Archive for the ‘Design’ Category

Can the structure for innovation planning be used to disrupt itself?

This diagram is from Vijay Kumar’s 101 Design Methods. It is the basis for his structured approach for innovation planning, and the essence of what is taught at the methods driven human centered design program at the Institute of Design, IIT Chicago. Today I want to question some of the fundamental assumptions that underlie it – and from the very beginning of the process, not simply at Phase 5 (Explore Concepts) as given in the book. Some notes on this phase are shared below:

Explore Concepts: In this mode, we do structured brainstorming to explore new concepts. The insights and principles framed earlier provide the starting points for ideation, as well as guides to ensure we’re on track with matching concepts to needs. This helps make our concepts defensible and grounded in reality. In addition to the product and service, ideas for branding, communication, and even business models, are explored. This is the first stage we begin to construct rough (low-fidelity) prototypes – they help focus the team discussions, and provide probes for early user feedback or help the client clarify and refine their product development strategy whilst giving us feedback on the technical aspects.

And the mindsets recommended for this mode include:

  1. Challenging assumptions
  2. Standing in the future
  3. Exploring concepts at the fringes
  4. Seeking clearly added value
  5. Narrating stories about the future

Yet, what I question today is whether these mindsets that encourage experimentation and exploration should come up so late in the process, at the concept development stage, long after research and analysis have been completed? It is true that Vijay says the process is non linear and that a conceptual brainstorm (mode 5) may lead the way into research designed to validate its viability, feasibility and desirability, but this is at the tactical level of business innovation rather than at the strategic level. I question whether its possible to use this powerful and methodical approach to begin with a structured and rigorous questioning of our initial assumptions at the very inception itself in order to over turn the often implicit and tacit drivers of consumption driven growth seeking only to maximize profitability.

Let me share an earlier variation of this diagram first, where the real and the abstract are also mapped on to the process.

It is here, at the real stage, where we seek to understand what is what – through research, before we can analyse it and synthesize our narratives and concepts, where we have the opportunity to question our assumptions regarding the ‘system’. The lower left quadrant where we seek to “understand the real” is where we have the power to make the change that can genuinely disrupt business as usual. Not in the sense of a business model that disrupts but still holds the premise that all profits should flow to the shareholders, or a shift in the corporate’s focus to services from manufacturing but without the explicit articulation of environmental impact or resource conservation. To disrupt business as usual in today’s world would mean starting to question Whom are we serving? Why? For whose benefit? from scratch rather than leaving them unasked, resulting in default assumptions that a business only seeks to innovate to increase its own profits rather than seeking to serve a greater good such as the planet and the wildlife.

The triple bottomline approach captures the end results for those corporations who are already oriented in this way but is there a structured and rigorous planning approach to ensure their near future innovation and strategies align with these corporate goals and visions? And, is there such a flexible tool that the smallest startup can use it to think of how they will choose to do business – after all, it is a choice, and framing it up front in the product and service development process means that it now becomes an explicit choice, a considered decision to be taken, rather than one after the fact or halfway down the process when some inadvertent outcome leads to challenges that were not foreseen.

Sustainable product development already has numerous robust and validated systems and processes, from green buildings to recyclable packaging, what is missing however is the holistic integration of design and manufacturing (which hold the maximum power for good for the planet and the people) with the business thinking and the sustainable revenue generation strategies that can ensure that probability of the innovation’s success is maximized.

And, if we can design the fuzzy front end to be customized to the priority needs of any particular operating environment then following through with this adapted approach to innovation planning for the informal economy or for sub Saharan Africa’s consumer markets will be a cakewalk. Half the current challenge of business planning and corporate strategy in disparate operating environments with very distinctly different conditions is that the methods, tools, and frameworks available to us are all the same, and primarily developed in the context of highly industrialized and information rich consumer markets. They leave assumptions on the conditions and constraints of the operating environment untouched and implicit*.

Thus, going back to the first diagram, where the first mode is Sense Intent:

Sense Intent: Before jumping straight into a project, we pause to consider the world in which our intended users reside. We scan the horizon, looking at technological & socio-economic trends, precursors, competing products, and a variety of other factors that can affect our topic area. All of these offer us a way to reframe our initial problem and help us think of our initial intent and the direction in which we should be moving. This is where our research questions are mapped out, and the problem space described.

