Posts Tagged ‘design strategy’

New Market Analysis: It all boils down to Interpretation

This isn’t a new diagram for anyone familiar with my writing. Its a diagram I’ve been using to explain where my work fits into the innovation development process since I first saw it on Luke Wroblewski’s blog back in 2006. However, I’ve just been struck forcibly by the realization that there’s a very important piece of this process that’s missing. And that is Interpretation.

What do I mean by Interpretation? 

Lets start by taking a look at the ever popular user centered design process, simplified in linear form, although we all know there are numerous feedback loops and iterations constantly happening in real time.

The understanding we seek in order to conceptualize and design emerges from the immersion in the new operating environment we wish to enter. This where we go and meet people and talk to them and watch and listen and learn. Its when we get back and analyse our findings that our aim is to synthesize them in the form of actionable insights that can drive the design and development of a new product, service or business model. The space between Insights and Design is when and where we conceive the ideas we wish to develop into workable constructs. Its a given that the process isn’t as linear as diagrammed and ideas and concepts occur much earlier but what is critical, and this is what I realized today, is in how we interpret our findings from the field.

This is the bit I’ve circled in red.

This is where our assumptions, especially those we don’t recognize, and our presumptions, are most likely to let us down. Two people, present in the same user observation study, meeting and listening to the same people, can interpret the raw data in very different ways. So much of this has to do with our preconceived ideas of the target audience not to mention especially important when you’re looking at such a study in a culture and society very different from your own, that its no wonder specialists in the field of design ethnography or user research keep emphasizing the need to able to step outside of yourself in order to observe and understand someone else.

While this is naturally important in all kinds of human interaction, it becomes far more crucial in the context of a professional user research project.

That’s why there are any number of case studies and examples of products and services that fail to match people’s needs or meet expectations *even* after extensive and expensive exploratory user research studies.

Did we manage to interpret our findings correctly? Did we understand what someone was saying in the context of their own culture and mindset and society? Or did we interpret their words and actions from the perspective of our own frame of reference?

I’ll end this with a simple example that comes to mind as I write this. A couple of years ago I was in the field for a small solar power manufacturer who could not comprehend why the very sensible decision of being able to save oodles of money on kerosene by investing in an affordable solar lamp was not being made by his intended target audience. Why were they not purchasing this product even though it made so much sense to do so?

In fact, it turned out, the real question was, did it make sense to the potential customer in the context of their own cash flow, income stream and household management?

Systems thinking and the mobile platform for economic impact and wealth creation

I have been meaning to write this post for quite some time now, percolating as it has in the back of my mind but it was Mark Kaigwa who finally spurred this writing. This is not all about MPesa, though it will take a look at some of the issues why its runaway success in Kenya has not yet been duplicated elsewhere, beyond the obvious brought up in most articles of “its the banking regulations” or “its the distribution network”.

Much credit of the fundamental thinking that will underlie this post’s premise must go to Wambura Kimunyu with whom I’ve discussed these issues on Twitter.  Furthermore, I believe that if we can frame the problem (and thus the potential solution) correctly, we may be onto something that could in fact make a big difference to the many ways  we attempt to enable and support social and economic development.

Some background

The topic today is the mobile phone (which I’ll also refer to as the mobile platform, since the phone aspect is but a feature of this handheld device) and its role among what is popularly known as the BoP or those at the Base or Bottom of the Pyramid, yet when I think about the very many pilot programs and attempts to spur development via the mobile platform or, as in the case of MPesa, to launch game changing mobile money transfer et al systems elsewhere, what immediately comes to my mind is a reflection on the issues that plagued the analysis of the success of Asus’ eeePC when it was first launched back in late 2007.

We take very affordable and very portable netbooks for granted today but back then in time, the category did not exist until Asus launched their 7″ linux based, open source, rugged and durable beauty for around USD 400.  It was referred to as a “subnotebook” back then and caused much head scratching among the developed world’s leading lights, even as it spurred all manner of competitors to focus on the two most obvious elements of its perceived success criteria – “price” and “form factor”.  Whereas I argued, that what made the Asus eeePC so successful was its fundamental premise – to be an easy to use affordable device squarely aimed at emerging markets and how it was this positioning that drove every other element, including its form factor and price. By focusing only on the obvious, without taking the holistic thinking and underlying value proposition into consideration, competitors were overlooking many of the details that supported its initial success.

Some framing

I see something similar happening with one of the most obvious success stories in the “Mobile as a platform for economic development of the BoP” bandwagon.  MPesa shows up in most analyses of “Business models or mobile thingies that are helping the poor” reports churned out so faithfully by researchers everywhere, yet the question arises, should it be even considered in that sandbox of things that help the poor in the first place? And by doing so, are we overlooking some of the factors of what makes it work so well in Kenya as well as misinterpreting that it was meant to be used only by the poor?

