Posts Tagged ‘design planning’

A theoretical approach to Value for Money in aid & development: Optimizing research and design for ‘best fit’ iterative programming

Last year, I briefly touched upon this concept as an approach to cost effective programme design that was still flexible enough to provide room for iteration for best fit.

Today, I want to explore the concept further to evaluate its potential as a framework for incorporating the concurrent shift in development thinking towards Value for Money (DFID) principles, in addition to designing for best fit.

Value for Money as a Process Driver

Value for Money (VfM) is not the same as traditional monitoring and evaluation which seeks to measure impact of a project, and occurs usually after the fact. In many large scale projects, this may not happen until years after inception.

Instead, VfM is defined by the UK’s National Audit Office as ‘the optimal use of resources to achieve intended outcomes’, which in turn, the DFID document contextualizes for their aid programming investments as “We maximise the impact of each pound spent to improve poor people’s lives.”

If this applies to all investments in aid related programme development, then it follows that it must also apply to earliest stage of discovery and exploration that leads to problem framing i.e. the necessary groundwork to write a comprehensive and inclusive design brief for future programming.

Thus, the conceptual approach that I introduced at the beginning of this post, which is taken from the discipline of Operations Research, and seeks to solve the challenge framed so – what is the optimal solution that minimizes resources (inputs) for maximum outputs (value creation) – fits as a potential framework that can theoretically apply from the earliest stages of implementing development strategy, even before inception of any related projects, including early stage research and feasibility studies. After all, the function of Linear Programming is optimization.

Note: Here I will only consider the theoretical aspects from the point of view of programme design research and development, and not the mathematics. That will have to wait until I have gathered enough data for validation.

Design Research for Programme Design Purposes

In this context, the primary function of such an exploratory project is to identify the opportunity spaces for interventions that would together form an integrated programme designed to effect some sort of positive change in the ecosystem within which it would be implemented, and offer a wider (more inclusive) range of cross-cutting benefits.

In the language of product development, we are attempting to build a working prototype. We cannot build and test first prototypes to see if they work, directly, because our room for failure is much less spacious for experimenting with aid related programming, ethically speaking. This is not a laboratory environment but the real world with enough challenges and adversity already existent.

Programmes are not the same as consumer products, nor are they meant to be designed and tested in isolation before being launched for pilot testing in the market. Their very nature is such that innocent people are involved from the start, often with a history of skepticism regarding any number of well meant donor funded projects aimed at improving their lives. This changes the stringency of the early stage requirements for design planning.

At the same time, the nature of the task is such that no first prototype can be expected to be the final design. So, from the very beginning, what we must do is set the objective of the outcome as a Minimal Working Prototype (MWP) that meets all the criteria for an optimal solution, and NOT a Minimal Viable Product (which may or may not work wholly as intended until tested in the field for iteration.)

That is, the first implementation of the iterative programme design must fall within the bounds of the solution space – that which is represented by the shaded area in the diagram above.

The Optimal Solution is the Iterative Programme Design

Thus, what we must be able to do at the end of the discovery phase of research necessary to write the design brief, is tightly constrain the boundary conditions for the solution space within which the MWP can then be iterated. This minimizes the risk of utter failure, and maximizes the chances of discovering the best fit, and all of this within the definitions of Value for Money and it’s guidelines.

There are numerous ways to set the goals for optimization – one can minimize resources and maximize constraints, or minimize risk and maximize return on resources invested. These will guide our testing of this framework in field conditions to validate the robustness of this theoretical approach.

In this way, we can constrain our efforts to discover best fit within predefined limits of tolerance, while retaining the flexibility to adapt to changing real world circumstances and progressive transformation of operating conditions.

Best fit, then, becomes less a matter of experimentation without boundary conditions and more a discovery of which of the many right answers – if we take the entire shaded area as containing “right answers” to the problem at hand – help us meet the goals of intervention in the complex adaptive system in an optimal manner.

The point to note from this conceptual framework is that there is never any ONE right answer, so much as the answer will be that which we discover to the question “What is needed right now for us to meet our goals, given these changes since we last looked at the system?”

