Perspective 2.0

Open letter to my readers

(thank you, Luke Wroblewski aka LukeW)

I'm probably in deep doo doo, but here goes. I've been struggling with the concept of does "design aid the commoditization of innovation?" since the last few days. And I've talked to everyone I know about it. Now I have to figure out what to say in response to this provocative statement.

Well if you must ask, here is how I would frame the same essential concept in most beneficial to all manner:

Design can aid the transfer of knowledge of innovation and methods across the barriers of culture, contextual knowledge, variations in literacy and language as well as socieconomic strata.

This will be my next self selected problem to solve.

After this post, I will be found either on Core77 or at my little corner of the Aalto Design Factory, Espoo Finland.

That's the good news. The bad news is that this blog is gonna die anyway. Mmm I think the last day is the 23rd of March, 2010. Happy Birthday, mon ami.

Form>Function>Understanding = Designer's perspective

Hm, feels like I finally figured it all out. Let's take a moment to back in time to what LukeW drew on his wall: (sorry for grabbing it whole but you did frame it so well :)

Designing with Vision

March 8, 2007by Luke Wroblewski

This week I caught a talk by Philip Haine from Obvious Design about Designing with Vision. Philip outlined how some products that seem to ignore the "best practices" of design turn out to be breakthroughs, while others that are designed by the book suffer from mediocrity. He also addressed why product design processes often suffer from have radically shifting requirements. According to Philip the answers lie in understanding product vision:

• Product vision is the missing discipline (marketing, design, development, etc.) in the product creation process. It has a profound effect on the outcome, is a source of innovation, and can override design quality.
• A solid product vision makes requirement gathering easy and gives clear guidance to design decisions.

Defining Vision

• Vision is a loose term but its outcomes are quite tangible: better designs, smoother process, and break through products
• Vision is a high-level requirement
• Vision is the selection of which problem to solve. It means making a choice
• Vision is a way to define a problem as a set of needs you are trying to address
• Creating a vision is a design process
• Every product has a vision whether implicitly or explicitly stated

The Design Pyramid

• Design: the only piece of pyramid that is visible to users
• Requirements: the specifications of what a product must accomplish
• Vision: the definition of a problem by which needs you are trying to solve
• Understanding: research or intuition about those needs
• It’s a pyramid because all layers above depend on what is below them
• Design is hard because there is so much invisible stuff that feeds into it (requirements, vision, understanding)
• For good design to happen you need the groundwork to be done
• If you have a clear idea of vision & requirements, the design just kind of pops out or reveals itself
• The design pyramid applies to functional design problems (not aesthetic issues)
• Requirements shift so frequently because new insights come in at the understanding layer
• The pyramid is recursive: it is set for a product but also applies to each feature within the product
• Disruptive innovation happens at Vision & Understanding levels

Bad Design

• The right product vision can override the design layer, but it rarely happens the other way around
• Products that use the right best practices may turn out mediocre while those that break the rules may become runaway hits
• If they are missing the discipline of vision, even the best design processes can’t help.
• Product vision & research is the driver (golf metaphor). Usability testing is the putter. [This was eloquently stated by Jim Leftwich on Functioning Form]

USN Scenarios:

• Used to understand the needs that build a vision
• User: customer/stakeholder
• Situation: or context or characteristic
• Need: that results from user+ situation
• Situation answers why something is needed and by whom
• USN scenarios separate the problem from the solution
• Need to be concise: necessary and sufficient

Applied Design Thinking

DF conversation with Lassi A Liikanen, circa 3rd February 2010

This post will continue but lets start the conversation on practice of design thinking instead of definition. Great, we wanna do it. Now what? Comments? Thoughts? Your perspective, experiences and/or point of view? Lets cocreate this conversation/observation.

Ok, I can program in Basic

In fact it just struck me that I sometimes write using Basic syntax - giggles like an idiot *rolls eyes* - so I don't know if my weird trend of posts of late, nothing even remotely BoP like would lose me a bunch of followers/subscribers? Oh well, who knows, there will be the usual shrinkage when I switch back to www.nitibhan.co on my 44th birthday. Four years too late, but I'm kinda semi retired from fieldwork now.

Otoh, I have an excellent team of user researchers in the emerging growth markets of the future, mainly women (who rock) so don't let the above make you hesitate to contact me.

Essence encapsulated 2010

Holistic solutions for the collective future will require a multidisciplinary approach and a flexible mindset. One that is open to new ways of making, doing, creating. One that is willing to seek solutions from any and all sources, allowing for the give and take of knowledge. One that will look for solutions that can address the needs of people and the planet not simply the profits that are crucial to every business. ~ Design for an Emerging World, July 2007, written for the Torino World Design Capital 2008 website

Reflecting on the workshop and Aalto's Design Factory

Fairytales of winterland and frost aside, the experience of pulling together the day long workshop at the Aalto Design Factory (although the event actually took place next door at the Venture Park due to space constraints) was a lesson in co-creation, cooperation and collaboration and most of all, enthusiastic open sharing of ideas and knowledge.

In my previous incarnation as Director, Graduate Recruiting & Admissions at the Institute of Design, IIT Chicago, I had had enough opportunities to herd the cats required to pull everything from Open Houses to Registration Day or even RecruitID together, at the infrastructural level. We had systems and processes in place to enable outcomes. Every one had clear roles, duties and responsibilities.

Nothing of that sort exists at the DF. Is this a good thing or a bad thing, I don't know, but here's what I saw. It is true that its chaotic here and few systems or checks and balances exist but everyone knows how to pitch in and make something happen. Its the planning that's important. And communication.

I learnt that instead of creating unmanageable chaos on a deadline, the fuzziness allowed for smoother workflow. I found that everyone and anyone will do what is needed to be done at that moment, if they happen to be standing around ;p and the needs have been clearly defined, thereby ensuring energy flows are uninterrupted. Little effort was wasted in finding the person "whose job that was" at any given moment. Will this stay this way or will it change and evolve as the DF grows up? Should it?

This same quality of "lets make this happen" infused the venture cocreation exercises - I was very pleasantly surprised by the sensitivity and nuance of the output, it seemed as though the 40 odd people there had already been thinking deep thoughts about those at the bottom of the pyramid and their needs. The emphasis was on making sure that the ideas and concepts were relevant and appropriate to the needs of the people, with the attitude that we'd figure out how to make it a sustainable business after we got the systems designed. If indeed we can provide a "passion based co-creation platform" to enable innovation, then one can surely say this prototype works.

On Design's responsibility to our collective future

Reading Chris Blow's recent thoughts on the responsibility involved in the work he and all the codemeisters and hackers worldwide are doing in the name of Haiti, made me think about the importance of taking a moment to reflect before moving into action.

I think that what we have witnessed in terms of global cooperation and coordination among those with their heads in the cloud, so to speak, is no different than Google's attempt to extend their brand into the real world. Oh help, the Internet has run amok :p

Now, back to design and why did I think about the responsibility that Design has globally to start thinking seriously about their own as well as the world's collective future.

Its not enough to be cutting edge if the world is flat. You'll fall off without noticing. Allan Chochinov captures this essential blind spot in his short pointed essay on Adobe's Inspire site where he says that this year's design trends and focus have already come down predigested.

But is that what we want, or we see ourselves taking steps towards what Allan has said so well,

Indeed, the definitions of "best" (and, appropriately in this case, "good" design) have changed over the decade, embracing sustainability, accessibility, systems thinking, labor practices, and energy flows into the criteria that flesh things out beyond mere form and function. I'm all for that. But a whole decade's worth of the best examples?

Does this mean that a year after embracing all of this or talking about it for the past ten, we have nothing to show for the talk, the products are still based on dominant logics of consumption and individual ownership, underwritten by waste?

The BoP and technology - what next? Cocreation workshop, Helsinki January 26th 2010

Scott Smith of Changeist LLC and progenitor of the Some Observers blog will be in Helsinki next week to facilitate a workshop on emerging technologies and emerging customers, with a focus on the next 5 billion. Yours truly gets to interject, chime in and interrupt, albeit not that frequently, over the course of the day. Here's our invite to you,

Exploring the BoPNet: Developing Future Technology Solutions for the Next 5 Billion

Emerging consumer markets in developing countries, many whom fall into the so-called Bottom of the
Pyramid (BoP) category, represent much of the future of communications technologies and services we have come to rely on today as a driver of modern societies. Likewise, many observers say the future of
transportation is in inexpensive city cars for the growing megacities that house the BoP, and future health, environmental and education services we all use will be significantly defined by their needs.

The list goes on: more and more technologies will in future be used by, and shaped by, consumers who
today earn between 2 to 5 euros a day — but who are rapidly emerging as tomorrow’s primary consumer cultures.

To explore more deeply the interaction of trends driving the growth of the BoP, its convergence or
divergence from the developed world, and the shape of its future users’ needs, we have designed a unique one-day workshop that allows participants to interact with and shape possible future solutions for the BoP—products and services that suit its unique dynamics.

Content and structure
We will mix exploration with interactive team based exercises to probe deeper into the emerging BoP
technology ecosystem, which we are calling the BoPNet for now. We will focus on defining future users'
needs, system dynamics of the ecosystem, how technologies might evolve differently, and what new
strategies and partnerships might be appropriate in this world.

Benefits
• Learn more about the dynamics of the BoP, focusing on both the human side and its technology
behaviours.
• Opportunity to interact with visuals, trends and artifacts
• Use unique rapid ideation techniques to create future scenarios and user-centered solutions.
• Explore the implications and interactions of these scenarios.
• Help further define the dynamics of the BoPNet as they see it.
• Takeaway information and knowledge shared and co-created during the workshop that could be
applied to existing developed world technologies or solutions.

