The bullet point series #2 - Next 4 billion

This second serie of bullet points about major document regarding BOP market is for a very detailled report made by the World Ressource Institute, from household income from 36 countries.

The report assumes the "orthodox" theorical framework of Prahalad, and give detailled figures about BOP market. This market is considered as gathering every people gaining less than $3000 per year. It makes a large and heterogenous group, but facing common unmet needs, BOP traps.... Focus is not so on poverty fighting, but on providing better access by sustainable models.

 The comprehensive report can be found here

Lire la suite : The bullet point series #2 - Next 4 billion

The bullet point series - The Karnani Mirage

After one year assuming a concrete business development position at Prakti Design, around dissemination improved cookstoves, I found it useful to take some distance and read again texts and articles, in order to find some sense in this strange BOP universe!

 I already spoke in this blog about an insightful survey about innovative model for this new type of market. I will start a serie of 10 (or more!) bullet points of major text and books.

First is a very famous critic of Prahalad's Fortune at the Bottom of the Pyramid,by Karnani. 

 

Let start by the conclusion, you can read more by clicking on... read more!

"Private companies should try to market to the poor. However, the profit opportunities are modest at best and I suggest a cautious approach. Large companies that require scale economies should be even more hesitant. The best opportunities exist when the firm reduces price significantly by innovatively changing the price-quality trade-off in a manner acceptable to the poor.
The private sector can help alleviate poverty by focusing on the poor as producers. One way to do this is to make markets more efficient such that the poor capture more of the value of their outputs. Certainly the best way for private firms to help eradicate poverty is to invest in upgrading the skills and productivity of the poor and to help create more employment opportunities for them. This is the win-win solution ; this is the real fortune at the bottom of the pyramid."


Simple, clear, and indeed, I myself faced these questions : what quality/price point, expensive cost of distribution in rural area, who are we really focusing, do we target enough the poorest? how can we make poor not only consumer but also producer?

You can download the full article in PDF here.

Lire la suite : The bullet point series - The Karnani Mirage

Aspiration for us all !

I wanted to share a fascinating conversation I had recently with one of my colleague of the social entrepreneurship sector that works for a multinational that in India, works as well in the "for the Poor" space.

What he said really inspired me: "aspiration".

In the social sector, we want to be innovative, have different ideas, and work from different angles; but what about the basis of Marketing!? The Poor are just like us and they desire things that sometimes they don't need. The Monitor mentionned in our of their report that 80% of the Poor in India want and would buy in priority: (fancy) phones , TV and want to have big weddings. The Poor in India, as everywhere, see what is happening around them and don't see why they should not want all those new desirable products.

Everything works by aspiration. As soon as we have something, we want to know what will be the next step! the Poor is no different! A friend of mine that works for TERI, the big solar research center in North India was telling me that as soon as you give people lanterns, people that have never seen the light in their life: they use it, play with it, adopt it and moreover, quickly want to know what is the next step, how can they have more: can I charge my phone on my solar panel too? Can I have more light? Can I charge other appliances on the battery?

When you work in the sector and trying to sell your products through NGO and MFI (microfinance institutions), they are always asking you to do yourself the "awareness campaign" about the product. the awareness campaign is : a stand in a village, cookies and tea (a lot), lots of advertisement boards, samples for free if possible, etc. And you replicate this in as many as possible villages. At the moment, even the big players do not have the money to have those MASSIVE campaigns all over India.

So how to still manage and survive?  Aspiration can be an answer!

Create the aspiration in the people who will then want to buy your products, without spending thousands and thousands of rupees in awareness campaigns. It takes longer, but might be stronger in the long term too... I leave this for debate.

You can start by reaching the richest of villages (from rich farmers to bank staff) that buy your products and then create aspiration for the poorest to want it... a quite interesting idea that I think we tend to forget!

In my company, Barefoot Power, we try and create aspiration in many ways. The most simple is by having a wiiiiide range of products that go from simple lanterns/desklamps, up to home kits with couple of lamps. We are trying to work on Reversed Rural Electrification, instead of waiting for the government to come and electrify remote areas. Our idea is to start with a lantern and going up to a house electrified, and following that electrifying the whole village through mini grid. 

I let you all think about this and hopefully come back to us with challenging comments!

Auspicious

I had this morning my second lesson about the importance of "auspicious" in India!

 My first one was some months ago, when we had to quickly finalize documentation for our accountant. Happy to meet the deadline on sunday, I was expecting to rush monday and give it the file! But a good advisor suggest us to wait for one day, for a more auspicious accounting day!

My second one is more interesting. Our combustion chamber is in part made of bricks, which are a very interesting material, light, insulative, low cost... But sometimes, during wet season, bricks can crack. That has absolutely no incidence on the performance of the stove. But one of our partner, working closely with Self Help Groups around Auroville, explained us how it was badly perceived by ladies using the stoves. In a traditionnal terracota stove, when a brick crack, it is immediatly change, it is not auspicious.

That helps understand how well-intentioned development program, giving stoves for free, can completely fail. Give 1000 stoves, nice, efficient, reducing wood consumption... If one brick crack, you don t care as an ingeneer, but your stove will never be use and the 999 remaining users will be aware in 2 days!

That is the interest of a pilot phase, which bring concrete feedback you can t guess otherwise, and a good personnal lesson about auspicious things you have to take care of.

A village 100% electrified with solar!

I m happy to welcome a new contributor on this blog. After Cecile Pompei, who is now business development manager of Barefoot Design (www.barefootdesign.com, more details to come soon!), Manon Delachenal took some times to give a feedback about an interesting experience we had together last week, during a field trip with Selco. Selco (www.selco-india.com) is a major distributor of energy solutions in Karnataka and Gujarat. It mainly provide solar solutions, but has also started an experimentation in cookstoves with Prakti.

We spent some days with us, observing first deployment of cookstoves. Manon on her side was finishing a one year tour of the world. After an experience in carbon finance management in France, she decided to take time to meet, share, identify... carbon related projects from south America to India. Prakti was her last mile. With the support of Geres and it new carbon finance alliance Nexus, Manon spent 1 month with us. She made a tremendous job to support us on the identification of carbon finance opportunity and it led us to be much more focus on forest and local environmental issue. But that s another story! Let s go back to our visit with Selco in Bommalapura, 50km south of Mysore, a village 100% electrified by solar solution, thanks to Selco skills and rural banking finance!

All following text is from Manon. Thanks! And all feel free to send me your contributions!

Lire la suite : A village 100% electrified with solar!