THE BUSINESS SOLUTION TO POVERTY – Paul Polak & Mal Warwick
Book can be found here (an amazon associates link) https://amzn.to/2Pjjf90 (this is an Amazon associate link which earns us commission to keep things going) summary and notes below:
The key is what Paul Polak and Mal Warwick call Zero-Based Design: starting from scratch to create innovative products and services tailored for the very poor, armed with a thorough understanding of what they really want and need and driven by what they call “the ruthless pursuit of affordability.”Polak has been doing this work for years, and Warwick has extensive experience in both business and philanthropy. Together, they show how their design principles and vision can enable unapologetic capitalists to supply the very poor with clean drinking water, electricity, irrigation, housing, education, healthcare, and other necessities at a fraction of the usual cost and at profit margins attractive to investors.
# Consider, for example, the horrendous waste of human talent. How many scientists, physicians, teachers, business innovators, gifted artists, and brilliant community leaders might emerge from the bottom billions if they were freed from the shackles of poverty? How much might all our lives be enriched if the 2.7 billion people who face the constraints of severe poverty today were given opportunities to fulfill their potential?
LISTENING: hearing what the poor people have to say about how to better their position
TRANSFORM THE MARKET: create a market dont serve an existing one
SCALE: make sure your able to cater for such a large amount of people
RUTHLESSLY AFFORDABILITY :prices on par to what they can afford
PRIVATE CAPITAL: needed to spur more innovation in the community
DISTRIBUTION: get local people do the bulk of the marketing/sales
ASPIRATION BRANDING: important to uplift these poor consumers
INNOVATION: constantly improving because no one owned the water pumps, when they broke no one bothered to fix them
– The water they drink is all contaminated, having e-coli
– If your an untouchable then it means that if your touched then people have to go through a cleansing ritual to get rid of the dirt
– Big NGOs rarely work because they’re so vulnerable to government corruption, bureaucratic inaction, the distance between the planners and the supposed beneficiaries, and both distrust and a lack of interest on the part of people who live at the grass roots
–Giveaways breed dependence and self-doubt instead of change
– people round the world have different definitions of what POVERTY is, some people who are said to be poor actually believe they are quite well off ( though one must ask if they have seen how other people round the world live, i.e in developed countries?)
– The most obvious, direct, and effective way to combat poverty is to enable poor people to earn more money.
-charities usually tell the poor people what to do to get the money, not allowing them to self actualize themselves
-villagers gather and deposit 10 cents to a pot from which they can then borrow from and repay
-average life expectancy at birth in India around 1950 was 38 years; today it is 65. In China, it was 41; today it is 77
-As high as 90 percent — of microloans are used not to capitalize businesses but for consumption
-For example, $1 million in microcredit loans in Bangladesh would enable 40,000 small farmers to install treadle pumps, which would permanently increase their yearly net income by $4 million after paying off their loans with interest in less than six months
-Several million poor families have multiplied their income using treadle pumps like this one operated by a young farmer in Bangladesh. The foot-operated treadle pump, invented there more than three decades ago, represents one of the biggest success stories in market-based approaches to poverty alleviation.
-Coca-Cola sells aspirationally branded, carbonated sugar water for about 25 cents a bottle in villages all over India
-Affordability and ministration go hand in hand, ford made a $360 car when $2000 was norm, apple did same with computer
-As many as 950 million people in the world go hungry, and an equal number lack access to affordable nutritious foods.
- More than a billion people live in rudimentary shelters, constituting a ready market for $100 to $300 houses with market and collateral value that could start them on the road to the middle class.
- At least one billion people have neither latrines nor toilets.
- More than one billion people have no access to electricity.
- One billion or more don’t have access to decent, affordable schools.
- A minimum of one billion people lack affordable and professional health services.
- At least one billion use cooking and heating methods that make them sick and pollute the air
3 rules for selling to poor people
1. interview 100 of them to get what they need/want
2.if it wont earn or save 3 times the customers investment in the first year don’t bother. Provide them with the tools to increase their incomes, thats the key! Identify what is the most expensive part of the innovation? How can u make that cheaper? Cut the weight ! No bells and whistles !
3.designed for 100 million people to make a lasting difference! Use local materials