It is this aspect that loads the burden of a successful outcome on the front end of the entire research and development process, given that framing the problem correctly at the outset is what drives the research planning and steers the discovery process in the direction of relevant criteria, conditions, constraints, and user needs that will not only form the bounds of our solution space, but also act as waymarkers for monitoring change and evaluating its progression.

Systemic design thinking and complex adaptive systems

Going back to first principles has been a refreshing exercise. Even as our work has taken us into some wholly new places, there’s comfort in knowing that others have thought deeply about the concepts, though not in our context. I’m a firm believer in not re-inventing the wheel. Consider it a working prototype to be tested in a new environment, rather like I’ve been doing with Vijay Kumar’s innovation methods.

Here’s the context of the thinking I’d been doing on iterative programming for complex, adaptive systems – that is, taking on the wicked problem space of international development where the operating environment is rather greatly different from the predictable regularity of the developed world:

People-centered systems design thinking for complexity
Pivoting from “best practice” to “best fit”: An interdisciplinary perspective (Intro)
An Interdisciplinary Approach to “Best Fit” for International Development: Process and Tools (Part 1)
Enabling development’s paradigm shift from ‘best practice’ to ‘best fit’(Part 2)

Thus, it was with pleasure that I dived into exploring Peter Jones’ publications on social transformation. Two, especially, caught my attention.
The first lays the groundwork in the work of bringing together the two disciplines – systems thinking and design.  From the abstract of his Systemic Design Principles for Complex Social Systems:

Systems theory and design thinking both share a common orientation to the desired outcomes of complex problems, which is to effect highly-leveraged, well-reasoned, and preferred changes in situations of concern.Systems thinking (resulting from its theoretical bias) promotes the understanding of complex problem situations independently of solutions, and demonstrates an analytical bias. Design disciplines demonstrate an action-oriented or generative bias toward creative solutions, but design often ignores deep understanding as irrelevant to future-oriented change.While many practitioners believe there to be compatibility between design and systems theory,the literature shows very few examples of their resolution in theoretical explanation or first principles. This work presents a reasoned attempt to reconcile the shared essential principles common to both fundamental systems theories and design theories, based on meta-analyses and a synthesis of shared principles. An argument developed on current and historical scholarly perspectives is illuminated by relevant complex system cases demonstrating the shared principles. While primarily oriented to complex social systems, the shared systemic design principles apply to all complex design outcomes, product and service systems, information systems, and social organizational systems.

And once I noted there was a bit of an overlap between the references I’d drawn on for my initial exploration of design planning as the discipline from which to source methods to address the challenge of complex, adaptive systems as currently explored in the development space, I was relieved to see that I was on the right path for our own theoretical evolution.

This paper is a great starting point for our methods development for the context of the informal sector in the East Africa, particularly outside the urban centers. And, a second paper by Jones – Design Research Methods in Systemic Design validates many of our assumptions while working with only the methods and systems thinking from one school of thought – the Institute of Design’s philosophy and approach.

In future blogposts, I will attempt to triangulate the thinking from all of these disciplines – design planning, human centered design, systems thinking, and international development. There’s a paper I’m hoping to write by the Autumn, if all goes well and the abstract accepted for a conference at the end of the year.

Frame Insights: Going back to first principles in the Innovation Planning Process

After conducting research, we need to bring structure to what has been found and learned. We sort, cluster, and organize the data gathered and begin to find important patterns. We analyze contextual data and view patterns that point to untapped market opportunities or niches. Finding insights and patterns that repeatedly emerge from multiple analyses of data is beneficial. ~ Vijay Kumar, 101 Design Methods

“It’s what happens after the research that’s important” is something I found myself saying three times to three different people in three different contexts over the past couple of days. Anyone can go out and interview users and beneficiaries. What’s important is what happens during the Analysis phase.

To ponder this in detail, I wanted to go back to first principles, and drill down into the post research stage where we are expected to frame our insights.

