I wonder what sort of cultural considerations MSoft has taken to ensure that this market will actually want to pay-as-they-go. I could be wrong, but the typical Indian consumer (I know, there’s no such thing as a “typical” consumer any more..) is all about pay once, and reap the advantage over time. What is good about it is that the PC actually becomes the possession of the family after a certain # of hours are bought. Kind of like rent-to-own. I wonder what kinds of apps are installed as the boilerplate PC version. Would they allow other applications to be installed, or is it only the Microsoft suite? It probably doesnt matter anymore too much, as long as a browser is installed, since there are a plentitude of internet apps that suffice.
Its also interesting to see what kind of capital and resource will be thrown behind Linux, and open source applications to “compete” with Microsoft’s FlexGo.
Its a good article, but I have one small bone to pick with the author. He criticizes Prahalad’s Fortune at the Bottom of the Pyramid from a purely economic bottom-line basis, without understanding that companies who invest in these emerging markets are focused not only on financial gains but also to improve the lives of those who live on less than a dollar a day. Moreover, extricating these populations from destitution creates wealth that can eventually lead to future growth for the company. I really feel we’re at a precipice. Once a few more companies start selling to BOP markets efficiently and “get it”, we’re going to see economies increase in scale faster than ever. Let’s hope American CEOs are willing to spend time in innovating for these markets, or I fear the US might lose its edge and first mover advantage.
Anyway, I realize that this is a small part of the author’s overall point, about the disappearing market for “middle, mediocre” goods. And his Costco anecdote makes perfect sense. This happens to me all the time, I end up buying random crap from Costco that I don’t need because I feel like I’m saving so much money. Doh!
I realize I’m really late on this post, but I guess I just found out that the theme during the World Economic Forum @ Davos this year was “The Creative Imperative”, and of course, IDEO was there.
So this is my favorite part… Calling all future potential employers: “Creative people want to be part of a great, creative team and culture. Community is very important to them. Shaping and managing that organization is critical. Creative people need compelling problems they can feel passionate about. These are problems that can change markets, solve social ills, and build new product categories.”
Its exciting to think that Design Thinking is finally getting the play that it should in solving world problems. The possibilities are endless.
As mentioned earlier, last week Kansas City hosted a Global Health Symposium. I was lucky enough to view a host of presentations by speakers from academia, philanthropic organizations, and businesses.
Notable:
1) Dr. Paul Farmer: The founder and driving force behind Partners in Health, an organization created to provide healthcare to the poor. Paul talked about the amazing work that PiH is doing in several countries including Rwanda and Haiti. I was impressed with PiH because their focus was not only on systematically helping AIDS/HIV patients, but to try and foster better health through access to clean water, food, decent housing and education. These components seem so inextricably tied it would seem, and any charity that seeks funding for only targeting one global social ill would learn a lot from exploring the PiH model further. Paul also makes the argument that the cost of intervening and prventing HIV/AIDS is far more than the potential cost of a widescale epidemic.
2) Saskia Sassen
Her notion of the rapid emergence of “global cities” over the traditional regional or national boundaries is interesting. My knowledge of international affairs and foreign policy has dwindled in the past 4 years, but not enough to understand that her visions of the future are not unique– There are many economists and futurists who believe that cities will become more important globally. I think that this is caused by two reasons, 1) the rapid urbanization we have been experiencing since the industrial revolution and 2) “resources” are more or less driven be human capital and knowledge workers, who of course, live in cities, for the most part.
I enjoyed Saskia’s discussion on the importance of “grandparents”. She mentioned that having abuelas or grandmothers in the household has been proven to improve health in 3rd world nations, and went on to describe the reasons for this. I guess I never thought about it before, but it makes a lot of sense.
3) Inge Kaul, from the UNDP, mentioned economic returns from socially responsible funds are increasing, but still low. A call to arms in the future will be to seek ways in which the average consumer will seek out SRI, and expect a modest return on their investment while helping to eradicate poverty and associated problems. Inge went into the problems of the “commons” and advocated that personal wellbeing in the 1st world relies largely on private goods, not those in the public domain. This situation is flipped in the 3rd world, and as a result, we in the US don’t understand how funding in these areas would help that much. She advocates that the problems of poverty need to be turned into arguments of self-interest (open borders allow the spread of terrible diseases that could have an impact on 1st world countries). Inge makes the case that inaction is more costly than action, which is probably the strongest argument I’ve heard to appease the economists. Many speakers at the global health symposium reiterated this fact. Finally, Inge made the notable point that aligning incentives to the public/private sector was far more effective than top down mandates (The UN requiring countries to contribute a certain % of GDP to AIDS/HIV efforts, for example).