This is where the power resides to remake our world. What if we began with the mindset that:

  1. Challenged assumptions
  2. Stood in the future
  3. Explored the fringes
  4. Sought added value and began with articulating for whom (all stakeholders)

And began with the story (5. Narrating stories about the future) about the changes we wished to see, and the impact we wished to have, on our own future, thus inspiring and informing the scope and shape of the research we conducted in order to know people (mode 2) and know context (mode 3) so as to gather the type of forward looking insights we would need in order shape and craft something wholly different from the ground up.

What if we thought about innovation very differently from the current context of a new product or a new service, of looking to disrupt the existing even while seeking to exist within the conventional frameworks of success – profits, scale, reach, impact, fundraising et al

We need new narratives and new goals but ad hoc design fictions and scenarios aren’t going achieve the kind of new we need for the way our planet has changed. Along with the limits of what can be, we have also reached the limits of where our existing methods and tools can take us. And without changing those, at the systemic level, we’ll still be trying to come up with changes within the constraints of what has already been established. We don’t need the existing tools that help us to think outside the box, what we now need are the tools to build new boxes.

 

*This is the tyranny of dominant logic CK Prahalad spoke about.

One (last) word: Plastics

A UN report issued on World Environment day  showed dozens of nations acting to cut plastic, including a ban on plastic bags in Kenya, on styrofoam in Sri Lanka and the use of biodegradable bags in China. via

There’s a backlash against plastics that is ongoing in many not so noticed parts of the world today. So called ‘weak’ signals from three major economies stand out for the impact in the near and emerging future of their policy shifts towards the material use of plastics.

The first is India, where a recent waste audit in Bengaluru showed that over 60% of the waste littering the streets was from non recyclable consumer product packaging by both international and domestic brands. By 2020, India will abolish all single-use plastics, and introduce a campaign against marine litter, among other things.

The EU has also moved to ban the same, and the proposal also requires EU countries to collect 90 percent of single-use plastic drink bottles by 2025 and producers to help cover costs of waste management and clean-up.

China, on the other hand, has caused consternation among nations who relied on shipping their plastics off for recycling. They’ve banned imports of contaminated waste plastic, leaving questions hanging such as “And how do you get manufacturers to design a product that is more easily recyclable.” Though I find this conversation interesting for its consistent and tone deaf externalization of the problem – waste management is certainly a developing country problem, but materials technology and consumer packaging innovation is a developed country design challenge.

With more than 50 countries waking up to the plastics problem, there’s a deeper shift occurring in the air, beyond our critical need to protect wildlife and the oceans. That of dependency on oil – in case you didn’t know, the bulk of plastic is made from oil.

Here’s a quick round up of something of things happening in these major economies with significant chunks of the world’s population.

India has just approved a massive new 5000 megawatt solar farm, and as the map shows, there’s many more out there in the desert wastes. The Chinese and Indian solar farms are 10x the size of those in North America.

The number of electric cars on the road has more than doubled over the last three years, and of the global sales of electric vehicles (EVs) last year, China contributed more than half. And there’s a shift now from blind growth towards more strategic product development, with greater impact. Numerous European marques are opening factories and R&D centers in China. And India’s doing its best to keep up.

What is going to be the impact of these moves, combined, from these three major economies on the planet? The head of Shell’s Scenarios* team has already developed a scenario called Sky “which shows that changing the ways we transport people and goods is one of the crucial steps toward the world meeting the goals of the Paris Agreement — keeping the increase in global average temperature to well below 2⁰C above pre-industrial levels.”

On a planetary scale, these trends are the future, and products and business models that do not adapt to them are going to be increasingly obsolete, or suitable only for walled gardens. The use of Fahrenheit is but one example. Conserving humanity’s collective home is far more important for all our emerging futures.

 

*Shell originally developed the concept and tools for scenario planning

What can we learn from an informal market?

