Archive for the ‘Process’ Category

Customer-Centric Business Model Design for Financial Inclusion

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The Challenge

Digital financial services (DFS) seek to bridge the chasm between the structures, policies and institutions of the formal economy, and the cash intensive informal and rural economy. Current day approaches tend to take the perspective of the service providers when assessing the market opportunity and the needs of the intended customers. And so the research to inform the design of products and services focuses on the behaviour of the end users apart from their context, and isolates their unmet needs within the narrow bounds of a specific project or purpose.

Given that the user researchers, the concept developers and the service providers, are mostly from the formal operating environment and/or first world contexts, they tend to consider consumer behaviour without the explicit acknowledgement that these user responses to the introduction of digital financial services (DFS) are emerging from the context of very different conditions than they themselves are immersed in. That is, there are implicit assumptions tacitly being made regarding the market and its opportunities, which, if left unquestioned, may obscure the underlying causes of the problem. And, thus, may inadvertently act as intangible barriers themselves.

 

A Framework for Approaching this Challenge – Pasteur’s Quadrant

The cash intensive informal and rural economies of the African continent are a very different operating environment from the formal, structured economy of banks, service providers and institutions. This chasm in context, and thus customer worldview, is particularly wide for the vast majority who tend to be defined as financially excluded. They manage their household expenses on irregular income streams from a variety of sources, not regular and predictable paychecks.

This means that many of the market assessment frameworks and tools anchored in the characteristics of the formal, calender based economy may not apply directly to a wholly different context with entirely different conditions and criteria, and their use without adaptation or acknowledgement may skew the resulting insights and concepts. Most of the available research tends to fall into either pure social science or design driven user research. As we have seen, when it comes to making markets work for the poor, neither approach alone is enough to make sense of the opportunity.

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We are inspired by what is known as Pasteur’s Quadrant – a hybrid approach that integrates the need to understand the context with the pragmatic goal of immediately useful and relevant information.  Our objective is identify strategies that lower the barriers to adoption, whilst minimizing the dropout rate. That is, our goal is to craft sustainable concepts that work for the target audience within the contexts and conditions of their own operating environment and daily life. This approach increases the success rate of a business model. We have been inspired by the way the prepaid airtime model bridges this same chasm for telecommunication giants around the world.

 

Grounding Insights in the context of Informal and Rural Ecosystems

Taking a systemic view of the untapped market for digital financial services, thus, would ground the market observations and the customer insights within the frame of reference of the target audience’s own operating environment. Among the financially excluded, particularly on the African continent, this can safely be said to be the informal sector which contributes a significant proportion of each nation’s GDP and employment, regardless of industry.

Framing the essence of the challenge in the form of these critical questions,

  • What are the barriers to adoption of DFS ?
  • What can be done to lower these barriers to adoption?

permits us to take a systemic approach to identifying barriers to DFS adoption, balancing the need for understanding the unknown with the insights required for conceptual design.

The following questions demonstrate the way we can drill down for comprehensive understanding for a particular customer segment or region in a viable manner:

1. What are the common characteristics of the cash intensive informal economy in which this population resides?
2. What are their current means to manage their household expenses – urban vs rural
2a. What are their current options for financial services – which all do they have access to and which all do they actually use – informal AND formal
2b. Why do they use what they use? And why don’t they use what they’re not using but have access to?
3. What are the market forces acting upon the existing DFS market in their region – regulatory, policy, prices, interoperability, tech of the solution, type of phone etc
4.  What are the assumptions these DFS are making wrt their target audience needs, behaviour, usage patterns and capabilities? How do these assumptions fall short of the real world context and usage behaviour in the context of their cash intensive operating environment?

And thus, the starting point for business model design are the answers we are able to synthesize from the insights gathered above, in order to answer the following question:

What is necessary in order to bridge the gap between the DFS and the intended target audience?

 

Our approach offers a pragmatic diagnosis of the situation, from the perspective of the informal economy and the poor, within the conditions and constraints of the current day regulatory and policy environment. It clearly identifies the gaps in the existing system and describes the opportunity space for new business models that would offer value and resonate with the target audience’s needs and context.

We recommend giving technology a backseat and approaching the solution development process from a more holistic perspective of people, their operating environment and their existing financial behaviour.

Read more on these interdisciplinary lenses for innovating for the informal economies of the developing world’s emerging consumer markets.

