Weekly Roundup (1/18/14): Market Building is Cool
We all love to read about the ingenious products being designed and built these days to improve the lives of people at the base of the pyramid. And why not? It’s fun to consider the possibilities of how an inexpensive cook stove or solar lantern or water purification system, for example, can lead to a healthier world.
But that’s the problem. Too often it’s just about possibilities, because those amazing devices don’t end up in the hands of those who need them.
As Hystra puts it, in its 2013 report on best practices in marketing innovative devices for the BoP, “Engineers have done their job but marketers have not. As a result, addressing the marketing bottleneck has become a priority on the development agenda.”
So the spotlight is widening to include not just those who design cool products, but those who truly understand BoP market dynamics. Or those who do both, like the nonprofit D-Rev, recently profiled by Christine Larson for The New York Times.
After doing tons of fieldwork, D-Rev designed an inexpensive, durable light system to treat infant jaundice in low-resource hospitals. It’s a noteworthy innovation.
But D-Rev’s leaders realized that was only the first step. Next, they needed to ensure their Brilliance LEDs were actually used. Toward that end, they came up with an interesting plan that relied on local markets, plus licensing deals with local for-profit distributors. That effort faltered, however, when real-world problems like bribery, cronyism and a lack of knowledge about the product’s technicalities got in the way.
In short, the market didn’t work.
“We thought if you design a good product, it will scale on its own,” Krista Donaldson, D-Rev’s CEO, told the Times. “That works in efficient markets, but most developing communities don’t have efficient markets.”
So D-Rev took the expensive step of analyzing the markets where it does business, with the idea of building those markets. It sent analysts to the Philippines and South America for months at a time.
“We always expected to be a little bit involved with building markets, but it was more work than we anticipated,” Donaldson said.
Organizing supply chains isn’t as fun as designing amazing devices, perhaps, but it’s proving to be no less important.
“What D-Rev is doing hasn’t been done before,” Kevin Starr, managing director of one of D-Rev’s donors, the Mulago Foundation, told the Times. “They’re combining ways of designing equipment by focusing on the user and the user’s context, while also thinking about how to get it to people, about strategies for distribution and the market.”
It seems to be working. D-Rev officials say their lighting system, launched a year ago, is being used in six countries and has saved 300 babies from death or disability.
Larson, in the Times, points out that foundations which fund nonprofits like D-Rev might not be accustomed to a system that includes a third-party, for-profit distributor. After all, that’s a relatively new way to look at markets.
But it might well prove to be an idea worth getting used to. Especially if it enables more amazing new devices to start saving lives.
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