I was few days in Paris last week to visit a couple of organizations and partners. I took this opportunity to also attend the event organized for the release of the report on Leveraging Information and Communication Technology (ICT) for the Base of the Pyramid. This report has been developed by Hystra and TNO and I got invited because I was one of the interviewees.
First of all, I think it is a very valuable piece of work, and each use-cases is very well documented. So it worth reading it, or at least the very detailed executive summary. The research investigate 4 domains (finance, agriculture, education and health) and identify “successful” projects and entrepreneurs. The proposed classification (direct access, local agent aka intermediaries, and crowdsourcing) is interesting, and the grid used for the review is also worth considering. I also very much like the identification of success pattern, like the fact that all successful entrepreneurs needed a couple of years to test and find the best options for their project, or the fact that while proof of concept is the matter of a bright individual entrepreneur, a successful scale-up requires a multi-stakeholder partnership.
That said, I have few remarks and divergent views on some of the topics.
Business model vs commercially sustainable model?
The methodology used in the selection of use-cases was based on the commercial sustainability of the project and its proof of scalability. Obviously, in all studies, one has to define filters to select a couple of use-cases to focus on. However, selecting commercially sustainable projects is quite surprising to me. First of all, this is a very limited view of what is sustainability, and what are business models. It is not, IMHO, good or bad per se to focus on such models, but it is essential to acknowledge that it is a bias while selecting use-cases. We are, at the Web Foundation, involved in both commercial business model definition while working with our mobile entrepreneurs and sustainable business model in our VOICES and W4RA projects. The way you approach the problem of sustainability is quite different. On one side you focus on benefits, you think about your customers etc. One the other side you focus on costs, and impact. Of course, this is all about development issues and how to improve people’s lives, but it is a different approach. I’m not saying that one is better than the other, but again, it is essential to underline the difference.
This leads to my second remark, which was also mentioned during the discussiong and Q&A session of the meeting. The report found that the number of services in health and education was very low. This is a direct consequence of the methodology, and surely not something one can observe in the field. Health and education are public services, and therefore, not a usual domain for entrepreneurship. Take the case of education: who are the customers? In most cases it will be the person/organization in charge of organizing education (e.g. education ministeries). For those customers, what is important is not the impact alone, but it is the business model that will show that e.g. for the same investment per kid, the impact is greater. This is a different way of building a business model than a commercial approach. This is just to say that based on the filter defined for the report, I believe it is quite natural that there were only very few use-cases in the education and health domains. I want again to emphasize that it is not a critic about the selection, but my feeling that it is important to explicitly define the scope of the study, and underline what is in and what is excluded.
A successful model?
The second comment i wanted to make is about what is a commercially successfull project. I’ve to say that I was a bit disappointed on this part. Most of the projects presented were quite far from being commercially viable. Few of them got multi-millions VC funding, but it is not, for me, a mark of success, particularly in this domain, where VC are unlikely to be specialists of the local conditions. I’m sure that some of them will be successful, but they are not at this point, and they haven’t demonstrated yet any sustainability or scalability features. I even had the impression sometimes that the researchers received a sales pitch from interviewees rather than real information (e.g. I can run a survey from one click and reach 2 billions people in the developing world !).
The third comment I have is related to the definition of ICT, and technologies in general. The report speaks about technologies in general. While globally I agree on the fact that the type of technologies (SMS, voice, Web, etc.) is not a differentiator in a success or a failure of a project, I think it is essential to understand which technologies are available where, and what are the different dimensions of the context to consider to select a particular technology. By not identifying the different type of technologies, the report is providing a view that is sometimes, IMHO, inaccurate. For instance, some services and use-cases are in the category ‘Direct Access’ targeting population at large as end-user, but based on the technology they are more or less missing their target. E.g. a sms-based agriculture service in ‘Direct Access’ is unlikely to reach all farmers given the ability of farmers to use SMS. In the same category, teaching english through short audio clip is accessible to everybody beeing able to dial a number. This is just to say that I’m convinced that such research should consider the different technologies and how they fit to the context.
The Bottom of the Pyramid?
The last comment is related to the previous one and concerns the definition of the concept of Bottom of the Pyramid. There are obviously many ways to split this category in terms of income (1$ a day, 4$ a day, etc.), in terms of rural/urban, etc. However, the question here is about ICT, so what makes most sense in that context?
The answer in the report is that, like for technology, there is no need to split the category. I personnaly don’t subscribe to this point of view. In my experience with our projects in Agriculture, particularly W4RA, there is at least one split that is critical, related to the type of technology that people can use. It makes a huge difference in terms of the type of services that can be built and deliver if the target end-user can use a textual interface (e.g. SMS or USSD) or not. As of today, there are only two options: using intermediaries or using audio interface. This is independent of the capacities of the devices and the network around, and that makes an essential difference for those who want to build a specific service for a specific part of the population. Missing this key difference is imho the path to failure for service providers and entrepreneurs (NB: there are also far more dimensions to consider to characterize the context, anybody interested and reading french might want to have a look at a talk i gave last week too).
Finally, I would also have loved seeing an analysis of the pro and cons of each model. For instance, there are lots of services in the local agent/intermediaries section. This model has some good features, but also some critical flaws: creating gender issues (most of people who have the minimal education to become an intermediary are male), creating a position of power, scalability and sustainability issues (it is an element in the ecosystem to pay), etc.
All in one, I believe that the report is good, and worth reading. It provides very valuable information and input to the community but it is limited to business approaches to commercially viable development projects. In that sense, the title is perhaps a bit misleading.
I would be very happy to hear what other readers of the report feel about it, and share comments.
September 19, 2011
Hello Stephane, thanks for the feedback. Surely useful. Indeed the lens chosen was purposely narrow (initiatives with social impact, financial sustainability and potential to scale). One thing that was important as well is the involvement of the private sector (hence commercially viable initiatives). While in health and education which are often publicly driven, it might then give you the explanation, it is still a question mark while the private sector is not entering that space more when opportunities as highlighted by the report are there (vocational training in education for instance. Look forward to hear more comments on the study. Nicolas
September 22, 2011
Stephane, thank you for these comments.Your point on the focus is well taken, and while I could argue that some degree of focus was necessary, we will certainly heed your advice of making it clearer in future work.On education however, you certainly know that in many countries where education systems are not quite as rich as they should be, parents are actually spending on money on non class education. This money is captured by entrepreneurs. the only thing is that these entrepreneurs are not using ICT (and they are usually small scale).On the latter segmentation issue, I can only restate my answer to your question in the conference, which is essentially that i believe you are right, and that in such a young topic with such vast potential, there is still quite a lot of homework to do.
September 22, 2011
Francois,thanks for answering here.Agreed, like Nicolas mentioned, that a focus is always necessary, and I feel that the angle you took is surely very interesting. so we are all in agreement here.The point on education is very important (the fact that non-IT private sector is quite developed). That's something i missed, and this is quite interesting particularly for entrepreneurs. So now i understand more the remark Nicolas made on understanding why IT entrepreneurs are not focusing on this field. It might be that they are not aware of the opportunities in this domain, or not aware of the type of services they could provide.It is part of our roadmap to integrate domain specific sessions in mobile labs, this might be a way to bootstrap the process here. Thanks again for these facts I missed.steph
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