Who Should Attend
All those with an interest in innovative strategy, product development and design can test their own
assumptions, uncover new insights, and more deeply explore the needs and requirements of the fastest growing and most demanding consumer segment of the next 25 years: the next 5 billion customers.

Venue and Date
January 26th 2010 (Tuesday) at the Aalto Venture Park, Otaniemi (Betonimiehenkuja 3), Espoo.

Registration
Contact kalevi(dot)ekman(at) tkk.fi to register, free admission, first come first served, RSVP by 22.1.2010 – (only 13 spaces available)

Demanding savvy customers at the BoP

Probably the most successful global BoP consumer product today is the mobile phone and its attendant services. While there's fodder for a separate post to follow contained within that specific sentence, this one looks at the reasonably maturing market as a frame of reference by which to evaluate the last point made in the previous post about considering the BoP as your most demanding customers. Some snippets from the news before I summarize the lessons learned from observing those at the BoP up close and personally for a couple of years now.

From The Phnom Penh Post dated December 17th, 2009,

IT can't be easy being a mobile-phone operator in Cambodia, one of the world’s most competitive markets, with nine operators chasing just 14 million people. The Post tagged along last week on a sales push in the coastal resort town of Sihanoukville, where a vanload of chattering employees from Metfone took the trip from Phnom Penh to set up a sales kiosk in the coastal resort. The setup is a familiar one across the country, with bright advertising hoardings slung everywhere and music pouring from speakers to entice the locals in for a closer look.

Interest was strong, with price appearing to be a key consideration. The hottest sellers were low-end mobile phones retailing for US$14 and $17, as well as the firm’s $25 Methome device, which looks like a landline but runs off a mobile network. Many customers displayed intimate knowledge of tariffs and handset prices, quickly spotting any change from the last promotional visit. Though many sales seemed to hinge on these price points, most customers also seemed to have a solid grasp of comparative network quality. Many more had an eye to the future, looking for advanced products and 3G connectivity. Plenty for the customers to think about, and the operators, too. ~ JEREMY MULLINS

And coverage from the abs-cbn news from 20th December 2009 aptly titled "Getting to know the sophisticated prepaid user",

Prepaid subscribers currently account for more than 95% of mobile phone users in the country (The Philippines). (They) may usually belong to the low-income segment of the market, but they are actually very sophisticated, according to Globe Telecom Inc. CEO Ernest Cu. With the wealth of bucket-priced offerings at their reach, he said these users have learned to shop for the cheapest call and text promos, posing a challenge to profit-seeking telecommunications firms.

And why just rely on remote news articles, recall my rental car driver in New Delhi firmly dismissing the much advertised telco 'price wars' offering him prepaid plans at just one paisa a minute by saying he had a plan which cost only 50p a minute, thus saving him 10 whole paise.

What we're increasingly beginning to see is that regardless of varying levels of education or numeracy, language or culture, urban or rural or Asian or African, the BoP customer is savvy, demanding and an extremely sophisticated financial analyst in a manner that most of us - dazed by the clever pricing strategies in supermarkets - can only dream of being in our everyday lives.

Summarizing the observations made on the buying behaviour of this demographic, we can say that they tend to:

• Maximise the return on their investment (every purchase is considered such)

and

• Minimize their risk by
  
  • Choosing reputable and/or proven brands
  • Relying on a number of trusted recommendations and other's experiences
  • Waiting to purchase until proof of performance and commitment is demonstrated

The trickle-up influence of design for the bottom of the pyramid

The most common question posed by designers (at the Design Factory, in Finland) has been "What is different about designing for the BoP from the way I already design for mainstream consumers?"

Its a good question to ask, because it takes a systemic view of the user centered design process and methods being taught to them rather than focusing only on differences in features and attributes of tangible artifacts. This post is an attempt to grapple with developing a possible answer to their question and  starts with CK Prahalad's framing of the traditional MNC approach vs his suggestions for the BoP approach.

The quality, efficacy, potency, and usability of solutions developed for the BOP markets are very attractive for the top of the pyramid. The traditional MNC approach and the approach suggested here—top of the pyramid to BOP and from the BOP to the top of the pyramid—are shown (above)

As the (foregoing) examples illustrate, the demands of the BOP markets can lead MNCs to focus on next practices. The BOP can be a source of innovations for not only products and processes, but business models as well. Let us start with the growth opportunities in local, stand-alone BOP markets first. ~ CK Prahalad via

Interpreting this in the context of design:

1. Consider the design of the entire ecosystem in a holistic manner rather than the product alone

The majority of industrial designers in studios and corporate departments around the world are tasked with the design of a specific product or application, isolated contextually, for the most part, from the larger ecosystem of the market primarily due to their experience of and immersion in the existing sophisticated marketing infrastructure. They have the luxury of access to information flows on packaging, distribution, supply chains and retail outlets as well as competing designs and this lets them focus on refining a particular product, package or UI.

This situation is almost reversed when it comes to the BoP consumer and the BoP markets. The paucity of information does not only hamper the BoP themselves but also those who seek to serve them. Furthermore, much of the market infrastructure is non existent or of a vastly different quality than that experienced in richer markets.  Factors such as income streams that are irregular and lack of financial tools such as consumer credit available for outright purchase are issues rarely considered during the design process but can and do influence the final outcome. Products designed in isolation may win awards but may never quite impact the quality of life in the manner they were designed to do so if their business model, pricing or payment plans, much less distribution or usage do not reflect the conditions of the operating environment.

2. Price as a rigorous design constraint, not simply a data point or the sole criteria for reverse engineering

The issue of pricing then, becomes mission critical in the design brief but not as a reason to compromise the design. That is, if the traditional MNC approach is top down, stripping features and degrading quality and lifespan achieve no purpose except risking the brand's reputation. Instead, maximizing the constraints while minimizing utilized resources can be seen as a way to innovate for this demanding consumer segment by providing value through elegant design solutions that appeal yet offer a return on their investment.

3. Being aware of and questioning assumptions made

Whether its as basic as availability of electricity and running water or as subtle as the design interpretation of such underlying value propositions as "convenience", the assumptions made about consumer buying behaviour, purchasing patterns and decision making or choice of brand or product cannot go undebated or unquestioned. A challenging environment, conditions of uncertainty or scarcity and the hardships of daily life managed on irregular incomes all serve to influence the value system and mindset of the target audience in ways we are not always able to immediately discern if we don't flag our implicit assumptions as a potential stumbling point.

4. Nuances of local culture and society matter

These markets are not the already saturated mature ones of the "global village" with a blase attitude towards such throwaway things as the use of religious iconography on lunchboxes and t-shirts, still preferring to stand on their dignity and self respect over the sophisticated acceptance of perceived disrespect. Thus, nuances observed during user research that may be overlooked when considering different regions within the developed world may in fact be far more important in the context of BoP consumer markets and influence the user acceptance and adoption rate of the product or service. Choice of colours, features, tone and style of communication are some of the design elements so affected. Choosing to tread as delicately as a newcomer never hurts.

5. Think of them as your most demanding customer, not the helpless poor in need

India's telco price wars; a street view

This issue of Businessworld caught my eye on the flight from India, with its accompanying cover story full of informative graphs and numbers. Anecdotal evidence from the rental car driver tells me that some gaps exist between marketing and the end user, he said he prefers the 50p per minute rate for his prepaid account rather than the 1p per second rate because that adds up to 60p per minute. I wonder if the per second rate billing is rounded off to the nearest minute? If not, they have some communication challenges ahead if your average Ram, Jeet or Hari doesn't get it.

Here are my attempts to capture this ongoing "war" to and from the airport during my 10 hour stopover in New Delhi on the 15th of December, 2009.

And, as we whizz by these marketing campaigns that apparently signal the 'price war' for the BoP customer, one assumes, I thought I'd add a photo of the driver's time pass, a book whose title transliterates as "Rapidex English Speaking Course". A gift from a disgruntled customer since he confessed to poor language skills. No, he hadn't heard of that well known Finnish solution for learning English via his phone either...

All photos taken in New Delhi, India on December 15th 2009.

Can big business save the world? It depends...

Jared Diamond's op ed in the NYT struck me with the question he posed, which is whether big business can save the world. Diamond went on to use Walmart, Chevron and Coca Cola as examples. I leave  it to you to decide, but my preferred choice of three in answer to that question would be Tata, Nokia and the brand called you.

You wouldn't be reading this otherwise.

But I'm not a big business you'd say... true, by the metrics used by the behemoths above, but all of you out there (whether you read this or not) working to save the earth add up to the biggest business of all, dont you?

I sure hope so.

*This* is a design revolution

Reading Helen Walter's review of Emily Pilloton's book Design Revolution in Businessweek titled "This is a design revolution?" made me wonder what would happen if we approached doing business with the BoP without the filter of "social impact" or "doing good" or other fuzzy wuzziness etc? What if the design of a product or service was simply considered the same way one would for any other demographic? And metrics of profitability, viability and sustainability of the revenue model applied to the decision to enter a new market, regardless of whether they were "the poor" or simply humans? How does this influence the success of the product or service in the market and, critically, how does it influence design?

It seems to me that this is what Tata is doing when they consider the overlooked and the underserved that comprise the majority of their domestic market. This week, Ratan Tata launched the Tata Swach, a water purifier designed and developed to serve the base of the pyramid market in India. A snippet from the news,

“The whole group has been fired with the view of how can we create products which were earlier not within reach of the vast number of people through innovation and technology, not just stripping down the value of the product,” Tata Sons chairman Ratan Tata said.
[...]
The Swach, a pet project of Ratan Tata, is the group's bet that the private sector can offer a better, consumer-based solution to one of the world's most persistent health problems than most governments in the developing world can.

