Perspective 2.0

Have phone, will work

Gombak, Kuala Lumpur, Malaysia  May 14th 2008

Nice to have or basic necessity? is the title of Ken Banks' latest column in PCWorld where he begs the question,

Four recognized basic necessities of life -- not to be confused with human rights -- are food, water, shelter and fire. Of these, food can be grown, water collected, shelter built and fire made. In years gone by, this gave people a certain degree of control over their destiny. After all, these basic necessities have been universal throughout all of human history -- it's always been possible to grow or gather food, to collect water, build or find shelter, or start a fire. By the sounds of it -- in some parts of rural Uganda and Kenya at least -- people are putting communications above food and fire (and perhaps also above water and shelter). It begs the question: should communication now be considered the fifth basic necessity of life?

He ends with the concern that people should be able to afford both airtime and put food on the table if indeed they are purchasing airtime before they do food with their limited funds as research is apparently showing in Uganda.

This is a prime example of the trade off being made in purchasing decisions by those at the base of the pyramid. Their buying behaviour has shown that the trade offs made are based on on maximizing the return on their investment i.e. the money they spend. When and why would airtime be more important than food?

When airtime becomes the means by which to earn the money to buy more food, that's when the investment in airtime before food in the short term becomes more important than the meal itself. Its an investment in the future. When your phone number is your 'office assistant', the means by which you advertise your services and get more work, then going without a meal in order to ensure the continuity of availability for future meals (and other necessities) is a no brainer.

The sign above is from the parking lot of the RapidKL station in Gombak. There's not even a name, nor a fancy flyer. Just a simple piece of plywood with a hastily scrawled service - context based advertising, you could say - "Pickup truck" and a mobile number. The quality of the handmade sign tells us that the owner of the phone has little cash to spare for fancy posters or flyers, but he has access to a working 'lori' and probably some guys to help him move or carry whatever it is you need to transport. Incoming calls are free,  but  you'd still need some airtime to coordinate a 'job'.  Were you to lose your phone, you've lost  your 'income' until you can either go around replacing those posters with your new number or replacing the handset. Again, you'd invest in a replacement for your handset first, even if the trade off you were making in this purchase decision was between food and a phone. Because only when you were accessible could you be certain of ensuring a continuous stream of work, though unpredictable and irregular, as opposed to no contact at all.

Is it a basic necessity?  You decide.

Vodafone, United Nations, NGOs and Mobile Technology

The United Nations Foundation and Vodafone Group Foundation recently released a report: Wireless Technology for Social Change: Trends in NGO Mobile Use.

'The report identifies emerging trends in "mobile activism" through 11 case studies, and highlights the results of a global survey of NGO usage of mobile technology.' The report was co-authored by Sheila Kinkade from ShareIdeas and Katrin Verclas from MobileActive.

The question then is, how can NGO work be improved, and how can new ideas be designed to have a greater impact.

Regional Economic Outlook for Sub-Sahara Africa

Very interesting report from the IMF, lowdown is that Sub-Sahara Africa growth is robust, but we all know that. Great interactive Data Mapper, have a look at Angola.

Thanks to Emeka Okafor.

Double vision

I guess I could claim to have grown up (kinda) in this house. I lived here from 1971 to 1979. I'm sitting in my neighbour's house. I haven't been back here in at least 20 years, the last time I was actually in Malaysia - this is Petaling Jaya, a suburb of Kuala Lumpur - was 1990. It feels like seeing double, everything is so very familiar and 'known' and yet just that tad bit different. Not just tangibles like renovations or additions to the homes but everything feels a bit different. I am much bigger now and I'm looking at things through a 'grown up's eyes - the road is so narrow it seemed to me, wasn't it so big when we'd run out to play after doing our homework? Look at the drains, they aren't scary and deep anymore. The trees are bigger and smaller all at once. And yet, I don't feel a stranger.

