Over the past 30 years, I’ve looked at hundreds of technologies for developing countries. Some provided elegant solutions for challenging technical problems. Some were big and clumsy. Some were far too expensive. Some were beautifully simple and radically affordable. However, only a handful were capable of reaching a million or more customers who live on less than $2 a day.
Three-quarters of the design challenge for a new, radically affordable technology relies on a strong branding, marketing and last mile distribution strategy. Tweet This Quote
If you succeed, against all odds, in designing a transformative, radically affordable technology, you are only a quarter of the way there. The other 75 percent of addressing the problem is marketing it effectively, which requires designing and implementing an effective branding, mass marketing and last mile distribution strategy.
Any competent electrical engineer can design a beautiful solar lantern that provides enough light to read or cook by in a village thatched roof house. But designing it with the features that a poor family is willing to pay for, at a price providing them a four month payback from savings in kerosene, batteries and candles, is an entirely different matter.
Eight Practical Steps to Design for the Market
If designing a branding and marketing strategy and a last mile supply chain that will put a product in the hands of a million or more customers is three quarters of the design challenge, you will want to read these eight steps to make it happen.
1. Interview 25 likely customers before you start.
We planned to sell battery charging services to villagers in eastern India using affordable solar technology, but when we interviewed 30 customers in ten remote villages, we learned there wasn’t enough market demand to justify it. Many villages were being electrified, and when one village received electricity, the fifty villages around it within a half hour bicycle ride got functional electricity. Villagers preferred putting a battery on a bicycle and plugging it in at a village with electricity to paying more money to a village solar-powered battery charging service.
2. Design to a customer-derived target price-point from the beginning.
The reason $10 is a sweet spot price-point for solar lanterns for customers in developing countries who earn less than $2 a day is that most of them spend $3-$5 a month on kerosene, flashlight batteries and candles. If they save $2 a month after subtracting costs like battery replacement for the lantern, they get their money back in five months. This falls into the 2-300 percent return on investment most poor customers look for.
If you succeed in designing a transformative, radically affordable technology, you are only a quarter of the way there. Tweet This Quote
3. Select the tradeoffs acceptable to customers to reach target price.
These tradeoffs occur with price and effectiveness. For example, government standards for a subsidized solar lantern in India called for eight days worth of reserve light for days when the sun didn’t shine. However, when I interviewed 25 people who had used solar lanterns in Kenya for a year and asked them what their source of light was before the solar lantern, they said they used kerosene lamps (which they still had). So, one trade-off to reach the target price of $10 is to bring the number of days of reserve light to zero. That’s because any rational poor customer will gladly use their kerosene lamp on dark days if they can’t bring the price of the solar lantern down to what is affordable for them.
4. Create a proof of concept prototype.
When we designed the first proof of concept prototype for a low cost drip system in Nepal, we simply drilled holes as emitters in black high-density polyethylene pipe lateral lines and let water flow through them from a 55 gallon drum about 2 meters above the ground. Then, we put a glass under each emitter and measured how much water came out over a fixed period of time. The proof of concept prototype worked well. If yours doesn’t work right away, keep prototyping it until it does.
5. Put the prototype in the hands of at least 10 customers.
Give the customers a chance to use the product, then learn what’s wrong and fix it. When we put these prototypes in the hands of ten one acre farmers in the hills of Nepal for one growing season, they told us that water squirted sideways out of the holes away from the plants. Thus, we put plastic sleeves over the holes. Then, the plastic sleeves came away from the holes when the lateral lines were shifted. So, we designed and extruded a baffle that fit snugly over the holes and didn’t move when the lateral lines were shifted.
Create a proof of concept prototype, put it in the hands of at least 10 customers, learn what’s wrong and fix it. Tweet This Quote
6. Design strategies that are capable of reaching a million customers.
These strategies include branding, marketing and last mile distribution. With the treadle pump in Bangladesh, we used staff from a commercial marketing firm in Dhaka to create the name Krishak Bandhu, meaning farmers’ friend, which is also now being used in India. We implemented a strategy of recruiting 75 small manufacturers, 3,000 village dealers, and about 3,000 well drillers, each of whom acted in their own economic self-interest to make market and install treadle pumps. Then, we launched a national marketing initiative, including Bollywood style movies, to create sufficient volume sales to make each of the small enterprises in the last mile supply chain profitable.
7. Field test the technology and all strategies.
Do this in at least five different villages for at least four months, and modify it from what you learn. For example, a few years ago, Windhorse International (the private company I founded) was testing our strategy to sell safe drinking water to people in ten villages for six months, with a full independent evaluation. We quickly changed our strategy in at least six important ways. For example, we introduced attractive jerry cans, but when they fell off the rack of customers’ bicycles, they dented easily, so we had to double their wall thickness.
Make sure to field test your technology as well as the marketing strategy. Tweet This Quote
8. Scale up systematically to reach at least a million customers.
IDE reached 1.5 million customers in Bangladesh simply by replicating the model of manufacturers, dealers, and well drillers supported by IDE staff to reach scale in more and more geographic regions, and putting a lot of emphasis on supporting the Krishak Bandhu brand and national mass marketing campaigns.
Design for the Market: Practical Examples
The following video is a little long, but if you can suffer through it for nine minutes, it describes how three real enterprises need to change what they are doing to reach a mass market.
Then, please watch this video to learn applicable tips for designing a product that can be commercialized.
A version of this post originally published in July 2013. It has been updated and reposted to inspire further conversation.