Vijay’s slide pops out 5 key outcomes from this phase, and these are critical for solution development in the subsequent phase. These 5 outcomes from analysis of the data collected during the research phase are:

  1. Looking for patterns
  2. Exploring systems
  3. Identifying opportunities
  4. Developing guiding principles
  5. Constructing overviews

It is this stage that distinguishes the quality of the outcome. Now, in the case of our work in the informal economy operating environment, we have built up an overview of the landscape over the past several years, primarily through immersion and thick data collection using design ethnography methods.

Starting from the purchasing patterns and buyer behaviour of low income consumers, back in early 2008, all the way through to the development of guiding principles such as flexibility, we have explored and mapped the ecosystem from numerous vantage points.

Today, our synthesis of user research does not happen in isolation from the body of work – intellectual property – that has been developed over time, through experiential and practical knowledge.

This, then, is what underlay my conviction when I spoke about the importance of the quality of interpretation of the data, and the transmutation of these interpretations into implemented insights in the form of new product features, service design elements, or nuances of the payment plan in the business model.

Increasingly, the Frame Insights phase of our work has led to the evolution of our understanding of the commercial landscape in rural and informal markets where incomes tend to be irregular and volatile, and infrastructure is inadequate or missing. It is this that I’ve been attempting to capture under the category of Biashara Economics.

It’s not Africa specific. The patterns hold, give or take ~30% margin for historical/cultural/social differences, across continents. That is because these patterns are the natural response to the common characteristics of seasonality, volatility, uncertainty, and unpredictability. And this is why one can see the success of the prepaid business model around the world.

It strikes me here that this in fact validates the methodology and approach to exploration and discovery in unknown contexts, something I had framed as the starting point for the very first such project almost a decade ago. Over time, I discovered how much the methods, as delineated by Vijay in Chicago, had to be adapted for the context but that is a topic for another time.

How the African movable assets bill can unleash innovation opportunities for the rural economy

Somewhere in Kenya, 4th June 2012 (Photo: Niti Bhan)

As Kenya joins Zambia and Zimbabwe in ratifying a Movable Property Security Rights Act, there’s a sense that the floodgates to innovation in access to finance might be taking place in rural Africa, south of the Sahara and north of South Africa.

Kenya’s law also goes beyond the cows and goats and allows a borrower to collateralise future receivables arising from contractual relationships.

How it ends up being implemented will set the stage for the next big disruption in financial inclusion. In the meantime, let’s take a closer look at the opportunity space for innovation in the informal and rural economy that dominates these operating environments.

 

1. A whole new bank, designed to meet the needs of rural Africa

Last night, a tweet by Charles Onyango-Obbo struck me forcibly, and reminded me of our Banking the Unbanked proposal crafted for ICICI back in January of 2007.

The very fact that contemporary thoughtleaders in the Kenyan banking industry are unable to take the concept of livestock as collateral for loans seriously, taken together with the deeply embedded assumptions of the formal economy’s financial structure leaves the door wide open to disruption.

It would not be too difficult to conceptualize a rural, co-operative bank custom designed for the local operating environment. In Kenya, where the mobile platform provides clear evidence of the viability, feasibility, and desirability of innovative financial tools and services that work for irregular income streams and provide the flexibility, reciprocity, and negotiability inherent in the cooperative local economies, such a bank could change the social and economic development landscape overnight.

In fact, one could conceivably foresee this “bank for rural Africa” scaling far beyond Kenya’s borders.

 

2. Insurance sector must respond to banking disruption

The domino effect of disruption in the banking sector should kickstart the stagnant insurance industry that has been ineffectually attempting to scale outside of the formal economy’s neatly defined boundaries. Bankers willing to take livestock as collateral for loans will therefore require insurance on their movable asset as a surety against the risk of disease, or drought.

Current products tend to emerge from the international aid industry, seeking to insure smallholder farmers against the shock of losing their livestock to climate related disasters such as prolonged drought, or an epidemic of illness. There is a dearth of relevant and appropriately designed insurance products from the private sector targeting the needs of the rural economy. For all the talk of African urbanization, even the most optimistic projections show that East Africa’s rural population will continue to dominate.

Thus, this an opportunity ripe for the plucking, given the right mix of product, pricing, and promotional messaging.

