Al Hammond

A Lesson for BoP Technologists: Put the Business Model First

Girls with OLPCA recent Wall Street Journal article documents the demise of Nicolas Negroponte’s dream of a $100 “one laptop per child” for millions of schoolchildren in the developing world. (Thanks to Ethan Zuckerman for pointing it out.)? To give Negroponte his due, the idea stimulated significant technology development and focused market attention on the need for low-cost computing devices for BOP markets.? And from an engineering perspective, it’s a magnificent machine.

But the $100 price was never realistic; the market is dominated by small businesses and only secondarily by educational systems, and the project lacked a real business model, including such essential details as training and technical support.? (We’ve written about OLPC’s lack of training and tech support time and again here on NextBillion.)It was from the beginning an inspiring but unrealistic vision?comparable to the “build it and they will come” belief that funneled hundreds of millions of development dollars into Internet access telecenters, 90% of which failed when the grants ran out. Technology push strategies just don?t work.

If there is any lesson that our studies here have shown, the essential starting point is a viable business model, grounded in a real understanding of needs, the value proposition as perceived by local people, and evidence of willingness to pay. Only then can technology opportunities really be evaluated. That is not to say that technology doesn?t have a critical role as an enabler for BOP communities?witness the still accelerating adoption of mobile phones (and their prepaid service business model).? But engineers?especially those that don?t know developing market well?should take to heart the real moral of the laptop story: First, it’s the business model.

The current campaign to “Give One, Get One” for the Negroponte laptop – trying to enlist US consumers to buy one for themselves and donate one to a schoolchild in a developing country, in effect marks the failure of the one laptop per child vision – a recognition that it will not succeed in getting developing country governments to buy millions of the devices. As the WSJ article documents, Intel, Microsoft, and other commercial vendors have produced similar devices that are available at competitive prices (about $300), with training and technical support plans, and they are already outselling the Negroponte device.

It is also pertinent that both Intel and Microsoft have divisions focused on low-income markets and their needs, and have spent years and management time understanding the needs of those markets.

(For ongoing coverage of the OLPC, add OLPC News to your bookmarks and RSS feeds.? A must read site managed by ex-Geekcorps director Wayan Vota.)