From the perspective of appropriate technologies, disruptive innovation means coming up with highly affordable and very basic products or services that satisfy the collective deep felt needs of huge sections of previously excluded consumers. Zimbabwe’s entrepreneurs can draw inspiration from Indian ‘disruptive innovation’ entrepreneurs.
India’s frugal engineering
With an estimated 1,2 billion people, India has the world’s second largest population after China. Of this billion-plus, more than half live in rural areas. India’s huge rural population is an ocean of non-consumption, with respect to unmet needs. Though India is the world’s 10th largest economy with a Gross Domestic Product (GDP) of US$1,5 trillion, its per capita GDP is below US$2 000. What this entails is that Indian entrepreneurs have a vast scope to deliver appropriate technologies that are affordable to the millions of Indians who are slowly inching out of dire poverty.
In view of the vast untapped consumption, Indian entrepreneurs are turning to what has been coined frugal engineering. Frugal engineering is also known as Indo-vation or Ghandi innovation. Allusion to frugality with reference to India’s Indo-vation speaks of the entrepreneurs’ desire to deliver highly affordable innovations through satisfying the most basic customer-jobs-to-be-done.
ChotuKool fridge story
Godrej & Boyce, an Indian household appliances firm were seeking a way of reaching low-income Indian consumers, earning about US$5 per day, translating to US$140 a month. Among a variety of household appliances, Godrej & Boyce manufactures fridges. Their traditional fridge was way beyond the reach of an Indian consumer earning US$140 a month. They had to come up with a new affordable fridge for the rural users.
This is how Godrej & Boyce went about courting rural non-fridge users.
First, they used a jobs-to-be-done approach to uncover the jobs rural people needed to hire a cooling system to do. Several researchers were deployed into rural India with the intent to closely observe the habits of rural households. It would be through the patterns of ‘habits observed’ that the jobs-to-be-done by an appropriate cooling system would be decoded.
David Mackenzie Ogilvy, the legendary in-your-face advertising prodigy, whom Time magazine, in their October 12 1962 edition embroidered “the most sought-after wizard in today’s advertising industry’’ once remarked: “In the modern world of business, it is useless to be a creative, original thinker unless you can also sell what you create.’’ Godrej & Boyce would not fall into the trap Ogilvy alludes to. What the Godrej & Boyce’s observers found out was that folks in rural India do not buy in bulk, preferring to frequent grocery stores on a daily basis. That might sound like a common-sense observation that one could have established without going into the field. Research is still needed to confirm what we think we know.
Second, Godrej & Boyce had to decode the jobs-to-be-done from the established observations of spectrum of habits. Armed with evidence-based knowledge of the common buying and storage habits, Godrej & Boyce concluded that the most basic jobs rural Indians needed done were: ‘help me to keep fresh my basic supplies for a day or two’; ‘help me to keep a few bottles of liquids cool enough’; ‘help me to keep my basic supplies fresh and a few bottles of liquids cool enough when I travel away from home.’
Third, Godrej & Boyce had to come up with a design of a refrigerator that could help do the jobs identified above. Of design, the late Steve Jobs once remarked: “Design is a funny word. Some people think design means how it looks. But of course, if you dig deeper, it’s really how it works.” It is Steve Jobs’ conception of design that Godrej & Boyce set to employ. If you earn US$5 per day, what are the chances of buying supplies that need the big-sized traditional refrigerators? How do you enable the mobile rural populace to keep their food cool in the face of poor electricity supply? The answer to these two questions is that a small portable fridge is needed! That’s what Godrej & Boyce set out to design.
Fourth, Godrej & Boyce had no choice but to come up with a very radical design for the fridge. A portable and ridiculously affordable fridge is nothing short of being radical. An average traditional fridge has 200 parts. That alone makes the fridge too heavy to be portable. That too, means that consumers are burdened with the possibility of high maintenance costs.
A compressor is a key component of a traditional fridge that drives the gas-powered cooling system. Godrej & Boyce had to make sure that as at many points as possible of the buyer experience cycle, they minimise the economic risks to the cost-sensitive potential consumer, hence their focus on the maintenance stage of the buyer experience cycle.
Like innovators before them, they looked to unlikely alternatives for ideas to build the core of their innovation. Godrej & Boyce realised that a desktop computer has a cooling system that is based on a computer chip. Eureka! They would base their cooling system on a computer-chip. That would also mean that the fridge would not draw huge power, enabling the fridge to run on batteries.
Temperatures of 5 degrees Celsius to 15 degrees Celsius would do the jobs rural Indian households needed done. Thus the computer chip-anchored cooling system was a major breakthrough that would significantly reduce both the cost and weight of the fridge—portability and affordability were close to being a reality. The computer chip-based cooling system meant that their fridge design did not need many of the parts of a traditional fridge.
Their fridge would have just 20 parts, instead of 200! I hope you see why this innovation paradigm is referred to as frugal engineering. Size would not be a big issue. Potential consumers needed just a fridge that would store a few vegetables, other basic perishables and about 6-8 bottles of liquids. One variant of fridge measuring 59,2 cm x 41,8 cm x 37,2 cm.
The fridge variants weigh between 7kg and 9kg — that’s very portable. The fridge would open from the top and have a handle to carry it as rural folk travelled away from home! To beat intermittent electricity supplies in the rural areas, the fridge could work on a battery, with its simple insulation system capable of keeping fridge contents cool for long hours.
Fifth, how about US$69 for a portable fridge? That would be the consumer retail price! Now, if potential customers are in rural areas, how do you get a US$69 fridge to them without incurring huge marketing and distribution costs? Godrej & Boyce knew that they could not use traditional marketing and distribution tactics. Radical innovations at times necessitate radical business models and supporting strategies.
The postman would deliver the fridges! Godrej & Boyce struck a partnership with India’s postal network. Rural buyers would place an order with their nearest postal office and make their payments there. Godrej & Boyce’s IRP system (integrated resource planning) was linked with the postal services. The fridge would be delivered within five days.
Sixth, for a brand name, how about ‘little cool’? That’s what Godrej & Boyce named the fridge — ChotuKool — which is Hindi for ‘little cool’. This is called purpose branding, whereby a product or service is named after the job it does. Zimbabwean entrepreneurs need to take a leaf from that.
Did you know that Zimplow’s hand-held plow is a Zimbabwean example of frugal engineering or disruptive innovation? We may not, like India, boast hundreds of millions of untapped customers. Considering Africa as a whole the potential market complexion changes. Africa is a US$2 trillion economy supported by a population size similar to India’s. Africa’s combined per capita GDP is slightly higher.
The market for frugally-engineered products by Zimbabwean entrepreneurs is vast.
Chulu is a management consultant and business strategist. Let’s discuss at email@example.com.