This is interesting because the product is one which is not really in line with any of the TATA Group's current line up, and the water purifier market in India is currently a battleground. Hindustan Unilever, yet another firm with no history of consumer products of this sort has its Pureit - the first mover in the BoP segment, is facing challenges from the incumbent water purifier maker Eureka Forbes, who only recently woke up to the potential of the lower income demographic. One would think that in this situation the timing of the Tata Swach's launch would be a disadvantage but apparently not if this input is anything to go by,

Tata will sell two versions of the 19-litre Swach container, priced at 749 rupees ($16.11) and 999 rupees ($21.48), depending on the material. The filter itself costs 299 rupees ($6.43). It will purify 800 gallons (3,000 liters) of water – enough for a family of five for a year – before it automatically shuts down.

 Hindustan Unilever's Pureit filter, which also does not require access to running water or electricity, costs 2,000 rupees ($43.01), with a replaceable battery kit that costs 365 rupees ($7.85) and can purify 1,500 litreof water.
[...]
The Tata Swach – Hindi for “clean” – meets U.S. Environmental Protection Agency standards, and doesn't require running water, electricity, or boiling, executives said. It's cheaper than boiling water, cheaper than bottled water, and 2.5 times less expensive than Hindustan Unilever's low-cost Pureit filter, according to data provided by the companies.

This implies that Tata has applied the lessons learnt from developing the Nano, as  well as approached the whole market entry strategy as carefully and as rigorously as it would in any segment. Their primary criteria - as a business - for the design and development of this product was to take the concept of the Bottom of the Pyramid as a viable demographic to serve, setting the design criteria and constraints for both the product itself as well as their revenue model and pricing structure accordingly. The fact that it will "do good" or "improve life" is as important but this aspect has not been permitted to overshadow the need for the product to be competitively priced and attractive to the consumer, offering value for their hard earned rupee, even as it prevents their children from suffering from diarrhea.

This interview with the product's designer, award winning NID alum, Satish Gokhale, quotes him accordingly,

"Once the technology was finalised and tested, we were mandated to design the container and other features," recounts Satish Gokhale. "The most important part of our brief was the target selling price of Rs 999. The design had to therefore be simple in construction, easy to manufacture and easy to use.''

Most details about the materials and methodology that went into manufacture of Swach is under wraps, but Gokhale said there was the dual need of using right priced material without compromising on the strength of the unit and its usability with the ultimate aim of making it affordable to everyone who drinks water in the country.

This sounds more like design for a demanding client, no aspect of "social impact" or "doing good" being allowed to overshadow business needs. After the three year long project has finally seen the light of day, Gokhale's wife is quoted as saying,

"It was a tiring journey of dozens of sketches, and renderings and e-mails going back and forth," Falguni Gokhale told TOI, adding that Tatas wanted a perfect product and nothing half-baked would do.

Meanwhile back at the ranch, Unilever's response to the "water purifier for the BoP market" marketing war, from the previously linked article throws up this interesting nugget,

HUL says it has subsidised the machine as it knows it can bank on making money through the replacement of battery kits that cost Rs 365.

Compare the difference in approach and in framing of the problem (market entry strategy for low income demographic) between Tata and Hindustan Unilever (HUL). No subsidies for Tata, no compromises and from all that one can read and find, greater value for the rupee offered to the discriminating investor that is the BoP consumer. To quote our own marketing ;p "Price is simply a design constraint, not the sole criteria".

Yet one can already see that when the market awareness and education of the poor user has created the demand, this latecomer to the product category will walk away with the lion's share of the sales. Tata is a global brand, poised apparently to become the Nokia of drinking water, since their next goal is entering the African market with the Swach.

Now bringing this whole blather back to the questions posed in the beginning of the post, what if "BoP Design" was approached from the same perspective as  design for business and not design for social impact or doing good or any number of heart warming phrases that seek to imply improving the lives and livelihoods of the poor.

Is there any doubt that better quality water would do all of the above? And is there any doubt that this shows all the signs of being a successful commercial product for Tata?

This is just good design doing its job - making stuff that people want to buy. (For the BoP are people too)

Women at the BoP: what does it mean when your money belongs to you?

Photocredit: WSJ slideshow

I came across the following anecdote from the CGAP blog referencing biometric identification technology as a means for financial services to serve their BoP customers and it gives rise to some food for thought. Here's the snippet from Claudia McKay's post,

I remember encountering an elderly man arguing with a teller.  His son had died, leaving a widow and three children, and he wanted his daughter-in-law’s savings. It is tradition that all of the family’s possessions belong to the husband’s parents, regardless of the wife’s contribution.  The wife had accumulated about $150 in her savings account, but because her account required her fingerprint, the man was denied access. The next day the wife came to the bank, filled with gratitude that she still had the money she needed to support her children. 

This incident repeated itself many times and before long, standard marriage advice to brides included opening an Opportunity Bank account that offered ‘magic’ protection from drunken husbands and desperate in-laws. Others called the ATMs a tool of Satan that scanned your soul through your fingerprints.

Connecting some dots here, such as the future biometric ID cards to be made for all of India, not to mention the rural banking services now being made available, what will be the influence of "owning your own money" be on the women at the BoP? I'll focus for a moment on India, since my own experience makes it easier for me to ponder the consequences.

[Takes a moment to reflect on drunken husbands and desperate in-laws.]

Wow.

Already we're seeing a sense of pride, accomplishment and empowerment among women in India, particularly outside the urban metros. And the ladies I interviewed at Dastkar Ranthambhore for the Prepaid project talked about the sense of power that their income gave them, enabling their evolution from passive daughters in law to decision makers in control of their own lives.

Now, if technology can prevent fraud, misuse or forgeries, and one hopes does NOT give rise to incidences of fingerchopping (akin, I imagine to dowry deaths and bride burning), then truly, its influence will be felt in the patriarchal hierarchies of rural Indian households far beyond what the actual earnings or income may provide to women who work for their livelihoods.

Godrej: Setting the bar for BoP innovation in consumer marketing?

Image of Godrej Chotukool from the WSJ

Distracted by the coolness of the product, I overlooked the real story developing in the Indian consumer market. New ways of distributing, new ways of creating and meeting demand, in ways that proffer dignity to members working to solve the last mile connectivity problem are the real innovation in the saga that is the BoP.

Microfinance institutions are getting involved in Indian retailing, using their networks to reach out to end users in villages and small towns across India. The perfect mashup, the win win partnerships provide a reason for the microcredit being offered.

 

Rukmini Adsule (left ) and Anita Mane, from the microfinance fold, sell Godrej & Boyce’s nano refrigerators and Hindustan Unilever’s water purifiers, among other products, in Osmanabad, Maharashtra. Adsule earns Rs 3,000 a month as commission. (outlook india)

Young school educated women are selected from the end user communities to be trained as product cum financial advisors, for sales is not that simple among the BoP. You have to educate them on many things first, before they can begin to appreciate the value of your product or service, thus lowering the barrier to their purchase. Ironically, its perhaps the most transparent sales and marketing channel of all. All the patterns of behaviour of BoP consumers, from their high bullshit meter to their need for proof of performance before they shell out, are covered in these new channels.

Innovation, it seems, means overturning the rules that govern the design of supply chains and distribution networks, sales staff and marketing communications. These are emerging BoP ventures, either as brand extensions of wellknown behemoths or category creators who are baking their own pies.

By what criteria do we now evaluate "design for the 90%" now? 

From this interview of Adi Godrej with Forbes India yesterday,

Bala Balachandran, one of the longest serving members of the Godrej Consumer board and a professor at Northwestern Univerity’s Kellogg School of Management, recalls a strategy meeting that led to this reorientation towards rural markets and low income housing. Asked what they think Godrej Consumer’s main product was, most executives came up with Cinthol or Godrej No 1. But Adi Godrej, who is known around the office for his punctuality, said it was something more, including the brand’s connect with the customer and its distribution system. “All the focus on rural and the segment that he concentrates come from the ‘customer centric culture’ of GCPL [Godrej Consumer Products],” says Balachandran.

Usercenteredness, I don't hesitate to say, is a critical starting point for BoP and rural market development strategy, and an emphasis on the bottomline tradeoff between cost of serving this customer and ensuring that value was being delivered to the bottom of the pyramid market. Zoroastrians aka Parsis, like the Tata clan, the Godrejs are not unknown for their socially responsible businesses and charitable activities.

Photoblogging: Stocking up inventory in BoP retail

All photographs taken by the author on 20th February 2009 in Januiay, Iloilo, The Philippines.

Reflecting on managing retail at the BoP (Prepaid Economy project)

Ma Fe's sari sari shop, The Philippines, March 1st, 2009

When I think about my time in the filipino village earlier this year, the most significant learnings from the field are the ones I never really wrote about or pondered deeply at that time. They were too specific to retail, I felt, or business management, and while this shop was one of the sources of income for the household I was living with, was it crucial for cash flow or simply something for Fe to do in her spare time?

I had lots of time in the evenings since there was no internet access nor much to do here in the village and I thought I'd entertain myself by evaluating the inventory management, pricing and profit margins for the shop. After all, it wasn't part of the main focus on the research but could provide insights into what it was like to run a shop like this.