The values gap in banking the unbanked

Back in 2008, after my first deep dive into the African consumer market, on behalf of Samsung, I’d identified something I called the “values gap” as an intangible barrier between the first world’s consumer brands, and the mindset and worldview of the majority market, then referred to (erroneously) as the “Bottom of the Pyramid.”

The value propositions of the producers immersed in mainstream consumer culture – “buy now; pay later”, “new and improved” or “throwaway and replace”- fell far short of the mark when it came to reaching the emerging consumer markets of frontier economies.

Overlooked by marketing communications and the messaging of the advertising industry for generations, these new consumers were not conditioned to respond to these familiar messages. In fact, their buyer behaviour – their “consumption values” if you will – resonated more with almost the exact opposite responses – “minimize risk; maximise returns”, “tried and trusted”, or “repair and reuse”.

These choices were the outcome of their environment of uncertainty, and often, adversity; of inadequate infrastructure and, incomes which tended to be irregular and unpredictable. Without access to consumer credit, their purchasing patterns were driven by their cash flow, and an environment of resource scarcity influenced their consumer behaviour.

This gap in mindset and in values meant that the value proposition of a product or service or even a business model was ignored for the most part, as noise. “Not for the likes of us” as some had said, in India, in South Africa, or in The Philippines. The irony, in some cases, was that even when the product or service was meant specifically for the lower income segment or for those in the cash based informal sector, the way it was advertised overshot the target it was intended to reach.

An example of this is Wizzit, a South African mobile bank designed for the erstwhile Base of the Pyramid (BoP) customer. Unlike traditional banks with their reams of required paperwork, most of which were unavailable to the BoP customer, all you needed to open a Wizzit account was your mobile phone number and your ID. You didn’t even need any money, nor were you penalized if the account was empty or left unused for 6 months.

You would think that everyone would open an account as soon as they’d heard about it? Well, it didn’t happen that way.

Wizzit’s marketing messaging focused on the value proposition of “mobile” as interpreted for the first world or privileged customer – “Now you can bank on the go”

Imagine someone who had never thought that they could qualify for a bank account hearing or reading that value proposition? “Its not for the like of us” and tune it out.

If the messaging had touched upon the value proposition embedded in the product’s design – ALL you need is a phone number and your ID and YOU TOO can have a bank account – their audience would have immediately recognized its relevance to their own context. “Hey, I can qualify for this bank account, let me go find out more”

As simple as that.

When the value proposition of the producers immersed in mainstream consumer culture don’t resonate with the world view and mindset of the customer, there’s a gap that cannot be crossed no matter how hard you try. This values gap manifests itself in the product’s design, its marketing communication, distribution strategy, and sales promotions.

And its not just consumer products or services that fail to bridge the chasm. Wherever you seek to lower barriers to adoption and minimize the dropout rate – promoting a new irrigation technique, for instance, or adoption of formal financial services – bridging this gap is key to success.

People, Pesa & Place: A Multidisciplinary lens for innovation in social & economic development

ideo model

This original Venn diagram visualizing the sweet spot of innovation success is a familiar one, with as many variations as there are practitioners. One of the most common is the one below, where business, people (or, as often, design) and technology replace the human centered qualities of viable, desirable and feasible.

csm_HPI_School_of_Design_Thinking_-_Innovation_en_a0f1b067ef

I’ve used them both for years, particularly the latter, evolving it incrementally in the project for the Dutch govt where we looked at barriers to adoption of new agricultural techniques (technology) introduced in international development programmes.

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Yet, I still struggled with this framing when actually considering solutions for programme design and development, or rather, any  products and services meant for the poor in the developing world.

Innovation, this Venn Diagram said, happens at the intersection of the attributes of viable, desirable and feasible. A solution that met these criteria would have greater chances of success. This made sense and it still does.

However, when it came to solutions meant for the lower income demographic, particularly where the majority were managing on irregular, often unpredictable, income streams, from such activities as informal trade and subsistence farming, there were additional issues to be considered. These were often critical to the success or failure of the newly introduced innovation.

For instance, inadequate infrastructure is a fact of life. Whether is variability in electricity supply in the urban context or lack of it in the rural. Things we take for granted in the operating environment in which these lenses were first framed – pipes full of running water, stable and reliable power, affordable, clean fuel for cooking, credit cards and bank accounts – are either scarce, inadequate or unreliable for the most part.

