August 9

Heather Esper

The Role of Local Communities in Base of the Pyramid Business Development

If you had to guess, what percentage of BoP ventures would you say engage BoP communities at a deep level both during their development and throughout their lifetime? I’m talking about average community members, who aren’t already involved with local development organizations such as non-profits. And when I say at a deep level, I mean engaging in regular conversation with the BoP, not conducting basic market research on an intermittent basis.

Surprisingly, when I tried to create a list of such ventures, it was shorter than I had anticipated. Even more surprising then is that many successful BoP ventures and the BoP Protocol (whose development has been covered multiple times by NextBillion) advocate for such community involvement through human centric design, deep listening, home stays, and many other methods during the design stage. However I’m not sure how often these organizations continue to build their relationship and engage with the BoP community after the product is developed and piloted.

Too many times, I wonder if certain products are purchased by low-income customers because although it is something they value and want, it doesn’t actually address some of their most pressing basic needs. Perhaps if BoP communities’ voices were involved deeply in the development, delivery, and regularly heard by the venture I wouldn’t worry about this issue. Which leads me to wonder: how do we ensure a mutually beneficial relationship between companies and customers in a BoP context?

Well how does this work in the “ToP” context? It doesn’t, the feedback mechanism at the ToP is whether one decides to purchase the product or not, and civil society acts in the interest of the consumer to provide oversight. But who or what acts as the civil society in the BoP context? Given the sensitive issues around selling and buying from the poor, is whether a BoP consumer buys or not the right feedback for the BoP ventures? Or should we develop regulations around mandatory education about products before offering them on the market, or do we decide to focus on developing products that only serve basic needs of the BoP? These questions also bring up a lot of ethical questions, are “we” taking advantage of BoP communities lack of consumer knowledge, do “we” get to decide what is best for others in terms of what types of products we offer or don’t offer? And when a non-profit, who has the best interest of the poor in mind, offers or partners with a company to offer a product, isn’t there an implied message to low-income communities that they need that product?

To again contrast to the ToP, who decides what we need? Well in most cases the ToP does, but they have many more resources available to judge whether a product is a wise investment, and compare price and quality among competitors. So how do we ensure that the BoP’s voices are involved in the creation and continued delivery of products?

Ideally, creating an advisory board of average BoP community members to give oversight on the venture’s activities could be a great way to ensure that ventures do not inadvertently take advantage of BoP communities. This advisory board of sorts could serve the role that civil society places at the ToP. This partnership would benefit both the venture and broader community. The community could ensure that their wants and needs are met by continually assessing if the product is working in ways they need or even if the product is developed how they imagined it would be. While the venture could improve their business model based on the feedback from the community, and as a result become more successful from better meeting the needs of their end constituents. This would also help venture to stay true to their original missions.

Of course this type of partnership between BoP ventures and local communities could be difficult to implement given the work schedules of community members, and would need to be designed in a way that balanced power, and was not coercive. It may also be difficult to bring such an advisory group to scale, as well as ensure the group is representative of the larger community. It would also require a skilled mediator to help draw out ideas and allow members to envision future possibilities. However, the power of community involvement and the resulting communication between groups that come from different backgrounds can be tremendous, and as a field I don’t think we utilize communities to their full potential to better serve the BoP.

What do you think? Are there other ways to leverage BoP communities and their opinions to better meet their needs and create greater value, such as from feedback through self-help groups who may already use or sell these products? Do you know of any successful models or ventures that have worked with BoP communities on a deep level?