale by virtue of our combined due diligence and access to Credit Guarantee Schemes.
Cost of Accessing Bid Opportunities: Scale is seeking grants and partnerships with private sector organisations to either remove or subsidise these costs thus encouraging more participation.
Cultural Barriers
Time compression barriers: Scale provides MSMEs with dummy bids that they utilise to build their capabilities given the procurement lifecycles and availability of opportunities that are relevant to them.
Absorptive capacity: we are mapping the level of procurement knowledge upon onboarding and are providing requisite interventions, both technological and human, to improve the ability to absorb new knowledge and procure.
Procuring Entities
Organizational inertia and Core rigidities: Using successes of MSMEs in Scale to showcase them as a cost-effective, innovative and efficient alternative to existing rigid frameworks.
Complexity, embeddedness and stickiness: Using the data to showcase the availability of capabilities within our MSME database to cater for a myriad of procurement needs outside the established businesses.
Legal Barriers
Using the successes on Scale to prepare bids digitally to create integrations and develop commensurate systems for procuring entities to enable acceptance and analysis of digital bids.
What type of organization is your solution team?
For-profit, including B-Corp or similar modelsIf you selected Other, please explain here.
N/A
How many people work on your solution team?
Full-time Staff
Marvin Tumbo - Co-founder and CEO
Brian Mung’ei - Co-founder and COO
Comark Maloba - Co-founder and CTO
Oscar Senyeli - Design & UX Lead
Phyllis Githaiga - Customer Service Lead
Maureen Kagambi - Digital Marketing Lead
James Smart - Communications Lead
Part-time Staff
Maurice Murage - Video Content Production
Nicholas Wambugu - Video Content Production
Contractor
Isaiah Chebii - Finance and Accounting
Others
IDEO.org provides us with help in the form of a Business Designer, Interaction Designer and Communications Designer on need basis.
How many years have you worked on your solution?
3 Years
Why are you and your team well-positioned to deliver this solution?
Marvin: Worked as the Digital Director for President of Kenya and has overseen major projects for the Office of the President. He has wide experience in the development of robust research and data-led strategies for Governments, businesses, projects and communication initiatives across Africa.
Brian: Worked as Head of Digital for Safaricom Plc, the largest Telco and most profitable company in East Africa where he oversaw the development of various digital products. He has the unquestionable ability to manage people and oversee the development of major projects.
Comark: A leading developer in Kenya who built the President’s Delivery Portal and AGPO Portal for the National Treasury amongst other major systems. His additional experience in the banking sector has proven especially invaluable to Scale as we pursue integrations with financial institutions.
Oscar: Worked as one of the senior designers at Scanad, the largest advertising agency in East Africa. Oscar not only designs, he has that rare skill of being a creative, designer and programmer who can translate all that he designs into interactive user experiences.
Phyllis: Experienced in bid preparation which has been integral to Scale when it comes to designing user journeys that are responsive to the needs of bidders.
Maureen: A digital communications professional with experience in developing & executing key digital campaigns which will be integral to lead generation for Scale.
James: A consummate journalist with an intricate understanding of the local & global media space and will help us navigate these avenues to better position Scale.
What organizations do you currently partner with, if any? How are you working with them?
Scale currently has three partners on board and we are in conversation with others across Finance, Entrepreneurship and Technology.
The National Treasury
We will be piloting Scale with over 114,000 SMEs that have been registered and certified by The National Treasury as Women, Youth and Persons with Disabilities owned businesses under the Access to Government Procurement Opportunities (AGPO) program.
SNDBX
We have a memorandum of understanding to pilot with SNDBX, a collective of experts, to provide ancillary business support services to MSMEs on Scale, helping them improve other aspects of their businesses, at discounted rates.
Village Creative Group
We have a memorandum of understanding with the Village Creative Group, a collective of creative agencies that will enable us to produce the best in class marketing and communication campaigns for Scale - including podcasts, educational content and other collateral materials.
What is your business model?
Scale is a fast and reliable digital bid preparation platform that is designed to give MSMEs an upper hand when bidding for procurement opportunities, enabling them to compete with established businesses for these opportunities.
MSMEs face many barriers when in procurement that have seen them lose out to larger more established companies. These barriers include:
Limited information about upcoming tenders;
Time constraints in preparing their bids;
Not getting feedback after evaluation to know what went wrong in failed bids;
Finding tender procedures too complex, and
Lacking tendering skills in general.
These have resulted in poor quality bid submissions leading to very few MSMEs winning bids.
Scale is solving for these barriers in various ways including:
Granting MSMEs free access to bid opportunities,
Providing them with a simplified bid preparation process designed to mitigate common bidding mistakes,
Enabling them to apply for more opportunities by significantly reducing the time and cost of bid preparation,
Ensuring they submit high-quality bid responses, therefore increasing chances of winning more bids.
