As Robert Katz posted last week, a BoP Conference entitled “How to do Business at the BoP” was held on February the 27th in Madrid. The conference had pretty impressive speakers and visitors, since it was mainly directed at the corporate world.

Robert was the first speaker of the day. He kicked off by explaining the reasons for BoP studies and briefly went through the three main penalties suffered by BoP customers: price, quality and access. After giving an overview of business strategies at the BoP, he presented “The Next 4 Billion” study and explained some of the most important conclusions that the study sheds light upon, such as the significant unmet needs in the ICT and Transport industries.

The second part of the conference introduced several BoP case studies from different industries, presented by members of the BoP companies themselves.

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NextBillion ally Bill Stevenson - who blogs for Lenovo at The Heart of Business - pointed me to a 6-minute CNN story about a recent TechnoServe business plan competition in Kenya.  Entitled "Believe, Begin, Become," the competition's initial 5,000 applicants were whittled down to 100 finalists and eventually 1 winner.

Interestingly, Believe, Begin, Become is the subject of a forthcoming documentary by Carol Pineau.  NextBillion and BoP enthusiasts will recognize Pineau as the creator and director of the 2006 documentary Africa, Open for Business.  In the CNN video, Pineau is interviewed about her six subjects in the forthcoming documentary, telling viewers a bit about each entrepreneur, their business, and - most gripping - how recent political and social upheaval have impacted them.  For more on the documentary and competition, check out Pineau's recently-launched Kenya Stories web site.

Be sure to check out the CNN clip, and keep an eye out for the 'handsome pale white guy' - nice self-description, Bill.

What do Aravind Eye Care, d.light design, Ekgaon Technologies, ITC's e-Choupal, and the much awaited Tata Nano have in common?

New market segments?
Radically new paradigms?
Technology?

As the BoP discussion moves from whether-to-invest to where-to-invest, there is an increasing need to measure the impact of new ventures. I see a strong correlation between Successful Models and Technology.

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So what does it take to supply millions of households in emerging economies with clean renewable energy? We often talk about finance, new models, willing entrepreneurs. Kenneth Westrick, CEO of energy consulting group 3Tier says it's information.

Really? Hard to believe this at a time when the development agenda is about doing, not thinking, and action over words. But in our conversation, Ken contended that what the renewable energy sector really needs right now to successfully tap BoP markets is a map. In particular, the online map that 3Tier launched on Monday - this technology will utilize the most recent available research to show in any given 5 km space anywhere in the world the viability of wind and solar energy based on how much sun or wind that area is exposed to on a regular basis.

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The New Ventures team is proud to welcome Francisco Noguera on board as the latest addition to our pool of talented NextBillion.net Staff Writers.

Francisco, a native of Colombia comes to NextBillion.net with a deep understanding of issues around implementation of BoP initiatives. In addition to founding his own microfinance organization in Bogotá, Francisco was involved in various socially-focused projects during his four year tenure with StratCo consulting.

Francisco holds a degree in industrial engineering from Universidad de los Andes and is eager to continue advancing the dialogue around BoP issues.

Mobile phone banking is already fully commercial in the Philippines, South Africa, and Kenya. It's about to happen in perhaps a dozen additional countries. With more than 1.5 billion mobile phones deployed in the developing world, the potential market is large and growing. The need is equally apparent-most of the BOP have no access to modern financial services, despite the success of microfinance.

So what is keeping this from becoming a revolution in financial services for the poor? In a word, regulatory hesitation. Central banks-and behind them, the U.S. Treasury-want to be sure that the democratization of financial services does not also lead to widespread money laundering and consumer fraud. And a key part of current security systems-the SIM card that gives each phone a unique ID-is device-based and potentially hackable.

Today we report new research that assesses the potential of biometric security systems-user-based, not device-based-for mobile phones. It turns out there is an obvious candidate, and that phones with this technology are already in commercial production.