3) Dr. Tyler Cymet (Lifebridge Primary care physician), provided the most incisive commentary on the “Bono-ization” of health care. He was touted by the symposium’s organizer as the “antidote” to Paul Farmer. Though controversial, I felt his lecture was one of the most realistic views on global health missions. He advocated taking into account cultural differences between the United States and the countries that we typically run missions in. I liked his top 3 reasons for anti-aging medicine: “#1 Don’t get sick, #2 Don’t get old, #3 Don’t die”. He went on to say that we need to accept death in the 3rd world at a younger age than we would typically accept in the US. There are not enough indigenous resources to keep populations surviving, let alone thriving. It is far better, then to deal with the problems that are easily solvable (low hanging fruit), and save the rest to fate. He advocates doing the best for most, not what is best for each individual. If AIDS/HIV antiretrovirals prevent the spread of an incurable disease, then it is worth it. But if they simply prolong the inevitable and agonizing death of these individuals, is it really worth it? I tend to agree. Tyler raised a great point, that the biggest global health issue is TOBACCO (a completely manmade device). Go figure. Smoking cessation in the 3rd world would be a lot more productive than curing the symptoms of AIDS.. Finally, Dr. Cymet concludes that goals must be realistic, both sides must benefit (the wealthy countries sending mission workers as well as the 3rd world countries receiving them), and the focus on global health should be taken holistically.
4) Dr. Niraj Mistry (Global Business Coalition on HIV/AIDS)
This was certainly my favorite presentation during the “business track” of the second day of the symposium. I was extremely pleased to learn about the developments that the GBC on HIV/AIDS is able to accomplish with the help of MNCs. He spoke about the “de-medicalization” of AIDS.. So in other words, HIV/AIDS cannot be cured with “drugs and doctors alone”. The example he gave was in the Niger delta- the main issue was a lacking power generator (for the refrigeration of vaccines), not the lack of medication available. So companies donated money (or power generators, if that is their commercial output), and this problem was resolved.
The GBC on HIV/AIDS created this continuum for their interactions with businesses:
Workplace Policy-> Core Competency -> Corporate Giving -> CEO Advocacy
I perceived this to be an extremely effective model that is working to have businesses engage at the level they are capable of. I found that CEO advocacy held far more importance than I ever thought in the past. The rationale is that when business leaders speak to government leaders about global issues, there is a higher tendency to listen than when NGO/Activists do.
Some additional intersting examples that were interesting:
* MAC, the makeup manufacturer, has started a line called VIVA GLAM. ALL (yes, that says ALL) profits go to AIDS research. **AND**, they have measured that this has a tremendous impact on their profits in other lines, because people are more likely to buy from a socially responsible company.
* The NBA’s biggest asset, its players, have started “Basketball without Borders” – and seek to educate global citizens about HIV/AIDS.
* TATA – Basera Pre marriage counseling
Niraj mentioned that companies who sell to markets are in-tune with their consumers, and are able to understand cultural specific differences better. He mentioned how buy-in rhetoric can work: e.g. Female condoms were introduced in Tanzania and Uganda to decrease the spread of STDs like HIV/AIDS. In one of the countries, the female condoms were touted by doctors to prevent a horrible disease. No one used them and AIDS continues to spread rampantly. In the other, the condoms were pitched as an erotic sexual implement, and all of a sudden, the spread of disease was minimized. Global companies are very likely to understand knowledge/attitude/perception, a community of international doctors might not.
Finally, and possibly the most economically slanted argument Niraj mentioned was that the Copenhagen Consensus determined that the HIGHEST return on investment for the world’s toughest problems was for curing HIV/AIDS. Wow. Why don’t we ever hear anything like this in the popular media?
All in all, it was a fantastic symposium. I learned a tremendous amount from the fantastic speakers. I am both proud and happy to be a part of it.
Whether it be the uber-complex “Chinese menu” of health care information technology solutions for hospitals to choose from, or 31 flavors (that come in “rich”, lowfat, fat free frozen yogurt… which really makes 93 flavors ), or a phone that has a built in still camera, video camera, keyboard, MP3 player, wireless internet, cigar lighter, and miniature pipe organ… products and services are getting more complicated. And its largely because consumers don’t really know what they want. Sure, they’d love to have a miniature pipe organ.. shoot, if it was free, and something you could brag about to your friends, why not?
This week’s working knowledge caught my interest because it talks about feature bloat. The article talks about finding a happy medium and satisfying customers with less features and simpler products. It also talks about using more prototypes and product-in-use research.
The one point, that stuck out the most to me, however, is the consumer decision aid concept. There are tons and tons of products that are mind-numbingly complex and confusing to explain the value proposition of each feature to a customer. But why couldn’t someone create an application that graphically displayed (using some interactive flowchart) the most appropriate features and functions for them? So they could essentially choose the ones that they’re interested in, and the output would be the product that they should purchase? I know various companies do this on their website manually, but an app that you can just drop in some sort of decision matrix as a spreadsheet and would generate a visual interface quickly and easily seems very useful.
A preliminary search for customer decision aid on Google provided fruitless, and I haven’t heard of any business that is doing it. Anyone?
