The initial $100 price tag of the XO Laptop from Nicholas Negroponte's One Laptop Per Child (OLPC) created quite a furor when it was first announced three years ago. At the time, the cheapest laptops were hovering around $400 to $500.

This subject has been rehashed many times in the press and the blogosphere, but reading a recent report on Total Cost of Ownership (TCO) for computers deployed in schools in India prompted me to write about the pricing debate and what can be learned from it. A longer version of the report can be found here.

The report was prepared by VitalWave Consulting, a firm specializing in consulting and research for technology companies growing businesses in emerging markets. They performed a study in India, funded by Microsoft, on the TCO of computers deployed in schools. They built a model that took various factors into consideration when estimating the total cost of owning a computer over a period of time.

Purchase cost, maintenance, support, training, replacement cycle, and electricity cost are just a few of the elements they factored in. They looked at desktops, laptops, and ultra low-cost laptops like the XO and Intel's Classmate PC. The report also compares the differences between TCO in India and TCO in a "global" model.

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I absolutely love that phrase.  I heard it at the Social Capital Markets 2008 conference this week in beautiful San Francisco, said by William Foote, Founder and President of Root Capital, on a panel I didn't attend but heard about later.  The phrase perfectly epitomizes the mood and underlying themes of the conference, and the panel I myself moderated, as well as the panel I was asked to blog about for NextBillion.net.

I love this phrase because I see the positive message within it, just as I tend to see the positive in most things, including my approach to business strategy which I call "disruptive leadership." which I've already blogged about here.

You could argue there is absolutely nothing positive in the word "pathological."   The Encarta® definition leaves little room for a positive interpretation:

 

path·o·log·i·cal adj

1. uncontrolled or unreasonable

2. relating to disease or arising from disease

3. relating to pathology or used in pathology

I follow the Dale Carnegie theory that he puts forth in his famous book, How to Win Friends and Influence People, in which he posits that humans are driven primarily by self-interest.  He writes that the only way to influence people is to speak to them in terms that either makes them feel good or portrays how you can help them.

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I've long been an advocate of using for-profit business principles (e.g. capitalism) to promote development and world progress, specifically in technology. This belief has been formed from:

1. My personal experiences working with local entrepreneurs in emerging market countries.
2. Leading business initiatives such as Intel's "World Ahead" program that (uncomfortably at times) straddles business and philanthropic objectives.
3. Reading/following various proponents of marrying for-profit businesses and non-profit philanthropies into win-win scenarios (e.g., CK Pralahad, Muhammad Yunus).

This phenomenon has been gathering steam signaficantly over the last few years. Descriptors are abundant. From the original founders of NextBillion.net came "Eradicating Poverty through Profit" and "Development through Enterprise," the last being the site's current tagline. Social entrepreneurs and social capitalists are converging at SoCAP in mid-October 2008. Bill Gates introduced the term "creative capitalism" earlier this year at a speech in Davos and it has appeared frequently on NextBillion.net and the blogosphere.

In writings on this subject, you'll find a complex set of ideas, theories, and debates. If you follow my postings, you'll find that I'm a bit of a "simpleton." I like to simplify the complex. So what does all of this really mean to someone who wants to create a social enterprise?

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Editor's note: The posts in the "When Being Disruptive is a Good Thing" series were originally published as Guest Posts by Mark Beckford, before he joined NextBillion.net's team as Staff Writer.

In general, the penetration of tech products into emerging markets has not made a significant impact in closing the digital divide, even with higher overall growth rates than typically found in mature market countries (the mobile phone being the exception).   Some argue it is the lack of one or more of the "disruptive" product attributes (affordability, ease of use, value).  Maybe. 

Again, looking just at PC affordability specifically, there have been a multitude of ventures that have aimed to close the PC divide by delivering very cheap, and sometimes free, computers.  None of these ventures have taken off in a large scale, at least those that I am aware of.  Please point me to any that are successful (e.g., that have shipped millions of units in at least 5 or more countries on different continents).  

I think the key is that the business model strategy is often given a lower priority than product development.   

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Editor's note: The posts in the "When Being Disruptive is a Good Thing" series were originally published as Guest Posts by Mark Beckford, before he joined NextBillion.net's team as Staff Writer.

Someone or something that is disruptive is usually associated in the negative. The sub-prime mortgage crisis has disrupted financial and housing markets. That's bad. My son was being disruptive at dinner while someone else was talking. That's bad too.

But I believe the idea of being deliberately disruptive can be a huge positive when used in the development of strategies, organizations, products, business models and markets.  Specifically, disruption can be useful for companies that are trying to serve low income markets and eradicate poverty, all while building a successful business venture.

Back in early 2005, I read CK Pralahad's The Fortune at the Bottom of the Pyramid and Clayton Christensen's Innovator's Solution just as I started my new job as co- General Manager of the Emerging Markets Platforms Group at Intel. Our group was responsible for developing and selling new PC and mobile products designed to meet the specific needs of those at the bottom of the pyramid. 

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