Chapter 5: A Micro-Level Approach to Understanding BoP Markets
Madhu Viswanathan, University of Illinois, Urbana-Champaign
“The devil is in the details,” as the old saying goes. In this chapter, Madhu Viswanathan makes the case that BoP markets have to be understood at the ground level— from the bottom up—if a venture is to succeed in those marketplaces. What are the marketplace-relevant characteristics of poverty? In the one-to-one interactional marketplaces of the BoP, the boundaries between “human” and “economic” issues tend to get blurred, long-term relationships tend to trump short-term ones, “rich networks” make up for resource constraints, and consumption and entrepreneurship can be two sides of the same coin. BoP entrepreneurs, therefore, have to concretize, localize, and “socialize” their products and services.
Chapter 6: Reframing Design for the Base of the Pyramid
Patrick Whitney, Institute of Design, Illinois Institute of Technology
By enabling breakthrough products, issues of design have come to the fore in the industrialized world, which is leaving behind economies of scale for economies of choice. Contrasting the Apple iPhone with the Chotukool refrigerator, author Patrick Whitney explores the provocative question of whether strategic design techniques that have proven themselves at the top of the economic pyramid might also prove useful—in identical or modified forms— when applied to base of the pyramid markets. His answer is “yes”—albeit with some important caveats.
Chapter 7: BoP Venture Formation for Scale
Allen Hammond, Ashoka
Social enterprises do good works. But unless they achieve a significant scale, they aren’t in a position to serve millions of BoP customers, or to help reshape economies. Author Allen Hammond argues for a combination of both bottom-up and top-down enterprise formation to better reach and serve BoP markets, and explains how that productive mix can be accomplished. Additionally, he suggests, BoP entrepreneurs can build business ecosystems (rather than stand-alone ventures) to support scale. Hammond explains how “hybrid” organizations can serve that purpose—and provides insights from a real-world example.