Press Room
>The evolution of smartphone prices
>It is well known that Moore’s Law models the exponential growth in processing power and the exponential drop in its cost. IT technology is constantly getting cheaper and better at a fast clip. But it is harder to visualize the impact of that progress in the sales and prices of electronic gadgets.
The Washington Post has just created a great visualization that shows this effect in the most common gadgets we use:
You can clearly see the exponential growth in US sales of feature phones and the reduction in their price. In 1998, the average one cost $268 and 27M were sold. In 2008, these numbers were $112 and 102,8M.
From there on, sales started dropping. Why? Simple: smartphone sales were taking off. From less than 8M in 2005, sales have grown to 54M this past 2010. Meanwhile, the average price has dropped from $537 to $325.
That’s a more drastic change than what we saw with feature phones. In my opinion, the reasons are the existence of honed distribution channels and the pull of the internet and apps. Since both causes are also present in emerging markets, I hope the spread of smartphones there will be even faster. And Google seems to think the same way!
>Three female users of Tiendatek
>When we first thought about the most likely users for our product, we zeroed in on young males as more techie and thus willing to adopt our innovation. Well, as we have grown the network of users, we have seen that gender plays a very little role in the process. There are actually more women than men currently running their shop with our product! So much for preconceptions…
Below you can hear some of those female shopkeepers as they talk about our Tiendatek product and what they like about it. The prize for social impact goes to Damaris, who got her latest loan by showing her financial information on her phone to the credit officer at the microfinance institution.
>Differences between Silicon Valley and BOP entrepreneurs
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To learn from the best, I follow several blogs written by Silicon Valley entrepreneurs and investors (check them out on the right column). It is a remarkable learning exercise to read about their experience at the cutting edge of the highest technologies. From them I first heard about Customer Development, Lean Startup, Business Model Generation and a few other key concepts that I believe apply as well to social enterprises. It is amazing to witness the creation of a start-up discipline and set of tools and I can’t wait for that wave to hit the social enterprise space.
But there are still a few differences when working at the BOP that make the transposition of these toolsets a hard effort. First, getting your hands on usable information is much harder. Not only there is almost no market research, the target customers can be suspicious and obtaining feedback efficiently from them is also difficult (by the way, this is a blessing in disguise: our data products will have a lot more value!).
Second, the speed of customer acquisition is vastly different. For the new wave of web and mobile start-ups, all they need to convert customers is in place: broadband, computers, smartphones… That allows for overnight hits and millions of new users per month. In contrast, as we try to bring business tools to the BOP we face a tiny installed base of smartphones, problems procuring them and expensive mobile data plans. Luckily the smartphone revolution is already picking up speed even in developing markets and this problem will solve itself nicely (there are for instance more than 20 Android models in Mexico today!).
A third big difference lies in the value of the solution brought to the customer and her perception of it. Since they come from far behind in terms of productivity and access to IT tools, the users have a hard time assessing value, which makes sales hard. On the bright side, leapfrogging a shopkeeper from medieval accounting practices to 21st century ones can greatly benefit her operation and also her self-esteem.
Of course, helping an underserved customer group like the shopkeepers is the whole reason we launched Frogtek. Despite the difficulties of bringing hi-tech products to an unsuspecting BOP, we are rewarded by slow but constant progress and are encouraged by the vast potential lying ahead. And as I like to say, if it were easy it wouldn’t be fun!
>Reflections from the Road
>The first three weeks in October I was lucky to speak in panels at three different conferences. It was a lot of traveling and a lot of exchanging business cards. We got in touch with amazing people from all walks of life and also got exposure for Frogtek’s adventure. Throughout these conferences I could see how the topic of social entrepreneurship has grown tremendously, jumping from a field of study in business schools to infecting mainstream thinking.
First I attended SoCap in beautiful San Francisco. This is the pre-eminent conference for the industry where more than 1300 attendees gathered to listen to the leaders in the field and to connect with each other. The Fort Mason center, next to Alcatraz, provided a fantastic setting for the buzz and hopeful energy from all corners of the world. It was truly impressive to see what the industry can put together, a clear coming of age in my view.
From San Francisco I flew to New York, just in time to participate in the Social Enterprise Conference organized by Columbia Business School, my alma mater. Since the first one I attended in 2006, the conference has moved from small classrooms all the way to the largest auditorium on campus. I’d be surprised if it’s not the largest conference of the year. A phenomenal success story, riding the student increasing interest to attract world-class speakers and even corporate sponsors.
And finally I went to New Orleans for the Daily Beast‘s Innovators Summit. This conference had a more mainstream focus with panels about the US economy and the growth of China and India. But the venue was chosen to highlight New Orleans’ fantastic rebound after the levee’s breakdown, led to a large part by a vanguard of social entrepreneurs. The mayor even offered his city as an example of fertile ecosystem for social innovators.
Actually, social entrepreneurs of all stripes featured prominently next to heavy-hitters like General McChrystal, Vinod Khosla and Barry Diller. And Echoing Green was a co-host, with our President Cheryl Dorsey intervening on stage at several points, including two panels with Fellows. The spillover was so infectious that the Daily Beast may choose Social Innovation as the anchor theme for their next conference.
Stringing the three conferences together, we can observe three distinct stages in the development of the field. First, the few initial practitioners triggered a tsunami of interest from business school professors and students, so the first conferences were organized at Columbia, Harvard and the like. Gradually the segment grew and captured talent and attention, to the point that the launch of the professional-focused SoCap in 2008 was a resounding success. And now the new ways of doing business are infecting the mainstream parts of the economy, with cutting-edge publications like the Daily Beast acting as vectors.
The future thus shines bright for the field. Hopefully it’ll catch up with its hype and won’t disappoint all the pragmatic idealists building the industry one conference at a time…