 

3. Disrupting assumptions of Poverty and Purchasing Power

Whether it is Kenya’s significant non profit sector or the nascent consumer oriented markets, the redrawn lines defining assets, collateral, and the floodgates of access to finance will require a complete overhaul in the way the population is segmented and measured.

Once these hundreds of movable assets have been valued, insured, and registered officially, even the most reluctant banker must now count the pastoralist among his wealthiest local clientele, able to draw a line of credit against his true wealth to the tune of thousands of dollars without feeling the pinch.

 

4. Triggering a rural investment and consumption boom

From mabati for a new roof and simti for the backyard wall, to the latest model smartphone or pickup truck, the concurrent boom in investments and consumption provides an ample playing ground for new products and services tailored for the contextual needs upcountry. Finally, Farmer Joe can install that solar powered irrigation pump for his orange groves in time to reap the next big harvest. And Mama Mercy can think of building up a nest egg of investments faster from the income provided by her farmyard animals.

Kagio Produce Market, Kenya, April 2013 (photo: Niti Bhan)

This might turn out to mean upgrading to a breed of high yield milch cows or being able to provide them with better quality feeds and medicines, but the financial bridge that a well designed strategy leveraging this movable assets bill and it’s timely implementation could mean the difference between the brass ring or treading water.

 

5. Trade and Commerce will open new markets

Given that the Kenyan Movable Property Security Rights Act 2017 goes beyond livestock to include other stores of wealth and value creation, there will be an undeniable impact on regional and cross border trade. No trader will give up the opportunity to leverage their existing inventory if it qualifies for additional credit that can be plowed back into the business.

On the road to Bungoma, Western Kenya, February 2016 (Photo: Niti Bhan)

Trader’s mindset and the documented biashara growth strategies already in evidence point clearly to the productive economic use of this access to finance rather than passive consumption alone. As their business grows, they will require a whole slew of tools and services tailored to their needs. This could be as simple as a basic book keeping app or as complex as customized commodity (assets, livestock, non perishable foodstuffs, grains and cereals) exchange platforms that integrate the disruptive new services percolating through the entire ecosystem.

 

In conclusion

These few steps outlined above are only the beginning of laying the foundation for disrupting the current social and economic development trajectory of small town and rural Kenya. I see immense potential for both direct to consumer as well as business to business segments for forward looking organizations seeking a foothold in the burgeoning East African markets.

We, at Emerging Futures Lab, would be pleased to offer you customized white papers on the opportunities for new products, services, and even business models, based on this emerging financial environment recently signed into law by President Kenyatta. Contact us for an exploratory conversation on the scope and scale of your particular industry’s needs. Our experienced team can help you maximize these opportunities from concept design and prototyping all the way through to path to market strategies.

The importance of user agency for good design in the humanitarian and development context

humancenteredThis is a topic that has come up so often on Twitter that I thought to write it out once and for all. A link would be ever so much easier to argue with than to make the case for recognizing the agency of the end user – whether an intended customer or beneficiary – of an innovation.

At some point, I’ll get around to writing a much longer version with citations and links to contemporary research in iterative programming for complex, adaptive systems i.e. the ecosystem intended as the target recipient for the implementation of a socio-economic development program or project. For now, this short version will do.

The late John Heskett, professor in Design Planning and Market Forces at the Institute of Design, IIT, Chicago, once said in the classroom (notes, Spring 2003) that an invention could not be considered to be an innovation until it had been embraced by the end user. Witness the difference in adoption between Apple’s iPod and the Segway human transporter.

This metric of success for the novel – be it a product or a service, or even a business model such as the prepaid/pay as you go means of using mobile phones – requires that the customer (the end user or the beneficiary, as the case may be) be given the opportunity to choose, that is, to make a decision on whether to adopt, adapt, or reject the innovation in question.

In order to choose, and to decide, the user for whom such systems are designed must then be imbued with agency, rather than be considered passive recipients of the innovation.

This respect and recognition of the recipient’s agency forms the core of our work in innovation planning and concept design inspired by primary research in the informal markets of rural and urban sub Saharan Africa, South Asia, and the ASEAN. It has been informed by more than a decade of practical knowledge from experience in the field.

