Incorporating Market Dynamics into Human-Centered Design
We hear a lot about human-centered design – Melinda Gates has even touted it as the innovation that’s changing the most lives in the developing world. But what about the market systems in which people in developing countries are operating? OnFrontiers expert Jeff Walcott shared his thoughts with us on the importance of understanding and […]
We hear a lot about human-centered design – Melinda Gates has even touted it as the innovation that’s changing the most lives in the developing world. But what about the market systems in which people in developing countries are operating? OnFrontiers expert Jeff Walcott shared his thoughts with us on the importance of understanding and working within a market system to achieve success. Jeff is a senior business strategy consultant focused on early-stage, socially-oriented businesses and programs. He’s also a freelance photographer and photojournalist. Here’s Jeff’s write-up based on his personal observations in Kenya:
While the days of the savior complex in development work is fading, there still exists a challenge in developing countries where entrepreneurial companies and programs are too reliant on Western resources and staff for success. These models are costly and often fail, or don’t achieve sustainability, often due to the fact that they are too complex to maintain within a market that wasn’t meant to support them.
Instead, social entrepreneurs and program managers can look to the existing landscape without judging it as better or worse than that to which they are accustomed. These markets can simply be viewed from an objective lens where assets are identified and utilized for the common good of the program. In other words, social entrepreneurs, instead of trying to change the entire market landscape, can capitalize on existing factors to lead their businesses to success.
A situation on Lake Victoria in Kenya helps illustrate my point. In the waters off of Mfangano Island, there exists what locals call the “city.” The lights in this “city” have nothing to do with permanent infrastructure but instead are an optical illusion created by the fishermen that use lanterns in the dark to attract omena, a baitfish, to their nets. For years these fishermen have relied on dirty and potentially dangerous kerosene lanterns to provide the light needed for their beacons. I’ve spent a night in these boats and can confirm that open flames in a wooden craft paired with fishermen who are often poor swimmers is a recipe for disaster.
However, the use of these kerosene lights has persisted for many years due mostly to one factor, cost. Up until recently, there was no other option. But with the proliferation of solar lights, suddenly there was a competing product that could provide the same service. The solar light produced on the water is similar and attracts the fish just as well as the kerosene lanterns. But people were hesitant to switch. Why? Mainly because of the high up-front price of a solar system.
Filling a lantern with kerosene for a night of fishing costs less than two dollars, while a set of solar lamps and a solar panel to charge them is almost 90 dollars. Even though in the long run, or after just 45 days of fishing, the solar would become cheaper, few fishermen have the capital available up front to purchase this option.
As a social entrepreneur, this type of challenge is pervasive. Human-centered design tells us to create a solution for the people and the problem. But if a group can’t afford what is offered and the price can’t be lowered, what is the secondary approach?
As was alluded to above, the secondary option is to study, understand, and tap into the existing networks and market systems that are currently functioning in whatever location the program is located. In other words, use human-centered design principles to develop a service model in addition to the product that utilizes local market forces and actors to reduce costs.
Kenyans, by nature, are enormously entrepreneurial. As such they are incredibly practiced at finding market opportunities. In addition, the fishing communities on Mfangano are very close, with small villages working as a network to provide each other with the necessities. If a solar provider understood this close-knit and entrepreneurial dynamic, a solution would become clear. Simply offer solar panels on credit to a select number of fishermen in the central village locations. Remove the need for everyone to buy their own solar panels and empower a few as entrepreneurs who can charge slightly less than the price of kerosene to power the lights for the night. This simple fix could open a market that was previously closed, suddenly enabling volumes of solar lights to be sold.
In fact, the situation on Mfangano Island is changing due to the approach above. While three years ago only a handful of affluent fishermen used solar, now roughly 50% of the fishermen in the waters have lamps that burn solar blue, as opposed to the orange glow of the kerosene. The “city” hasn’t changed except for its color. People are able to take advantage of the solar lights because the major burden was removed through the entrepreneurs that found a way to increase availability and price affordability.
In short, human-centered design cannot be limited to defining or designing a product or service. The business model design process must also be leveraged to understand the acting market factors that can be utilized to achieve success. Changing a system from the inside is difficult enough. By working within a system, entrepreneurs have an increased opportunity to impact change and scale in the markets they serve. To be successful, we have to view markets not as right or wrong based on our own perception, but as living entities with their own sets of opportunities and assets that can be leveraged to achieve success.
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Featured image was taken by Jeff Walcott.