Disruptive Innovation: Social Entrepreneurs' Lessons

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In yesterday’s Disruptive Innovation panel at SoCap09 “Three Successful Approaches to Scaling Impact”, Kevin Jones moderated a panel of three very different but equally disruptive business models. Instead of establishing a nonprofit organization to increase computer access around the world, founder Mark Beckford explained that NComputing is a for-profit company leveraging existing distributing channels and repair services in developing countries. Their hardware and software solution, which they call “the $70 PC”, can actually yield more margin and profit for distributors than more expensive computers with high-cost distribution networks.

nComputing makes computers accessible in developing countries

NComputing is also using a technical solution to green PC use. With distributed computing, nComputing systems draw less than five watts, using 90% less energy than a typical PC, and can be run by solar power or a battery.

Sungeeta Chowdry of the Acumen Fund spoke about the Ripple Effect Project, their collaboration with IDEO (represented by Sally Madsen) to create solutions for customer-centered, sustainable and affordable delivery of water.

They brought together twenty organizations (both for-profit and nonprofit) on the ground in India and East Africa, in addition to the nonprofit Gates foundation, the private company IDEO and the Acumen social venture fund, for a complex cross-sector collaboration. IDEO led a human-centered design process, which means rapid prototyping, speaking to potential users immediately, iterating while continuing to listen, and coming up with a fairly quick solution. The resulting projects are commercial water sales operations, with some unusual aspects such as government ownership of the land and/or equipment in some places.

So why is water sales a more effective and scalable solution than donated aid? Some of the answers are compliance and aligning incentives. Madsen and Chowdry explained that people aren’t always able to make the best health decisions. Using a standard business practice of customer segmentation, IDEO put together a set of behavior profiles, so on-the-ground organizations could talk about more than health, such as by emphasizing the status of buying clean water or following  government direction.

And, what is disruptive? By making the program revenue-generating and financially sustainable, the twenty on-the-ground organizations are eager to expand instead of worrying that their resources will be depleted by being ambitious.

FrontlineSMS Medic

Lucky Gunasakara says that FrontlineSMS Medic flipped wisdom around scaling on its head. Instead driving costs down by building volume, they are starting with the lowest possible price point first (free) and to scale very quickly. FrontlineSMA Medic uses open source software development and volunteers to spread medical assistance through mobile phone messaging among local health workers. Open source developers around the world donate their time, continuing to develop the two-way text messaging platform that manages contacts and broadcast texts to health workers.

In addition to providing the software for free, they provide the hardware as well. Soliciting donations of old phones at www.hopephones.org, then refurbishing and selling them, FrontlineSMS Medic uses the procedes to purchase local cell phones which are given to clinical partners in developing countries.

More:

My post on the Opening Session of SoCap09.

If you have an innovation that needs funding, maybe you can win the $100,000 prize in The Buckminster Fuller Challenge.