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Eco-Systems in Aid?

February 3, 2013

Remember the 90s? “Platforms” were still all the rage – as a client you buy into one once and you are assured to remain a client. Changing platforms carried a premium and big companies surfed to the top with more and more clever platforms and “platformized” products. Microsoft was the leader of them all, first with their slick operating system and the office suite. Polaroid was an early pioneer and so was Gillette who made a fortune over the previous 40 years building isolated platforms of cheap shaving machines and selling you blades at a premium. HP and others transferred that model to printers driving down the price of owning a printer, and the rest is history

But what is going on now? Polaroid is no more, Windows is trying to find their feet again in a strange new world, HP is struggling and millions of consumers are not sure what to do with tons of outdated platforms.

In fact, the platform is dead. Actually not dead, dead, but dead and reborn into something else. Evolved.

Eco-systems are the new platforms.

Apple, Amazon, Google, Walmart, Facebook are already the stuff of legends and, while once their respective products and platforms were existing in oblivion of each other, their eco-systems are already overlapping. Everyone is competing with everyone and if you are in business and you think you have no competition you are insane. Competition does not come out of your category anymore – it can come from literary anywhere. 

All modern successful companies manage incredibly sophisticated supply-chains, for starters, which give them access to increasingly higher quality information and resources faster and cheaper. Millions of small and medium entrepreneurs live off side operations that help these gigantic companies thrive. They produce raw materials, they assemble stuff, they design and run server farms, they write code, they move things all over the world. They innovate.

You either manage the eco-system or you are part of it. 

The benefits are obvious. Cost efficiency. Economy of scale. Pipelines and channels through which many unrelated categories of products and services can be pushed with small additional investments. Reach. Access. Increasingly complex Insights into consumer behaviour. Ability to experiment. Organic growth and innovation.  

Remember “Build a better mousetrap and the world will beat a path to your door”? Well, these days, if you happen to build a better mousetrap, you’d better give it away for free and perhaps charge people to step on that path,  once they built it for you. Then, you can sell them some refreshments while on the path and invite them to network among themselves to exchange ideas on how to better apply your mousetrap to their specific mice-problem. You will then ship personalized versions of the mousetrap to their house after you buy and float the shipping company. Then you launch a mousetrap-accessorizing business and perhaps open your slick shipping infrastructure to the guy who sells catfood, because you know that people who buy mousetraps are more likely to be cat-people.   

Now what does all that have to do with aid and development? Well turns out that in this industry we still live in or before the 90s:

In our sector, we just now start talking about platforms (as carefully as our varied coordination committee allows), but for the most part we are still working in isolation. In the public health sector for example we continue to think in clusters. HIV. Malaria. WASH. Or we think in Projects. Or in demographic categories. Youth. Women. Children.

We invest all our resources to create dedicated, isolated structures that serve these clusters. Or get individual projects implemented. Or reach these segments of population individually. And we hope that if we do our part well, others will do the same with their part and all pieces will be taken care of.

In fact, we end up investing enormously in creating parallel, inefficient structures. And often we insist that these structures be designed, built and managed by people who should do something else. Epidemiologists are no the best people to manage supply-chains and ministry of health bureaucrats cannot manage very impactful communication strategies.  

Then, it takes a lot of effort and resources to reach for example a pregnant woman with a meaningful malaria message. But, as we are focused on malaria, we ignore her nutrition needs. Or Family planning needs. At a later point, we invest in reaching her again, with the nutrition message. Later still, with the family planning message. That makes our operation inefficient and expensive. 

Always focused on our immediate objectives we often end up creating inefficient parallel supply chains (warehouses, staff, transportation aimed at delivering goods or services to beneficiaries) that sometimes harm the local economy even while they enrich middlemen who benefit significantly from the development investment. A mass distribution campaign for water purification solution during a cholera outbreak will affect negatively the local market for water purification.

The few people who own trucks and warehouses will obviously charge a premium and end up pocketing significant money aimed at helping the poor. In Mozambique we also compete for trucks, warehouses and other logistics resources with the mining industry. Costs go through the roof.  

Of course, in the order of things responding to that outbreak justifies the smaller harm to the market.

But what if there was another way?

What if we could design a comprehensive approach that would help us achieve many of these fragmented objectives jointly, with economy of scale? An approach that would also create market-related tipping-points that would lead to small but noticeable positive impact on local markets.

An eco-system that would allow a more effective delivery of aid.

That is why we developed Movercado. By combining a simple technology (SMS) with a clever business logic, consumer insight and insights from behavioral economics we are combining real-time information exchange with behavioral incentives with incentives for the trade to build and eco-system that ensures a more efficient distribution of aid and higher development dividends for local small businesses so they become partners in development rather than feel threatened by us and all the free stuff that harms their fragile markets. 

As a bonus, using the leverage that eco-system gives us, we negotiate special conditions with commercial banks, ensuring access to small capital for these business and an outsource of financial risks to the banks. (Think Amazon and book publishers). This will help many entrepreneurs thrive, which will have significant economic effects at community levels.

 

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