Documenting Busia Market, Kenya, January 2016 (Photo Credit: Niti Bhan)

I took this photo of Rinku taking photographs during our visit to Busia’s bustling cross border market as a means to document our own work documenting the borderland’s informal trade ecosystem. Sometimes we’re so immersed in our work that we forget to look up and recognize we’re participants too. Document everything, I tell people interested in the how and what of our work, you never know what will be important to capture until later in your analysis, usually when its too late to go back to the field for another look.

So, what can we learn from a visit to an informal market?

The subtext to that question would be “when using human centered design approach to observation and analysis as compared to a regular market visit”?

We’re looking for opportunities. We’re keeping an eye out for what might be missing, a gap or an unmet need. We’re watching closely, often sitting down for a while, or chatting up shopkeepers as often as the fancy strikes us. Its not just window shopping or wandering around aimlessly with a camera. Its entering the market place with a clear focus on learning how it works – what’s the organization of the layout? why are the all these products clustered over there? what is the underlying rhythm of the seeming chaos?

One visit won’t do if you’re looking for opportunities for innovating new products or services for one or more target segments of the market’s population. You might want to make a first recce to get a sense of the whole, and then come back to drill down further into a particular thematic area – is it the delivery men you’re interested in, or the logistics of egg transportation? Or, is it the fresh produce section where you’ve noticed greens wilting in the sun and think you have an idea for a cold chain solution – what would be its business model in this context?

Already, the ideas flow just from thinking about the market. Don’t let the chaos distract you from keenly discerning the system and the structure. That’s where the secret lies.

Stepping up human centered innovation planning for financial inclusion

Two Ugandan analysts from the Financial Sector Deepening (FSD) programme in Uganda write on the need for more human centered product development approaches in the design and delivery of financial services for rural Ugandans, especially the rural poor. One of their suggestions caught my attention in particular:

(iii) Third, to increase the introduction of new game changing solutions by financial institutions the government needs to put in place policies, laws and regulations that allow for new business models and approaches to financial delivery.

Innovative regulatory approaches like “sandboxes”, where startups are allowed to conduct live experiments in a controlled environment, have demonstrated success in developed markets. Regulators can therefore play a crucial role in being financial inclusion catalysts.

The late C.K. Prahalad, guru of serving the poor profitably, first mooted the concept of an innovation sandbox back in 2006, and the essence of his concept has remained an integral part of my own work ever since.

This approach could be called an innovation “sandbox” because it involves fairly complex, free-form exploration and even playful experimentation (the sand, with its flowing, shifting boundaries) within extremely fixed specified constraints (the walls, straight and rigid, that box in the sand).

The value of this approach is keenly felt at the bottom-of-the-pyramid market, but any industry, in any locale, can generate similar breakthroughs by creating a similar context for itself.

What Jimmy Ebong and Joseph Lutwama, the co-authors of the original article linked above, are mooting, however, is an extrapolation of the concept, where the regulatory and policy framework forms the boundaries of the “sandbox” within which various financial services pilots can be tested in the real world.

Committed and forward thinking governments can make the difference overnight for the ‘wicked problem’ of financial inclusion of the rural poor, inspiring innovative human centered solutions to citizen service delivery where its most sorely needed – the resource constrained and inadequate infrastructural operating environments of rural Africa.

 

Note:Mooting” is a favourite word of East African newsmedia, meaning the specialised application of the art of persuasive advocacy.

IKEA in India: Culture Centered Design Strategy

Its taken more than 10 years for single brand retail stores to enter the Indian market, and this year sees India’s first IKEA opening in Hyderabad. TS Ninan introduced their retail challenge succinctly, though he left me wanting more. And this snippet from an interview with the market opening CEO of IKEA in India (who, having laid the groundwork for 6 years, has now left – an interesting and thoughtful strategy right there imo) caught my attention.

In Europe, businesses look at the past, their systems and processes to plan ahead. India does not have a legacy. People don’t look backwards. Here you create the future as you go

Was IKEA’s product, design, and brand strategy going to be as human centered as reports of their 1000 home visits made it seem, or, as the groundbreaker Juvencio Maeztu implies, committing to India means a “culture centered strategy” – that too, one that is customized for each different culture, centered around a metropolitan area. For those who think India is a country, I like to remind them that its closer in concept to the EU, its a single market and currency, but each city has its own languages, culture, cuisine, and clothing, not to mention each state.