Feasibility, thus, takes on an entirely different meaning in this context. Each location or region (place) may have different facilities. Launching a service in Kenya or Tanzania, even for the most rural and economically challenged, means we can think of using mobile money solutions in the business model, while a similar service in India would have to be designed to adapt to the local context. On the other hand, India has an extensive postal system as well home addresses, while this is still a barrier to delivery in many African locations.

Similarly, the viability of a concept, in this context, must look beyond just the conventional definitions of business, business model or marketing. The embedded assumption here is that a marketplace already exists, with all the support services, information flows and distribution networks.

Further, the current version of this framework, does not offer cues to the research and design team to look for, and take into consideration, elements such as cash transactions, cash flow, lack of formal financial instruments, seasonality, and a myriad other underlying reasons that drive preference for payment plans such as pay-as-you-go or credit based on future harvests.

And as we all tend to promote these diagrams as a means to anchor our explorations and discovery process towards identifying the design drivers for innovative solutions, it seemed to me that we needed more obvious cues to signal that these issues not only exist, disparate from what we may be accustomed to, but also need to be clearly and realistically described. There is far too much tacit knowledge and too many critical assumptions embedded in the current process.

LensUCSD_EFL_26May2015

This diagram is my prototype of the next generation of the original Venn Diagram, where the attributes of the lenses have been interpreted in the context of the difference in operating environment. While it has emerged from a focus on the erstwhile Bottom or Base of the Pyramid or the poor – both of these terms are anathema to me when referring to people – I believe that it might very well make sense to use it for a wider range of incomes and consumer segments, particularly in the African marketplace.

People, of course, does not change from the original, and desirability – that is, creating something that will resonate with them – permits us to lower as many barriers to adoption and minimize the dropout rate. This element came to fore in the Dutch project where the question posed was related to the sustainability of donor funded programmes to effect positive change after the funding ends.

Place replaces Technology, as a lens through which to consider the feasibility of a solution. Furthermore, the benefit of this is that it opens up the framing of the solution space, away from technology per se, and lets us consider a broader range of interventions. Technological solutions may be only one factor, and not a given, as the current framing assumes from the outset.

Pesa is the word I’ve chosen to designate viability. It means money in more than one language across the developing world and thus implies more than just the marketplace which may or may not exist in the formal sense assumed in the first generation diagram. In the context of new products and services, it can cover all aspect of the business model including revenue generation, payment plans, pricing and timing of introduction. And in the context of programmes, it brings to the fore the need to look at means for economic impact, and, uncover a way to measure this impact. Irregular income streams tend to make it difficult for people to know what their monthly income may be or whether, this week, they’ll have that mythical $1.25 or $2 or $5 to spend today.

I look forward to your feedback on this and will be writing more on the diagram separately pertaining to both innovative products and services for the emerging African consumer market as well as a framework for social design innovation for the economically challenged.

Assessing the size and value of investment opportunities with an informal economy footprint

There’s an interesting snippet from the Nigerian news yesterday that led to this framing of a necessary problem statement. KPMG’s head of private equity is quoted as saying:

Meeting current needs of the one billion plus population and, the future demands of the rapidly emerging middle class consumers will drive the next wave of Private Equity investment on the continent.

However, investors, according to KPMG, are keener to do business in sectors that have little to no direct relationship with government, or through structures that limit government control and undue influence.

This was the view of ‎Partner & Africa Head, Deal Advisory & Private Equity at KPMG, Dapo Okubadejo, who said that throughout the firm’s ongoing interactions with foreign investors, it was clear that concerns about ‘red tape’ and perceived corruption are still top of mind for investors who are looking to enter African markets.

Given that private equity investments are currently the hottest thing in key African markets, this shift in emphasis to more consumer facing sectors brings to light some unique challenges that investors will have to face beyond the oft mentioned challenges such as variability in quality of infrastructure and inadequate systems:

  • African consumers transact mostly (90-odd% in most markets) in cash.
  • Emerging consumer classes are more likely than not employed in informal sector activities, in small business and trade. This has impact on both their purchasing patterns as well as their cash flow regardless of income strata.
  • Services are mostly part of the informal sector.
  • Greater degree of retail formalization at the front end (B2C) is no guarantee of similar degree of formal structures at the back end (B2B). Distribution, delivery, payments – the entire supply chain – may have components from both the formal and informal sectors.
  • The role of personal relationships and social networks in the information ecosystem and impact on B2B and B2C decisions.

