Interview with Girish Prabhu. Girish talks about experiences with developing innovations for ‘bottom of the pyramid’ applications.
There is a transcript of the interview below:
I: We’re very fortunate today to have with us Girish Prabhu who is the director for User Business Design Innovation with Srishti Labs in India. Girish, thank you very much for spending some time with us. I wonder if we could begin with a brief background to Srishti Labs and what you do.
GP: Yes, sure. Srishti School of Art, Design and Technology is a visionary experiment and actuarial institution of media arts. Growing out of Srishti’s experience working with industry, we started this lab in 2009 as a hybrid bridge organisation and it blends a creative energy of students here with a discipline expertise of industry professionals. Through strategy design services, our mission is to dramatically increase the success rate of new products and services developed by early innovators for emerging markets. We, basically, target the middle tier of India, going towards the bottom of the pyramid.
I: That sounds fascinating and quite a challenging experiment. I wonder if you could tell us a little bit more about this target. You mentioned emerging markets, particularly the middle tier and towards the bottom of the pyramid. This, of course, is a huge, but a very differently shaped market to the ones that, perhaps, products and services have traditionally been designed for. Could you tell us a bit about the different needs of this market?
GP: Yes, especially as you go towards the middle of the pyramid and bottom of the pyramid, needs move from a consumption of products to consumption of services. They may not, necessarily, be able to afford buying a product and using the product as it is. For example, the top of the pyramid iPad designs for a rich population or western market may perfectly fit in within a top tier of India. However, if I have to bring that product into middle tier or bottom of the period, they may not necessarily be able to buy it. It doesn’t necessarily mean that the services that are provided, the experience that can be provided on iPad is something that this target population may not be interested in.
So, one has to start thinking about what are the basic needs of this population and how do I provide those needs. Most often, rather than a product consumption, it becomes a product service system that needs to be designed. What we have seen, from our experiences at Srishti Labs and my prior experiences with HP Labs and Intel, is ethnographic research becomes very important to understand deeper into the needs than doing a multidisciplinary approach. That’s why we have what we call a user business design approach, where we understand the user needs, but we also explore it from a business perspective as well as a design perspective. That has proven quite successful in coming out with product service systems.
I: That sounds fascinating and, as you say, a very different approach, although one we’re seeing an increasing amount of in many markets, this shift to product service systems. I wonder, could you give us a couple of examples of such innovations and the impact that they’re having?
GP: Yes, sure. One of the examples was a product service system that we designed for high frequency retail. These are mom and pop shops that you see in many of the emerging markets. With modern retail coming in, these mom and pop shops were being threatened. For example, if you look at China, most of the ‘Mom and Pop’ shop markets are completely removed and modern retail has taken over, whereas in India the government has been very careful on keeping FDI – Foreign Direct Investment – into modern retails and big chain retails to a minimum. Partly it was done because mom and pop shops are social security for this population.
When I was at HP Labs, we looked at this as an opportunity and tried to see how technology can help this segment. So, we went and did what we call user business design research into this segment. When we went in, we had a western mode of thinking that we would come out with the point of sale system that will help this market to keep better records and inventories of sales, a typical point of sale functions. We were also thinking about how computers can be brought into this market.
The first round of research very clearly suggested that there was no need for any computing technology. There was no market for computing technology. A couple of things that came out were things like, ‘I have about 1,000 SKUs and everything I keep in is in my brain; my brain is my computer, I don’t necessarily need a computer.’ From there all the way to, ‘Computers are really expensive.’
Now, when we did this research in 2003, one of the things I noticed was a couple of shops we visited had a digital scale. This digital scale was about $600, which was actually slightly more expensive than a computer. That got us into thinking and, when we talked to two or three shops that had this digital scale, they had a very clear back-up plan for their calculation of what kind of value does the digital scale bring them. That led us to thinking that, if I had to design computing solutions for them, I cannot think about it from the viewpoint of sales systems are used in the western world.
So, we started doing ecosystem research to understand who are the players who support mom and pop shops and these were companies such as Unilever and Procter & Gamble. So, we went and talked to the CIOs of these companies, we went and talked to banks like ICICI and HSBC and so on. We realised that there is a huge dependency on these six to seven million shops in India for companies such as Unilever and P&G. They were looking at getting data from these small shops and, currently, none of this was automatic. They were getting that data, but it was not online or very timely. Whereas banks such as HSBC and ICICI were hoping that, somehow, the high frequency retail shops could read their ATM machines for small transactions.
Now, this type of information was very interesting. Based on that we put some sort of a service model and high frequency retail shops not just having a point of sales system, but how about having a point of service system? With that we went back to the small retailers and, suddenly, there seemed to be traction.
This is an example where, if you turn it upside down and start thinking about what’s the major insight or major USP that these people would really like to have? The USP in this case was, ‘What’s the value for me?’ The value here was, ‘Can I increase my revenue?’ And, by providing services apart from just inventory management and so on, the technology was helping them. The solution that we came out with after that was it was a point of sale system, but it also allowed them to provide services to their customers.