And it is this recognition of agency, which is that which empowers, that provides the foundation for our processes and systems, our methods and tools, and thus, our learning and teaching of how to think differently across the bridge of disparity, and inspires conceptual design of holistic solutions.

Without explicit acknowledgement of the individual’s agency or recognition of the diversity of circumstances, abilities, and aspirations in a community, any designs meant to effect positive change will remain lifeless attempts to intervene from the outside. Witness the number of pilots that fail to scale, or programmes that remain unsustained once external funding ends.

A Precursor for Systems Design and Social Change from Finland

Sitra, the Finnish innovation fund, has released an excellent analysis and work plan for systemic change at scale – how to change the national mindset to become a society focused on sustainability and wellbeing.

I remember noting Finland’s leadership in systems design and strategic planning back in 2007 during our Cox Europe Mission to observe multidisciplinary creativity in business and higher education. One of the reasons, I still believe, why Helsinki became a World Design Capital.

This report considers the circular economy (or, REculture as I’ve often called it). While the whole document is entirely the work of Sitra, one cannot help but recognize the contributions made by Doblin, the pioneer of design planning back in Chicago. After all, all of us who were taught by Larry Keeley were introduced to the 10 types of innovation  page 44).

This gives me hope, as my team and I start exploring the method for triggering systemic change for an entirely different kind of complex, adaptive system – that common in the developing world context. This means that we can draw upon the lessons we learnt back in school and then seek to evolve them for the disparities in the operating environment.

Unlike Finland, where there is high trust in the system, and things run rather smoothly, even after the worst blizzard, the average rural market town in East Africa has unreliable and inadequate infrastructure, higher mistrust in systems, and almost no credible sources of historic data for any kind of trends analysis much less an easy and affordable way to monitor and evaluate anything less than highly visible (mobile phones) gross changes in the ecosystem.
sitraThus, while we can be inspired by this straightforward roadmap for the Finnish context, I already know that our progress will not be as simple or linear. Most likely we will have a lot more exploration and discovery, such as mapping the landscape, as well as needing to adapt our approach in conditions of greater uncertainty where planning is a challenge, and preparation means survival.

As a Finnish entrepreneur, I’m grateful for this contextual opportunity to be inspired by this living example even as I proceed further with my own work.

5 examples of the breadth of African led human-centered design and thinking and planning

The other day I was searching for news on design from the African continent and noted on Twitter that it seemed as though only the South Africans were consistently talking about their various creative outputs. Having long been part of the crowd that believed in the indigenous creativity and innovation in the less visible parts of the world, I went digging to see if maybe it wasn’t the words that were important but the intent of the action.

Was there, in fact, evidence of people centred thinking and planning, and solution crafting, that was innovative or transformative? This is what I’ve found with just a couple of days of desk research, I expect there’s much more out there and this is only the tip of the iceberg.

South Africa: What was designed to exclude can be redesigned to include

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Papwa Sewgolum Golf Course © Johnny Miller / Millefoto

During apartheid, barriers were both constructed and modified to segregate urban spaces—roads, rivers, and large stretches of open land separating rich neighborhoods from the poor. Twenty-two years later these barriers still exist, large homes with lush lawns just a few yards away from tightly-packed communities organized with dirt roads rather than tree-lined streets. Photographer Johnny Miller wanted to capture the dramatic divide from a new perspective, and decided to shoot many areas in South Africa from several hundred feet in the air for a series titled “Unequal Scenes.”

Miller’s photographs went viral as evidence of the inequality inherently embedded in the design of the landscape. Now, the City of Johannesburg is talking about redesigning apartheid’s spatial design:

The city is trying to achieve this through its spatial development strategy dubbed the ‘Corridors of Freedom’ to eliminate sprawling low-density areas without practical public transport networks.

The City of Johannesburg’s executive director for development and planning, Yondela Silimela, says suburban living is not efficient, as leisure amenities are shared by few people. The proposal by the city is urban mixed-use areas that promote shared public spaces such as swimming pools and tennis courts between the rich and poor, to close the widening inequality gap.