I won't give away the story-read the report, Biometric Security for Mobile Banking-but the cost of including this technology in low-cost GSM or CDMA phones appears to be low, well within the buying power of most of the BOP. The report also places this new capability in the context of broader technology trends that could extend the reach of mobile phones-and mobile banking-into rural areas.

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What does a next-generation BoP strategy look like?  How do large companies work effectively (and profitably) with the BoP?  What have we learned in the years since Stuart Hart and C.K. Prahalad published their s+b article, Fortune at the Bottom of the Pyramid?

If you're looking for answers to these questions, then you may be in luck; they - and many more - are addressed in the newly-released Base of the Pyramid Protocol: Second Edition.  The Protocol, first developed in 2003 and 2004, has been revised extensively under the leadership of Hart and co-author Erik Simanis.  The new edition's subtitle?  "Toward Next Generation BoP Strategy."  That alone should tell you enough about its value to those of us in the BoP space.

Some may ask, what is the BoP Protocol, anyway, and was there a first edition?  Good questions.  The Protocol is a new business innovation process, developed specifically for the BoP by a group of academics and practitioners over the past 5-plus years.  The first BoP Protocol workshop was held in 2004, and the first edition document was released in 2005 - download it at the BoP Protocol web site.

Over the next 3 years, the Protocol was field tested with SC Johnson (in Kenya) and DuPont/Solae in India.  The Second Edition is, in part, a reflection of what the authors learned through these field tests and in their own development of a sustainable innovation process for the BoP.

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We are all looking for opportunities to develop our ability to address poverty and underserved markets with business solutions. One forum that brings together students and young professionals to connect around these ideas is StartingBloc.

I was encouraged to apply to StartingBloc through WRI staff who have attended in the past and who recommended the program. I was then fortunate enough to be admitted as a New York City 2008 StartingBloc fellow, and I would like to share some of my experiences thus far.

The first of three weekend gatherings was held at NYU-Wagner in mid-February. 115 students and young professionals from 21 countries convened to kick off the program. During the course of the day, we talked about Scojo, Grameen, Acumen Fund, D-Lab, Kiva and numerous other BoP initiative poster children.

The agenda was packed with speakers and sessions on these well-established organizations. Those stories, as exciting as they were, have been told before. I felt that the more unique aspect of the day was meeting the other fellows, who ranged from the ages of 20-35 and carried a sense of unbridled idealism and curiosity.

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NextBillion ally Cat Laine - editor of the excellent AIDG blog - posted a fantastic social marketing video earlier this week that I just had the chance to look at today. Entitled Don't Wait for the Rain, the video features Maasai rap artist Mr. Ebbo alongside actors portraying the MoneyMaker pump in action. It is a combination music video, advertisement and soap opera all rolled into one entertaining 5-minute package. It is not the first time Mr. Ebbo has signed onto a social or governmental cause.

I will embed it below, but if you can't see the video, click here for the YouTube link: Don't Wait for the Rain.



Lyrics are via the AIDG Blog - thanks Cat:

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Over the last few months, there’s been plenty of discussion about the growing importance of building talent in the area of BoP business/social enterprise. Moses Lee has mentioned talent often – in one recent post, he described how a BoP business scheme failed when a group of experienced managers believed they could run the venture from afar and had no interest in taking talent into the field to do the "heavy lifting." Related to this is a recent post on the Acumen Fund Fellows' blog, where Tricia Morente - who is working with a chain of low-cost, high quality maternal care hospitals in India - placed talent ahead of money as the biggest challenge to scaling up a social enterprise.

These discussions about talent reflect maturation within the sector. There’s increasing recognition that, while entrepreneurs remain the keystone of BoP success, without the permanent building blocks of specialized skills and long-term management processes, the bridge will not stand for long, no matter how brilliant the idea. Building the sustainability of a sustainable business is becoming as important, if still not as sexy, as scouting out the next pro-poor business model or innovative product design.

