Great Innovators reaping rewards at BOP

Years ago, during a business school strategy course, I read some works by C.K. Prahalad. From the first lines, I honestly felt as if the skies opened up and the entrepreneurial heavenly lights shone on me. I thought 'wow this is a man after my own heart". The late Dr. Prahalad was a strategy and innovation genius who wrote the Fortune at the Bottom of the Pyramid and many other books on strategy, innovation and global markets. He suggested that entrepreneurs and large companies alike find growth through product innovation for the largest (and most ignored) income group within the global population.

The population at base of the economic pyramid are defined as individuals with annual incomes below $3,000. Currently, this total income segment is a $5 Trillion market. The largest segment in the BOP earn roughly $1,500 annually.

While the individuals within this income segment don't have deep pockets, they do provide a petri dish for innovation and huge rewards... if only companies look at the needs of these communities.

As Dr. Prahalad believed, the worlds poor are not to viewed as charity cases. Instead companies should look at these communities for savvy consumers (looking for bang for their buck) with brand loyalty (don't have the $$$ to try every new product or trend that comes along), and unique needs. Furthermore, innovating for this demographic essentially means the creation of products and services for millions of people. While margins may not be high, volumes are enormous and the impact is even greater.

Large and small companies of the world, imagine not fighting for 1, 2, or 5% market share... take an unsexy route, develop a new product for say communities in Kenya, India or Congo. You might have millions of new customers in no time.

I was inspired to write this entry, bc over the last few weeks, I've gotten really excited by so many startups developing technology for the developing world - specifically African countries. A few of my favorite include Ushahidi which uses FOSS to Crowdsource Crisis Information. Similarly, Childcount uses improved sms technology to support child and maternal healthcare in Kenya...ultimately improving response time and treatment. On the finance front, Kenya-based Safaricom uses cell phones to perform wire transfers. Kenya was the first country in the world to offer this service!!! Now, get this, they've taken it a step further...with M-Kesho, Safaricom will offer mobile microfinance, insurance and other products...essentially mobile bank accounts for the 9.4 million M-Kesa mobile customers. How brilliant is that??!!!

What's really fantastic is that these innovations have utility across borders - even in here in the USA.