 

Government of Rwanda’s political will to enhance citizen-centered governance

In Rwanda, however, the people centric policy design has entered the realm of the intangible – pushing the envelope of design thinking as far as any Nordic city. Taxation policy is to be reconsidered after a User Perception Survey, and an ambitious plan for leadership commitment has been launched by the president for people-centered development. We have hopes of a design policy lab being pioneered in Kigali.

 

Namibian invention disrupts mobile technology

petrus-simon

Petrus Simon with his invention

More pragmatically, a young Namibian figured out how to make mobile phone calls without the need for a SIM card. Luckily, this achievement of his captured the media’s imagination, catapulting him into the limelight and garnering him a scholarship in technology at any university of his choice from the local telco. If every young African inventor received the same, the landscape of STEM would change across the continent.

Ekandjo revealed that the company does not usually fund learners from grade 12, but MTC  is proud to make an exception.

Last year Petrus won a gold medal at the NamPower national schools’ competition, after he invented a machine that serves as a seed drier and cooler.

 

Kenyan Andrew Kio saw the unmet need for African sizes in clothing

 “There are no standard sizes for Africans like the way people walk into shops abroad and you are asked whether you are a size 12 or 14 and such like things.”

Kio did basic market research to help him carve out a niche for himself in the market given that most people then still had a preference for imported jeans, despite the fact that they did not fit properly. He learnt that women have the most problems. He had found his entry point. Kio then went and bought some pairs of women’s jeans, ripped them apart and studied their designs carefully.

Blacjack now has six full-time employees and Kio has recently bought new machines to keep up with demand. Blacjack dresses KFC and Kengeles staff and recently signed a deal with French retailer Carrefour, which has debuted in Kenya. He also imports Woodin designer African prints from Ghana for uniquely African jeans. Source

 

Which segues nicely into the recently launched initiative by the AfDB called Fashionomics – complete with a B2B platform for pan African SMEs. We keep our fingers crossed that creative entrepreneurs like Andrew see the fruits of all this hard work.

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A Framework for New Market Entry Strategy

There are two parts to this article: The first is a revision of the lenses through which we assess the landscape within which your new market strategy will be expected to operate; and the second covers your implicit assumptions at inception, as well as gaps in your  mental model.

1. The lenses for innovation need a universe to ground them.

The development of the first generation prototype lenses for identifying the sweet spot of innovation in the operating environment prevalent south of the Sahara desert on the African continent are described here. The evolutionary path from the original lenses (shown below) is described.

ideo modelPeople, Pesa, Place were used to replace the words Users, Marketplace, Technical as a means to provide cues for contextual exploration. However, in practice, this revised Venn Diagram (shown below) was still missing a means to distinguish the very different landscape of an emerging market. That is, it overlooked the need to consider the whole as an ecosystem in its own right.

The formal definition of a Venn Diagram, taken from the Oxford Dictionary is as follows:

A diagram representing mathematical or logical sets pictorially as circles or closed curves within an enclosing rectangle (the universal set), common elements of the sets being represented by intersections of the circles.

Without the universal set being represented in these diagrams, it was difficult to create a cue for identifying and describing the often inaccurate yet implicit assumptions made at the very beginning of a new market strategy formulation. And, this gap often revealed itself in form of cognitive dissonance between the observed marketplace and customers, and the tactics intended to support the strategy.

Here is a revised version of this Venn Diagram, enclosed in the rectangle.

VennInformalBy changing the description of the universal set, as shown below, one is then able to evaluate the entire ecosystem holistically.

VennMCCThere is a chasm that divides the value propositions of the producers (sellers, marketers, MNCs) from mainstream consumer culture and the mindset and worldview of the buyers (erstwhile bottom of the pyramid, or emerging consumers from cash intensive, informal economies), and this chasm is where new market strategies tend to falter, and fail. This is particularly noticeable in the African consumer market, especially when considering the mass majority.

2. Questioning the assumptions underlying your value proposition

By adding the missing universal set to the Venn Diagram, one is then forced to acknowledge the systemic differences between one’s own consumer culture, and the vastly different one in this new market. It may indeed be informal and rural, as shown in the sample above, or, it may be the urban consumer markets in the sprawling cities south of the Sahara. Even then, a significant proportion of the economy falls outside of the formal structured environment prevalent in most of the sophisticated consumer markets of the global economy.

