NextBillion.net - Development Through Enterprise - Micro-Innovation: Bringing Billions into the Conversation - Comments

Re: An Interesting Idea

Grace Augustine — Wed, 04 Jun 2008 19:49:48 -0400

Thank you very much to Dagny and CJ for the insightful comments.

CJ, I think you bring up some very good points. The first is that the internet is somewhat of a leveling tool, but it can also be agnostic to different individuals’ needs such as language and accessibility. However, thankfully you seem to validate from personal experience what I have seen only in numbers, and that is the rapid adoption of not only connectivity, but also technological understanding, in the developing world.

Your question about how to incentivize individuals to interact with this type of application is a good one. Clearly, there would have to be some benefits (whether social or monetary I’m not sure), but an application such as Crowdspirit needs to offer value in more than its products, and again this model has yet to be proven in the U.S and will probably go through multiple iterations before it is widely adopted.

I think that your central point is probably the most significant, and that is that of establishing a distinction between product innovation and business model innovation. I must say that my post was primarily aimed at product innovation, and I completely agree that in terms of business model innovation, as you exemplified by your experience with WHI, processes and procedures need to be standardized before scaling out. But I think that this micro-innovation model is not about rapid (or should I say premature) scaling out, but rather, establishing an incubator for innovation.

I used the BoP Protocol’s action learning principles to exemplify a much more intensive, on-the-ground approach to both product and business-model development. I have a great respect for the Protocol and the time and effort that numerous practitioners have put into it, and I think that it has been the most instrumental effort and success for showing BoP critics that we believe in local trust and ownership, and we are about much more than “selling to the poor.”

From my understanding of the BoP Protocol, it is designed to encompass both business model and product innovation, as I have heard Hart speak of going into communities without a product or service in mind. However, you are right in saying that most of the Protocol success stories have resulted in an existing product (SC Johnson, Solae, etc.) being brought into a BoP community around an innovative business model.

Therefore, I think that we can both agree that there is still room for both the BoP Protocol and other methodologies to explore novel approaches to BoP product innovation. I will likewise keep my fingers crossed for some of the potential service innovations that could come out of the Ascension project, especially since it is located in a community that I know well!

An Interesting Idea

CJ Fonzi — Mon, 02 Jun 2008 22:20:48 -0400

Grace, thanks for this post; I think your idea is a good one. An “open source” approach to technology innovation at the BoP would certainly bring more ideas and perspectives into the discussion. There may be some struggles getting around the “digital divide” to converse directly with the target users, but perhaps less than one might imagine. I’ve been spending extended periods of time on the ground in urban slums, and rural communities in India. While my laptop and internet card are often the only access point in the community, most of the children and young people know just what to do when they ask if they can use my computer. Another good sign, in India anyway, is that these computer literate folks are the same people who possess the English communication skills to join the conversation. The question might really only be- how do we encourage them to take a seat at the table?

As someone working with Simanis and Hart to implement the BoP Protocol I want to comment on your points about innovation and scale out. We must first note that there are really 2 areas for innovation in the development of a BoP enterprise, one at the level of the product and the other with the business model. The first 3 phases of the BoP Protocol are about cultivating innovation on both of these levels. It is at this point where you’ll find the “lengthy, intricate, complex and time-consuming” activates we call “co-creation” and “action learning”. The final phase, scaling out, is about replicating what we’ve done. In the Nutrition for Sustainable Development protocol project with DuPont/Solae in India we have 3 project sites. As we near the end of the enterprise creation phase and begin to look at scale out we’re already successfully moving processes and ideas that were co-created at one site to the other sites. There is no doubt that the economics of BoP enterprises don’t make much sense until the enterprise is scaled, but care must be taken to scale the right model. I did some work with WaterHealth International last year, a company with an impressive and strong business model who was already in the scale out phase. As we discussed making seemingly minute changes to the business model, the task became daunting when we looked at the 70+ sites that were already operational at the time. One should note that the BoP Protocol does not suggest that we “go from community to community and engage in participatory design” rather that we employ enough resources upfront and take the time to listen and co-create something worth scaling.

Returning to the point of product innovation vs. business model innovation; this may be an area where the BoP protocol work to date is open to some criticism. The Focus of our current projects has clearly been heavy on business model innovation while mostly integrating existing products into BoP markets. This summer an exciting new project is starting with Ascension Health (in the US of all places!) Because Healthcare coverage is more of a service, significant room exists to actually experiment with the product being offered. Hopefully this project will lead us to a more inelegant discussion of using the protocol for product innovation.

CrowdSpirit

Dagny McKinley — Tue, 20 May 2008 10:47:39 -0400

What an amazing way to let inventor interact with the very people he is trying to reach. This is a brilliant idea and gets to the needs of the market you are trying to reach. Letting people have a voice and help create what would work best for them guarantees a market for your product. Dagny McKinley www.onnotextiles.com organic apparel

Micro-Innovation: Bringing Billions into the Conversation

Grace Augustine — Mon, 19 May 2008 14:27:45 -0400

Base of the Pyramid (BoP) strategy has a few key tenets, one of which is the power of aggregated demand. Those living at the base of the economic pyramid may have little buying power on their own, but when they are pooled together, their consolidated demand amounts to a viable market.

Companies are increasingly aware of and planning around this aggregated demand approach, as we have seen through such examples as the William J. Clinton Foundation's ability to bring down the prices of AIDS drugs through a guaranteed high volume of sales.

That said, there is a need for not only existing products and services, but even more so for innovation at the BoP – so what about aggregating demand in those cases? How do you assess the ability and willingness of the poor to pay for products and services that do not already exist, and how do you convince companies to take a risk on such a vast and fragmented market?

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