Accompanying Fe to the nearest town where she stocked up on supplies at retail prices was an eyeopener. Sachets and single serve packages, small tins of food or even diapers - none of them was priced to be beneficial to the final reseller, instead their pricing was calculated on the assumption that whoever bought the product at the end of the manufacturers supply chain was the actual end user or household consumer. They are also buying here directly, sure, but I would wonder at the percentage of sales actually being made by sari sari, spaza or kirana type shops which are so ubiquitious among the BoP.

I found that standard practice is to simply add an affordable 2 to 3 peso markup to the product, rather than basing it on any percentage of the cost of the item or total cost of purchase. After all, when we went to stock up this shop, it cost us 7 peso each to reach the town, then spend another 15 or 20 hiring a modified motorcycle tricycle taxi to bring us back with the shopping all the way off the main road into the cluster of houses in the rice fields.

The shop was not making any money at all and just about staying in the black. It was a diversion for Fe, and I suspect a disillusioning dissapointment as well, since she'd gone to the trouble of taking out a microfinance loan to start it up. Although in this case, I'd arrived in late February and the region was still recovering economically and socially from the worst typhoon in 80 years which hit the previous June in 2008.

Analysing the situation I found that while she'd had first mover advantage in the walkable distance with her shop and also priced competitively with the main road shops further away, neighbours saw her success and rapidly copied. There were two other shops within hailing distance, neither of which was critical to their owner as a source of income. There's a subtle hierarchy developing in this part of the The Philipines, based on the status of the migrant worker supporting the local family - was your remittence coming from a merchant seaman or a domestic servant?

Then I looked at the products themselves, trying to find a markup on the cost that would not only be reasonable and even attractive compared to "competition" but still offer some returns on the investment. That's when I found that there was no rational basis for the pricing of sachets by P&G or Nestle vis a vis quantity available and purchasing frequency patterns of the local populace.

 There were maximum constraints on pricing purely due to the "closed" customer base and their cash flow and income, so how else to discover a cost advantage? I looked for an "economic order quantity". I found that shampoos and coffee sachets could be bought 6 at a time, sold with a reasonable markup and covered the cost of all 6 by the time 4 were sold. So these 6/4 sachets became group A and were primarily fast moving. Then you got the powdered milk and diapers, you could only afford to buy 4 at a time and were only able to cover the cost of all 4 when you sold 3 sachets. And so on and so forth.

But after all that, the bottomline didn't change much, it might have only eased the cash flow/inventory purchase cycle but there really wasn't anyway to generate a significant increase in income as it was.

At this point I want to say that if MNC brands like Nestle and Proctor & Gamble really want to effect positive change among the BoP, one thing that they can do is design their sachets, pricing and sales material to target the BoP small shopkeeper, not just the retailers and traders within their existing sales and distribution channel. Literally a few cents difference in pricing here or there, along with an increased focus on the shopkeeper - training, pricing, margins - could make a signicant difference in their livelihood and income.

Entering BoP markets successfully - behemoth or startup?

Late last week I met a packaging designer based out of Beijing who happened to be in Helsinki on a company visit. He posed an interesting question, from his perspective, that a behemoth multinational could easily address all the various segments in a national market by simply being able to flood the market with products in different price ranges, but what could a startup do?

I turned it around. Is a behemoth more nimble in dealing with the challenges of the unknown BoP demographic or a start up?

Did one need to flood the market with a wide range of products or could one focus on a narrow niche very effectively?

It seems as though the answer boils down to how the challenge of addressing the entry into a new market or launching a startup is addressed - is it by the well known "sling spaghetti on the wall" approach much favoured by Chinese manufacturers or can one narrow one's choices and improve one's ROI by taking a far more user centered approach to strategy and product development. I hesitate to use another cliche here, which is, design thinking.

A behemoth can afford to flood the market - a start up cannot. However, a start up can instead focus on one local geography and launch a prototype - whether a product or a service - and test it with the users directly and use the feedback and observations to tweak and improve their product. Especially if they are able to do so under the radar of the "media, analysts, industry watchers, blogs" etc that behemoths have to constantly deal with.

Ironically, a behemoth has little choice but  to create a hubbub around their new (raw) product or service, particularly if its one which is very different from what they'd done before. A startup in many ways might have an advantage. And furthermore, is this advantage greater in a product?  A service ? Or a technologically enabled solution? 

Where do the Kickstart pump's efforts fall in this continuum of scale, reach and size?

BoP market segmentation: a chicken and egg dilemma?

The idea that has captured my imagination for the past couple of day is the question I've attempted to pose in the title of this post. "Consumers" do not exist, they are not a human archetype like hunter, hero, traveler or savior. This I'm sure is an area better covered already by experts in myth making, advertising, marketing and the field of human communications.

Now, continuing on my thinking from yesterday's post on ethics, I wonder if the need to create demand, thus marketing within the BoP constraints and conditions implies the creation of consumer segments or discovering existing ones, who may or may not resemble far better known consumer persona stereotypes from mainstream global culture.

I know that I've often said the BoP is the great unknown and must first be understood as a market in its own right with a different value system in play due to challenges of both income as well operating environment. Today I wish someone was holding a flashlight for me.

Creating a market among the BoP: my ethical struggles online

Its interesting for me to note that the category "Ethics" has been a part of this blog from its inception although I'll confess to not really knowing why I was adding it to the list. I've the least amount of posts in this category but here is what just might be a longish one.

I've been thinking. So what's new? That's what this blog is all about isn't it?

So anyway, I've been thinking about the ethics of creating the vestiges of consumerism among the BoP and struggling with what seems to be an immutable fact that we may need to do just that if we're to use market forces to alleviate poverty. Which this BoP thing is all about, isn't it? Otherwise we'd just be calling them the "poor" and still donating away?

Feed Africa or give Africa some disposable airtime and see what happens?

The challenge we face is that in order to offer empowering products like the Kickstart waterpump say, we need to create the market for it. People don't just suddenly figure out what's available for sale and what's good or beneficial and how to buy it, you have to show them first. And that means elements of mainsteam consumer culture must transfer across the value gap to the bop mindset too. Oh dear, and here I'd already made the assumption that the bop consumer mindset was based on values that were far more enduring than the mainstream throwaway consumer culture we sometimes notice we are in.

Where do we draw the line? And how deeply?

Lessons from the BoP 10: Life is hard; make it easy to use, easy to choose

Photo credit: Goverdhan Meena, Rawal village, Rajasthan India Jan 2009

When Goverdhan, my local fixer in Sawai Madhopur shared these photos he'd taken in his village back in January when I was doing the prepaid reserach in rural India, I was amused. Note the heavy duty environmental protection due to the heat and the dust of Rajasthan and also note the brand preferance. Endurance? Survival? Simple? Easy? and wholly and completely committed to the BoP customer's challenging needs.

Just yesterday I came across this news article that states, although I do add a caveat that the actual report is a little mangled when it comes to making sense of the data.

Simplicity of handsets and tariff plans are the main drivers for mobile telephony in rural areas, according to a research by consulting firm Accenture. Besides simplicity, a rural subscriber is concerned about the ongoing cost of a connection.

The BoP and their "Africa" price

Our good friend John Lumbe writes in from Malawi that the price of a loaf of bread is 100 Kwacha and an egg can cost between 18 and 20 kwacha. Not half a dozen or a dozen, they buy eggs as single treats. Imagine if a minute's phonecall to a person using a different network is 70 kwacha worth - that's a lot of food to give up for a conversation. Most of us are watching the development of the Fair Mobile initiative that Steve Song has begun focusing on over at the Shuttleworth Foundation in Cape Town but that's not what I'm writing about here.

I just came across this article that talks about the high price that Africans pay for basic services, here's a snippet,

Utilities providers shortchange Africans as they pay more for basic services compared to people elsewhere in the world. Africans pay 12 dollars monthly compared to two dollars by South Asians for mobile telephone services. This was contained in a report, "Africa's Infrastructure: A Time For Transformation", a release from the Accra Office of the World Bank said at the weekend.

Is there something turning out to be the BoP's "Africa price" just the way in some industries they talk about the "China price" or "India price" ?

What does it mean to be an African consumer, paying a premium for quality of life?

Lessons from the BoP 9: Uncertainty is the only certainty

How do you communicate the concept of "being comfortable with ambiguous, uncertain working conditions" across the vast cultural divide of the absolute North and the easily adaptable East?

I, myself, have just had my assumptions about the BoP, in context of consumer marketing, jolted from their very foundations. Reading this post by Maneno, where he points out the obvious now that he's shown it to us, which is:

It does indeed seem like it's a good idea, doesn't it? But how will this really help people? Issues in Africa aren't due to a lack of information for people living there, as that is spread quite readily, but more due to a lack of outside communication. It's a one-sided, one-way communication for some group from Norther America or Europe to dump something like this on a people.

The issue is that it's short term, scatter shot thinking to just send a device like this to Africa. Yes, it could give knowledge to the next William Kamkwamba, but it is much better if someone comes from the continent, sees the device, thinks it is indeed a good idea and takes one back to share with people. Others see it, agree and have more sent in. That is more of what is needed, Africans making the decision as to which technology they think is appropriate for them. I believe the term often used is, "supply and demand". I know, it's revolutionary.

It struck me that there's a missing skillset of creative information technology hacking required to adapt the products to the local market or create indigenously designed innovative solutions. Or so we assumed, until Maneno pointed out the obvious. Nobody ever asked the poor African or Indian children whether they wanted a laptop at all?

If innovation happens at the edges, does that make the BoP the fringe of the global economy?

Just curious and wondering.

This question emerged from a conversation I'd just had over the phone with a young woman doing her PhD at the Hanken School in the broad space between marketing, the BoP and human rights. She's going into the field next week to do what we'd done earlier in India, except that its in Tanzania. They say mPesa is finally on the uptake there, must ask her to bring back some photos of mPesa advertising from Dar es Salaam.