And what tends to happen is that elements or concepts from the formal economic ecosystem are introduced or implemented isolated from the supporting information systems and infrastructure. One or two elements from one ecosystem will not thrive in an entirely different ecosystem if there is not fit or context for them to succeed. A clear example is what happens when financial services and tools are introduced under the guise of inclusion.

By going back to the foundation of one’s assumptions, one can identify where the gaps might lie in the value propositions that make so much sense in one’s own context when considering them for consumer segments who might never have been exposed to the same marketing messages, or conditioned to expect “New” to mean “Improved”.

This exercise also provides a cue to consider the systemic differences between the two operating environments, and to assess whether the value proposition or the solution can be introduced as is without the need for an entire support network surrounding it.

 

 

Note: I have used the African context as the working example, but the basic framework is flexible to use for any set of disparate operating environments.

@Prepaid Africa Connecting Dots – October 2015

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October was a busy month for us – The African Development Bank hosted their first Innovation Weekend in Abidjan from the 9th to the 11th of October. Our contribution was thinking about the problems we face as the starting point for new venture design.

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Emerging Futures Lab’s Niti Bhan, collating everyone’s problem statements. Abidjan, 9th October 2015

Savvy young people from across Francophone West Africa gathered to conceptualize startups over the course of the weekend, culminating in grand prizes and the opportunity to grow into viable businesses. Much excitement.

The startups; PayFree, a multiplex platform for payments; La Ruche, a marketplace for artisans to sell their wares; Coliba, a mobile platform for managing urban waste; and BioPRO, an intervention seeking to help rural people get access to energy and electricity will each receive an AfDB fellowship with Ampion to accelerate these projects to become viable companies.

 

Continuing with the Francophone flavour, our next big news is introducing our Beninese collaboration – Ms. Yacine Bio-Tchane, who has been blogging in French on the emerging consumer markets in the region. Emerging Futures Lab now has a Francophone West African footprint.

Portrait robot du nouveau consommateur africain
La ruée vers la Côte d’Ivoire des marques internationales
Les taxi-motos, potentiels livreurs en Afrique de l’Ouest
Où se trouvent les plus grands consommateurs en Afrique?

 

 

tumblr_nwsbz0ytDw1qghc1jo1_500Finally, Senegal hit the headlines with the launch of indigenous wine from the shade of the baobabs.

 

 

 

ColdhubsNigerian innovators have become a hot trend – Coldhubs is an outdoor solar powered fridge, developed by Nnaemeka Ikegwuonu as a sustainable solution for minimizing post harvest losses faced by farmers. Meanwhile, a team of students from Nnamdi Azikwe University (UNIZIK), Awka, have built a made-in-Nigeria mini bus, which they say is the first of its kind.

tumblr_nx7cu51yEp1qghc1jo1_500And finally, from the Nigerian diaspora, Dr. Samuel Achilefu, has won the prestigious St. Louis Award for 2014 for creating cancer-visualizing glasses.

 

 

And to round up this exciting month, we cover the just concluded India  Africa Forum Summit, held in New Delhi 26th to 28th October.

16BYAThe hype

India-Africa summit is meant to strengthen trade ties
India is trying to match China’s engagement in the continent
China is accused of exploiting Africa’s natural resources

Reality check

India isn’t really doing any better than China
It exports 67% consumer goods, 2% raw materials
Imports are mostly raw materials – salt, ores, oil, metals

Tsunami of change – design, brands, marketing and the mobile phone

In the 10 short months since I wrote on the market forces influencing the global mobile phone market, and the implications of the democratization of innovation whose early, weak signals I could already foresee, matters have come to a head. I had written:

The locus of innovation in handset design, product planning and market strategy has moved its center away from the erstwhile first world to the former developing world i.e. India and China.

And along with this re-centering, ideas on business models and profit margins have changed to reflect those prevalent and appropriate for these new operating environments. Just look at this statement from Xiaomi’s Hugo Barra from an interview last week:

“Innovation is not a luxury item. Innovation is for everyone.”