What does this actually mean, though, to the investment community?

A few years ago, Emerging Futures Lab had the unrivalled opportunity to work with Village Telco, a South African social enterprise whose corporate mantra emphasized open innovation. We can openly share our experience of qualifying, from the perspective of investment and potential for returns, an industry sector for which little or no market data is available due to its significant footprint in the cash based informal economy.

While the industry itself – cyber cafes or internet cafes – maybe in decline today due to the proliferation of affordable smartphones and data plans, back then it was a significant market opportunity for an innovative communications technology. Our task was to assess the size and dollar value of this industry and the market potential for Village Telco’s Mesh Potato device. This was complicated by the fact that not only had we to offer product pricing recommendations but we had to elicit purchase intent for an unknown product category.

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Implications for Investment in B2C

This experience was an eye-opening exercise in shedding light on assumptions made in traditional market analyses and pricing exercises.

When such a significant proportion of the industry is operating in the informal sector then many of the heuristic methods and frameworks either did not apply or resulted in skewed outcomes.

The assumptions underlying pricing, for example, focus on utility value, whereas we discovered the majority of informal sector businesses looked at revenue generation potential, intent on maximizing the returns on their capital investment in new technology.

The implications for risk and returns, as assessed by consumer facing businesses, are also influenced by the cash flows and patterns of the informal sector. When the majority of transactions are in cash, how does this influence decision making?

The specific business or industry itself that PE funds are considering may not be as informal as the internet cafe industry but any consumer facing business in this operating environment will face the implications of the propensity for cash.

To summarize the challenge for market assessment:

  1. Heuristic frameworks for market analysis developed in the context of more developed operating environments may not always offer accurate insights on potential for sales and market share.
  2. Assumptions made on purchasing patterns, pricing and buyer behaviour should not be left unquestioned, particularly if the industry segment has a significant footprint in the informal sector.
  3. Risk assessments may be skewed by the impact of the above two factors in the qualification of a market’s potential or industry viability.

Caveat:

Many of the most visible investments till date have been in FMCG such as dairy or biscuits but The Economist offer their opinion albeit without mentioning the increasing emphasis in the B2C space.

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RIP Google BebaPay – Requiem for a cashless payment system

Less than a year after going live, Google is closing down the BebaPay smart card which was introduced as an NFC based cashless payment mechanism for Nairobi’s public transport.

Last year, I’d analyzed the context and the operating environment in which they’d launched their service, on hearing the news that they’d been struggling to gain traction. I’d gone on to add my thoughts on designing services for the informal economy, where a vast majority manage on irregular incomes and transactions are primarily in cash.

Today we note that Kenyan BebaPay card holders have been advised to use up any remaining balance and/or turn in their smart cards for a prepaid MasterCard, issued by the same bank that Google partnered with. We also note that Google had shut down their payments pilot in The Philippines and is apparently planning to step out of the payments space.

This gives rise to food for thought – are they shutting these initiatives down because of a pivot in business strategy away from payments, leaving the way open for MasterCard? Or, and this is of interest to me from the design planning perspective, did their inhouse approach to new product development create a situation where they found themselves struggling to lower barriers to user adoption of their services, and thus led to their decision to withdraw from the entire playing field?

Tech driven innovation

I have the experience of a deep dive or immersion – in the operating environments of both Kenya and The Phillippines – exploring the way people manage their finances whilst juggling their irregular income streams to minimize volatility and plan for their expenses. These new markets are so different from Google’s accustomed playing field that their usual approach to new product introductions may not be the right fit, if indeed they seek to expand their reach beyond their existing sphere of dominance.

On the interwebs, we have become accustomed to the concept of companies that launch products in beta, still buggy and finding their way. Over time, we have also come to recognize Google’s habits of shutting down services, regardless of how much we may weep or wail –> Google’s RSS Reader, for example, is one still missed by many in the old skool.

But once you step away from your tech savvy audience in the broadband segments, to the millions of noobs coming online, with an entirely different contextual knowledge of technology and its practices, I don’t believe you can summarily make the same moves you could have earlier, without there being a bigger backlash.

700,000 commuters have been left stranded in Nairobi, forced to find a replacement for an innovative tech solution that they were forced to adopt in the first place when the government put their cashless policy in place for bus fares.

This is the real world, and these are real people, struggling to make their way home after a hard day’s work trying to make a living.

