Are you selling the right the thing ?

When is comes to BOP market, the firs question you need to ask is are you selling the right thing?
When I say "right thing" it means is you service worth selling to the poor. Ask a few questions for yourself before you jump into the business of improving life at BOP.

  1. How big a change does your product/service will bring into their life ?
  2. You have sold a story to an investor, he bought it, but is it right to sell it to the people at BOP?
  3. Is you price justified ? I usually see the prices for BOP products are very much higher compared their counterpart products in regular market.
  4. Are you comparing you lifestyle with theirs to sell your product ?
If it doesn't improve their life then better sell something else. As I have already said, they don't want a shoe !!

Market research of BOP and LED lighting

After writing the blog about rural market for lights. We decided to do a market research. We choose rural regions close by to our place. It was round 1 of our market research. The villages were already electrified and were connected to grids !!! They do have regular power cuts but our research was to see how much difference would these lights to their lives. We will do a round 2 in remote villages, for now here are our findings.

  • They had maximum of 8 hours power cut at irregular intervals and 2 hours in the night. Which really didn't matter to any of the villagers. Of course it doesn't matter much to people in Cities in India.
  • They are happy without light for an hour or two, there is no way they will buy a rechargeable lamps.
  • There are technical guys in these villages who can connect lead acid batteries to grid and make it work if they really need backup.
  • Solar panel should be optional, a better battery management would be the best solution.
  • They are aware of low cost Chinese products and thats quality for them. They don't mind if the light is blue or white. It's just light for them which is better than kerosene.
  • They did ask for warranty !!!
  • Pricing is a major factor. They will probably buy Alkaline batteries for a good lighting product rather than pay high upfront cost for rechargeable batteries.
This just few rural regions. Things vary widely. Will most our next market research data which will come remote villages with little or no access to grid.

Things the BOP market needs

This is my first blog in the series. This series will deal with services and products that the BOP needs. Here we go...
The most hottest product sold in the rural market are the high efficient white LED based light. Either powered from AC or a solar panel. This has given raise to few startups dedicated to provide lighting solutions to the rural market. The lights are cheap and provide a better lights compared to kerosene. There are three main players for now, all of them are venture funded.

Dlight seems to have 3 types of products now. There is also SELCO India, which is much more amazing in it's business model. There are few more companies that donate the lights, but thats a different story. Though the market existed in India since a long time ( even in Urban India, I remember using tubelight based emergency lamps during my exams), it is in recent times that major VCs have seen a potential market. The logic behind is simple. Most villages have either no grid power and if they have there is no sufficient power for them. They use kerosene, which gives bad light,fumes. An average person in a village would spend Rs1000 per annum of kersoene which can be replaced by these lights. There is a market for millions of such lights !!! With cheap electronics and plastic you have a very good margin.

Get your hands dirty

You have a great product, a clean website and you know people in villages need your product. Thats not enough guys, go in, talk to the villagers, get your hands dirty.Understand their lives, see how your product can help them.Teach them to use it. That is the only way you can these people. Your website and blogs sends you good luck wishes from people who will never use these products.
So go get your hands dirty...

Mobile phone to close digital divide

Mobile phone are very popular in rural India. Probably they are the best technology ever made for BOP. As I said in my previous blog illiteracy is the greatest challenge for using PCs in rural regions. No wonder there is an obvious solution to keep use computers with a different GUI.May be PCs are best used in rural production center but a mobile phone seems to be an obvious choice for an Individual. Niti is right, it will be a great way to teach basic business. It will be easier to teach usage of 10 numbers and then teach them to use calculators.
Single day sessions on how to effectively use mobiles for there business will be a great idea, but this can work only Mobile service providers consider this market. They can probably do this as a part of CSR activities ! Well it's for profit.