Ikea’s global designers meet artisans in co-creation workshops to handhold local artisans design products that meet global quality and design standards.via

I see familiar names in the design article. And I do like the photographs though I recognize my eye is taken aback because the years in Finland have influenced my aesthetic sensibilities closer to the Nordic norm. What I can say is that if this what the Swedes came up with after distilling down their hundreds of home visits, its an excellent integration of two extremes of design language. IKEA will have fun in India, and I suspect they intend to. The takeaway for culture centered design isn’t that “India” will receive one singular design aesthetic or product line but that each one of India’s cultures, both traditional and modern, will be catered to. That is powerful.

Moving from Unbranded to Branded

There’s a larger story here as well. The changes occurring in the Indian consumer market, for instance, and the increase in aspiration, purchasing power, and most importantly, design sensibilities. Back in 1990, during my first job after leaving the National Institute of Design, Ahmedabad, I faced barriers to marketing industrial design services that I suspect don’t even exist now. Product design was imitable and not something one paid good money for oneself. There were corporates who understood our value as a design studio but they were few and far between. Now, IKEA’s entry isn’t into a completely untapped market – there’s competition that’s been born in the last decade, both online and off. And, finally, there’s the handmade artisanal informal sector, who have long copied IKEA products from hand me down catalogs. On the other hand, unlike most consumer brands entering the Indian (or the African market) IKEA recognizes the competition offered by the informal (unorganized, as its known in India) economy, and seems to have addressed it.

What’s interesting about the Wharton analysis from October 2017, is that all the issues it raises seem to have been covered now that IKEA is finally revealing its India strategy as the first store prepares to open this month.

Unlike my concerns back in 2006/7, this time I’m a lot more confident that IKEA will achieve something wholly unexpected in India. I look forward to visiting.

Tecno and Nokia: The tale of two brands

Chinese mobile maker’s original brand strategy succeeds in Africa: Transsion’s Tecno

This year, Nokia got shoved out of the top 10 most admired brands in Africa list, not bad for a company that had lost its way in emerging markets 7 or 8 years ago. As an old (in all senses of the word) Nokia fangirl, here are some of my favourite posts from the heyday of following Jan Chipchase around Africa vicariously through his blog. These days, I tramp my own paths in Africa.

Luthuli Avenue, Nairobi, Kenya, July 2012 [Photo Credit: Niti Bhan]

What’s interesting about this list is Tecno, a mobile phone brand that’s unknown outside of Africa. Transsion Holdings, the Chinese manufacturer that owns this brand has a clear strategy and focus. They own Itel and Infinix brands of phone in addition to the Tecno brand and focus only on the African consumer market. You’ll note Itel is listed at number 16 in the chart above.

According to a report released by market analysis company Canalys, Tecno, iTel and Infinix, which are all sub-brands of Transsion, overtook Samsung with a 38 percent market share in the first quarter, compared with a 23 percent share for Samsung. Via

Rather than the old Nokia strategy of a product aimed at every price segment whilst keeping hold of the mother brand, Transsion has broken branding rules by deploying three brands each with their own persona – Itel for example is very popular for its featurephones among border market traders in Kenya and Uganda due to its week long battery life. Few are aware of Transsion itself. Until its time to add up the numbers.

This brand and design driven original manufacturing strategy reminds me of the work Prof. John Heskett had done in the Pearl River Delta before his untimely death.

John, posing for me when we met in Singapore, back in 2009

This slide captures the essence of his teaching. I only have my class notes.

Transsion’s focus, rise, and brand strategy are all hints of his influence, either directly or indirectly in their approach and work. I’m very glad to be reminded of him today, and I recognize that I will be back writing on more of his work in the very near future.

Ecodesign, Ecolabels and the Environment: How Europe is redesigning our footprint on earth

What do chopped fresh green beans have in common with high definition flat screen TV’s? And how does this relate to design? In Europe, they’re both considered consumer products whose journey from raw material to shopwindow requires energy to process—emitting greenhouse gases that can have an adverse impact on the environment—and are considered to possess a ‘carbon footprint.’ In other words, they are products of a larger global industrial ecosystem.