When the first reports of MPesa’s hiccups in South Africa came to light, it was then that Wambura first tweeted about the lack of the banked that were critical to spur the unbanked and thus the overall uptake of the service.  That is, if the MPesa ecosystem did not have enough banked people with money to circulate, then there wouldn’t be enough unbanked nor would there be enough money to circulate etc etc leading to the challenges that they are facing in South Africa now.  You needed the banked to bank the unbanked.  It sounded counter intuitive to me back then but over time as I observed many different facets of this activity across different strata in Kenya it came to me just how much sense this made and also how relevant this aspect was for the success of anything that should be considered as a means to improve incomes among the BoP when using the mobile platform (or otherwise, to be honest).

Why so?

Some systems thinking

That is, for any solution designed to enable the flow of wealth – mobile money transfer for example – or improve wealth creation at the BoP – it was not enough to simply target the poor alone. It would not work as a “Solution for the BoP” primarily because the BoP do not have any liquidity,  even if they do indeed have assets especially in rural areas, or they do not have the cash for it to flow through the system in the first place. Thus solutions aimed at improving economic activity for the poor needed ‘non poor’ actors in the ecosystem in order to inject cash into the system and thus make it flow (and one hopes, grow).

Taking this thought one step further, MPesa – assessed as a holistic ecosystem for financial transactions – has been so very obviously successful in the Kenyan context primarily because it is used by everyone, regardless of their economic standing or bankedness (if I may coin a non word).  In fact I believe that the number of banked actually surpasses the number of the unbanked – there is a link there that right now is not in the scope of this post but we can look at it later.

And thus, when ‘Solutions on the mobile to help the BoP or poor’ are considered, they should be looked at in terms of the complete ecosystem including the critical question of Where will the money come from into the system in the first place?  Without which, they will limp along as a cash poor system with little wealth to circulate, achieving nothing for the BoP in question. Look at this article on MPesa repositioning itself in South Africa towards higher income brackets and away from the original target audience of poor rural women. QED.

Solutions meant to improve economic conditions for the BoP cannot be focused only on the BoP.

Rather the focus needs to shift to complete ecosystems that fill a vacuum of need – usually in infrastructure or services – that include actors from differing socio economic strata in order to make a viable difference to larger population involved.  Not only is MPesa a clear example of this framing – it filled the vacuum of “how to securely and affordably send money” – but it did so for everyone and anyone who wanted to do so.

Similarly, when I consider my favourite example of the Mumias Sugar Company and their payroll management pilot program for their daily wage sugar cane cutters, I see the same potential for a greater impact on social and economic development for the lower income demographic involved in this system. The solution is one that is win win for all stake holders – from the company who doesn’t need to send armed guards with cash into the fields to the workers who now not only have savings accounts but don’t need to carry lumpsums of cash around with them on payday.

I also hear that real time inventory management and other enterprise level solutions for supply chain management are also moving onto the MPesa/mobile platform in Kenya – again involving the tiniest duka as well as the big name manufacturers or distributors.  Again we can see the potential impact on inventory management and thus, cash flow, even at the bottom of the retail pyramid, where its most critically needed and we can project the potential that it will improve the economic standing or at least help smoothen the variability of income streams that these smallest players in the informal economy require.

Will all stakeholders benefit? Yes. And will the members of the ecosystem who happen to fall into the so called BoP category benefit? Most likely. And more likely than if only the lowest segment was involved in a system of this sort rather than participating in the larger ecosystem of buyers and sellers.

Bottom line

Bringing all this back to the framing of the solution space or rather, the analysis of the success factors, I believe that a simple shift away from seeing only the obvious – mobiles! money! BoP! –  system level solutions that fill critical infrastructural and service gaps in locales where there are few or inadequate alternates and that serve many including the BoP can and will do far better to improve the economic wellbeing across the board of society that those that focus on one demographic alone.

Note: This was the original post that inspired the editor’s version published on Afrinnovator.

Design for the next billion 2012: What’s missing?

