While we continue to look at connecting the dots between the Disability Economy and the world of venture capital, it is critical to move beyond just awareness and understanding. VCs must establish innovative ways of thinking around this new ecosystem to recognize the very mechanics that exist so they can institute their own set of strategies to engage within the marketplace and find mutual success as investors as well as for the founders, entrepreneurs, and companies they empower.
Venture capitalists must first be mindful that throughout the history of innovation hubs such as Silicon Valley there is a belief that they could change the world to the point of parody where HBO’s series of the same name proclaimed its fictionalized company Hooli “is about innovative technology that makes a difference, transforming the world as we know it. Making the world a better place…” It is this sentiment that is central to the Disability Economy itself. This very ecosystem is predicated on the idea that innovation propelled by a global disability community can offer solutions making the world more user-friendly by creating a more accessible environment for all.
It is high time that investors take a different stance toward the Disability Economy. Rather than seeing it as a niche space, it is so much a part of the human story. For more than a decade there has been quite a lot written about the business case around disability by numerous organizations ranging from Accenture, The World Economic Forum, The International Labor Organization to the Harvard Business Review, and many others. The data is very clear, however, for VC firms and other investors to have a level of confidence in entering this space they need to appreciate that this type of move is a strategic one that lies at the crossroads of impact investing and shaping an economic future that has real global value. The Disability Economy should be recognized as a language that can describe the role of human variability and the value proposition of needs. Perhaps then VCs and other investors will be more adept at embracing a mindset where they can see the vast horizon that is the Disability Economy focusing on areas of needs from physical, cognitive to mental health as essential to their portfolio strategy.
Though one of the greatest barriers of friction for investors to get to this place is moving beyond the larger business case and getting to the real mechanics of what needs to be known when evaluating areas of the Disability Economy. Like any smart investor, doing one’s due diligence is essential. So let us look at three key metrics that are critical for investors to participate in shaping the framework of this growing ecosystem. The first is TAM or Total Addressable Market which just refers to the revenue opportunity of the space and offers a quick measurement of available revenue opportunity and underlying potential. The second metric that is of note is SAM, or Serviceable Available Markets which is defined as the part of the total market reach, focusing on the economy of scale. Finally, there is SOM, which is a metric that is defined by the estimation of the potential revenue within a specific market or product segment that a company can capture. Each of these business measurements is not only recognizable to investors but valuable in the sense that it just shows that the Disability Economy while unique, has some familiar points of connection. It is this familiarity that can be a lynchpin for investors in that it offers a bridge for firms to get past their own unconscious biases allowing for a deeper examination of this new ecosystem in more serious ways.
As venture capital and private equity firms begin to explore the Disability Economy in earnest, there needs to be a recognition of the role they play in cultivating this ecosystem through the growth of these various companies, founders, and entrepreneurs. They are pivotal in helping to shape a culture of innovation that will truly redefine how we as human beings engage with the world around us and realize that scaling everything from inclusive design to accessibility in its broadest context is not only good business but vital for moving culture forward in a more humanistic way.