When the postal service is setting down guidelines on the creativity and production of direct mailers so that their customers can better recycle them, it signals that graphic design needs to evolve the way its practiced entirely.

 

Acronyms and Initiatives
The European Union’s chosen approach to address the issue of environmental degradation and climate change is a combination of regulations, directives and voluntary activities. Industrial designers and engineers around the world are familiar with many of many of these already in effect—the EU Directive on the Restriction of Hazardous Substances (RoHS) and the EU Directive on the Waste from Electrical & Electronic Equipment (WEEE) are top of mind in the field of consumer electronics and other energy consuming products (EUPs)—the first sector to be addressed by these rules.

Just ratified is the new European law on chemicals, REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals), which covers the toxicity and hazards of chemical substances, touching the nascent field of green chemistry. Also to be enforced is the EU Directive on the Ecodesign of EUPs – this will directly regulate the negative contribution to the environment across the entire lifecycle of the product, not just the use phase.

Supporting activities include the Ecolabel—a voluntary certification for a wider range of products beyond those that merely consume energy during their use—helping consumers identify products that have considered all aspects of environmental impact toward minimum ecological footprint, compared to other products in the same category. This includes the chopped green beans, as their total carbon footprint assessed across the supply chain would take into account the energy expended to grow them, process them, package them and deliver them to the neighbourhood supermarket.

All of these and more come under the holistic approach of the Integrated Product Policy (IPP), which can be considered the foundation for such decision-making and the design of the various directives, programs and certifications. The IPP is a systemic look at the environmental impact of the entire supply chain and life cycle of any given product, taking all aspects of the global industrial ecosystem into account: raw materials, manufacture, transportation, distribution, marketing, sales, delivery and waste treatment at the end of life.

 

The Power of Design
While design has been picking up speed in addressing issues of sustainable development, a quick purview of the larger ecosystem helps in understanding the long-term consequences of the decisions made in the studio. It is recognized that a significant proportion (ranging from 70% to 90%) of any given product’s ecological footprint can be addressed at the design stage. But the considerations mentioned above take into account factors all along the product chain that can directly or indirectly contribute to environmental degradation; decisions made at the design stage now become crucial in ensuring the best outcome throughout the entire system.

Carbon Trust UK‘s simplified diagram of the lifecycle of a typical can of cola, for example, enables us to visualize and correlate the relationship between product design choices and energy consumption at every stage of the supply chain.

Read On…

Shopping for Innovation: What you need to know before hiring a design firm

This guide was written for Core77 in late 2006, co-authored with Steve Portigal. I was looking for it today, as I wanted to share the distinction between a Vendor of innovation and design services and a Partner who goes beyond the requested task to discern and perceive the real challenge to be solved. I couldn’t find it online, Core77 having redesigned their site from the ground up, so I’ve reposted it here from the Wayback Machine.

Getting Started
You’ve read all the articles and can’t possibly stomach one more column on the iPod. It’s clear that design+innovation is the hot topic for business—with businesspeople taking more active notice of the design scene, and designers focusing more on strategy. (It’s not like business and design were so far apart to begin with, of course.) But what about those new to the conversation? If everyone is telling you that design is the differentiator, how do you get started? What are the considerations when bringing on strategic design services?

There are many things you need to consider before hiring a design firm, but we’re going to start with three: The Problem (defining your needs), the People (who the players are), and the Partnership (the nature of the engagement). Design firms are businesses, but with unique perspectives and unique work processes. Understanding a bit of the industry culture will go a long way in helping you to establish a successful engagement.

The Problem: Defining your goals
As with any initiative, you first need to define your problem and your goals. Having these goals well-articulated and written down on paper as a starting point for the discussion is crucial. You may find that your reasons for bringing in design services differ from others in your organization, so you need to get your story straight before you begin talking to creatives. You should also understand that that story is likely to be pushed and pulled.

Design can be brought in as a service, but it’s important to remember that it’s a creative service. Designers are smart and talented people who typically do “think out of the box” (a phrase more derided inside the design community than outside, yet still requested in more initial meetings than you can imagine). So although your desired outcome may be very specific, the designer’s process to delivering your outcome will inevitably involve challenging its very foundations. Here’s an illustration:

Q: How many designers does it take to change a light bulb?
A: Does it have to be a light bulb?