Lessons from the BoP 8: Assumptions of contextual knowledge questioned to lower barriers to acceptance

Quite a few people, all quite wellknown in their fields, mostly from high tech industries, have said the equivalent regarding the BoP - "just give them the technology and they'll figure everything else out, look how creative they are etc" when it comes to introducing new products and services.

And, with world class researchers and user centered designers, they can create some great works of art, technologically speaking, that you couldn't argue with as being well designed for the BoP. However, there's a step further that's missing, the one after the introduction of the technology. And that is what I call the mysterious fuzzy factor ;p

Basically, we need to start from scratch when considering the basic user profile for whom to design said product or service for - not in terms of features, looks and style - more basic than that, which is what is your target audience's contextual knowledge of that general product category?

Let me give you an example, its a generalized one that attempts to describe the basic gap in contextual, immersive knowledge (kinda like the "dialing phone number by muscle memory home" thing where we couldnt actually tell you the number without counting our fingers) between the great majority at the base of the social and economic pyramid and mainstream consumer culture across the globe. 

Lets start with financial services alone, since that's a topic that's been buzzing around my little corner of the interwebs of late - mobile money in all shapes, forms and brands, all aimed at the underserved (not undeserved ;p). You and I, for the most part, if we're reading and writing on here, know how what is expected of us when a cashier type person hands us a little device with our credit card sticking halfway out of it and the flashing signal seeking answers from us. Or what - more or less - to do at an ATM regardless of whether the two languages offered are suomi and Svenska and we ourselves are stuck with Hindi and English. Imagine if it were kanji?  Or the difference between a credit card and a debit card and just how helpless you are as a traveller without one?

So, anyway, the point is that if there is a vast swathe of people that were hitherto unbanked, it could be said that they were also lacking in many of the subtle nuances of information and knowledge we process everyday. We must not assume that this knowledge exists - true, many in these demographics we consider the "BoP" may have had exposure to many of these things we take for granted, but there is a greater likelihood, once you combine the challenges of isolation rural residents face, that this contextual knowledge is missing.

Now, framing your future design solution in this way, how would you go about designing a new product or service for the BoP?

Banking on the future of mobile financial transactions

Espoo, Finland on 6th November 2009

Bo Harald of Tieto Corporation shared a vision of the future that his company has been working on along with many other stakehholders. They are already in the process of implementating eInvoicing, part of something they call the Real Time Economy of financial transactions around the world. And they're making the basic part of this executable by a basic mobile phone. That means that even Ramu the teawallah, if he has to collect his accounts receivable from the MNC employees every month, they could eventually conceivably simply transfer it to his account. From what I could gather there is a finnish bank involved with the prototype and the Finns have been asked to set the standards for the EU wide system.

That is the now.

But what does it mean for the future if all transactions are eventually to be standardized over the mobile phone, regardless of the location? Would Nokia Money be part of this? And if so, what would it mean in terms of disruptive innovation? Here's another slide.

Mobile money services, contextually designed biz models for the BoP

Dave Tait shared this press release today from FNB South Africa who have just announced a very sensitively designed system for remittance across urban and rural South Africa. On the other hand is the World Money announcement by Vodafone, who are desperately trying to position their "World Money bank account required" mobile money transfer system as something to benefit billions, well maybe, but billions in dollars not people at the base of the pyramid. Here's a snippet, then lets discuss,

“Honestly, it may not be a big business for us in terms of margins because of the small transaction fee. But it will be an incredibly powerful tool for economic development, reducing social divide because it helps the underbanked and non-banked people around the world, as we have seen in Kenya,” Colao said.

Starting with that very first word, something isn't quite right if the above is supported by the below description,

It is not mandatory that the sender and recipient have standard bank accounts.
However, a potential beneficiary has to have a World Money Account with a local bank, which will be independent of one’s standard bank account. There must be sufficient credit in the account concerned to facilitate money transfer on mobile phone.
“We will help them open the World Money Account, which is currently an option for Vodafone customers. Since we have tied up our post-pay and pre-pay segments with bank accounts, it becomes easier to set up a World Money Account,” Maher explained.
Vodafone will set up a Trust to operate the World Money service and manage the accounts in the bank. All World Money customers will be beneficiaries of that trust.

This system will only make sense if the bank account that the beneficiaries are supposed to set up in local banks can be opened without the regulatory paperwork required by the bank itself to  open a standard account. Also, how will it work in villages where there may not be a physical bank, as seems to be implied by this description.

There's a lot of information about banks and money movement and mobile phones online today, @whiteafrican linked to this article on whether MPesa's success can be replicated outside of Kenya which I think seems to tie in nicely with the rest of the data points.

Mapping hyperlocal BoP markets, Ushahidi might work well

I'm going to try and describe something that Erik Hersman and I once talked about for about an hour or more over Skype back when I was still living in Singapore, could have been early this year. Anyway, we got into discussing it over email again and I have his permission to share some of these ideas.

What the Ushahidi engine does is visually flag locations with an accompanying sms text message. It could conceivably help something like Kiva.org (which is an internet website) to connect with their community of loan seekers allowing them to write back their progress and letting the loan givers visualize their money's journey and ROI.

Now, Erik feels that maps may not always be required, a list is enough but I wonder whether the maps might not eventually help when everyone can access the interwebs through 3G or something as it is a tool that transcends language and culture. Sure the sms needs the ability to read but I wouldn't be surprised if local "languages" are firming up around sms usage among the BoP in different parts of the world. I dimly recall a press release by Nokia long ago in some Indian newspaper that people who didn't know English were nevertheless familiar enough with the alphabet (they teach it even in slum schools as "english medium" these days) to come up with stuff like DD for sister (didi) and BB for wife (bibi).

Anyway, I was thinking out loud whether Ushahidi might not even help the colalife.org people as a way to keep track of the various people they work with? It might help with logistics and distribution? What happens when you integrate it with a payment method?

I bet it could also connect mobile phones by SMS to the internet?

Lessons from the BoP 7: the challenge of establishing trust, a last mile problem

Wallpainted advertising, near Kanpur, India, September 12th 2009

Along with cost, the second biggest challenge at the base of the pyramid markets is building "trust" in the community, the local equivalent of building a brand.

First, find out which media people trust the most and aim to be on three of them, the highest ranked you can afford. For TV and Radio are the most respected across the BoP world but few companies choosing to address them can afford that kind of advertising.

Second, find out how information flows by word of mouth in the community or region you seek to serve. There may be rural and urban differences, for example, in a "static" community like the factory shopfloor your maintenance men are the "movers of knowledge" or infomediaries, but in a village or market, it would be the one with a fixed location yet highly central, like the local paanwallah, Chotu.

Third, enlist the support of these individuals, giving them special status in the community, perhaps, look at how this NGO which is sharing information on nutrition and health is organizing their infomediaries.

Further reference can  be found here, on the Role of Mobile Infomediaries among BoP and of course, the brand aspect is quite well documented already.

Keeping my promise to Ben

During a Skype conference with Ben Lyon, executive director of FrontlineSMS: Credit, I said I'd write about what I was seeing in today's twenty something generation. Keep in mind, ladies and gentlemen, that Mr Lyon is but 22 and a half years old or thereabouts.

I wish I'd had the opportunities, technologies and shifting ideologies happen back when I was in my early twenties in the late 1980's, when my idealistic yearnings of making a better world to live in were stifled in silence, today I can share it with you.

Whether it was Steven B Daniels who conceived of A Better World by Design, with a little help from the VC partners, or Ben Lyon who initiated  what perhaps we'd all been sitting around and waiting  for someone to make ha5ppen, these kids are changing their world. For the better, thank you ver much, you Oldsters.

I think we should be listening to what they may have to say...

Lessons from the BoP 6: sophisticated cash flow management

Do telecenters in Sri Lanka make money? Yes. They report an average monthly income of Rs. 22,119. (=USD 201) This is associated with a relatively large standard deviation of Rs. 21,714 (= USD 197) indicating a variation within a wide range. This means a large number of telecenters are running at a loss.

This snippet from LirneAsia's post on the economic health of telecenters meant for the BoP simply shows that the target audience's variability of cash flow influences the earnings of their market. This is a key characteristic of the informal economies in which the BoP tend  to operate. Addressing this challenge will be crucial.

Lessons from the BoP 4: Maximize constraints, minimize resources

Leather workshop, ladies NGO, Kanpur India September 14 2009

During a long skype conversation with Scott Smith, who recently wrote about the just launched WikiReader a couple of days ago, we arrived at the conclusion that perhaps the onrushing juggernaut towards ultimate convergence of handheld devices was perhaps not such a good thing.

Scott pointed out that the increasing bifurcation that I'd begun to notice in the development of the mobile web, where the iPhone and its attendent  media hype were misrepresenting what was really happening at the point where the social, the mobile and the web intersect. That instead of being obsessed with chasing after the ultimate singularity, the handheld device that even did your windows, we should instead be taking a leaf from the WikiReader and learn from what was happening at the bottom of the pyramid.

This little battery powered handheld device allows anyone to access Wikipedia, a free online resource. The device is affordable at $99, robust and only needs to be connected one in a while for updating the information contained therein. It could stand alone and work in any environment and did not need ICT infrastructure that many smarter devices do. Furthermore, teachers could not object to it in the classroom, unlike mobile phones, as it had no distractions like chatting, games or txt.

