Product Development for the Bottom of the Pyramid

Here's an interesting article about product development for the poor in India. Some of the illustrative examples are really neat (cleaner and cheaper stoves, adapted refridgerators) and the article goes into the opportunity to reach many, many customers (many of the products have already sold millions of units) and how tapping this market may spur product designs for other markets (lead user?).

I found it very inspiring.

http://online.wsj.com/article/SB125598988906795035.html

Best,

Raj

Excerpt from the article (reading the article requires a WSJ online account):

"India's many engineers, whose best-known role is to help Western companies expand or cut costs, are now turning their attention to the purchasing potential of the nation's own 1.1-billion population...

A start-up company, First Energy, which was launched with the help of BP PLC, had to reinvent the wood-burning stove to come up with a product that had the convenience and the price to crack the same market. Hoping to help village women who spend hours a day looking for wood and keeping a fire going to cook for their families, the Pune-based company adopted the gasifier technology used in power plants to make a stove that would burn more efficiently and with less smoke. Engineers from the Indian Institute of Science in Bangalore designed a stove with a perforated chamber that uses a small fan to get just the right amount of air to keep a fire burning at a high temperature, meaning less smoke and quicker cooking. It has sold around 400,000 of the $23 stoves across India.

"A lot of innovation has gone into the stove as well as the fuel," which is dry pellets made of agricultural waste like corn husks and peanut shells, says Mahesh Yagnaraman, head of First Energy. "This is not a gizmo like a cellphone. But it is definitely a life-changing product because the houses will not be smoky."

To bring banking services to villages, Anurag Gupta, a telecommunications entrepreneur, distilled a bank branch down to a smartphone and a fingerprint scanner. A bank representative goes directly to a village and can set up shop anywhere there is shade. Savers line up and give an identification number, scan their fingers and then deposit or withdraw small amounts of rupees. The transactions are recorded through the phone and the representative later visits a standard branch to pick up or drop off rupees as needed."

(Eric Bellman, WSJ Oct. 21, 2009)