The BoP Innovation Center – one of IBA’s network partners – supports entrepreneurs and organizations to develop new products or services for the Base of the Pyramid and get them to market. We receive lots of emails from people that want to pitch their idea to us which we think is great. While we are not an impact investment enterprise, we do like to team up with entrepreneurs if we like the idea and the people behind it. In some cases we take these ideas into our own programs as our programs can provide a testing or acceleration space for respectively early and more mature ideas.
Whenever innovators ask what we could do to help them go from idea to impact, often we don’t talk about where to find the money right away. On the contrary, we would first like to learn more about what drives the team, the idea and the business model behind it. In other words, the essentials that are required to attract investments in the first place. So why not go through some of the typical questions we like to ask at BoP Innovation Center:
- Do you have the DNA of an Inclusive Innovator? Innovating for the Base of the Pyramid is not an easy job as the markets are very volatile and complex. This means you need to be equipped with a certain attitude and skillset and, even more important, you should not be afraid to make mistakes. By working closely with innovators, we have learned that the chances of success increase when the team is purpose-driven, empathic, agile, and collaborative (read more about what defines an Inclusive Innovator in our earlier blog series).
- Is your offering Desirable? All too often innovations strand because they are the result of what the innovators thinks that people at the Base of the Pyramid need. That’s why inclusive innovators need a consumer-centered design approach and perceive the BoP as a (heterogenous) group of consumers with their own aspirations that drive their purchase decisions (you’ll be surprised how much different these can be from what you thought). Therefore, we encourage innovators to test their proposition as early as possible and not wait until they only have a functional prototype ready (low-key prototypes like storyboards and roleplay can already provide you with a lot of consumer feedback). When you’re testing your proposition, make sure you not only test people’s willingness to purchase your offering but also find out if they would want to keep spending their money on it and, most importantly, keep using the product/service. This will ultimately define the social impact and the financial viability of your business case. We have seen improved cookstove businesses fail because the entrepreneurs underestimated the behavior change that was required for BoP consumers. As a result, people went back to their old (unimproved) cookstoves and the new cookstove ended up eating dust.
- Is your offering Feasible? With the desirability of your offering validated, it’s important to start thinking about how to produce and distribute your offering at large volumes to bring down the costs. This requires innovations to talk to as many manufacturers as possible and explore the costs and quality implications of local vs. remote manufacturing. At the same time, we encourage innovators to design for the extreme conditions at the Base of the Pyramid in which their offerings will be used. This reduces the chances of product or service failure and the needs for local maintenance and repair services which can become extremely costly and difficult to organize. Again, doing early tests will give you the best answers.
- Is your offering Viable? Last but certainly not least, any innovation relies on a solid business model that allows you to reach scale. This is about how you balance costs and revenues and how you plan to market & distribute your offering, knowing that low-income markets are often informal and underdeveloped and that rural consumers are hard to reach. Many offerings that are new to these markets require awareness raising which can be achieved by, for example, cleverly piggybacking on public or private programs that seek to reach similar impact. Having the right partners for marketing, distribution and consumer financing is therefore key if you want to scale and sustain the business. We still see many innovators trying to do too much on their own which is a pity because it has never been this easy to collaborate with private and public sector partners at the BoP.
Curious to understand what BoP Innovation Center can do for you? Go through our online Inclusive Innovation checklist.
We hope this blog post gives inspiration and direction to the inclusive innovation journey you’re on. Don’t hesitate to get in touch or have a look at our Inclusive Innovation services. Also, we recommend you register your team on the iba.ventures website as it provides an awesome place to meet with like minded ventures, investors and mentors.
Originally published here: http://bopinc.org/updates/so-you-have-an-innovation-for-low-income-markets