Such leaner, lighter products applications and services are being launched everyday in the developing (but highly advanced in their own way) markets of Kenya and India and South Africa, developed for the constraints and conditions of their operating environment. They require the minimum of resources and are changing the way businesses design their operations and address their pricing and cost strategies. They are the result of the influence of the vast underserved and overlooked markets at the BoP, a customer base whose most important characteristic is their high sensitivity to price, followed by variability of environmental conditions and uncertain infrastructure.

Should these lessons of designing products with maximum constraints and minimum resources be solely for these markets or could we, in fact, integrate them into the way products are developed for the top of the pyramid?  Is the glamour and glitz of developing for the ultimate smartphone - all of 34 million served - sucking the creative abilities of the best talent in the world into a blackhole of innovation that ultimately ends up focusing on 2% or 5% of an entire planet's population?

Platforms and metaplatforms: aim for interoperability

FrontlineSMS has become a metaplatform for the next interweb, the one that will be accessible by basic phones anywhere there is a cellular signal. Why do I say this?

This fact struck me during a dinnertime conversation while in Providence, after the end of the Better World by Design conference, listening to Patrick Meier speak about crisis mapping and what Ushahidi has been able to do. The open source Ushahidi engine has been evolving into a platform in its own right - one that has been used to deliver services such as mapping the availability of medicines, monitoring elections or  humanitarian crises, among other things. Yet, it's in turn powered by FrontlineSMS, so one could call that a metaplatform - a platform that supports not only the creation of services and applications but also new platforms.

One could conceivably see the rapid building up of the next web, the mobile one accessible by any phone with voice and text, anywhere in the world, coming up around this infrastructure of early applications easily available to anyone anywhere. The recent advent of CreditSMS is only the start of embedding financial tools in the very foundation of this bopmobweb, enabling commerce, connectivity and communication (eventually) - rather than the clumsier applications and sites we're challenged with on this current internet.

Markets, information, money, conversations, sharing - all of these elements of the bazaar are already possible given these tools - if one forms the scaffolding, can the others be the interlocking bricks in between?

The ground has been broken, let construction begin.

New York, some observations

View from Singer Building, New York October 8th 2009

These are views of Prince Street, just off Broadway and walking around the area what caught my attention were the street vendors. For one thing, they've tripled in number since I was here last year - many of whom are vets who receive their licenses for a discount or even free from the city. Other vendors have licenses based on how many years they've been in a spot but have to pay a significant amount according to a jewellery maker/seller I spoke with. 

More interesting is the byplay between the formal and the informal economy here in the streets of New York City where the boundary lines seem to blur across the pavement between the little vending stands and tables and the shiny shop windows that line the walkway.

Another thing that's changed since last year is the proliferation of private ATMs or cash machines every few meters in the whole neighbourhood - where Chinatown meets little Italy. These tend to charge very high fees, upto $3 a transaction and seem to have been installed by local businesses, perhaps as a way to add to their income stream.

Lastly what caught my attention were the electric bicycles and mopeds parked around the area. Stu pointed out the new cycle lanes - you can see them painted in green up above. It seems to me these are weak but informative signals of the changing conditions in this urban landscape.

Just an observation, btw

Kanpur back streets, September 15th 2009, India

The mobile as a platform for social and economic development at the base of the pyramid around the developing world, as per The Economist, couldn't have happened without Finnish engineering standards and Indian ingenuity working around scarcity. Imagine the bop mobile space without Nokia, and think about it for a moment. Or to quote @changeist, pondering, not pushing. Nokia meri jaan is not a joke in India, but its not enough for a sustainable future. On the other side of the coin, Bharti Airtel is doing so well and the MTN talks are stumbling again, one wonders why Bharti can't merge with Nokia for emerging services markets globally speaking?

The rise of the village netbook

From the latest Economist, is this article on the future after everyone who wants a mobile phone will own one and the snippet that caught my attention.

In the meantime, notes the Grameen Foundation’s Mr Cantor, the internet equivalent of the village-phone model could provide a stepping stone to wider internet access in the poorest areas, just as village phones did for telephony. The Grameen Foundation has already experimented by giving netbooks to a few village-phone operators in Uganda so that they can sell internet access as well as telephony. Despite the relatively slow connection provided by Uganda’s 2G mobile networks, demand for the service proved to be stronger than expected, and revenues were double the level required to make the service self-sustaining.

Christine Zhen-Wei Qiang of the World Bank notes that internet-kiosk operators in India are charging small fees for access to government services online. This makes such services easier to get at, prevents officials from extorting bribes and provides an income for the kiosk operator, “so there is a revenue-generating model,” she says. It might make sense to offer microfinance loans to entrepreneurs to buy netbooks and provide information services. Many of the methods used to make mobile phones more widely available seem likely to be applied to extending internet access in the future.

As Ms Qiang’s research shows, access to the internet can provide an even bigger boost to economic growth than access to mobile phones. But to make the most of the internet, users have to have a certain level of education and literacy. Its effect on development may be greater in the long term, but is unlikely to be as sudden and dramatic as that of the spread of mobile phones in the first decade of this century.

In the grand scheme of telecoms history, mobile phones have made a bigger difference to the lives of more people, more quickly, than any previous technology. They have spread the fastest and proved the easiest and cheapest to adopt. It is now clear that the long process of connecting everyone on Earth to a global telecommunications network, which began with the invention of the telegraph in 1791, is on the verge of being completed. Mobile phones will have done more than anything else to advance the democratisation of telecoms, and all the advantages that come with it.

Summing up India: tomorrow's girlchild

Student, Kalyanpur, Kanpur India, September 15th 2009

She boldly came out of her classroom a few doors down and stood there, poised and waiting, for me to take her photograph. My, how the Indian girlchild has discovered her inner mischief. It was these little bits of data that give me hope for the future of India. Her women are just plain fed-up with the oppressive  patriarchy of millenia - Indian men average as the most bigoted in the world.

Women reporters in the midtwenties run around Kanpur like its all okay now, in slums and bastis they are comfortable in their jeans and tshirt, waiti ng for whatever to happen to happen. India has learnt to tip her media off at the slightest hint of injustice or systemic abuse of the voiceless. Aaj ki awaaz is the national television media channels, whom, at first glance I found very crude and shameless but now realize that they speak to the needs of the common man. He feels heard and protected in today's India thanks to the privately owned media channels tentacling the country.

Leather artisan making braid from scrap, Kanpur, September 14th 2009

Muslim women pay for their daughter's education by painstakingly hard work - getting paid Rupees 2 per metre of braid woven. I tell you, that's sheer exploitation. Now in addition to that, these ten ladies are getting paid Rs 50 a day during training that hopes to prepare them to service customers directly abroad with orders for purses etc in ttheir own right. Yes, they're looking for work, just email me  your request for an introduction.

A neighbourhood paanwallah was interviewed, and he said something about the future of India, the next decade or so that struck me forcibly. He said, wait, just wait and see, in ten years all the women would have woken up, then, we'll see where India can go, they've already stepped on the moon, na?

Nokia Life Tools analysis: Subscribing to beginner's English education

I'm not happy with Nokia Life Tools, that's the bottomline. For all its promise and potential, NLT has seriously dissapointed me, albeit I must add it might be due to my personal feelings for Nokia and always having high expectations from them. Hence the unexpected dissapointment.

NLT has been designed for the design team's managers to approve and understand, not the actual end user.

Nokia Life Tools analysis: Service availability and confusion

Lets start this analysis from the very beginning. While I was made aware of the fact that right now, in India, Nokia Life Tools is only available via IDEA Cellular (of the education advt fame); this was not made known to a first time user of the handset/application, if by chance they had not purchased the device themselves, since I'm not aware of how much knowledge the phone wallah would impart during hte sales process.

I could imagine the frustration and discomfort of your average intended user of Nokia Life Tools when faced with this scenario. No disclaimers made in a leaflet inserted in the packaging either or even a sticker on the phone itself? Come on guys, this just doesn't feel right imho. Especially in the Indian market where systemic mistrust is endemic.

All photographs taken by the author on 22nd September 2009 in Gurgaon, India. This phone was provided on loan with no monies being exchanged for any activity hereon.

Nokia Life tools initial startup and disclaimer screenshots

This is the fascinating bit no? CYA for any future developments.

All photographs taken by the author on 22nd September 2009 in Gurgaon, India. This phone was provided on loan with no monies being exchanged for any activity hereon.

Opportunity spaces vs ideas - business development for the BoP markets

Inaugural Issue of Entreprenuer magazine, photo taken in Kanpur India, Sept 13, 2009

Ideas or concepts are not the same as opportunity spaces or gaps in a particular market. Exploratory user research can identify opportunities for innovation, that is, either unmet needs or gaps in the existing ecosystem which could be filled by a product or service with the intent to create and provide value. On the other hand, actual ideas for new businesses or concepts for products or services may not be the immediate outcome of such exploration. Insights from the field can act as waymarkers for new revenue generation opportunities, they are not the actual ideas or concepts themselves.

Imho, this conflation of the two - a concept or an idea and an opportunity space or gap in the existing market - gives rise to confusion about the goals or outcomes from fieldwork, particularly in the short term or as the immediate result. It must be noted that even insights derived from observations are usually the result of data analysis and synthesis, best done in a team after the field research has been completed. Only after this can one say with any degree of confidence which gaps or behaviours observed would translate into potential opportunity spaces for innovation or new product development leading to sustainable and sustained revenue generation opportunities.

The potential 'market' at the BoP is vast, complex and chaotic and too many needs go unmet that at first glance it may seem that the opportunities are indeed available  for the picking and the possibility of fortunes immense.

The first critical challenge is to evaluate which of these potential areas offer value; a return on the customer's investment, meagre though it may be.