This isn’t the minor inconvenience of not being able to use Reader’s free service to grab your favourite RSS feeds.

These are also new markets for the Google brand. One where reputation, commitment and longevity matters. These are not your regular customers tied to your GMail or other services, like the rest of us, that we still come back to search or check our mail even if you take away a toy or two from your playground. Particularly if you’re looking to provide a service for the lower income bracket in the developing world.

The Ugandan tech blog Dignited pointed out the demise of Google’s Trader – yet another service meant for the untapped and emerging newcomers to global connectivity – and this implies that a pattern of unreliable behaviour has already established itself in the enduser’s mindset.

They embraced your shiny new bauble you launched for them with such fanfare and then you yanked it away.

This won’t be an issue only for Google, tbh, its a part of the design culture for the digital era. And one, perhaps that needs a momentary rethink when considering the next billions coming online.

There is a larger conversation here, I can tell, on design, process and methodology and its evolution in response to more greatly intertwined world we live in. On the internet, which is now ever more global, the flap of that butterfly’s wing can indeed reach further than you envisioned.

 

FAQ on Value creation

The NDA expired 4 years ago

1.    Problem statement:

How do you build and maintain trust and commitment without face to face contact with your customers?

Value proposition:

Through a cohesive, integrated strategy of brand building across all information media sources, whether they be handhelds, mobiles, monitors, screens or even the product interfaces on medical equipment

2.    Problem statement:

How do you create and implement a consistent brand experience across multiple channels?

Value proposition:

Bringing together global talent in branding, graphic design, visual communication, user interface design, interaction, experience, information architecture and the back end software skills to bring to life your corporate vision in a compelling brand story. By being technology agnostic, we create the environment for your users to experience your brand that best suits the business challenge

3.    Problem statement:

There are too many brands competing for mindshare across the same platform, how do I differentiate?

Value proposition:

When the service provider, the manufacturer and the application developer all need to capture mindshare and contribute to the total user experience though one mobile phone interface, our responsibility is to ensure that our client’s story/brand/message are consistent and compelling in that tiny space of the view screen.

4.    Problem statement:

How do you ensure that you’ve covered all touchpoints to build your brand and customer experience in an integrated manner?

Value proposition:

By applying the observation techniques of user research as well as secondary research, i2 can uncover all brand building opportunities and harness the future potential of your current technology.

5.    Problem statement:

How do you go forward within the rapidly changing technological landscape and proliferating information channels? Time is the only commodity and catching your customer’s attention needs innovative means of communication design.

Value proposition:

i2 can assist you with working prototypes to visualize the future steps towards introducing disruptive innovation in your messaging and media to create that buzz in the market.

This problem set was written by Niti Bhan for Method, while consulting with Kevin and David for their new service Interface Innovation (i2) in November 2005.

Designing with Understanding

Wroblewski 2007, Designing with Vision

The last 6 years have been nothing more than constant proving of this philosophy and approach, as embodied in the design pyramid as captured by LukeW back in the day. As an ardent proponent of exploratory user research (Chipchase and Jung, 2007) this conceptual image just burst into a million twinkling stars of potential and understanding inside my whole brain. Take the thought of designing with vision one more step further and begin with understanding the landscape on which this vision will lie. For example, if you are going to build your castle of dreams on Cloud 9 then I wanted to begin by describing what Cloud 9 looked like first.

What was the operating environment like – or, rather, in the case of the way it turned out for the rural economy in the developing world or lower income segments in urban sprawls of South Asia and East Africa – how was it different from mainstream consumer culture in which most of the worlds tech innovation and product development seemed to be taking place?

In the case of the rural economy it seemed like the natural seasons and their rhythmic impact on farmer’s purchasing power were the key differentiators for successful consumer product launches and market entry strategies including payment plans and business models.  These characteristics emerged initially in the form of design constraints and criteria for filtering concepts for further development after the initial brainstorming, that is, they emerged as “actionable insights” from the “analysis and synthesis” phase after reams of data had been collected by primary user research methods as well as secondary desk research aka “Immersion”. A very crude and simplified blocking out of the basic user centric process (for more or less anything really, product, service, payment plan or business model, value chain et al)

All the nuance and strategic visioning has been stripped out, as have the iterative arrows in every which way, the point is to be nimble and poised to pivot, based on the data coming in from this wholly different operating environment.