No, its not quite deja vu. But it falls into that same conceptual space. Makes one wonder truly if time is indeed linear or 'all at once' - just our perception of it changes depending on our perspective. 

Access is more important than the device

What if people could access information relatively cheaply, or even free from an affordable device that was readily available and easy to use, that used the internet as a platform for conveying knowledge? This has been talked about for a long time and is nothing new, we are talking about accessing the internet from a mobile phone, and while designing websites for small screens or adapting HTML to Wap has hopefully come and gone, we are on the cusp of the next web, that is, the web accessed through mobile phones by a much wider audience than ever before.

Access to information is more important than the actual device used; software that is not universal can only be used on certain devices, software is rarely free and the price attached becomes yet another barrier to increasing user acceptance.

The information that people will want, should it be education, health services, financial know-how or the latest entertainment news will be more important than what the device can do other than access the internet.

One barrier to using a mobile phone is the small screen size; it also means that the small screen allows less people to view the content. Another downside to most phones is the numeric keypad with predictive text, which not everybody gets.

Microsoft recently announced Fone+, which while not being an entirely new concept, it uses existing technologies and combines them to deliver a workable solution to gain access.

Fone+ uses a mobile phone, a keyboard and a television to have a larger windows mobile experience. Could this be a sustainable model that decreases barriers to access for the next billion customers?

Waste not, want not

Reading today's BBC article debating the reasons why tons of uneaten yoghurt gets thrown away each day made me notice two more articles in the same vein published almost simultaneously. One talks about the mountains of waste the consumer marketing ecosystem generates each day, just as its designed to while the other, also from the BBC touches upon the uneaten food wasted in large quantities even as food prices rise daily. Makes one wonder whether the consumption juggernaut is Frankenstein's monster out of our own control if we can't stop the tide of waste? Here's a snippet to ponder,

She says this efficiency in waste management has created a disconnect which makes it easy for people to ignore the broader environmental and social impacts of their consumption.

“It has the psychological effect of insulating us from the reality of the waste that we generate,” she says. “If people can’t see where their garbage goes, it’s much easier for them to continue consuming and to not ask the important questions about why are the products that are made so wasteful? Why is our economic system so reliant on wasting for its growth and expansion? Why is that considered a healthy economy when it’s creating such a tremendous environmental impact?”

African potential, Indian experience

The Economist calls it the "the biggest thing to pass between India and South Africa since Mahatma Gandhi moved from one country to the other." They add their voice to the speculation online about Bharti Airtel, the largest mobile-phone operator in India, holding “exploratory” talks to buy South Africa’s MTN, the biggest operator in Africa.

What I find interesting is that the potential for disruptive innovation is currently seen as flowing only one way, that from India to Africa, with Bharti bringing its experience operating in India's low cost, high volume environment where subscriber growth has famously propelled the country to second place globally in mobile subscriptions. This is not a bad thing, as I've observed before, as introducing disruptive pricing models in Africa would create a similar explosion of growth and wireless service usage.

What intrigues me however is what kind of innovative new practices could possibly flow from Africa to India and how will this influence what's happening in the markets there?  Airtime as defacto currency is a trend that has not yet really taken off in India, the patterns of mobile subscriber penetration and their demographic make up are different from what happened across sub Saharan Africa. But as the Indian operators continue to look lower and lower down the economic strata to increase their share of the pie as well as penetrate deeper into rural India, will the African experience begin to cross pollinate local business models and services?

Dave had attempted to open a Wizzit account as well as an MTN Money account - both mobile banking initiatives in South Africa - and his experience was an eyeopener. He now uses MTN Money and will sing the praises of its simplicity and ease of use if asked. The Reserve Bank of India has recently been making noises about creating the structure for mobile banking in India by mid June and this year's budget had emphasis on 'inclusive banking'. While Indian banks wait around to see who will dip their toes in the water first (my personal experience tells me they've been waiting around since late 2006 to bank the unbanked) what will happen if this transcontinental mega mobile merger goes through? MTN's format and systems for financial transactions are already tested and in place, transplanting them might be easier with localization for Indian needs giving Bharti a head start in this space with a ready made solution even as others quibble around wondering what happened.