The next is to evaluate the time and effort any new venture among BoP customers would require before it would start showing returns.

This is not a hit and run market and recent observations have only confirmed initial insights from early 2008 - the core values for doing business successfully at the BoP remain the same: simple, easy, endurance, survival and commitment. Taken together, they add up to trust.

Filling in the gaps

Rereading last night's post after Dori Tunstall left a comment via facebook, it strikes me that there are a few missing links in my writing. I'd like to add some thoughts to my musings here as the whole topic has weighed on my mind ever since.

Dori wrote wondering whether local innovation in India had been overlooked since the United States tends to focus more on innovation = disruption or the next big thing. In fact, here's her comment copied from FB,

But I wonder if there is innovation, but we don't see it because it does not come in the recognizable package. Innovation as promoted in the US is about creating and successful marketizing a "break through" idea. Epistemologically, it requires a prediposition to completely abandon the past and chart a new unknown future. In places with deep history (like India), perhaps innovation comes from recontextualizing the past but because we only see innovation as a break away, we can't identify its innovation as such.

First, with all due respect to Prof. Anil Gupta's work in particular, and of course good old fashioned desi innovation in general, I should clarify that i've always believed in and seen the indigenous and ingenious solutions, ways and means of doing things here in India. There certainly is innovation and its visible too, except perhaps that driven by scarcity of resources at the base of the pyramid or in rural areas.

What I'd perceived yesterday was more of a mindset or approach - I'm minded of Seth Godin's excellent recent post on this very topic on the hierarchy of success at this point - and this mindset of conforming, rather the approach of following previous successful models or solutions or paths, seems to be more of a middle of the diamond thing rather than at the bottom or the top.

What am I trying to articulate here?

For one, that I was perhaps not talking about innovation per se, or at least not just it alone, but more of a mindset or thinking style, one which characterizes a curious mind, a questioning one, that wants to learn more about the world and explore the potential and possiblities contained therein.

This is the mindset that is severely lacking since the system itself does not cultivate it (although there are always those who are the outliers, of course). Education seems to be by rote, we heard numerous classes repeating after teacher out loud and much of homework consists of memorizing "stuff". The focus naturally are exam results, competition is rife for college placement, everything in fact, since the population density is such. However, I'm not just talking about this aspect, since there are those far better than I who have written extensively on the education system. I'm simply pointing it out as one of the factors that may lead to the kind of situation I came across yesterday.

Dori's comment puts an aspect of it quite well - if one were to take the thought a step further, one could say that it due to this weight of history, heritage and legacy - not just from eons ago, but also the one who came just before you, that those who follow are hesitant to "play jazz" but instead attempt to hit the same high notes exactly as was heard.

A simple example would be coaching or preparation classes for IIT entrance examinations. The best classes are those with teachers  who have gained a reputation for being able to prepare their students to crack the exam, a multibillion dollar industry in fact, particularly here in Kanpur, but is it one, which, one wonders, is turning out perfectly trained automatons rather than thinkers of any caliber, perhaps? Its the unquestioning obedience of percieved authority that unnerves me at some level.

Can India innovate?

Cartoon illustrating a "politician" in today's paper, India, Sept 16th 2009

This post is a general, yet concerned rant. Its not concerned with any individuals or situations although conversations today inspired it. It may be controversial and I might be risking some brickbats. However, it needs to be said, or rather, blathered or mused upon. Its certainly provided me with food for thought.

I met some midlevel students who are part of an executive education program here at IIT today, they hope to participate in a socially responsible business plan competition. In the course of the conversation one of them, formerly a manager at a large global co with a decade of work experience, said something that struck me forcibly. We'd just completed brainstorming on a possible or potential direction for their triple bottomline women oriented business plan when he asked if I had any other ideas to share (meaning alternate concepts for fleshing into business plans). I sat back heavily in my chair and said, certainly, do you happen to have a few thousand euros on you?

My first thoughts that I blurted out were that we didn't respect ideas or the ability to ideate (create? innovate? think out of the box? brainstorm?) enough here in India. That we admired those who'd built big companies or made a lot of money or were in flashy highly visible jobs for fancy foreign firms, but not those who were able to conceptualize or come up with new ways of addressing problems or ideate. Then I started thinking about it, wanting to explore the seeds or thinking behind the man's request. I realized that he was not at fault or to be blamed for asking the question he did. Very likely, from his perspective (and I was trying to explore the concept with him albeit without success) he was paying me a compliment. For, as I said to him, its entirely likely that this thinking is embedded in our culture since we know that often the way PhD students work is to expand and enhance their guides (professors) ideas or concepts and the same goes for master's theses.

I brought this up tonight with my Finnish teammate who is in the field here in Kanpur with me. His own PhD end next month with his public defense etc and so I got a very technical response sprinkled with words like "uncertainty avoidance" and "hierarchies" from Hofstede and of course "immense cultural path dependance".

But what does all of this mean in real terms?

The biggest concern, imho, seems to be how do we get over these embedded cultural constraints and enable innovation or rather, innovative thinking, a willingness to think beyond the obvious or that of conventional wisdom or established success? Or even, as Arno has been asking, what kinds of innovations are a prerequisite? Is it an innovation in the way we manage and encourage human resource development? Is it something that can be bypassed - look at Infosys etc or even, outlier though it may be, Tata? Or its not like there aren't models indigenous to our nation but instead a hangover of the education system? 

Regardless of what the inherent reasons may be, at this point in time, with respect to the future that could conceivably await India, one can't help but wonder if we have the  balls to think different. And not just in choice of Maggi Hot & Sweet  either.

Rural rumblings: is rural India the next Telco battleground?

Yesterday I came across this article outlining Reliance Communications (RCom) extensive multipronged strategy to enter the rural Indian market for mobile services. It made me wonder if this was where the next major telcom play in India would take place?

RCom is launching three initiatives — BharatNet plan, Grameen VAS and M2M (Machine to Machine) solutions — under its rural drive. BharatNet plan is a high-speed wireless Internet service in over 20,000 rural locations across India and will address four million PC users in rural India. A high-speed variant of the Reliance NetConnect service specifically designed for rural and sub-urban markets, it will offer speeds of about 153 Kbps, which is 4 to 8 times the current dial-up speed of wire-line services. BharatNet is being offer at Rs. 98 a week with downloads up to 350 MB.

With this sachet pricing, RCom plans to create for all users across rural India.

Asking the same question on Twitter led to @rajeshaithal 's agreement, since he does focus on "Marketing in India" while teaching at IIM Lucknow, I tend to take that opinion very seriously. In addition, my former colleague from HP India's marcom unit @barkhad noted the "sachetization" of telco pricing and what she refers to as the increasing "FMCGization" of the telecom industry in India, a good thing apparently for reaching the masses.

Aithal did link to this article on the challenges the rural Indian market will pose to the telcom industry however and that gives us some food for thought.

In fact, the rural-rural divide is very much a reality in the pattern of telecom penetration. In January 2009, the top five states in terms of rural population, UP, Bihar, West Bengal, Maharashtra, and AP, did not figure in the top five states in terms of the diffusion of rural telecom services. The top performers were the usual suspects: HP, Kerala, Punjab, TN, and Haryana. HP had a penetration rate of 38% and Bihar only 8%. In other words rural diffusion is happening in relatively well-off pockets and once these pockets are covered, diffusion is likely to hit a roadblock unless new policy frameworks and business models are conceived.

This article proposes a unified framework to view rural telecom. The elements of this framework are relevant applications, infrastructure, technology, and entrepreneurship (RITE). A holistic approach encapsulating these elements is particularly necessary in the context of the geographies which represent the next frontier of telecom diffusion.

 Also received this link in agreement from @futurescape, who is based in New Delhi, which highlights Bharti Airtel's plans for rural India. A snippet that hints at financial services and alliances to come,

Rural India and a dependence on rural India will make us change a lot of things internally and externally.

What it changes for us is our distribution strategy, it changes our marketing strategy, it changes how brand connects with rural India. It actually makes us revisit our business model in many ways. You change your strategy from using IVRs (interactive voice response systems) and contact centres to how to service them through a local face in the local language.

Partnerships change as well. For urban India you have different types of partners. For rural India, you partner with Iffco (Indian Farmers Fertiliser Cooperative Ltd) which is a fertilizer company; that’s what can take your distribution down to rural India—fertilizer using communities, etc. Then, you partner with Nokia—not to brand bigger stores and locations—but to invest in mobile vans so that you can travel from one rural haat (market) to another and then actually have a rub off on each other’s brands and capabilities and also manage costs.

Similarly, to service customers—rather than having calls come down to the contact centres and IVRs, we went and invested into rural service centres and there are already 20,000 of these operational. In another few months’ time, this number will go up to 50,000.

So now it seems we have some triangulation on the possibility of an interesting version of the Mahabharata that will take place in the villages of India. But the bottomline will finally be whether these services will improve the lives of the farmers and local communities in a timely manner.

Some business principles for BoP and/or rural markets

I just came across this great introduction to Indian entreprenuer Harish Hande, founder of solar electric company SELCO, written by Subroto Bagchi in Forbes India. Here are some fascinating insights into Hande's experiences while introducing and launching solar lighting solutions for the underpriviledged:

You need to know life before applying technology to solve its issues.

“During that time, on a field trip, I happened to visit the Dominican Republic and lived in a village. I saw poverty and darkness and the two began to look as one to me. I was churned deep inside. When I came back, something told me to go and live in a place where I could look at the challenge of living and the potential of technology without any of my urban layers. I needed to know life before applying technology to solve its issues.

