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After a year of running Frogtek from New York City, I finally moved closer to our customers and markets this month. As of October 1st, my home address is in the exciting neighborhood of La Condesa, in the heart of Mexico City.
We have completed our first version of the product and I was feeling increasingly removed from the action back in nyc. As we shift into deployment mode and we negotiate distribution and partnership deals, it makes a lot of sense for me to be based in Mexico. Parachuting in and out is just not going to cut it at this point. So it’s exciting to enter a new stage and being able to witness it first hand!
Yesterday Yael and I attended a very interesting lecture given by Edmundo Vallejo, a former LatAm CEO at GE that is now a professor at Ipade, Mexico’s foremost business school. Ipade organizes an annual refresher for former alumni and Edmundo’s presentation was focused on the aftermath of the economic crisis.
The room was full of senior managers from large organizations hailing from the spectrum of Mexican industries. Edmundo wanted to give them a taste of the new trends in global business, from cloud computing to strategic partnerships to crowdsourcing and the base of the pyramid.
To our relish, he used Frogtek’s example to thread a number of disparate concepts together. He provided a masterful description of our business model, which you can see in the picture above (I’m so stealing his slides!). Afterwards Yael and I took the floor to answer a few questions from the audience.
It was hard to believe our young company held any lessons for such an experienced crowd. But with a Professor like Edmundo, anything is possible!
>This is reblogged from a post I wrote for Columbia Business School’s blog on the Social Enterprise Conference:
Technology has a critical role to play in economic development. After all, together with education, it is what makes humans more productive. That is the reason why the phenomenal spread of mobile phones globally has created so much enthusiasm and hope.
The mobile operators, intrigued by the success of Grameen Phone Village Ladies, have done a remarkable job at reaching everyone, everywhere. Basic phones are now ubiquitous and can be taken for granted while designing social schemes. Thanks to a dense network of distributors and resellers, mobile minutes can be bought electronically at your next-door store. And in lucky countries like Kenya, you can even send Mom some money through the wildly successful mPesa.
These new opportunities are not going unnoticed, and social entrepreneurs are bringing their start-up innovation in full force. For instance, in Colombia you can text a cab’s license plate to Taxi 911, and they’ll tell you if it is registered and give you an instant insurance policy to boot. Or you can upload your resume to EmpleoListo and be notified over SMS about any job match.
The future brings even more promise. As we go from simple phones limited to voice and text messages to Swiss-army smartphones, what applications will be created by social entrepreneurs? If you look at the Silicon Valley, one trend is clear: the integration of services unlocks tremendous amounts of value. Google, Facebook, Twitter, and most new start-ups offer ways for other developers to connect into their services and platforms. As an example, you can see what your Facebook friends are reading on the New York Times. And Google ads have powered many business models by being inserted into someone else’s web pages.
Surely social applications can also lever each other to produce richer services too. For instance, a person in Nicaragua could find a dream job with EmpleoListo and also receive his salary on his phone, no bank account necessary. Or a Taxi 911 app could show a map with the riskiest corners to grab a cab in Bogotá and send your GPS coordinates to the police.
Intrigued by the possibilities? Entrepreneurs in this space will brainstorm at Columbia Business School’s Social Enterprise Conference. Join us for a panel that will explore how to build a regional system to distribute, control, and pay for medicines and other basic goods in Kenya. All that, of course, using a lot of mobile phones.
>This weekend has been a fantastic one for Frogtek’s media coverage, with our product being covered in Spain’s most important news program and also in Colombia’s leading TV network.
As part of a longer piece on social entrepreneurs, our dear Guillermo was interviewed for the Telediario news program at TVE, the doyen of news reporting in Spain with an audience of millions of people. You can see our segment if you go to the 22nd minute of this video. Together with Frogtek, the piece featured EHAS, which connects patients in the Amazonia with distant doctors using mobile phones and the internet.
Also very relevant was a 2:30 piece covering our Tiendatek product in Caracol TV. We had the camera team come to Boris’ shop, record our technology and interview everyone about the benefits of the software and the genesis of the idea. As a response, we are getting tens of emails of interest from shopkeepers all over Colombia!
A few days ago The Economist ran a special report on Latin America’s remarkable economic performance over the last ten years. For the first time in living memory, it has weathered the recession better than other Western countries including the US. And from 2002 to 2008, the region grew at 5.5%. Countries like Peru are actually taking off at tiger rates of 9% and above. The happy consequence is that tens of millions of people have escaped poverty and are joining the vibrant lower-middle class.
