Category Archives: BoP

What Book has changed your Life?

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Fortune at the Bottom of the Pyramid

I read this book way back in early 2005 and it did quite change my thought process. Even though this book focus’s on helping Organizations understand how Innovative Products work in the Emerging markets, there is a key take away for Social conscious people like me.

The book embarks on a journey, in which Late Dr. Prahlad argues that organizations always work with the top and middle of the pyramid, but forget the largest part of the pyramid. Any products and service can be produced at better quality for a lower price when it reaches many more than what is anticipated. The discussion/argument is not about the exclusive products like cars or luxury items, but others which are quite necessary. The book takes you thorough case studies of organization who have innovated to help people who absolutely need few things, ranging from Home to HealthCare to daily consumables.

I am not going to go deep into any of the case studies, but would like to share how it motivated me to think differently. Before I read this book, my understanding of the world and organizations was very limited, but this book opened my eyes to a whole new world of understanding what consumer needs and how this has changed they organizations did business.

Today, we have organizations building even cars exclusively for the price sensitive population (Tata Nano car which costs only $2,500). The products and services which have been innovated for the bottom of the pyramid (price sensitive population) also has impacted the middle and top of the pyramid. Organizations realized this a bit late. The prime understanding of any good producer is that any product/service accepted by consumers will always be accepted. However, one aspect which organizations miss is that even in non-price sensitive markets, people consume only limited quantities. However, when you produce goods and services in smaller quantities, acceptance might also go up!

Look at the classic example of Aravind Eye Clinic in Madurai, Tamil Nadu, India. This organization has constantly innovated from the beginning to provide cost effective eye care. If you speak to the founder, his inspiration is McDonald’s. He was amazed the Quality of food available at any of the McDonald’s outlets across the world, which is precisely the same anywhere and everywhere. Being an ophthalmologist, he wanted to create something which has the same quality anywhere and everywhere. Today, Aravind Eye Clinic performs more than 600 eye surgeries each day and these surgeries cost as low as $50. What is the outcome? Acceptance in the 80% of Rural India that they too can better their lives.

If I keep quoting case studies, the list goes on. However, the key take away for me is to produce something/anything which can be accepted at the bottom of the pyramid and impacts their lives. This will translate to acceptance at the middle and top of the pyramid too.

Power of Cooperatives

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Last Friday, I was at a book shop and the first book I stumbled upon was I too had a dream. I was looking for any books by/on Dr. Kurian for a long time and finally found it. I just picked up the book and began reading. Today, I completed it.I have to rate this a 5 Star. An amazing narration and very well written and compiled.

I didn’t know what to name this post. First, I wanted to name it as “Malayalee.Milk & Movie” (Read the book and I am sure that you would agree with me on the title).

Well for those of you who are wondering what this book is all about, it is the amazing story of Anand Milk Union Limited (AMUL) and journey of Dr. Verghese Kurian as India’s Milk Man.If there was anything which is a box-office and smashing hit in the Indian Cooperative Movement, it is the story of AMUL. I am definitely not going into the details of the book, but would want to highlight the key aspects of the Operation Flood.

What made me read the book non-stop is how bureaucratic our country has been in accepting the Cooperative methodology. India is a country with more than 70% of the population living in the villages. Since the independence, we have had many Government’s which came and went and also we saw a lot of development in many areas of life. In fact, I would not hesitate to say that no other country has come this far in the first 60 Years of Independence (comparing to countries which have been ruled by some other nation). However, there is a long way to go.

During the course of this book, Dr. Kurian emphasizes the importance of making farmers responsible for their produce, marketing and returns. What this simply means is giving the ownership and the Government playing the role of ensuring appropriate avenues are available. Well, to be very honest, this is the most difficult thing which any country can achieve. But, Dr. Kurian proved that with commitment and dedication we can definitely achieve this. What you need is the Will and the Belief in your dream.

I personally understood one aspect – The Primer Minister’s are people with a dream, and believe me, only people with that commitment get to the position (there are definitely exceptions too). In this book, Dr. Kurian writes about his personal interaction with almost all Prime Ministers since Jawaharlal Nehru to P V Narasimha Rao (after which Dr. Kurian retired). The key aspect is the team which surrounds this super power of our Country.

If you are an aspiring Entrepreneur/Social Entrepreneur, I highly recommend you reading this book.

Also, in this book, Dr. Kurian jumps deep into how Operation Flood, one of India’s most successful cooperative project came into existance and how long it took for them to succeed.

Innovation Series #2

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Well Well, the week has been pretty hectic for me. In this issue I have few interesting links to share with you and before that, let me share you interesting information on 1.6 Lakh ($3500) Tractor which is making rounds in news. Bhanjibhai Mathukiya, a small time innovator from Junagadh, has created a mini tractor of 10 HP (Horse Power), after being moved by the plight of the small groundnut and orchard farmers in Saurashtra. This is the power of thinking minds. We definitely need 1 Lakh car and a Rs.10,000 2-wheeler, but we also need innovation at the grass root level to sustain our living. Just imagine having huge building, good houses, affordable and comfortable transport systems etc provide quality of life, however, what if we dont have any thing to eat? Does it make sense? In the last 10 Years, the price of rice which we buy from the dealer has not gone up by more than 5% at the farmers end. But, we have been seeing huge price raise in the rice we buy at regular intervals. This simply means that the more money you are paying the shop is actually going to the trader who is selling rice and almost negligible amount is going to the farmer. There is another similar innovation to the poor farmer – “Bullet Sathi” where there is a lost cost equipment which is fitted to an Bullet (2 wheeler brand in India) which can help the farmer in various activities during farming.The above two are classic examples of innovation at the roots and affordable solutions to the bottom of the pyramid farmers.Found an interesting link on Pluggd.In by Sharada on choosing your firms Legal Avatar. 

Microplace

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Microfinance is a very popular term and it has become a very lucrative business for many organizations. However, there is a lot of difference between banking institutions having a microfinancing arm and an NGO working towards providing micro loans to people below the poverty line. There have been innumerable discussions on this topic and the whole practice depends on how it is utilized.
On one hand, providing micro-loans to people below the poverty line in groups, provides an opportunity for them to build up their livelihood instead of depending on bank loans (which for various reasons are more tough to get) and on the other side, there have been questions and debates on the interest rates which are being charged.
I am working on a white paper based on my understanding and will publish this soon.
Many major organizations are venturing into this business and e-Bay has recently launched their microfinance arm – MicroPlace. MicroPlace is an organization which has tie-up’s with other NGO’s who work at the grass root level to provide loans. Users can invest in MicroPlace and then the money is provided to organizations for the kind of investment the user chooses. The user has access to all profiles / organizations which are listed on the site and looking for any kind of investment and decide as to where his/her money goes. The most lucrative aspect of microfinancing is that the repayment rate is close to or more than 98% most of the time.