In real terms, this can be the difference between asking a designer to create a new vase, versus asking for a new way to display flowers in the home. The first problem statement already converges on a solution—perhaps prematurely. The second opens up new design opportunities, new target markets, and ultimately potential new revenue streams.

So though you’ll want to define your problem as clearly as possible to begin with, you should also be willing to engage in discussions with designers in order to craft a more open-ended, innovative, and ultimately actionable problem statement. This is the way designers think, but being prepared for this potential frame shift can be a tremendous challenge. You are likely to learn things that you didn’t want to know, that you aren’t even prepared to know, and that challenge your closely-held beliefs. (On the flip side, you should be aware that designers have a healthy skepticism about just how much “paradigm-busting innovation” a given company is prepared to make. The design consulting bar-tale of the client who proclaims, “I want something completely innovative, but I want to keep making my stuff exactly the same way I do now” is legendary, but it’s also true.)

Nevertheless, it is often difficult for clients to think like the designers they hire, and to not see them as threats. This is something you need to consider when you’re bringing in a design consultant: you’re hiring someone to tell you something you don’t know; to provide you with something that you don’t have. But will you be ready to take their advice?

Read On…

Goal Directed Research for Innovation Planning in Emerging Markets

What differentiates the research conducted to inform the design of an innovative product or service, in an untapped market? Michael Kimani asked me this question during a recent Skype conversation and I promised to write out the answer.

  • Goal directed research for innovation planning seeks to discover opportunities for new products and services for a particular market or population segment.
  • This means the scope must be broad enough to gather evidence of a market opportunity, customer needs and willingness to pay, as well as identify the constraints and barriers in both the environment (such as infrastructure) and the target population.
  • Looking for evidence of a viable value proposition and/or a business model is what distinguishes this type of early stage research from traditional product and service design research whose goals are to discover the optimal design solution for a particular task and target audience.
  • Unlike academic research, there may not always be a hypothesis to be validated at inception, nor the outcome pure knowledge.
  • Instead, there is a goal driving the design of the research, whether broad focused and exploratory, or narrow focused and specific.
  • This initiating goal can be set at three levels:
    • Sector specific
      • An example of sector specific goal setting would be to explore the potential for financial products and services for a bank. Alternately, this can be framed as identifying opportunities for innovation in financial services.
    • Demographic specific
      • A startup with a product or service under development may want to discover which segments of the target population should be prioritized for their product testing and launch. Alternately, a consumer products manufacturer might want to explore wholly new markets and the customization required for their product range.
    • Outcome specific
      • A popular outcome specific research framing that is sector and population agnostic is “What are the barriers to adoption for our intended innovation among this target audience?” We have conducted such research for a wide range of objectives, from the introduction of sustainable agricultural techniques among farmers in rural East Africa, to insights driving product development for a fintech startup.

The challenge in untapped markets is a dearth of legacy data and consumer insights, hence the need for more discovery driven exploration upfront prior to drilling down to specific research focus areas. In the forthcoming post, I will share our customization of Vijay Kumar’s innovation planning methodology developed over the past few years in situ during projects in East Africa. Note that subsequent research to inform the specific concept design of a product or service will have more of an indepth focus on the target demographic and their particular context.

How do we make a business case for an innovative concept given the data scarcity for the African mass market?

Anzetse Were writes some thoughtful points on the challenges facing private sector innovation in Kenya, and Africa. Two of her points caught my attention, in particular:

With regards to the private sector, an interesting point raised is that innovation targeting it must have a business case for adoption otherwise the innovation won’t be absorbed. Innovation must demonstrate that the short-term inconvenience of adoption will pay off in the long term.
[…]
We have a real problem with information asymmetry and data bias. [… ] strategies for market penetration and sharing cannot be rolled out since the lack of data means the private sector doesn’t know where the market sits.

While Anzetse has specifically focused on the interface between the private and the public sector with regards to innovation, the points she brings up are nevertheless a challenge for either or both parties.