I: That really is a fascinating business model as well. It reminds me of the idea of asking not what people want, but what job are they trying to get done; what do they value, and then developing with them solutions. One other aspect which you dropped there, the scale is huge – six or seven million of these high frequency retail outlets; that’s a significant market and that, obviously, does shape some of the issues around the pricing of the innovation as well.
GP: Yes, absolutely. It’s not easy to come out with solutions for this market, because, when this idea came out and we proposed this to take it to market, and this initially started in HP Labs, we took it to businesses within HP and we wanted multiple businesses to be working with us, because HP, like any other big company, had compartmentalised business units. So, they had a business unit which did computers, they had a business unit which managed services. To make this successful, these two business units will have to work together. More than that, computers were not what were required by the high frequency retail shops. It was a computing platform which was designed as a point of service system. Though the managed services business unit was quite interested, the platform business unit was not that interested in creating a new platform. So, even though the idea was good, it did not go any further.
Then we worked with Intel. I was with Intel after this stage. Because Intel is a platforms company, they saw potential and we started this with funding from Intel’s new business development group. This was run for about one year in India.
The reason I’m saying this is because, creating a point of service system for middle tier or the bottom tier is quite a big challenge and the success doesn’t come overnight; you need to have brave hearts who can deal with this on a longer term basis.
About a year into running this seed, where most of our ecosystem partners were on board, we saw some successes, but the patience from the company starting wearing out. We had to then wrap up this programme. Although there was a huge amount of interest from the pilot that we did and 50 or 60 high frequency retail shops started using this point of service system.
I: That’s fascinating. I wonder do you have another example which, again, underlines the challenges, but, also, the opportunities in markets of this kind?
GP: Yes, one more thing that comes to my mind is a computing platform that was designed when I was with Intel. The platform was supposed to be for villages in India. There are about 600,000 plus villages, so this seemed like a good enough market to go after. Through ethnographic research, through design exploration the team came out with a very interesting specification for a computing system to include features such as, ‘How do I make my computer work even when there is power failure?’ As you know, most of the Indian villages get about three to four hours of power, the rest of the time without power. So, a platform was designed that would run using car batteries. It also had filters for dust and it also had disaster recovery system, so, if there was any mistake done, whether it was because of power failure or any of the users doing any mistakes, there was one big button provided on the system to do a self-start and partition good data from suspect data.
The features that were put in and the specifications were amazingly in line with what the users would require. The specifications became part of the standard as it is part of specifications that Indian Department of Information Technology put in their specifications for village computing. India, as a policy, decided to have community service centres, about 100,000 community centres, which means that, for every six villages there would be one community centre having these computers in them.
Now, in terms of scale perspective, as soon as it became 100,000 computers, it was not a big enough business model, business case. This is when the team decided, and it’s kind of interesting, the group that took on this project had offices in China, there was a lot happening in South Africa. However, the team was very focussed, looking at just India as the market. To me, it was over-engineering to Indian emerging market requirements or Indian bottom of the pyramid requirements.
So, we tried to talk to our Chinese colleagues and tried to find out, can we utilise the China market. We realised that some of the features we put in, for example power failure, were not at all an issue in China, because even in villages they have a substantial supply of power.
Suddenly, what happened was, even though it was a good idea, you started realising that it’s not a big enough idea for a big company. Now, this idea could have taken and, even if it was to smaller companies, then it could be successful. However, if you’re working within a big company and you want to do substantial solutions for the bottom of the pyramid, this was when we learnt you need to go across different emerging markets, understand needs in each of these emerging markets and see what’s common and what’s different and, based on that, configure modular systems.
I: Yes. It really is a fascinating field and one which, to some extent, underlines good practice in managing innovation, but also opens up some new questions. You’ve already been reflecting, I think, on some of the lessons you’ve learned, but I wonder if we could conclude by asking you what messages, what lessons might you pass on to aspiring entrepreneurs who are trying to work in these markets? Any ideas for future entrepreneurs?
GP: Yes, my favourite [0:16:13.3] is, I think [0:16:16.8] bottom tier is it reminds me of a story of the wise man, the elephant and four or five blind people. So, basically, what you’re trying to solve is like trying to find an elephant. If I am a designer or if I am a businessperson or if I am an anthropologist or an ethnographic researcher and if I just bring in my own views, I’m just seeing one part of this big elephant. So, the blind person would touch the trunk, he thought the elephant was just a big rope. The person who touched the leg, he thought it was a pillar, and so on. However, the wise man comes by and says, ‘It’s not a pillar, it’s not a rope, it’s not a surface, but it’s a big elephant.’ That’s what needs to happen. Each of us, in our own field of expertise, whether it’s business design, ethnography and so on, we are blinded and, if you work together in a multidisciplinary approach, looking at the same problem from a different perspective, I think there would be more successes.
So, my advice to entrepreneurs would be to seek out different expertise. You may not, necessarily, have it within your organisation, but seek out as much expertise from different fields to figure out what’s the problem and what kinds of solutions we can come out with.
I: That sounds like very helpful advice. Thank you very much indeed for your time, Girish. We hope we can come back and talk to you some more about this fascinating field. For now, thank you very much.