Monday, August 16, 2010

At the base of the pyramid with Paul Polak (Part II of II)

(Continued from previous blog.)

Some facts Paul shared:

(1) Of the 90% of the customer base in the world, 2.75 bil living on less than $2 a day,
(2) 1.2 bil living on less than $1 day,
(3) 800 million (maybe 850 m) live on small farms depending on agriculture,
(4) There are 525 million farms in world (85% are less than 5 acres)
(5) Avg size of farm in Africa is 4 acres.

Given the above, Paul argues that small farm prosperity is the key to ending rural poverty.

Marketing is a critical element. There is no mass media at the BOP; people cannot read or write. So at IDE they recruited troubadours to write songs and skits with marketing messages imbedded. Bollywood movies were produced every year, they hired a top director and a top male and female lead and adopted familiar Indian plots: boy meets girl, they want to get married, there is a near suicide, then... INTERMISSION!! The actors talk of the benefits of low cost, effective pumps for poor farmers. They put customers on treadle pumps and after intermission, the movie continues where the father tells the boy to buy a treadle pump and boy and girl get married.

Polak says there are three (3) great myths of poverty eradication that must be overcome:

1. We can donate people out of poverty.
2. We can end poverty through GDP economic growth.
3. Multinationals as they are now will end poverty.

He also suggests, instead, 12 Steps for Ending Poverty:

1. Go to where action is
2. Talk to the people who have the problem and actually listen to what they have to say (interview at least 25 people)
3. Learn everything about the specific context
4. Think and act big (minimally reach 1 million people)
5. Think like a child (children have no limit to their thinking but get to the heart)
6. See and do the obvious (rural farms)
7. If someone invested it you don’t have to
8. Design for critical price targets
9. Design for measurable improvement
10. Work off of a practical 3 year plan
11. Keep learning from your customers
12. Stay positive: don’t be distracted by what other people think.

Moving forward in his quest, Paul has left IDE (although still on their board). He has launched another non-profit (D-Rev) – fomenting a design revolution to reach the other 90% of the population not targeted by marketers, aka the BOP. He is also launching a for-profit (Windhorse International) that takes on projects and influences how big business designs prices and markets its products. Its mission is to earn remarkable profits by serving the world’s poorest customers.

Paul started his career in poverty alleviation by talking to homeless people in Colorado where he lives and at the time worked with a friend of mine. We talked of our mutual friend then I asked him if he felt his approach to ending poverty would also work in developed economies. "Absolutely!" he said. "All the rules apply here too." I'm not convinced of the latter (yet) but I was very convinced by his approach and results at the BOP.

Paul Polak has done 1000+ interviews (all of which he records himself) with poor people around the globe, mostly with poor farmers at the base of the pyramid. His very first interview was with a homeless man in Colorado.