The implications of this positioning are enormous, particularly given the conventional wisdom currently prevalent in the industry that the latest, greatest, cutting edge technology is a much sought after premium piece of hardware.

What are the current manifestations of this seismic shift in the source and diffusion patterns of innovation?

The era of the Apple product/pricepoint strategy is over for everyone, including Apple. Big ticket flagship devices released to much fanfare and  the lining up around corners by fanbois may still continue to work for Apple but even for them the size of this target market has reached its limit. That is, they’ve captured all they could of the share of the market  likely to rush out to buy the latest, greatest shiny at whatever price.

IDC’s latest forecast for smartphone sales until 2019 has this little snippet tucked in:

Markets with the biggest growth opportunity are extremely price sensitive, which IDC believes will not change, and this is the main reason Apple will be challenged to take Android share throughout the forecast. Even if Apple were to introduce another low-cost iPhone (e.g., C version), IDC believes the price will struggle to compete with Android OEMs that are focused on portfolios aimed at price points of $200 and less. This isn’t to suggest that Apple’s success with the iPhone won’t continue, and IDC believes its efforts to maintain significantly higher margins compared to its competitors are much more valuable than chasing share.

The implication is that new entrants should focus on the “cheap smartphone for poor Africans or Indians” shtick. But this would be the biggest mistake any self respecting brand could make. The entry level segment is completely saturated with Shenzen makes, refurbs, grey market boxes, and a hodge podge of low end models from all and sundry. This is the commodification we saw coming 6 years ago.

Here is where I see an opportunity for a maverick like Xiaomi to capitalize on Hugo Barra’s statement that innovation is not a luxury but for everyone.

The growth markets might be price sensitive but they’re neither stupid nor resigned to their fate. Whether it was the poor man’s car – the Tata Nano, or the slew of wellmeaning first worlder’s introducing frugal low cost technology for the social and economic wellbeing of the downtrodden, the downtrodden have turned up their noses to it all.

Not since Nokia’s heydays has any brand succeeded by flaunting its low cost solution as its USP – and Nokia never flaunted their affordability, they just ran a truck over their phones and let you make a call after. You couldn’t help but realize it was worth the price, offering the biggest bang for your buck. Many of us still reminisce over teh good old days of long lasting battery power and rugged Finnish engineering.

In the past 10 years, everything has been changed by the rise of the internet and proliferation of social media. The connected consumer’s aspirations have found their own level, like water, on a global scale.

People have learned that affordable phones don’t feel necessarily cheap

There is no tradeoff to be made if you’re in the market for a new smartphone. This is the result of the democratization of design, exemplified by Xiaomi, and the result of the race to the bottom of the pyramid. Growth markets are part of the prepaid economy, and the considerations around brand positioning, price point and marketing strategy are not what you have been led to expect.

Here are most demanding customers on earth, operating in the most challenging environment. The mass majority for mobile phones isn’t localized anymore, not even on a regional or continental level – its global. And this is tailor made for affordable innovation, a customer experience that makes you feel as special and as unique as any fanboi without the accompanying price tag.

Only two to three years ago, Xiaomi was just a copycat. Ignoring Xiaomi’s ambitions is a big reason why Samsung is now facing a crisis.

Now, we have to ask serious questions: “Who are you, Xiaomi?” and “Where are you going?” Only when we figure out the answers will we know where we will be heading, too.

JoongAng Ilbo, July 27, Page 32

Just a quick search to see where they’re going offers up such tidbits as ordering a new Xiaomi phone online to be delivered by Uber. Who they are is what their competition isn’t – an opportunity seeking conglomerate leveraging gaps in the innovation ecosystem. Business models, marketing, distribution, design planning – they are re-inventing the conventional to suit the flexible, social, frugal world of the prepaid economy’s connected consumers. Its a whole new ballgame. As I said 10 months ago, the era of big brand cellphones manufacturers is over.

 

The Big Shift for Device Design

  • The market is global, local, social
  • Aspirations will drive purchase decisions
  • Innovation is not a luxury
  • Experience has a price tag