This week, Stowers and Cerner are hosting the first annual Kansas City Global Health symposium.
It should prove to be a great experience, and some fantastic speakers are coming in to talk about challenges of global health. Probably most notably, Dr. Paul Farmer is coming in from Partners in Health.
I’ve been rapidly working at throwing together a blog for conference resources. My aim is to produce a united community of Kansas City individuals across industry, and academic segments that actually uses the site and posts frequently, much like on the nextbillion.net blog. What I am afraid of is the site being completely ephemeral and people forgetting about all the great ideas and contacts they made at the symposium.
I’m meeting with a few people this week from work to talk about driving traffic to a conference’s webpage. Let’s hope it is fruitful.
I finished Blue Ocean Strategy last weekend, but I didn’t get a chance to post my notes or thoughts about it.
For the most part, I think that the high level concept expressed in this book is obvious to most entrepreneurs or SMEs. This is because the value proposition for many emerging businesses are based on value innovation. There are few businesses, apart from maybe local restaurants and service establishments, that typically enter the “red ocean” fray of competition, when they don’t need to.
Takeaways:
* I underestimated how useful strategy canvases can be. The visual representation of a business’s key factors is a perfect way to communicate and gain buy in amongst the “ranks”.
* “Price minus costing” is superior to “Cost plus pricing”, which makes sense, but I don’t think many businesses follow. This extends from the buyer utility test. makes so much sense. The examples– Philips CD-i failure, and others, serve to show how starting from buyer utility and moving through price, cost, and finally adoption leads to narrowing down a commercially viable blue ocean idea.
* Focus on the consumer, not on the technology. Obvious, but a good reminder. Examples given– lack of US consumer adoption in phone/wireless services as compared to Japan/European markets.
* Part 3: Execution of BOS is a great section– a lot of the good actionable material of this book is in this section. It discusses (with case studies) how to get past the 4 main organizational hurdles preventing BOS concept adoption: Cognitive, Political, Resource, and Motivational.
* Other interesting stuff to note: the 3 tiers of noncustomers and how to tap them, the 3 “E” principles, Engagement, Explanation, and Clarity of Expectation; 6 paths to reconstruct market boundaries.
What I think is great about this book is that the authors do discuss practical details (in the form of case studies). I would most definitely recommend this book to a design planner or entrepreneur. You could probably skip the first few chapters and focus on execution, if you understand the need for a “Blue Ocean Strategy”.
I’ve decided that I’m going to be attending the Institute of Design @ IIT in Chicago starting in August. I outlined a series of reasons below on why I decided to go to Design school over a top tier MBA program.
* I don’t want to be a management consultant or an investment banker. I can’t make that work/life balance equation work unless I know there are immense rewards at the end. (These are not necessarily financial in nature.. If I found a more equitable mesofinance model to help 3rd world countries emerge from poverty, I’d be willing to put in a little more work!).. I know I know, I can explore other options other than MC/IB after school… but all said and done, given the right amount of work and good connections, I can explore those options before even stepping in a B-school.
* I see myself as a visionary person who can create high level strategy. I need to hone this skill further, and leave the hairy details to an MBA to figure out. A design school (especially a degree in design planning) will help me towards this end.
* Going back to school, for me is nothing other than an incubation period. Its a time for me to be introspective and explore options that I feel I’m more aligned to as a creative person. From my undergraduate CS degree, I’ve learned that I can be analytical, and from my day gig I know that I can be quantitatively oriented. To learn about the nitty gritties of finance, VC or Private equity, it just requires that I sit down with a book for a while.
* The tag. Its no doubt that B-schools are all about “tags” and they are licenses to have conversations with those in upper echelons at VC firms, and employers (who graduated from the same schools). The material you actually learn is the same everywhere, but the others who are around you in school are bright, talented individuals who share the same goal.
* Geek street cred. I used to be an engineer not long ago, and a veritable geek, I might add. I understand the cynicism that most geeks have towards “business types” who are looking to monetize everything, to the tune of unfettered greed. Though I always understood the need for these archetypes in an organization, I’d rather be considered a thought leader by the geek community (who, as well all know, really fuel a knowledge driven enterprise)
* From the research that I have done, The Institute of Design @ IIT has the best design planning program in the United States. Period. Moreover, its small classes facilitate the kind of problem solving discussion that really exists (or SHOULD exist) in organizations. The students that I met there are talented, guiding creative lights in the design realm. When I look around at my peers, I am proud to be part of this community.
* All said and done, it will still be possible later on to get an MBA as a tertiary degree if I think it will help me. To date, I think I’d rather spend my time executing on ideas and visions and learning by making mistakes (after all, its really the only way I’ve ever learned in the past!). If I decided to work for someone else, it is far more likely that an employer would pay for an MBA than an MDes.
For more fodder, check out Seth Godin’s post. (more…)
