Neerja Stanford 11 12 08

Nov 12, 2008 Copyright Neerja Raman

What is BOP andand Why You Should Care:Hitting the moving market with diffusion programs

The Secret Sauce of InnovationStanford University Continuing Studies Program, Wallenberg Hall

Fall Quarter, November 12, 2008

Neerja Ramanhttp://neerja.raman-net.com

blog: http://fromgoodtogold.blogspot.com/

Senior Research Fellow, Stanford University

(fmr.) Director, Strategic Planning and Imaging Systems Lab, HP Labs

Author:

The Practice and Philosophy of Decision Making: A Seven Step Spiritual Guide


What is BOP?

� Is it Market or Strategy?

� A Mirage at the bottom of the pyramid?

� Capitalism gone haywire?

� Socialism gone haywire?

� A case for philanthropy?

OR

� ITS NOT MY PROBLEM

� Not interesting?

� I can’t do anything about it?


The secret sauce?

� Next-bench

� Back-of-the-envelope


BOP is your “Next Bench”


VC investment in Innovation(1st 3 qtrs, 2006) Source: Dow Jones VentureOne

Bristol

Japan

India

$19.5B $1.18B

$0.35B

GDP Growth:China 9.9%

Vietnam 8.4%

India 7.6%

Where is market growth?


Social conditioning


Customer Understanding


Business context in 2000+

� Customer life concerns� The next billion

� Climate change

� e-Networks

� Multi-cultural environment� Stone Age human behavior

� Local adaptation

� e-person

BOP = < $4/day


Back of the envelope

� With a world population of 6+ billion

� 2+ billion have a lot and 3+ billion have a little

� That 3+ billion is unable to contribute to global economics

� The Blame Game?

� China perspective: obsolete technology factories (which could not be built in US by law) are beng built in China for products consumed in US – so China emissions should be counted in the US column

� OR Innovation to the rescue?

� Technology – have the 3+ billion skip Oil/Coal phase for their energy needs (mobile phone vs. Land line)

� Market development – value creation at economics affordable by the 3+ billion (e.g. LED and CFL vs. light bulbs)


Sola-ickaws Anyone?


Datacenter Redesign

� Dynamic Smart Cooling (DSC): Sensor-rich data center in Bangalore will save 7,500 megawatt-hours annually – equal to the power consumption of more than 750 U.S. homes – and reduce carbon dioxide emissions by approx. 7,500 tons annually.

� New Metric: Measure total environmental impact- from extraction to shipping, operation and recycling in Bangalore- researchers consolidated 14 separate data centers into a single, 70,000-square-foot facility.

� http://techworld.com/green-it/features/index.cfm?featureid=3790&pagtype=samecat


metric: Lifetime Exergy Advisor

Source: Chandrakant Patel, Hewlett Packard Sustainability Lab


Ineffective Spend

� Tuberculosis - $1B on 100yr old tech. $300M supplies

� “Industry has limited knowledge of market size, character, geographic dimension”

� Industry-Government partnerships can alleviate “burden of disease” but only through innovation


Remote Specialist

Web PortalMatch-making, Scheduling, Medical Records

In the field surveyor

http://www.telehttp://www.tele--healthcare.orghealthcare.org

Global ConcernGlobal Concern

http://www.handheldsforhealth.org/

field doctorRemote database


The India Market

Source: NCAER, Millions of

Households in 1999

Source: NCAER, Millions of

Households in 1999

Purchasing powerPurchasing power

DESTITUTEDESTITUTE

ASPIRANTS

“Two wheeler”

ASPIRANTS

“Two wheeler”

CLIMBER

“Refrigerator”

CLIMBER

“Refrigerator”

CONSUMING CLASS

“Car”

CONSUMING CLASS

“Car”

RICHRICH

Source

Rama Bijapurkar

42 M

38 M

62 M

27 M

2 M


A BOP strategy must address ALL

http://www.internetworldstats.com/

STIMULATE MARKET

CREATE AFFORDABILITY

SUSTAINABILITY


Its not easy: many stakeholders

Corporate Sector

Academia

NGO's

The Village or District

MediaGovtAgencies

IIT's, IIM's, IAS academySrishti

Tech companies (Satyam, TCS, Infosys)Mobile service companies (Reliance Agricultural companiesBiotech companies

Corporate Foundations

top 5 per sector (education, health..)Barefoot College

CIET, NCERTOthers in each sector

PrintBroadcastInternet


A cup of tea?


Thank You

Neerja Ramanhttp://neerja.raman-net.com

Senior Research Fellow, Stanford University

(fmr.) Director, Strategic Planning and Imaging Systems Lab,

HP Labs

Author:

The Practice and Philosophy of Decision Making: A Seven Step

Spiritual Guide

Neerja Stanford 11 12 08

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