Company Spotlight

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Company Spotlight: Impact Hub

Impact Hub claims to have “the world’s largest community,” with 16,000+ members across more than 100 cities around the world. But this global consortium of socially responsible spaces never meant to get so big.

The original idea came from Soweto, South Africa. Impact Hub’s founders were invited to host an NGO event for the 2002 United Nations World Summit on Sustainable Development in Johannesburg. Instead, they decided to create a people’s summit with a group of local activists who were creating the “Mountain of Hope” arts, environmental education and community hub.

When they returned to London, the founders wanted to help people find more purposeful careers that had meaningful impact on global problems. Coworking was still in its infancy at this time, but they realized isolation was a major barrier to innovation.

So, the forerunner for the Impact Hub chain opened in a London loft in 2005. Everything in the space was built from scratch, and was carefully designed to enable collaboration and create a space where entrepreneurs and innovators could come together for social good.

This first iteration of the Impact Hub brand was meant to be a one-off, and certainly not the coworking empire it soon evolved into.

Social change

Impact Hubs’s social innovation movement was soon embraced by the world’s entrepreneurial community. By 2008, there were nine Impact Hubs on three continents.

At this time, the Impact Hub operated under a franchise model, where new Hubs would pay a joining fee and a share of their annual revenue to the global center. In return, they could use the Impact Hub brand and would receive help launching and running their coworking space.

However, this model didn’t take off in the world’s emerging markets and a cash crisis ensued, according to a report in the Financial Times. “The traditional top-down structures and systems started to fail, and so we decided to do something that’s very bottom-up,” Petr Skvaril, Impact Hub’s global partnerships manager, said when speaking to the FT in June 2015.

In 2011, the original franchise model was inverted so that each Hub would own itself and an equal part of the core organization. The central Impact Hub Association is a collective of all the Impact Hubs. There’s still a joining fee and revenue share – but both of these were reduced under the new model.

The Impact Hub Association also takes strategic decisions through a one-Hub-one-vote system of governance and owns the brand and other intellectual property and the global IT systems.

The company website explains: “The Association is the sole owner of HUB GmbH (Impact Hub Company), a charitable company with the mandate to manage global operations and facilitate the development of the network as a whole, similar to hosting a local Impact Hub community. Impact Hub Company is currently run by a dispersed global team, several of which are local Impact Hub founders.”

The change to the business model was a huge success and the number of Impact Hubs grew from just 15 to 67 in five years.

So, what is an Impact Hub?

Impact Hubs are part innovation lab, part business incubator and part community center. Each one combines three distinct elements: an entrepreneurial community and shared workspace; a diverse selection of programs and events; and startup support, including business advice, education and consulting services.

Impact Hubs are run by “Makers” who, according to the company’s website, are “passionate individuals dedicated to building a community of social innovators in their city. Embodying trust, collaboration and community, Makers set the stage for a better world.”

The Impact Hub brand seems to be striking the right balance between innovation and social good. Two-thirds of members have founded their own ventures, giving peer support equivalent to 420 FTEs, with more than 6,400 startups founded at Impact Hubs between 2012 and 2016.

Some Impact Hubs have seen huge financial success. For example, the Singapore Impact Hub raised £1.1 million in June 2015. In an exclusive interview with Tech in Asia, Impact Hub Singapore co-founder and CEO, Grace Sai, said of the unnamed investor: “He wants to unite the region. He wants to do something that brings Southeast Asia together. So, he thinks we’re the pioneer of ecosystem building in this way in Singapore. And in the years to come, we can unite the region through entrepreneurship.”

A sustainable future

Such impressive figures haven’t diluted the Impact Hub’s focus on sustainability, with 60% of members valuing social and environmental return over financial return.

Over in Birmingham, U.K., a new Impact Hub workshop and community center has just opened its doors. The aim of the Hub is to bring together people and ideas to improve lives across the city. Speaking to the Guardian, the space’s founder Immy Kaur, said: “We brought together people from a wide range of backgrounds who care about social justice and we have been experimenting. It was never about coworking – we’re not a corporate space – this is about the town hall for the 21st century.”

This focus on community is apparent in the company’s recent Global Impact Report, which pulled together data and stories from its different spaces.

“It is possible to create impact at scale without losing local context through standardization by ensuring that local roots remain present at all levels,” Impact Hub Global Executive Director Gabriela Gandel said. “Moreover, you need a backbone organization that focuses on the curation of innovation, the hosting of connections, and catalytic opportunities for all. However, this does not have to be always centralized but rather collectively coordinated to allow for leadership from the network. And thirdly, it is essential to find common impact issues that bring together various network entities and external partners to make a bigger, bolder difference.”

Going forward, it will be interesting to see how Impact Hub’s focus on social change and its bottom-up business model continue to evolve to meet the needs of the changing entrepreneurial community.

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