Editor's Choice, September 2014: Designing for the BoP - a Business Fights Poverty report
What are the key factors to keep in mind when designing products and services for the BoP? What are others doing and what lessons have they learnt? Business Fights Poverty explores some of the answers in its Report on their Design Expo 2014.
The report, based on crowd sourcing and discussions between experts at BFP’s week long Design Expo in June 2014, is full of ideas on designing, reaching and serving BOP markets.
The insights outlined in the report are not radically new or different from what is already out there but it has a host of vibrant ideas and lessons in one fairly short and very readable document.
Drawing on examples of businesses from across sectors, particularly energy, water, ICT and health, it is all about engaging, listening and meeting the needs of some of the 2.7 billion people living on under $2 a day. It usefully unpacks much of the jargon such as ‘zero-based design’ and ‘human-centred design’.
The report discusses the importance of portability, aspiration, aesthetics, usability, reparability, and pay as you go mechanisms, emphasising along the way that design is not just about creating budget versions for the poor consumers. These are familiar themes but they are well demonstrated through plenty of examples.
Looking beyond design, the report explains Eric Simanis’ approach to building a business model that works. This starts with estimates of local demand and potential market penetration within the radius of villages that can be served, and builds the model from there.
A section on last mile distribution to the BoP looks at actual distribution mechanisms (such as franchisees, partners, existing networks) but also emphasises the role of behaviour change, trust, and demonstration. Not surprisingly face to face marketing and focusing on community leaders are highlighted. I’m not so convinced about the celebration of micro-franchising, which seems to have risks as well as benefits (see Nisha Dutt's excellent checklist on whether a village level entrepreneur model is the right choice).
The report comes with useful warnings like penetration rates are not the same as usage rates. An example of a water filter project highlights this point. While the water filter was sold effectively via an MFI partner, it was found that 70% of the filters sold were actually not being used.
Another point it outlines is that building partnerships with MFIs takes lots of time – which could be spent on other things financing was done in-house. I, too, have had several conversations with companies finding that MFI partnerships are not the perfect solution, so this range true with me. The assumption that financing is done by financial organisations is beginning to change.
The report seeks to tackle gender questions (our theme for this month's newsletter). At the least it raises the importance of the issue, emphasising the value of involving women in marketing particularly to reach women consumers. Most positive examples of this come from agriculture. It contains examples of how some business solutions have made sure to reach women, either by adapting design to their needs, or tackling credit or portability. For example, Farming First reduced fertiliser bag size to enable women to carry them up steep slopes. A simple solution, but often not thought of.
This is not a posh report. It’s a delightful mishmash of examples, views, and quotes. Browse through and you will find a few gems. It’s a lively read designed to encourage the reader to think afresh about design, reach and relevance to the BOP.