The Indian mobile subscriber growth rates are not indefinitely sustainable, already handset sales are slowing. Focusing on rural India and improving infrastructure will offer another few years, but as 'everyone who can own one will soon own one' the future is obviously pointing to services and applications on the wireless platform rather than the hardware itself. Africa's lead in grassroots mobile innovation is a result of necessity rushing in to fill the vacuum of infrastructure and services. India's situation has been different, while considered shaky, her postal service, railways and basic distribution mechanisms are far advanced in terms of service and performance than most African nations.

The potential for cross pollination  has already begun to be explored by Tata. What happens when the same kind of subscriber growth happens across Africa? When Indian software engineers and application designers apply their skills to the African solutions?  I'm looking ahead to see what an information network spread across the 'developing world' like this one might actually become when ideas can flow freely between the continents. I'm seeing a mobile internet that joins Europe to India by the way of Africa. I'm seeing the next billion online.

The Economist starts and ends their article with quotes from the Mahatma, focusing on the two companies themselves, their operations, subscribers and revenues. But Gandhi's ideas that join South Africa and India in a shared history changed the course of the entire world, not simply his own.

Need for a new global capability - Ted London & Stuart Hart

From their 2004 paper, Reinventing strategies for emerging markets: beyond the transnational model (PDF), Ted London and Stuart Hart have summarized the patterns of success and failure of new market entry strategies implemented for base of the pyramid market segments globally. You can click on the image above for a larger version for easy readability.

Looking at what differentiated the successful ones simply underscores the viability of a human centered, co-creative approach that explores and incorporates local solutions for addressing local challenges. Hart and London's paper states that there are no easy, quick fix answers or models that simply be dropped into these markets but as economic growth and market forces have demonstrated since 2004, serving the billions of new customers effectively is becoming too crucial to be ignored.

Ps. At this point, I'm tempted to add that a great non traditional partner for MNC's to add capabilities and insights in this area would be the Emerging Futures Lab.

Snippet of an anecdote or how a dhobhi disrupted an industry

Reliance Infocomm made telcom history in India by disrupting the pricing models for the entire wireless industry a few years ago. Yesterday, dad told me an anecdote that apparently gives the reason why Reliance introduced such low prices for calling plans in India. I have no links to back this up, its purely hearsay but when the service was first launched by Anil Dhirubhai Ambani, his famous father, Dhirubhai himself, who built Reliance into India's most famous rags to riches story asked if a humble dhobhi would be able to make a call on a phone with the mobile plan under consideration? He's supposed to have said that there's no point launching anything on a national scale if your friendly neighbourhood laundryman couldn't call you to tell you your clothes were ready. The rest, as they say (in an irresistable cliche) is history.

There are no 'Consumers' at the BoP, only customers and clients

This post was going to begin looking more closely at the two terms - consumer and customer - and their use when referencing the people at the bottom of the pyramid. We've been tossing around the idea of looking for an alternative because we're not comfortable with using the word consumer when it comes to those we seek to serve, the next billion or more.

They really aren't consumers, when you actually look at the meanings of the word, but perhaps might better be known as clients or customers, for while they may not consume (in the now common meaning of this word) they certainly purchase goods and services.

But in today's common usage, the words consumer and customer have become sadly interchangeable. I do wonder how much that might be relevant to the way we percieve and approach the challenges of entering and sustaining businesses in this market?

Doing research on this post online today made me realize that this topic is too vast to become the subject of one simple post but instead might be the beginnings of an ongoing conversation. Based on what I have here, what do you think might be the unintended side effects or impact of using the words consumer and customer interchangeably? particularly when referencing the lower income demographics?