Disruptive Innovation: Social Entrepreneurs’ Lessons
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 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.
Prema of Teddy Exports in India with her Floral TotesThe guarantee of a “fair wage in the local context” is one of the most often publicized of the fair trade criteria. Fair Trade attempts to empower disadvantaged producers in countries that often do not have adequate workers’ rights laws including a minimum wage. Fair trade guarantees at least the minimum wage even in countries 
