Six Lessons From Mobile Money Ventures In Developing Countries
Tuesday, September 29, 2015
In many emerging economies, the need to give people in poverty better access to financial services seems obvious. The mobile phone is a perfect vehicle, given its widespread adoption, even among the financially less well off.
Designing a profitable solution for an unmet market need should be business strategy 101 for most entrepreneurs, so why have so many mobile money service offerings failed?
It’s a question being studied by Rajiv Lal, the Stanley Roth, Sr. Professor of Retailing at Harvard Business School. “You would think mobile money should be a hands-down success all over the world,” Lal says. “But 80 to 90 percent of mobile money operations are failures.”
His research shows that companies are starting their market analyses in the wrong places.
“Mobile money does not solve the same problem for every country,” says Lal. “If you look at successful implementations, they all started with, ‘What problem can I solve?’ If you don’t identify the right problem, the rest of it will not go anywhere.”
Lal researched successful mobile money programs, and a few that flopped, to compile tips designed to help prospective operators—and perhaps entrepreneurs in other industries as well—take an educated shot at developing a winning service. He outlined his advice in a July working paper,Mobile Money Services—Design and Development for Financial Inclusion, co-written by HBS research associate Ishan Sachdev.