Posts Tagged ‘frugal’

People, Pesa & Place:New lenses for design’s perspective on 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.

Picture1

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.

Tap lock: Design that mirrors need

These are jua kali manufactured locks for taps, where the padlock goes on the little handles shown and the contraption protects your faucet from either being stolen for scrap metal value or your water being used by unauthorized people. It was seen in the market in Nakuru, Kenya.

This is a conceptual design for a lockable faucet that I spotted on YankoDesign today. The blurb says:

The concept addresses the need for keeping these faucets secured and locked as unauthorized people may use them. The Locko uses a combination lock system to keep the tap locked and only those who know the combination will be able to use it. This will help prevent water theft (yes this happens!) and wastage. LOCKO is also a 2012 red dot award: design concept winner.

Minimizing risk: buyer behaviour among the BoP confirmed by Nielson

The South African Shopper Trends report by Nielson highlights some aspects of the township customer’s mindset and buyer behaviour, as demonstrated by the following snippet from this analysis:

How we make purchasing decisions
We make decisions based on what other people say, as well as how we experience a product. There is a major fear amongst consumers (especially in the township) of wasting money on a product that may fail on delivering – hence why 92% of consumers cite word of mouth as the best source for new product ideas. This results in very little initial experimentation, with consumers rather sticking to what they know and trust. For example, many people would rather walk for 20 minutes to buy airtime from Pep than buy immediately from a trader on the roadside. If there is a problem with the airtime, they know Pep will solve it, but the trader won’t – so there’s effectively too much of a risk to not buy from Pep.

Lack of willingness to take a risk on an unknown brand or service, minimizing the risk by the tried and true over something ostensibly ‘new and improved’. Proof of performance is critical as is getting the maximum value for their money i.e. the return on their investment. Reading these two articles linked reminds me so strongly of the purchasing patterns and buyer behaviour observed among BoP customers – the very first time in the townships of South Africa back in January of 2008, that I think I’m going to finally get around to sharing my Life is Hard presentation, and my accompanying talk to go along with the slideset.

Should you launch in emerging markets first? Some examples of an Africa first strategy

Freeplay fetal heart rate monitor

That is the question posed by Prof.  Vijay Govindarajan in Harvard Business Review.  A short piece, co-authored with an undergraduate student, its basic premise is that for medical devices and other impedimenta of the health care industry such as diagnostic tests, there are benefits to launching in emerging markets first before entering the advanced first world markets.  They end by saying:

Ironically, the fact that companies hesitate before developing for emerging markets creates a source of comparative advantage that startups can use to gain market share. Claro Dx developed a next-generation battery-powered reader the size of an iPhone to detect HIV, syphilis, and hepatitis, for example. Its older reader in U.S.-centered clinical trials for prostate cancer recurrence is the size of a desktop.

Startups can benefit from reverse innovation. Can readers think of other types of startups an emerging-market-first strategy might be applicable to (sic)?

This need not simply apply to cases of reverse innovation alone – that is, bringing innovations developed for emerging markets back to the developed world, take mobile money transfer systems and their region specific success. Considering this gives rise to one key factor that does not seem to be covered in this article. That is the role played by  a vacuum in the operating environment. When something is missing in the system there is a gap or an opportunity space for an innovative solution to fill the need.  An oft quoted example is the leapfrogging of landlines and communication infrastructure by mobile wireless devices now available in everyone’s hands.

In the sophisticated developed markets there are layers of legacy solutions or an established status quo which often act as barriers to entry, impeding the rapid uptake or even the introduction of some innovative product or service.  Frontier markets on the other hand, such as those offered by the rapidly evolving consumer markets in Sub Saharan Africa can offer some unique opportunities such as:

The Kenyan sub $100 IDEOS Android Smartphone

Building a new brand or awareness of an entirely new product category – Huawei is a Chinese telecommunications equipment company well known for successfully taking on established players such as Ericsson and Nokia Siemens Networks. However it has no such reputation in consumer products such mobile phones until the launch of the low cost Android based smartphone, the IDEOS via mobile operators such as Safaricom in Kenya and MTN in Uganda. After seeing significant sales figures in Africa, it has just announced the launch of a low cost smartphone in Germany under the IDEOS name.

Samsung solar powered netbook

Innovative solutions for resource scarcity – Many of the challenges posed by the emerging market environment such as need for low cost, robust solutions with innovative business models and distribution channels also act as a resource constrained crucible for testing new products and services.  Samsung has launched a solar powered netbook in Africa first before taking it the developed world.

Leapfrogging infrastructure and services – While MPesa may not be as easily portable elsewhere, its the first and foremost example of a service filling a vacuum while inspiring major global efforts to find similar solutions for other regions. Others are more common in the mHealth space and here the argument is better articulated by this article “Developing countries offer lessons for the West“,

Mobile health applications from developing countries have the same potential to penetrate developed markets. In developing countries, these applications span a wide range of activities, including data collection, disease surveillance, health promotion, diagnostic support, disaster response and remote patient monitoring,” Sandhu writes.

But it is an unrealized potential, according to Sandhu. “Although myriad mHealth programs are operating in developing-country markets, only a few prominent mHealth innovations in the United States have been imported from abroad. Among the most notable are Vitality GlowCaps and GreatCall Medication Reminder Service, both of which are working to improve medication adherence,” he writes. According to Sandhu, both are outgrowths of technology that originated in South Africa. The Text4baby messaging service for pregnant women and new mothers was modeled after VidaNet in Mexico and Mobile 4 Good Health Tips in Kenya, though, like GlowCaps and GreatCall Medication Reminder Service, it is not an exact replica of the original. This is intentional.

The goal should not be to copy programs exactly, but rather to adapt global innovations for the developed-world market,”

But all of these are centered around information technology and mobile communication – do we see the potential for innovations dispersing out of Africa in other areas such as renewable energy solutions or consumer products for the home or are we seeing the first signals where Africa will make its mark globally?