Mexico City is a buzzing and exciting metropole and home to over 10 million people. Recently I attended the BASE Forum with 1000 participants sharing their latest insights in developing BoP ventures.
The BoP market in Latin America includes 222 million people with a daily income of less than $10 and another 183 million surviving with less than US$4 a day. It is a market of 405 million people spending US$750 billion per year. The team of Luiz Ros at the Inter-American Development Bank (IDB) presented a number of significant opportunities in health, education and the food sector.
But what impressed me the most was the level of representation. From the CEO of Cemex, Juan Moreno, to the former Minister of Information and Communication Technologies of Colombia, Diego Molano – they share a common understanding of the business opportunities. No discussions about definitions and semantics – instead there was focus on solutions, for instance on better distribution or marketing towards the BoP.
The plea of Analia Mendez from Unilever to forget about ‘awareness’ but focus on ‘consumer insights’ and ‘behavior change’ was another sign of the level of understanding which is required. Representing such a large market with almost no territorial discontinuity and a common language puts Latin America a step ahead in terms of maturity – if compared to Africa and Asia.
Financials do matter
Attending the special session of Erik Simanis on “Running the Numbers at the bottom of the Pyramid” was another must-visit and an indication of the quality of the event. Erik focused in one of his ‘massive open online courses’ (MOOC), which I attended, on the question which financial models are suitable for a BoP venture. Going beyond the qualitative aspects of a business model and being able to show the numbers is definitely a must in a sector often driven by a good heart. This type of development will provide the necessary rigor to create a positive environment for market success and return on investment.
I was also very inspired, as always, by Olivier Kayser from Hystra and his call to business leaders to have the courage to re-invent their business model. It is not by selling cement as usual, which enabled CEMEX to reach the BoP with their Patrimonio Hoy Program. Instead, they created a model by providing a complete solution for affordable housing going way beyond what a ‘cement’ company would do. I cannot wait to continue working with Erik and Olivier towards more sound BoP business models.
One of the main reasons for attending the BASE forum was to co-organize the ‘Meet and multiply’ workshop with our colleagues from Endeva and SNV. No, this was definitely not a fertility program, as noted by one of the participants; it was a workshop on replication of inclusive business models.
Companies from India such as JAIN Irrigation or E-Kutir could meet potential Latin American adopters that could replicate their business models. Another example is the Mexican enterprise Salauno, that replicated the non-profit model of Narayana Hospital in India in such a way that it suits their commercial operations.
It was inspiring to see companies from different continents linking up like that. It was also refreshing to see how willing these entrepreneurs were to share and replicate their business across the globe. We will definitely do these replication events again to build on the early successes in the BoP and leverage the 110 inclusive businesses registered so far on the IB Accelerator.
Overall it was a great event, and I am looking forward to see a global BoP event of this quality in Africa or Asia, that would help consolidate our BoP industry.