An upcoming project’s requirements led to the realization that there is a huge gap in design for the next billion (and more). The subsequent domino effect has left a lack in tools, methods, frameworks and thus, disciplines themselves, from the perspective of addressing the challenge of serving the bottom of the pyramid (BoP) population segment. Here I will simply attempt to capture the questions raised in these four areas I’ve noticed:

1. Tools for the BoP Market

It all started yesterday when I was looking for a means to manage customer relationships with lower income customers in rural Kenya. Where were the CRM tools that could be effectively, affordably and easily used by a social enterprise or business whose primary target audience were the BoP? Examples of Customer Relationship Management apps proffered to me in response to this question in Twitter led to a series of design constraints coming to light as I attempted to explain why such and such or that and the other would not do for the operating environment in which it must work. It made me realize how few tools (if any at all) existed for the BoP market, that companies could utilize in order to build relationships and loyalty with their customers and offer them a well design user experience.

Why was there this gap when there was a plethora of such tools and applications for even the smallest startup to use in the developed world? Furthermore, given the years of investment by a vast variety of firms, large and small, attempting to improve the quality of life for the BoP yet still only partially succeeding in reaching out to these new customers and creating markets and demand, wouldn’t there be a crying need for appropriate technology and cutting edge marketing and communication tools to help improve the success rate?

This thought led to the consideration that in order for such relevant and appropriate tools to be created, there needed to be appropriate and relevant methods for design and development in the first place.

2. Design methods for the BoP

So when Victor Lombardi posed a question to me during a recent skype conversation:

How do you visualize the long term experience of the BoP customer?

I realized I hadn’t thought about it in quite that way before, and as Victor said, he’d not seen anything on this either. Whereas, these concepts and methods had emerged in response to the way increasingly sophisticated companies were engaging with their customer base. My attempts to grapple with this question uncovered such concepts as Customer Experience (and thus, customer experience design), User Experience and its design, and whole slew of information waiting out there among young and new design disciplines.

While their roots are in technology and the internet, their philosophy can be summed up as a holistic human centered strategy for sustainable customer engagement.

How different is it for those of us seeking to engage with the underserved and overlooked lower income customer base in the developing world? And due to the lack of market development and available information, was it not more critical that each actor focusing on the BoP market consider every single element of their business strategy rigorously in order to establish and maintain their enterprise sustainably? There are no specialized firms nor fragmentation of disciplines for BoP oriented enterprises, they must be the jack of all trades from inventor of new products and services and business models to figuring out how to reach these demanding customers who live in challenging environments.

Yet, all the conversations on “Design for the next billion/other 90%/social impact/poverty alleviation/BoP” revolves around the long established methods and approaches from traditional product design, development and engineering. There is a gap here that must be seriously considered if the tools and apps for reaching these customers, as mentioned in the first point above, are ever to be successfully developed for our use.

3. Frameworks for the BoP Market

And so, we need new frames of reference and ways of grasping the operating environment in order to create strategies and thus action points for this wholly different and new frontier market opportunity. Where is the Customer Experience lifecycle as it applies to a BoP customer, to go back to Victor’s original question? And critically, can the existing frameworks and disciplines deal with the challenge of bridging the socio economic and infrastructural chasm as well as the attendant underlying assumptions? Obviously not, since those are the tools and methods and frames of reference which we’ve all been struggling to apply with little degree of success in the BoP context.

Or, as I said to Victor in response to his question, how can we assume that the long term experience of the BoP customer will follow the same path as that diagrammed or framed for the ToP customers?

After all, when the fundamental mission of a social enterprise is to alleviate poverty or improve quality of life, then the ideal long term outcome for a BoP customer is that he or she moves up and out of the equation. That is, the idea is not that they come back for the “BoP” focused product or service meant for the economically challenged but that their life has improved to the extent that their upward mobility implies more expensive product or a different value proposition all together.

This is diametrically opposite the fundamental assumption in conventional frameworks where the goal is to create customer loyalty and long term engagement. On the other hand, one could create great user experiences and loyalty that leads to word of mouth referrals and advocacy even as the successful customer upgrades to the next level.

4. Design disciplines oriented for BoP customer context and needs

This is an open ended question. Is it enough that the existing fields of design, particularly the nascent and emerging ones – like UX strategy for example – simply be focused on the challenges and constraints of the BoP customers environment, infrastructure and cash flow, or, is it that there is a space for an entirely new design discipline that holistically covers all elements of the user experience – whether a product like a cookstove or a user interface for a mobile app or service – and takes all these fundamental differences between the BoP customer and the first world one into account?

For the tools, the methods and frameworks themselves might need to be redesigned in order to be successfully applied for this customer base. From Brandon Schauer’s writing:

UX managers are in a rare position where they can see both the business needs and user needs, and can find where they align to produce revenues from positive relationships, not from goading, entrapment, or annoyances.

Perhaps what is required is a new way to frame the problem solving approach, say for example, UX for the BoP and not simply use the term design as it is currently meant in the narrowest sense.