Providing them with post submission bid evaluation to know what went wrong in failed bids.
As a digital platform, Scale allows MSMEs to take advantage of bid opportunities at any time, from anywhere in the world.
Do you primarily provide products or services directly to individuals, or to other organizations?
Organizations (B2B)What is your path to financial sustainability?
In line with with our business model, our approach to financial sustainability entails the following key segments:
Subscription Model
Scale is a subscription model where MSMEs will be able to get better value for money compared to competitors. Our subscription model is driven by the following key elements:
Value-based Pricing: We’ve based our price on how much our target market believes it is worth by conducting a willingness to pay survey.
Pirate Metrics: Scale has been designed to specifically cater to all aspects of our financial sustainability as follows: Acquisition - We’ve Mapped where our Customers coming from; Activation - We’ve ensured our customer’s first experience is great; Retention - measuring how many customers are we retaining & continuously solving for why we losing the others; Referral - turning our customers into our advocates, Revenue - designing a robust RevOps framework.
RevOps: We have designed our revenue tech stack to ensure they act as one across the following layers: Payment Processing, Billing Automation, Subscription Management and Revenue Operations.
Revenue Share
We are developing a partner network with a revenue share framework that will enable us to provide Scale businesses with ancillary support services at subsidized rates.
Raising Investment
Scale is currently engaging Angel investors to cover our short-term costs as we build our subscription model.
Grants
Scale is seeking grants to provide subsidized access to Scale by MSMEs.
Support Programs
Scale is seeking funding to support outreach activities to build MSME capacity and skills to take advantage of procurement opportunities.
Why are you applying to Solve?
Financial barriers:
Capital: Scale is seeking employment and entrepreneurship grants for our operational costs (development, server, marketing etc)
Cost Barriers: Scale is seeking grants to remove the cost of accessing bid opportunities by MSMEs by ensuring Scale is the largest and most diverse repository of FREE bid opportunities.
Cultural Barriers
Absorptive capacity: Funding for outreach activities to increase the procurement and business knowledge of MSMEs.
Market Barriers
Complexity, embeddedness and stickiness: We seek funds for outreach activities to corporations that will allow us to introduce them to the capabilities of MSMEs as innovative alternatives to current supply chains. The MSMEs registered on Scale will be an asset whose collective strength Scale can utilise to get large corporations on board.
Legal Barriers
Scale is seeking partners in the policy development space to help translate the data we generate, the wins we record and the impact we have into policy papers and reform structures that could be applied across all developing countries.
In which of the following areas do you most need partners or support?
What organizations would you like to partner with, and how would you like to partner with them?
- GiZ: By partnering with Scale in their MSME training and support programmes especially as pertains to procurement.
- Kfw and DEG: By partnering with a local financial institution to pilot a financing framework for MSMEs that win tenders through Scale, using data from Scale to provide additional due diligence mechanisms.
- World Bank: By partnering with us not only in implementing preferential procurement frameworks but also in research and development using our data on the viability and successes of MSMEs.
- AfDB: Partnership with their “Youth Entrepreneurship and Innovation Multi-Donor Trust Fund” that finds bodies that support entrepreneurs and SMEs - start-up incubators and enterprise accelerators, financial institutions (banks, credit agencies and guarantee funds) specializing in funding and mentoring SMEs.
- ITC: Partnership with SheTrades Initiative, which seeks to connect three million women entrepreneurs to market by 2021. Scale is targeting women-owned businesses and we can partner with SheTrades to connect them to markets.
- DCED: The Donor Committee for Enterprise Development is a forum for learning about the most effective ways to create economic opportunities for the poor, based on practical experience in Private Sector Development. Scale is a natural partner in this initiative and can provide data and information pertaining to economic inclusion of MSMEs through procurement.
- The Elevate Prize: Geared towards elevating opportunities for all people, especially those who are traditionally left behind.
Please explain in more detail here.
Our partnerships goals are around the following critical areas:
Government Opportunities: Governments who have preferential procurement policies for MSMEs and other disadvantaged groups.
Private Sector Opportunities: The intention is to build an all encompassing repository of bid opportunities and avail them to MSMEs for free.
Capacity Building Partnerships: partner networks that will enable businesses registered on Scale to get access to ancillary services that will make them better businesses that are ready for growth.
Legal or regulatory Partnerships: Scale is a solution designed around a problem that can be powered by numerous legal, policy and regulatory reforms for it to really scale.
Financial Partnerships: Access to credit for MSMEs that win tenders on Scale to enable them to fulfil their contractual obligations.
Technology Partnerships: This can be in the form of infrastructure and technical advice to help us implement and optimize our technical systems.
Solution Team
-
Comark Maloba Co-founder and CTO, Scale
-
Brian Mung'ei Co-Founder and CGO , Scale
-
Marvin Tumbo Co-Founder & C.E.O, Scale Management Limited
to Top
Solution Name:
Scale