Last year, Seth Godin did a talk at Acumen Fund's Investor Gathering event on why market creation is hard. He tried to explain the frustration that many of us in social enterprise (and our investors) have on why people are not flocking to purchase these great products/services that we've developed that can transform their lives?
He cited an interesting fact that 1/3 of the population in the world has never bought something new! People at the bottom of the pyramid are conservative and risk-averse. They make choices that are "obvious" and "safe". In another word, they buy what their parents have bought, and they don't wake up everyday thinking, "what am I going to do/buy differently today". For the large part, people do the same thing over and over everyday the same way they knew before, and as social entrepreneurs, it is very difficult to (1) create the awareness that "there is a better way", (2) generate interest to learn more about this "better way", (3) turn that interest into desire to actually give the better way a try, and lastly (4) incite action to do thing the better way.
A grassroots approach, while slow and costly, seems to be the only way to overcome these hurdles. Truly. think back on the time we adopted internet or Facebook...we didn't opt into those new things because we were actively seeking out a better way to access information or to develop our "social network" (most of us probably didn't even know what "social networking sites" are until Facebook caught on). In fact, the majority of us probably joined Facebook because our friends have used it, and talked about how much they enjoyed doing it. We didn't even know we need it until we start using it, and after we've used it, now we cannot imagine living in a world without it! Facebook did not start out using mass TV advertising campaign telling people how their lives could be transformed with this new website. In fact, you probably can't really explain the concept of it in a 30 second ad back when it was first developed!
So why do we expect people at the bottom of the pyramid to behave any differently than us? After all, we are all human beings, and we behave more or less the same way! Despite of the challenges we have in the marketplace, I found the biggest point of frustration I have is the unrealistic expectations from some of our donors, investors, and distributors that our lights would become an overnight sensation. Just because they believe in the business, and are early adapters, doesn't mean that everyone else in the world will behave the same way. And just because it takes other people more time, doesn't mean the product is going to fail!
But before we can even focus on tackling this "market creation" problem with the consumers, I found that there is an even bigger challenges in coordinating the distribution network to be able to drive the consumer education model that we strongly believe would work. I came on to this fellowship thinking that I would be spending the majority of my time tackling the consumer communication piece; to my surprise, I spend most of my time trying to elevate their business standards (on all fronts) and to sort out various issues with our distribution network, organizing their structure so they can properly plan, implement, and monitor what they are supposed to do in order to deliver results.
After 6 months, I have come to believe that the key to success and competitive advantage one can have in developing market is not a out-of-this-world brilliant strategy, but the ability to obtain "good management" and to set up "structures" to implement a fairly solid strategy. The developing market really isn't rocket science compare to developed markets so most of the marketing and business principles can apply. The challenge is how to make sense and create structure out of an extremely unstructured world so that it can be actively "managed" and "shaped" based on our vision. We don't need to be doing many many things; instead, we can make a huge amount of impact as long as we focus on the most important items and get 1 or 2 things right.
So why has it been so hard for people to crack the nuts? Management, it can't be that difficult, can't it? Well, it is EXTREMELY difficult in this part of the world. Why? In my opinion, there are a few factors:
1) Competency: this is expected to be low given the average level of education and sophistication in developing countries. However, I think the biggest hindrance is not the lack of knowledge and experience (because those can be taught), but the lack of critical thinking and planning ability. I believe that a lot of this is driven by the history and some by the culture. Africa, for example, has such fertile lands and even season, it really doesn't require much planning for someone to survive. Typically, rain falls on specific dates and sunshine all year round. If you plant something, it will surely grow and one will never be hungry. Why plan? Then the colonists came, people became servants whereby all rights are taken away...they are told what they should do, why would they think critically about anything? Life has been pretty straightforward, if you do X, you will surely get result Y. There is not a lot of variance, therefore there is not a whole lot of needs (or practice) to plan for the unexpected, or think hard about how to do something differently and better. This doesn't really work though, in an increasingly "western" and "capitalist" society where survival of the fittest trumps everything else. It will certainly take time for that to takeover as the mainstream way of thought whereby you "have to" be able to think critically and plan in order to survive. Right now, those skills are "nice to have" but are not quite "must have" in most people's minds.
2) Mindset: focusing on "delivering result" vs. "working hard". Most Africans I know are actually quite hardworking. (well, by hardworking, I mean they work hard to earn their keep, and would put in the hours if need to; however, compare to many workaholics in Asia or in the US, who finds meaning and purpose in their job, the African certainly work much less and don't take work nearly as seriously). Despite of their hardwork, I found many are not working smart and focus on delivering results. In a way, working hard justifies their existence even though their hardwork generates no incremental value. There is very rarely a sense of "ownership" or "accountability" or "commitment" to their work. If you ask them to do X, Y, Z in order to achieve ABC...they will do X, Y, Z...but they follow the process rather than making sure that they actually achieve ABC. So when they face an obstacle along the way, so for example, after they finish doing X and Y, something along the way prevents them from doing Z, thus they cannot achieve ABC, they will simply stop...then after awhile, you ask, what's going on, have you done XYZ that I've asked? They will then tell you, this and that happened, so I couldn't do Z. First, they wouldn't alarm you what had happened so you know you can't expect the result you were expecting. Second, when you do find out, there's very little care that they won't achieve the results. Because, it seems as though in their mind, as long as they've tried to do X,Y that you've asked, and explained to you why they couldn't do Z, their part is done. The fact that ABC won't happen, even though it was the whole point of doing X,Y,Z to begin with, really doesn't bother them at all! If there is a focus on delivering results, then likely someone will propose a new way to achieve ABC. And if there's a stronger sense of accountability, then the person would have more motivation to raise the red flag early on, and actively look for alternative solutions. How do you bring about a result-driven mentality when the person doesn't have it in him? This has to be something that is taught from an early stage in life!
3) Discipline: discipline is also very hard to come by in Africa. This manifest itself in various forms. Time management being probably the best example. When you tell someone a meeting starts at 8a, it's probably best that you plan to begin at 10a. The truth is, some people will show up at 8a, but most probably begin coming in between 9-10am. You have to constantly set a fire underneath someone to make them do what they know they should be doing. Some might say this is because Africans are "lazy", but I beg to differ. I think some are indeed lazy, but you find bums in some old lady's basement in the US as well! I think really, it's partially driven by a culture where work is not the focus. There's much emphasis on enjoying life and each other's company, work is only there as a mean to survive, and when you live in an environment that is so abundant historically, who needs discipline and be so type A about things? Adding on to the general shortsightedness and hopeless optimism, there's pretty much only "hoping for the best" and no "planning for the worst" around here.
In a way, a lot of the challenges on the management side share many similarity with the consumer market creation challenge. People are used to doing things a certain way, until they could see and have the desire to do things the better way, the inertia is always difficult to fight.
Doing this work is extremely frustrating. Sometimes I feel like I've taken a couple step forward after much effort, then the next day I realize that we've taken a step back. I'm so used to seeing immediate results of my work and under this environment, I'm noticing myself losing steam a bit; however, I have not lost hope, and I hope that God (or whatever higher Being there is) will give me the strengths to never lose hope and faith of the progress I can help make.
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