Size and value of the market opportunity for an innovation when data is scarce

Investors in innovation for new and untapped markets need the numbers to make sense of the opportunity. A dollar value and estimated size of the market are among the conventional metrics used to provide evidence of a return on their investment. How substantial is it?

In the African context, the mass market where the volumes can be found tends to be heavily biased towards the informal sectors, and still for the most part based on cash transactions. Textbook approaches to sizing and valuing the market space fall short without accessible and relevant data.

A few years ago, we were faced with a similar challenge for Village Telco, a social enterprise launching an innovative ICT device for low cost voice and data communication. They had developed the Mesh Potato,  a device for providing low-cost telephony and Internet in areas where alternative access either doesn’t exist or is too expensive. It is a marriage of a low-cost wireless access point capable of running a mesh networking protocol with an Analog Telephony Adapter.

They were looking to enter the Kenyan market, with the notion that the cyber cafe industry would make the best target audience for their device. Their investors wanted to know the size and value of the market opportunity prior to launching the product in Kenya. Although this happened just over 6 years ago, Kenya had already made a name for itself as a forward looking mobile phone market unafraid of experimentation.

Our challenge was two-fold: We were to look at 2nd and 3rd tier towns, not just Nairobi and Mombasa. Village Telco was looking to connect the unconnected. And we had to estimate the size and value of the market opportunity for a sector – internet cafes – that was primarily cash based and informal, particularly given the rural and small town geography we were considering. There was little or no data available to even get a handle on the number of cyber cafes operating in Kenya.

Secondly, we had to get an idea of the price point at which the product would be acceptable to this target audience. Keep in mind that the device was wholly unknown – an innovation – and there was nothing comparable on the market.

A qualitative approach to quantitative estimation

Given that this was not a conventional research project, and time and resources were constrained to a market analysis, we designed a minimal viable market discovery phase that would permit us to gather enough insights directly from the cyber cafe operators in order to estimate the size and value, as well as recommendations for pricing and market entry.

In late 2011, Kenya’s administrative divisions were still the original provinces.

Based on population density and relative income demographics, as well as an ICT gap analysis of voice and data services – reports available through Kenyan government institutions – we planned an optimal route that maximized exposure to the types of locations Village Telco had specified whilst sampling cyber cafes across a range of infrastructure access and regional income. This coverage was completed in less than 3 weeks.

Surfacing trends through indepth open ended interviews

Where we invested our time and effort was in identifying entrepreneurial and innovative cyber cafe operators in the smaller towns and villages we visited. The vast majority of internet cafes are run as side businesses by the owners who might be white collar employees or civil servants, and often managed by employees. It was the cyber cafe owner operator who saw their business as a growth opportunity that we were seeking.They not only knew their market but had seen the opportunities to grow and expand their services.

They were able to give us an idea of the future of the cyber cafe business in their region, a rough estimate (few businesspeople are willing to openly share revenue data) of the scale of their business, and the trends in decline or growth of the types of services they offered.

Through the data gathered, we were able to estimate the high growth regions for internet cafe services – Nakuru town for instance had seen the number of cybers grow from 10 or 15 in 2007 to upwards of 50, primarily due the increase in tertiary education institutions. Kilifi, on the Coast, had seen a doubling when a local university campus opened.

At the same time, we were able to gauge the value of the opportunity space by using the proxy of the proportion of owner/operators to manager/employees – the former were more likely to be interested in the Mesh Potato than the latter.

Our route planning also provided evidence of the pathways for innovation diffusion, outwards in a hub and spoke model from the central hub of Nairobi’s business district where new electronic products landed from the manufacturing centers of Asia.

Sitting down face to face with the cafe owners and showing them the product and what it could do gave us the insight on pricing and market entry strategy. By the end of 5 weeks from start to finish, we were able to make a business case for innovation meant for a data scarce environment.

Innovation means breaking new ground

While the effort on the ground was very different from a conventional market analysis exercise due to the need to elicit information directly on the market and the product, the time and resources invested by the client were no different from an analysis based on secondary sources and accessible data flows.

The nature of the African mass market is such that pioneers entering the market will have to break new ground, not only with their products and services, but also their approach to analyzing and evaluating the business case for investment. It is not an impossible task and should not be considered a barrier to entry.