NextBillion.net - Development Through Enterprise - Aryty: Productizing Remittances Through Cell Phones - Comments

One of the best discussions on BOP

Anonymous — Tue, 13 Feb 2007 14:02:58 -0500

I have been to many BOP conferences and seminars and this is is by far one of the most insightful discussions seen yet.

It discusses all the critical successful factors that have been overlooked

-creation of innovative value chains

-bottom up strategy

-large untapped market

Thamel and Aryty comment

Rob Katz — Mon, 12 Feb 2007 17:48:05 -0500

This comment is authored by Bob Granger, a principal at Thamel International.

There is a message in this story beyond the elegance of Nils Johnson application of “productized remittances”. This message deals with how grass-roots “best practices” are replicated or “scaled”.

The NextBillion.net blog is built on a recognition that many of the most innovative sustainable practices are happening at the Base of the Pyramid. Why? Because this is where people are fully embedded in the context of their environment. These practices start with real people, address real needs and boot-strap the means by which they add value. The WRI “What Works” case studies are full of good examples.

The challenge with replicating or scaling grass-roots best practices comes in three forms:

First, it is often difficult to see what is really happening inside these examples. In many cases, the activities and practices being applied are localized versions of an underlying concept. These concepts—not the specific activities or practices—are what have the most potential for innovative replication or scaling. Alryty’s sale of re-paid mobile phone “load” is an example of the replication of the concept of “productizing remittances” as applied by Thamel Dot Com in Nepal in the form sending gifts during festival seasons.

Second, scaling grass-roots best practices requires capacity, resources and intent. However, these enterprises, by their very nature, are small. The entrepreneurs may not have the ability—or interest—in ramping up their activities in a way that others envision. Believe it or not, “more” or “bigger” are not always a top priority at the BOP. I learned this lesson as an agricultural extension agent in West Africa when I was in the Peace Corps. In many cases, scaling involves knowledge-transfer and networking among other grass-roots implementers. This requires skilled and motivated leadership…and the associated investment of resources.

Third, replication or scaling of grass roots best practices outside the home location of the enterprise requires the ability to address both the issues described above in a totally new environment. Again, the example of Alryty—and what Nils and his team are doing in the Philippines—demonstrate what has to happen. They’ve had to understand the core concept of productizing remittances; they’ve had to translate that understanding into the context of their business interests and motivations; they’ve have to put all this into the context of the Filipino transnational environment; and they had to invest the resources and energy to make it happen. Quite frankly, this is only going to happen at a sizable level when the process is underwritten and catalyzed by those who are motivated to make it happen.

All this said, it is rewarding to see the “organic” replication of grass-roots best practices like this example of Alryty. It is a tribute to Nils Johnson, and to Bal Joshi and his team at Thamel Dot Com in Nepal who put this concept of “productizing remittances” on the map.

I believe we live in a world of paradoxes related to sustainable development. People at the “Top of the Pyramid” have resources and, in some cases, motivation to operate at the grass-roots level, but lack the ability to “live” there. At the same time, grass-roots social and business entrepreneurs are making a real difference in people lives at the Base of the Pyramid, yet lack the ability to scale. And ironically, the development community recognizes this paradox and the value of grass-roots best practices but falls short in creatively bridging the gaps. So in the mean time, we have to rely on global communications tools like the NextBillion.net to connect grass-roots best practices with enlightened and motivated entrepreneurs…and for these entrepreneurs to do what they do best, stop talking and make things happen.

Aryty: Low-cost producer of interaction

Barry Leonardini — Sat, 10 Feb 2007 15:59:28 -0500

This has the potential to eclipse money as the coin of the realm and usher in the truly low-cost bartered society. Let's see if the banks, politicians and barbarians of business can slice a piece off that efficient model.Let me know when Aryty goes public.

Aryty: Productizing Remittances Through Cell Phones

Rob Katz — Fri, 09 Feb 2007 15:28:44 -0500

Remittances are a big deal – from an economic standpoint, a development standpoint, and a business standpoint. A lot has been written about the magnitude and impact of cross-border financial flows, both on NextBillion and elsewhere. The concept of productizing remittances – sending goods instead of cash – has not, on the other hand, been discussed very much outside of a few excellent posts here on NextBillion. Despite the lack of mainstream coverage, I believe that Bal Joshi, AnnaLee Saxenian, and Bill Kramer are right when they describe productized remittances as economically and socially more powerful than traditional cash flows.

I think Nils Johnson would agree. Nils (left) is the founder of Gorilla Mobile, and CEO of Gorilla’s new subsidiary, Aryty (as in "All righty" in text-message lingo.) His is an interesting story; he founded Gorilla, an international telecom firm, at the height of the tech boom. Soon after starting the company, the market crashed, and Nils was forced to find his niche: US mobile subscribers’ international calls.

A few years later, Gorilla Mobile had developed a big customer base, including many Filipino expatriates who used the service to keep in touch with family and friends back home in the Philippines. When Nils visited the Philippines for work, he couldn’t help but notice that the country truly was "the text message capital of the world." Filipinos send, on average, seven texts per day, and the big domestic carriers (Smart and Globe) were eager to grow their market share, including a reach downmarket to the BOP. So they developed a way for people to transfer tiny increments of pre-paid airtime between each other, creating the capacity to consume. (WRI produced a business case study of the Smart Communications BOP business model in 2004.)

Nils quickly realized that a highly valuable market was right in front of his eyes. If his Gorilla Mobile customers want to call the Philippines, wouldn’t they want to receive calls or text messages too? And wouldn’t they want to send prepaid airtime? So Nils looked at Thamel Dot Com as a model – productizing the remittance – and went from there. Instead of creating a remittance platform centered on locally-produced and delivered gifts, as Thamel did, Gorilla created Aryty to serve as a platform to send and request prepaid airtime.

Aryty allows expats to remit pre-paid airtime, or "load" as the industry refers to it, to friends and relatives back home. Aryty users are not sending money; they simply send pre-paid airtime to the recipient's phone in the Philippines.

Sending load is a meaningful gift from the US to the Philippines. With communications, there’s an urgent need – families back home are constantly running on empty when it comes to the phone, just topping up only what they need. So $10 worth of airtime per month is a significant gift, and very meaningful. Furthermore, there's no transaction cost because Aryty buys airtime at wholesale prices and then re-sells at retail; the difference is their profit.

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