by Sean Smith
There is no longer any doubt that mobile phones are a groundbreaking tool in the fight against poverty. Today, mobile phones are enabling credit and financial transactions for the unbanked, increasing the efficacy of HIV medicines, providing access to markets and enabling long-distance communications from previously unconnected rural areas.
Yet most of these solutions are currently focused on utilizing traditional cell phone technology to bring about social change: namely SMS and voice. While these are useful tools, they pale in comparison to the paradigm changing potential of smartphones. Smartphones and the apps they run have infinitely greater impact potential than traditional mobile phones. The question is: how can we successfully drive demand for an expensive technology in some of the poorest regions of the world?
Smartphone Applications as a “Business-in-a-Box”
The term “business-in-a-box” refers to a turn-key way of supplying entrepreneurs with a proven business model, also known as microfranchising. An oft-cited example of how this can be deployed is the model utilized by the organization
Vision Spring, formerly known as The Scojo Foundation. Alongside training, Vision Spring provides its entrepreneurs with a backpack that contains everything needed to successfully operate a business diagnosing eye disorders and selling glasses.
[1] Turn-key business models like this provide entrepreneurs with unique products and services that they know will be successful.
Business-in-a-box models for the poor in emerging markets rarely incorporate innovative technology because the products and services must be kept relatively simple, and margins usually can’t support high initial costs. However, if mobile app developers incorporate the idea of a “business-in-a-box” into smartphone applications, they enable a basket of applications to serve as a business. This way, the costs can be offset through multiple revenue streams and very low variable (or p/customer) costs. This might initially sound like a solution looking for a problem, but it’s not. We’ll explain.
Emerging markets (particularly those in Africa) have very little wired infrastructure. That means no telecommunications or electricity outside of urban areas. The result is growing poverty and inequity for billions of rural poor. Mobile phones have done more to combat this isolation than any other technology since the automobile, but it’s not enough. Most mobile phones are limited to basic SMS messaging for services. This dramatically reduces the efficacy and use of mobile phones for enabling commerce, telemedicine, tele-education or other emerging low cost solutions. Smartphones, with larger screens, powerful processors, integrated cameras and advanced wireless connectivity, are not limited to SMS or even expensive cellular data networks. With the right applications, they can provide nearly all the power of a computer without the power connection limitations and a much lower purchase price.
A great example of the diversity of developing applications for smartphones is Veritas Vision. Veritas, an MIT initiative, has developed an application (known as Perfect Sight) that enables a smartphone to be used as an accurate, low cost vision test that can diagnose several common eye disorders. The smartphone application runs concurrently with a plastic device fitted over the screen to ensure the user’s eye is properly aligned.
The Perfect Sight technology is ideally suited as a “business app” through which a smartphone entrepreneur could charge an affordable fee for eye tests. The business app model not only generates jobs at the base of the pyramid but also creates an efficient distribution model for Veritas Vision’s novel product.
[2]
"The Village Smartphone”
The problem is that a single app, no matter how innovative, is not likely to sustain an entrepreneur working in low-density rural areas. In these areas, successful entrepreneurs need to be able to offer a basket of services. Smartphones with two, three, or even five or ten “business apps” could conveniently and affordably provide entrepreneurs with enough revenue streams to generate solid income from smaller communities.
As we have discussed in earlier posts, the Village Phone was a pioneer in creating accessibility for mobile handsets by financing the high upfront cost through microcredit and converting phone ownership into a business. Being the owner of a mobile phone created a “business-in-a-box” where owners were able to sell airtime on their phone to generate income and provide their fellow villagers with access to mobile services.
The “Village Smartphone” is a natural progression and, with appropriate app development, a smartphone’s potential as a “business-in-a-box” is exponentially greater than that of a typical handset. This would create not only much greater earning potential for the “Village Smartphone” operators, but also diversify their offerings so that they don’t remain dependent on any one service.
Applications as a "Business-in-a-box”
While this sounds great in theory, it still requires focused and creative thinking from developers to create apps that can be run as business platforms. Smartphones will get cheaper, demand less energy and improve their processing power. Social innovators will continue to develop amazing tools to reduce poverty and inequity. Now we just need someone to put them together.
[1] Vision Spring’s “business-in-a-bag” gives entrepreneurial women a backpack with everything they need http://www.visionspring.org/how-we-work/business-in-a-bag.php Accessed on June 22, 2010
[2] An article from the World Health Organization that describes the potential global impact of vision testing and eye glasses http://www.who.int/mediacentre/news/releases/2006/pr55/en/index.html Accessed on June 22, 2010.
