Patience, persistence, resilience and income

Highlights from the IAP Conference and Awards 2013

The many and varied inclusive business journeys was the underlying theme of the conference that took in place in Lusaka, Zambia on 28 November. For many of the start-ups that participated in the conference, this journey could be described as a journey on a bike; It is a quite cheap and simple, yet effective way of transport. At the same time you are at the mercy of the local terrain and weather, one may need to be persistent and also creative in finding your way forward. Quite literary two of the companies, Tugende and Mozambikes, who talked about their business journeys rely on motorcycles and bicycles as means towards eradicating poverty. Mozambikes is innovating a product that has existed for a century and more, but still not widely used in Mozambique. Their analysis came to the conclusion that it was due to high price and poor quality. By doing branding of bicycles, Mozambikes can get the additional money needed to produce locally and sell a good quality bicycle that is priced at $30.

Many speakers brought up the point of price sensitivity and the constant strive to develop products at even lower price points at satisfactory quality. Both d.light and Nuru Energy has gone through several product iterations to be able to sell to the base of the pyramid-segment.

“But there is a constant demand for new products and new features”, commented Kate Montgomery at d.light, and this creates a high requirement on the company’s innovation capabilities. But the company had nearly abandoned its focus on product development in favour of distribution and marketing.

“Pretty quickly we understood that this was key to get our products out. There was a huge need to engage with customers so we made a major shift from product development to marketing and sales. Most money is still spent in marketing.”

Market Intelligence and BoP
The audience consisting of more than100 participants from many different parts of the world listened and interacted in sessions on how to adapt business models, how to do market research to understand the BoP customers, what happens when things do not go to plan and heard practical case studies about marketing and sales. Sida also co-led a session from a donor’s perspective on supporting IB through programmes like IAP. One striking difference from other start-up and industry conferences on innovation was the emphasis on inclusion of end-users and communities in the innovation and the business journey. There were many different aspects of this. Mozambike have worked closely with end-users in the product development and their pilot users have made suggestions, which resulted in 18 (non-aesthetic) changes to their first bicycle model. Some organisations take advantage of new ways of understanding market needs, like Text-to-Change mobile survey tools. This cannot entirely replace face-to-face interviews and meetings though, as their founder Bas Hoefman pointed out in his presentation. Rent-to-Own also talked about the use of IT-systems to manage their sales. One of the first things they invested in was a marketing information system to support their sales staff in the company’s relationship with its clients.

For Zanrec, who has established an island wide waste collection system on Zanzibar, community engagement meant finding their place and acceptance locally, since they were not the first ones to collect plastic materials, albeit the first to organize this into a system. Plastic drinking bottles have a re-use value for people who use them for storing oil, milk, and juices. The company started activities that could engage more people, besides hiring some of these waste collectors, in beach clean-ups, school activities and so on.

Back to the drawing board
Zanrec, as well as biomass producer Eco-Fuel Africa, both had a value addition production process at the heart of their business idea for how they would create economic value out of waste material. Both had to adapt their business model, but it took them in different directions. Zanrec found that the processing they had in mind was too expensive and they shifted to a service addition model to hotels on the island and now have nearly 100 hotels signed up to the recycling system, where they pay for collection. Eco-Fuel had a difficulty reaching the most remote villages. The answer lied in a decentralized model where part of the production can be done at the suppliers’ site, equipping farmers with a kiln to turn agro-waste into char. This brings the solution of waste closer to the problem, as well as shorter turn-around of waste into to the value-added products that are sold in the same communities.

“Our technology is very low cost and tailor made to this context”, explained Moses Sanga, who was also one of the nominees for the ‘IAP Innovator of the Year’ award.

One experience that most speakers, as well as many of the participants, shared is the need for boot strapping while getting the model right and getting customer traction. The search for any additional income to help survival of the people behind the social enterprises could probably have been a session in itself of useful advice and tips. Steven Putter counted to three “re-starts” of his moringa business before having a sound and scalable plan. Many later quoted Liisa Petrykowska’s own recipe to eke out her nearly non-existent income from her venture Ignitia: Growing long beans and designing furniture for expats.

“Usually case studies are about success stories, but it was very useful and constructive to hear about mistakes and change of plans”, commented a participant after the session, who felt it therefore was the best conference he had attended in 2013.

Marketing strategy in the concrete
What does cement have in common with menstrual cups? Well, the audience learned that both need sales to be boosted by creating brand recognition and affinity. Lafarge, which was the largest companies to be represented in the conference shared their marketing strategy and showed how cement can be promoted with plenty of giveaways, such as branded bags, t-shirts and hats. They also created a talk show on the radio for their affordable housing promotion, explained Chobelia Ndilia. Makit, on the other hand, it still working out a multi-pronged approach to reach the BoP target market. They need to become more visible in ordinary retail channels before their customers would trust the product, said Amaia Arraz, who showed their ‘No wings or strings attached’ advertising campaign.

A day full of lessons and discussion, that could easily have been extended into two days and as somebody remarked: “Is there possibly a meta data base for the basics of starting a business?” Indeed there are tools out there, even if not in a data base format, but the take away was also that no entrepreneur gets it exactly right the first time. Each context is unique and requires new thinking – if you want to work with innovations against poverty.