“I decided to go to Anuradhapuram in Sri Lanka with my scholarship money and a solar-powered laptop. For six months I lived in a sugarcane-growing village with no electricity. The idea was to install solar panels there. I lived among a people whose language I did not know. Elephants visited us routinely at night; I sat with temple monks who only spoke Sinhalese and through the interactions I understood how the urban elite is simply banking on the patience of the poor.

Show, don’t tell: That’s the best way to convince a client that the product works.

“One day, my contact in a villagetold me about a rich areca nut farmer. We went to him and I explained the concept of solar lighting to him. He would notsee the benefit. He dismissed me and went off. His 70-year-old mother was listening to the conversation and she came forward. She wanted me not to talk about, but to show the son that my idea works. She quietly gave me Rs.15,000 to secretly install the system in her son’s field. Wedid that in three-and-a-half hours and pushed off. When night fell, the son saw the field lit up. The old lady establishedthe business model for me. I wrote to Neville and my supplier to underwrite 25 more systems for me so I would repeat the feat. In 14 years, that model has not changed. We do that in every village we go to.

“We went from place to place — in a border village between Kerala and Karnataka that frequently experienced power cuts, there was this Don Bosco Church where Father Thomas Myladoor had darkness during mass. He wanted a solution.We installed a single solar light for him. During the next mass, power went off as usual but there was light on Jesus! The whole congregation asked how Jesus was lit up.

(my additional point based on his insights: the solution must not be paid from the existing income of the BoP customer, it must extend that income )

“Today, when we go to carve out a solution for a villager, a vegetable seller, a silk-worm breeder, we begin with the precept that the solution must not be paid from the existing income of the person. It must extend it. So, there was this auto-rickshaw guy who bought our panels, charged batteries during the day and rented them to roadside vegetable sellers in the evening for Rs. 20 — it means the woman selling vegetables can now extend her work by a couple of hours — she earns more, her vegetables do not stay overnight and rot.”

Open letter to Seth Godin

Hi there :)

I just wanted to say that I was struck by the realization that I finally understood, in a flash of understanding, what your whole story on Tribes is about. I must confess, to be honest, that I've always read gurus with a touch of skepticism, can't help it, am an argumentative indian, what to do, we are like that only ;p

So as I was saying, I realized that tribes are those people who are in your networks, real or virtual, who hang around together and seem to all hold similar values, or at least similar outlooks. I won't say worldview, for that is a very individual thing as Tom Guarriello informed me on Twitter the other day, but perhaps its a similar enough mindset that there's a resonance of like minded energies that can then be collectively directed towards the greatest good, ergo 'your' tribe.

(ed's note: Hmm, must write shorter sentences. sorry  ;p and don't alliterate like that either ;p)

One never uses one's Tribe, nor can one ask them to do anything for you. They must be convinced of the validity of your plan before they will do anything to support it, but if you are lucky enough to hold up to a bunch of questions ranging from finance to marketing to organizational structure not to mention business metrics adn success criteria, well then who knows what might happen, right?

Maximizing the efficacy of communication aimed at the BoP

CGAP has a very well done comparison of the Kenyan and Tanzanian market for M-Pesa, Safaricom's mobile phone based payment and money transfer service.

While most people may assume that what happened in Kenya could be easily replicated in neighboring Tanzania, there are important differences in country demographics and cultures, market structures, business models, and strategic implementations that make the markets in these two countries quite distinct. While Kenya’s experiences should serve as a useful guide for other implementations around the world, a carbon copy replication is impossible even next door.

They analyse whether something that is wildly successful in one market - similar though they may seem - can be ported over as successfully into another. Reading through, what I found interesting, however, was this paragraph, which to me exemplifies the challenges a company like Vodafone will face if they are unable to understand the low income demographic with a reasonable amount of accuracy. A snippet,

Unfortunately, Vodacom’s initial marketing campaign in Tanzania seemed to target the wrong audience by featuring situations that were foreign to most Tanzanians. For example, one ad showed images of people buying textbooks in city bookstores. In contrast, Kenyan ads featured urban workers sending money to their families back on the farm. As a result of these types of early marketing missteps, M-PESA Tanzania was perceived as a service for the upper class.

This kind of an error in identifying the value proposition most likely to resonate with your intended target audience shouldn't have to happen in this day and age. Was it because Safaricom in Kenya is far more of a local company with extensive understanding of their primary segments - in this case migrant workers, who are often the lowest hanging fruit when segmenting customers for innovative mobile services? Or was Vodafone's marketing communications for Tanzania sourced from advertising agencies unaware of the BoP and their particular characteristics? These are expensive lessons to learn. Reading further, we learn,

To correct this misconception, Vodacom has adjusted its marketing to make it more relevant to the average customer. It is now focusing its marketing campaign on being more educational and highlighting cases where “M-PESA is easy, affordable and for everyone.” In addition, M-PESA in Tanzania is a USSD-based application whereas M-PESA in Kenya uses SIM Application Toolkit (STK). While they both have their advantages and disadvantages, STK is known to be easier to maneuver, an especially important characteristic when targeting an often illiterate customer base.

CGAP's analysis ends by posing this question:

In the world of mobile payments, M-PESA Kenya is the clear outlier in terms of the large scale and large numbers reached. In this respect, perhaps the better question is not “why has M-PESA Tanzania not taken off?” but rather “what is it about M-PESA Kenya that has led to such success?”

Imho, while studying M-PESA in Kenya is a worthwhile exercise, the better answer to the question of why M-PESA has not taken off in Tanzania might be to question whether the service provider had identified their target audience correctly, understood their mindset and worldview and then proceeded to tailor their service and its communication to their needs. While global marketing campaigns and market segmentation exercises are cost effective and attractive to large corporations like Vodafone, the need to understand the BoP effectively becomes more apparent with every costly mistake. The future success of many more such services launched across the developing world depend on it.

dreaming of the bop mob web again

The last few days have had me dreaming of a mobile web for those at the base of the social and economic pyramid again. Its been some three years now since I first started envisioning the implications of offering communication, connectivity and commerce to those who needed it the most.

The biggest step, imho, is when we are able to detach ourselves from depending on any particular handset or operator. Just like the freedom of these interwebs we surf, regardless of Linux based eeePC or Macbook or PC, unconcerned whether Comcast, Starhub or DNA pave our way, when the mobile services become available to  the owner of any GSM phone anywhere, regardless of its age, the bopmobweb has come of age.

And so we begin, the next interface for bringing people together.

design thinking: blending the best from business and design to deal with unknowns

This is an attempt at articulating the implications of using design thinking as an approach to innovation. It emerged from a conversation this afternoon at the Aalto Design Factory with Mikko Koskinen and Lotta Hassi.

If, indeed we are to take the concept of design thinking as a potential toolkit for innovation, let us step back from it and consider its roots. It emerges from the fields of business and design, broadly speaking, and attempts to blend the best aspects from both of dealing with unknowns (which innovation certainly is, in a way). We won't look at the weaknesses of each, but instead at the strengths - these allow a complementary set of methods or tools which counterbalance the weak spots of each individual approach.

That is, where business tends to forecast future performance based on past metrics and needs excruciatingly detailed plans before implementation, design permits tolerance of ambiquity, thus uncertainty, and tends to prototype and test before implementing. Design also brings the human aspect into consideration but lacks credible metrics of evaluating the returns on an investment. Here, Mikko points out that while business tends to base forecasts on existing or static environmental conditions, the user centered design process requires one to go out there and find weak signals or emerging trends through exploratory and user research.

However, when these elements are blended together and called "design thinking", they do provide a reasonable approach to dealing with the unknown. And we take the "unknown" in this context as "opportunities for innovation yet to be identified" - these unknowns could be new platforms; emerging consumer segments such as the BoP; distribution networks or supply chains etc. In other words, as Lotta has noted in green, these unknowns encompass the broad areas where companies can innovate - product and/or services, business models, new markets, management and organization, supply chains and more.

That is, by approaching the whole process of change using a combination of methods and tools from both the business world, with its processes, systems and vast organizational structures; and the design world, accustomed to dealing with unknown outcomes and identifying unmet needs in a human centered way, we could in fact address the challenges of an uncertain, emerging future.

a roadmap of design thinking for emerging markets

After the last post, I went back to finish reading the article by John Hagel and John Seely Brown, and their four lessons from the innovation that is the Tata Nano made an impact on me. So much so that I want to share them here, while pointing out that they read like a roadmap  of design thinking for emerging markets - open, holistic, inclusive, participatory with workarounds willing to question dominant logic.

Emerging markets are a fertile ground for innovation. The challenge of reaching dispersed, low-income consumers in emerging markets often spurs significant innovation. Western executives should be careful about compartmentalizing the impact of these innovations on the edge of the global economy. As we suggested in Innovation Blowback, these innovations will become the basis for 'attacker' strategies that can be used to challenge incumbents in more developed economies. What's initially on the edge soon comes to the core.

Find ways to help customers and others on the edge to tinker with your products. Modular and open product designs help engage large numbers of motivated users in tailoring and pushing the performance boundaries of your products, leading to significant insight into unmet customer needs and creative approaches to addressing those needs.

Pay attention to institutional innovation. Western executives often become too narrowly focused on product or process innovation. Far higher returns may come from investing in institutional innovation - redefining the roles and relationships that bring together independent entities to deliver more value to the market. Tata is innovating in all three dimensions simultaneously.

Rethink distribution models. In our relentless quest for operating efficiency, we have gone for more standardisation and fewer business partners in our efforts to reach customers. As customers gain more power, they will demand more tailoring and value-added service to meet their needs. Companies that innovate on this dimension are likely to be richly rewarded.