We don’t need scientific citations to state with great confidence that daily life is very different in urban Western Europe than in rural East Africa. That every assumption we make, as we conceptualize, design or develop any solution, is across the gap in mindset and values of the erstwhile base or bottom of the pyramid. (BoP). To be honest, BoP was a good concept while it lasted, but just like Third World or Hindoo, these are labels that have done their duty in their time. Now they are obsolete. That is all.

But because the entire product_service_revenuemodel ecosystem is so very different, it makes sense for us to first understand that context in which our future solution will be utilized (or implemented, sold, used…). We would need to take a lens to this Environment, Economy and Ethnology in order proceed to beginning to see any kind of emergent ecosystem which could fill an urgent need worth micropayment or create a market much need further upstream in the sustainable agricultural value chain.

My methodology and approach are outlined here and this gives an introduction to the philosophy underlying the frames of reference I use for conceptualizing market entry strategies for emerging global middle class consumer markets.

Projected Impact of recognizing and integrating end-user’s agency on innovation adoption rates

Rajasthan, India January 2009

Our problem statement for the recently completed, two phase project on sustainable agricultural value chains, was framed as follows:

What are the barriers to adoption of sustainable agricultural practices that limit their spread and scaling? What are reasons and/or causes of the existence of these barriers?

 The complexity and wicked nature of the problem space – why do farmers stop using innovation (new agricultural technology and methods)once donor funding ends in large scale public private partnerships (PPPs) for social and economic development at the base of the pyramid (among subsistence farmers in rural Africa, for eg)- meant that we had to step back massively in order to grasp the entire process of PPP initiation and conceptualization all the way through to impact assessment after the usually multi-year projects ended.

Our aim was to identify the potential barriers to adoption i.e. the problem areas, in current day program development processes, at the systems level, rather than overwhelm the problem space with attempting to identify situational challenges unique to each PPP proposal.  Were there generalizable problems that could be identified, first, in the existing process, broadly speaking, and if so, could they be framed for solution finding at the individual project level?

We began with the premise that putting the user at the center of the program design would exponentially improve adoption rates as programs would seek to fill gaps in the existing infrastructure or services or validate and enable the end user’s aspirational goals. When we assessed the existing situation against this lens we discovered that in the majority of the cases, the first time there was any contact with the end-user of these programs (the beneficiaries) was at the impact assessment stage of the project, usually after hundreds of thousands of dollars and many months or years later.

Observations during our fieldwork on this project as well as from past experiences have always demonstrated the joy of recognition or appreciation end-users always expressed when the context of of user research and its relationship to a problem solving outcome of some sort (device, app, biz model etc) has been explained to them as background to our intrusions into their daily life. This project’s particularities emphasized this aspect and threw up the role of the end user’s agency in choosing to adopt an innovation in their daily work or not, as opposed to such programs tending to impose participation and outcomes as the only means to document measurable impact. 

We offer the hypothesis, to be validated in the next phase of research in the field, that this explicit recognition of the end-user’s agency that the upfront design research conveys to the participants (and the general community) as well as the integration of their context and its constraints and conditions into the program design, inspires and motivates far greater rates of adoption of the “innovation” (whether a pruning technique or a new seed or even equipment) which then tends to be perceived as a custom tailored solution.

Estimating price in unexplored and untapped markets

In addition to estimating the size and value of the Kenyan cyber cafe industry for our client, Village Telco of Cape Town, South Africa, we were tasked with finding out what would people pay for their product, the Mesh Potato. This challenge was the equivalent of walking up to someone and asking:

How much would you pay for this thing you’ve never heard of and you’re not sure what it does?

We discovered it was through the long rambling conversations we were having with our selected cyber cafe owner operators that we were able to get to this point of being able ask such a question. The conversations allowed us a peek into the way they thought about investing in new technology, and in many ways, reflected back to us the basics of the “BoP” consumer mindset that had already been identified previously.  For example:

Maximizing ROI (return on investment)

When asked what he’d pay for a Mesh Potato, our friend Moses responded with a question, “It depends,  how much money will it make for me?”

That is, as a business owner, his evaluation of the product’s price was intrinsically linked to its ability to generate an income stream. Maximizing the return on the investment is his primary criteria – whether it will save him money or a significant amount of time, and how soon will that possible are all the factors that go into the decision to purchase. His question also implicitly holds the corollary premise of Minimizing Risk.

