Paradigm Shift

Since starting dissigno the conversation we've had with people has shifted.  When we approached people to partner with, all piss and vinegar, passion in our voices, but little else to show for our goals, many people looked at us with a sad smile.  They couldn't understand how were were going to sell products and services to poor people.  "They're poor after all, how can they afford stuff". We also heard, with more derision in their tone, "...you're going to make poor people pay for things?  You going to make a profit from poor people?"

Well, yes and yes.  But in the same enterprise we are going to help those poor people to build wealth, establish enterprises within their community to access improved products, and to attain stability.  At least that was the unpopular notion three years ago.  Now, with CK Prahalad's book Fortune at the Bottom of the Pyramid, Jeffrey Sachs End of Poverty, Harvard Medical, Aravind Eye Care, Unliver's success, Dell Computers, the Indian small scale neighborhood garbage removal, India's Dabbawla's (shall I continue or do you get the picture?) and any number of LED lanterns business, solar distributors etc.  Countless businesses have either developed out of rural poor communities or have been co created with the base of the pyramid specifically in mind.  These business have provided products for sale and created job and investment opportunity.  They have thrived or failed, just as in the developed world based on all the variables that exist for businesses.  But all have the same intention; addressing the needs of the poor.

Prahalad wrote about the poverty premium.  It exist where there is little competition and constrained access.  Due to limited competition, rural markets actually pay, on a percentage basis, higher costs for lower quality products.  Dollars for kilowatts in Tanzania is 1000 to 1 compared to the US.  This is due to the fact that the US has had 80 years to develop the infrastructure to deliver electricity very cheaply.  Whereas in Tanzania, there is no infrastructure in many places, so in order to deliver a similar mechanism the costs have to include distribution.

We were invited to attend the IDEO/Rockefeller Foundation Conference called Design for Social Impact.  Many organization (for profit and non-profit alike) attended.  The conversation was focused on "what do poor people want/need?"  The conference already had the paradigm shift of assuming that the models existed to complete the transaction and now the problems were focused on fulfilling the needs.  Now it's true that the commerce aspect still needs focus, but for major design firms to recognize that this a design gap existed and that filling it wold not just positively affect the world but crate a business opportunity for their bottom line. From a business point of view you can not ignore 5 billion potentially new customers.  However, care must be taken to avoid exploitive opportunistic businesses that poison the market and compound the problem.