It's great news, then, that NextBillion ally Agora Partnerships is launching the Agora Fellows Program. The program will link skilled professionals who have an interest in sustainable business with emerging enterprises chosen from Agora's portfolio of promising entrepreneurs. The first portfolio enterprise to receive a Fellow is Bambucasa ("Bamboo-house"), a start-up in Nicaragua that aims to build an environmentally sustainable and profitable bamboo construction business while also helping to alleviate a serious shortage of affordable housing. (For more information about this Fellowship, and how to apply, click here.)

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By all measures, this has been a pretty long post to finalize.

In January, Ana’s post about the mobile phone banking conference at Chemonics aroused a series of insightful comments. Al Hammond then weighed in with a post of his own (he also recently wrote about Biometric Security for Mobile Banking). In this context, I felt I could join in the debate with a post about business strategies in the mobile phone banking sector (or m-banking, as it is commonly known). Specifically, I set out to analyze what affects mobile phone banking business models, their most common critiques and their challenges for the future.

However, the post quickly got a bit out of hand, growing beyond what I had envisaged to more than 10 pages. With this in hand, I felt I could develop it from a blog post into a “proper” study. When I finished it, I decided to try my luck and get it published. Thanks to the support of Professor Juan Luis Martinez, I got it published as an Instituto de Empresa Teaching Note. Due to work commitments, I could not sign all the required papers until February the 27th, during the BoP Conference here in Madrid (which we recently covered).

I hope that this study helps to clarify many of the issues we have touched upon here at NextBillion, and that it helps stimulate yet more questions.

After doing some research on the issue (I am by no means an expert), there is one thing I can say with certainty: the very field of mobile phone financial services is opening in front of our eyes. It is very exciting indeed.

To download the study, please click here.
Comments are welcome!

Ride Metrocable, an impressive system of cable cars that connects to the Metro and carries Medellin's poorest citizens over the steep hills that host the city's slums (traveling together with an increasing number of curious tourists). Step down in the uppermost station, and you'll have a beautiful view of two remarkable buildings that summarize Medellin's transformation at the BoP level: the beautiful Santo Domingo Public Library, part of a network of five such centers in the city's most depressed areas, and the neighborhood's Cedezo (Local Center for Enterprise Development), an equally impressive building that hosts Medellin's Cultura E (Entrepreneurial Culture), a program led by the city government through a partnership with local Microfinance Institutions. The two buildings summarize the character of the social programs led by former mayor Sergio Fajardo and his successor Alonso Salazar.

Today, I want to describe the remarkable Cultura E program and set it as an example of how local Governments can successfully engage with the private sector to enact initiatives aimed at the core of what we stand for at NextBillion: the power of enterprise to alleviate poverty and the need for policies that foster the creation of economic opportunity for the BoP.

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The quote is from an interesting NYT Magazine article I just read and got me thinking about successful models to scale the impact of socially minded initiatives. Freakonomics authors Levitt and Dubner discuss innovative models implemented by Smile Train and the Prevent Cancer Foundation to scale impact on the ground level and provide incentives to attract potential donors.

The Smile Train model was specially thought provoking, as it lies on the power of fostering local talent and capacity to deliver benefits where they are most needed, as has been discussed by Abigail, Grace and Moses in recent NextBillion posts.

I hope you enjoy the read! Stay tuned for upcoming posts on strategies to scale impact at the BoP level.    

I ran across this Fair and Lovely ad on YouTube recently. For those who don't know, this product is a skin-lightening cream that was at the center of a debate last year over the value and impact of a BoP approach to poverty alleviation.



The ad is in Hindi, but the message is clear: lightening your skin with this HLL product will open doors for you, leading to a happier more successful future. I support BoP initiatives in general but don't believe that every successful attempt to market to the poor should be lauded.

This ad crosses a line for me and last year I found myself personally agreeing with the BoP critics' point on this specific product. As a consumer who has wasted a few dollars of his own on useless items, I can say that we often get goaded by ad campaigns with empty promises into irrationally buying products that do not serve our best interests.

But it got me thinking about how we draw the line between BoP initiatives that deserve our support, and general market activity involving the BoP that it may not be our place to condemn, but that we should neither hold up as a model example.

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