So rarely was the price seen in isolation but instead it was considered in context of a variety of other factors.  For business owners, their primary value driver was “Is this a source of increased income for me?”

Another factor was that of the need to question assumptions underlying traditional models for assessing pricing – from wikipedia’s entry on the underlying assumptions used in Van Westendorp’s model:

The assumption underlying the Price Sensitivity Meter (PSM) is that respondents are capable of envisioning a pricing landscape and that price is an intrinsic measure of value or utility. Participants in a PSM exercise are asked to identify price points at which they can infer a particular value to the product or service under study. PSM claims to capture the extent to which a product has an inherent value denoted by price.

What if price is not the intrinsic measure of value or utility but long term revenue generation potential is?

Until we are able to gather enough insights over the course of a number of such studies and come up with frameworks customized for a very different operating environment, it will only be through the willingness to question all our assumptions and adjusting our approach that we will be able to make reasonably accurate assessments for these untapped markets.

Exploring post-industrial platforms

This spread is the centerfold of an interesting little PDF called Fact, Forces, Fog:: Reckless guesses in a time of change by The Doblin Group of Chicago.  I was first introduced to it in the Fall (Autumn) semester of 2003 when I took Larry Keeley‘s class “Design Planning” (or whatever its being called now) at the Institute of Design-IIT. It captured my imagination, and to be honest, hasn’t let go since then.

I bring it up in order to introduce the basic concept of a “post-industrial platform”, from a post written some three years ago, here is my snippet:

What do we see when we look at the PDF centrefold?
Keeley shared that if we look at the way things were – the greyed out section on the left hand side titled Industries gave rise to material goods & services then look at how things are ‘now’ [approximately 2002/2003] Digital systems and connections amplify trends, using Doblin’s methods they were able to forecast the future direction of way things were going to be evolving.

The essence of the evolution if you look at the clusters closely is that business models are evolving away from the capital intensive industrial infrastructure requirements of an Industrial era towards post industrial platforms based on intangible concepts. On the far right hand side is the final section titled Hot fields foster powerful convergence. Doblin’s team identified 11 key areas:

Simplicity – Enlightenment – Talent leverage – Mastery – Travel – Entertainment – Personal Expression – Relationships – Financial health – Health & Environment – Political Freedom

Now, at first glance, comparing these words, with those I’d extracted in yesterday’s post, it seems as though Wisdom itself is a meta-platform, comprised of the following:

Value –  Understanding –  High Standards –  Curiosity –  Love –  Uncompromising vision –  Ennoble – Eternal.
 
But a closer look at the concepts themselves will show that they are not all capable of becoming platforms in their own right, by virtue of the definition given above.  These are the individual qualities of wisdom, and needs must be taken together in order to embody Wisdom itself.
On the other hand, Love, as a concept, can and does exist outside of wisdom (as any cheesy soap opera will inform us).  And Umair Haque’s articulation from his Wisdom Manifesto, has it as:

Strategy is the application of force. Wisdom is the application of love. Strategy suppresses, but Wisdom evokes. Its test is the ability to spark new ideas, concepts, and solutions. That is how to be valued by people, communities, and society

Wisdom is the application of love. That is, one discovers, that perhaps wisdom is not a platform per se, but its manifestation, which then can be articulated in the many ways already so discussed.  Therefore, one is left with the point to ponder further, is Love then a post-industrial platform in its own right? And if so, is it repeating any of the concepts that have already been covered by the existing 11 platforms articulated above? The closest seems to be Relationships, so I zoomed in on the clustering of tags shown around it from the PDF.

Interesting. As a platform for business models, the intangible concept of Relationships resembles all the services available online for social networking, matchmaking, dating, sharing media and common interests as well as those which have tried to embody ‘trust’ into their interactions. But there’s no mention of the emotions behind these qualities, the engine or driver of empathy or that indefinable, inexplicable sense of our common humanity.

Perhaps there is, indeed, room for one more post-industrial platform then. But  how would we extrapolate its manifestation, since so much of what we know as “love”  has been commodified into meaninglessness by every pop song or preacher around the world? Although it must be acknowledged that everything we talk about when we look at “doing well by doing good”, or “social impact” or even, the triple bottomline over pure profits, seem to implicitly imply a form of love, perhaps for nothing else but simply that for our own emerging future.

This conversation will undoubtedly continue…

Your thoughts?