That hopeful picture is what we constantly see in our work in Mexico and Colombia. Micro-entrepreneurs are witnessing a general improvement around them and feel optimistic enough to borrow money from microfinance institutions, in effect making a bet on a more prosperous future.
The report also highlights the low productivity found in the region, linked strongly to the vast informal sector. We couldn’t agree more, but at the same time we get excited by the opportunity to boost that productivity. We believe the IT-led boom in the rich service economies will be replicated in the informal sector in Latin America. But it will happen on the back of the new mobile and cloud computing platforms, as micro-entrepreneurs leapfrog over PCs.
We will surely love to join in that tremendous improvement!
>We are thrilled to announce that out of more than 400 entries from around the world, we are the first winner in BBVA’s Open Talent competition! BBVA is a leading Spanish bank that operates extensively throughout Latin America, and with the financial and institutional support valued at €100,000 we will distribute our TiendaTek product to shopkeeper clients of BancaMia, one of the largest microfinance institutions in Colombia and partly owned by BBVA.
As part of this project we will develop mobile educational and marketing tools to help both shopkeepers and BancaMia improve their respective businesses as well as strengthen their relationship. We are honored by the award and look forward to a long and fruitful partnership with BBVA.
>In this past weeks The Economist has written a couple of articles that I wanted to mention. In the first one, they discuss Obama’s Social Innovation fund and similar efforts out of the UK. Both mostly focus on domestic issues and show the great progress being made in the field. It is fantastic that these approaches are reaching the Economist’s wide audience, hopefully soon we’ll read about international topics.
The second article covered the spread of smartphones in South East Asia, fostered by competition on mobile calls that have reduced the revenues per user. This is very good news for Frogtek, as it shows that the relatively poor are being chased by the big operators and handset manufacturers. In turn, that trend should bring down the prices of hardware and data plans.
What The Economist didn’t discuss is what the poor will do with those smartphones. They’ll obviously consume media and entertainment like everyone else. And they’ll also communicate in a frenzy, now that everyone’s on Facebook.
But will they also put the phones to productive uses, for instance to help their micro-businesses? We surely hope so!
>Today I landed on a great post by Alexander Osterwalder regarding the combination of his methodology for business model prototyping with the approach we follow at Frogtek of Customer Development, as defined by Steve Blank. The two come together very nicely, one providing the visuals to think through and understand complex scenarios, the other the rigourous approach to learn the facts and iterate accordingly. You could say that the former is the Kanban to the latter Agile Development, using a software analogy.
But the beauty of the post didn’t end there. It used as a case study the example of Peepoople, a social enterprise that brings a single-use toilet bag to the slums in Kenya. Here’s an example of a potential business model (go here to understand the canvas):
I was delighted to see how these leading thinkers, who are shaping new business practices, support the nascent field of social entrepreneurship as applied to the BOP. Steve Blank also wrote about social entrepreneurship a while ago.
Please, keep these posts coming!!
>Mobileactive recently wrote a very well-researched blog post comparing the benefits and disadvantages of delivering content through a mobile website versus an application. As smartphones proliferate, content producers need to decide whether they want to cater to their audiences one way or another (or both) and the article makes a good case for mobile Web content.
However their analysis is not focused on emerging markets, where data connections tend to be slow and pricey. And more importantly, it also leaves outside the case of software tools that are designed to perform tasks interactively instead of distributing content. We believe that in these two cases native apps provide a much better alternative.
Through our work in Mexico and Colombia at the BOP, we have painfully learned how unreliable the mobile data connections can be, even in urban areas. That turns the mobile web into a distant aspiration, as mobile browsers today need a connection to render content. In contrast, a native app can be designed to store information to be uploaded when a connection becomes available. That added flexibility comes very handy with spotty networks. This approach also economizes on bandwidth, as graphics and the user interface can be found locally and only vital information is exchanged with the server.
And if what you are building is a productive tool and not a content consumption method, native apps win hands on. As mobileactive’s article already notes, the more user engagement and features you need, the more a native app is the right choice. Accessing a local database and getting barcodes from a reader can only be done by a native app.
Finally, a typical BOP user doesn’t have the luxury of a laptop to complement a smartphone for the more demanding tasks. If the smartphone is the only computing device available, the user will need the full-fledged experience that only native apps can offer.
So we believe that the mobile web will be less important to BOP users than mobile apps, given the conditions of data networks and the need for productive engagement.
In time technology will synthesize and eliminate this dichotomy: you can already insert mobile pages within a native app, as we are doing with our Tiendatek. This will allow the software designer to combine the best elements of each approach according to the particular goal at hand.