Closing the digital divide one step at a time

We have seen lot of articles about the existing digital divide between the urban and rural India.But why do we talk about the digital divide when rural regions lack even the most basic of basic requirement like light,water,food.....
Now lets go back to the basics. Computer, they truly amazing. Can do wonders. Change your life style. If they can change yours they can changes any life. When we talk about rural India, echoupal has proved what computers and internet can do for Indian villages. Thats nice, but wait a minute, there is a basic flaw !!! villagers need to know how to read and write. Even if they literates, they need to know english. Every Indian state has it's own language. Do you get computers and keyboard with all these languages ? And where do you get trainers who can teach computers in these languages ? Or do you first teach them english and then computers ?
So how did echoupal do ? Well ITC has resources to help them.They hired people who can help villagers. But you may not be able to do that. There needs be a practical solution. So if you are trying to build a computers to help the Indian rural regions its not only about the cost, it about literacy, its about linguistcs. Here is the solution:
"Build a software that is illiterate proof, and probably use the same to teach them how to read and write." Isn't is simple?

Buy one and we will donate one,thats crazy!!

I have come across many social startups that run with this model. You a buy a item that they sell and they will donate same item to someone in the third world countries. I say thats just crazy.
Firstly, you are charging your customers twice as much it costs. Secondly even if the customer is here to help, it's better he donates directly. The reason is pretty simple. The needs of the customer who is buying are totally different from needs of the people who are accepting the donation. Take this example of TOMS Shoe, for every shoe you buy they donate a pair to poor children in Africa. It's pretty obvious from the photos that shoe is something that need right now.
Now you give them something that they don't need. You have purchased something you might never use !!!! But the website has sold 2 items. It's the same with $100 laptop (OLPC). Seriously if you want to help someone in need donate what they directly, I don't you will be using that laptop ever when you have a cool new MAC at your place. There are organization dedicated for the cause and most importantly think if they really need what you are donating. 'A pair of Shoe ? really !! Why do you want a pair of shoe when you haven't eaten properly for a month ?
The only winner is the person who sells two items in a single sale.

Impact maximization : One more piece of bread

The idea is pretty simple. Maximize the impact for a single family. It's a small village. Every extra penny creates a story. Every person talks about the story. Within a short period you have more people asking for your product or service.
In most cases it very easy to see the impact. A single extra bread for every family member is a huge impact. Enough to create a wave among the tightly connected village population. Most people are unaware about the benefits of the product/service you are trying to sell. They ignore you just because they can't afford. They simply assume it be a piece of gold. Find a way to show the impact. May be find few people whom you think can show the 'impact figures' and let them use your product/service for free or just rent it. As I told you one extra piece of bread/roti is a great way to measure impact. Everybody wants one for himself and his family.

Indigenous product

When I started digging the web for renewable energies for the world's poor, I came across lot of innovative ideas. The ideas were just great. Hats off to the brains behind them. They said: "We have created 'something' that can help the world's poor and this system can be built from indigenous materials."

Now take a close look again. There is a fundamental flaw. Most of these designs come from developed countries. What's indigenous in US is not indigenous in Indian villages. A car dumped in US is great for your work. But a car never get dumped in India !!!! So to all those innovative engineers out there, keep up the good work, just redo your design and save the world !!!

Getting ready to change the world

You have a great new product that you think can change the lives of world's poorest. You are all set to move to Africa or India and start selling. But few months into the business it gets harder and harder to sell.
Say you have a perfect product that gives almost free electricity for life. You have a great young team. Yet it gets harder day by day. So where are you failing ? Heres the thing,

  1. The keyword is 'convince'. Convince them, prove that your product can truly change there lives.Change just means which can give them extra few dollars or even few cents every day or cure a disease.
  2. Make sure you provide them with the a great finance options. Well if you don't trust your product can pay you back then don't sell it to them. They will be investing there life savings into your product.
  3. Make sure they pay you back by giving them ways to use your products productively.
  4. Provide a great customer service.
  5. Finally make sure they need your product. I mean before you sell water heaters make sure they have access to drinking water. Don't try to solve the wrong problem at wrong place.