Scaling Up Without Falling Short: Leveraging Mobile Tech for the Base of the Pyramid

Posted by EKStallings on Oct 19, 2011

Despite possibilities of scaling projects with technology, many technology-based initiatives in social and economic development have failed to make it past early pilot stages or grow to scale. This study by Hystra, in collaboration with Ashoka and TNO, examines what successful ventures within four sectors can teach us about models for scaling Information and Communications Technology (ICT) -based applications and projects aimed at reaching bottom-of-the-pyramid customers (referred to as Base of the Pyramid in the report). The researchers focused specifically on these sectors: education, health, agricultural services, and financial services.

What Did the Study Review?

Initially considering 280 projects as promising models, researchers found that over half were not worth researching because projects lacked sustainability or replicatibility. Many of the projects were dead pilot projects or were small with no sign of the possibility or intent of scaling in size or reach.

From there, researchers homed in on 16 groundbreaking cases. These projects had reached scale (defined as having 10,000 clients or more) or had the potential to do so. All projects were assessed against three criteria: Is the solution solving the (specified) problem? Is the project economically viable? Is the project scalable and replicable? The researchers grouped projects into specific clusters based on business model type. All projects researched were value-added or market-based, because of the researchers’ belief that such models increase project sustainability and client investment in the project.

The models that the researchers looked at varied. For instance, researchers asked whether end-users accessed the technology themselves as opposed to being delivered trough an intermediary.

What Did the Researchers Find?

Technology for development is a young and dynamic field. And, with many new fields, especially in the area of social change, the rhetoric doesn't measure up to the reality of impact for many projects. 

Researchers found, not surprisingly, that many projects turn out not to be sustainable and that those that have reached some semblance of scale are rare. Many ICT4D projects, being donor-funded and donor-driven, are also short-lived and lack an identified, economically viable revenue stream. Additionally, the impact of ICT4D projects is hard to single out and measure. Researchers also found that there are various degrees of financial viability across the education, health, financial and agricultural services sectors studied. The most viable cases could be found in the finance and agricultural services sectors.

The paper goes into great detail about findings, with a chapter dedicated to each business model and sector, detailing different types of capital for different models, pros and cons of models, challenges facing each, and strategies for scaling. The paper also analyzes the state of the education, health, agricultural services, and financial services sectors.

Highlights include:

  • Education - while demand is growing for ICT support, without governments procuring the technology, it remains to be seen if there is sufficient purchasing power at the BoP to support technology education services.
  • Health - mHealth has the highest proportion of dead pilot programs, especially programs that were grant-funded.
  • Agricultural services - some of the largest projects are in this sector, some serving millions of people. The most viable of these over the longer term link individuals with income generation.
  • Financial services - by far, the most mature and viable sector with some great successes, according to the research.

What Makes a Successful Project?

With this detailed analysis, the researchers were abe to point to some characteristics of successful projects. These include, understandably, a focus on the end-users ability to pay, a project structure that could adjust through trial and error, an ability to capture a large share of customer’s mind and wallet (often through related services), and varied revenue stream through a wide-range of services.

The authors also described key challenges encountered by many projects in the four areas investigated: Conflicting and confusing policy frameworks to work through (e.g. telecom and health policies), a lack of understanding of local needs and demands, as well as a lack of technical and sectoral expertise; and inability to find adequate capitalization.  Technology, especially when a project is growing, remains an issue as well. Similarly, many of the social entrepreneurs who began a venture lack solid IT expertise.  

Some Conclusions

The authors aptly note, that while an entrepreneurial spirit is needed to start successful services, the ability to work with other across sectors is needed for scaling projects to include partnering the public, private and civic spheres. The paper further provides several recommendations. These include, not surprisingly, a solid focus on problem-driven approaches and a bottom-up, customer-centric world view. The authors also recommend supporting existing entrepreneurs, promoting cross-sector synergies, and removing specific barriers to scale. The paper ends with the warning that efforts must be made to reach those who as of yet do not have access to mobiles to minimize the likelihood of further excluding already marginalized populations.

More details and the full report can be found in our mDirectory here.

Photo by Ken Banks,

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd><p><br> <b><i><blockquote>
  • Lines and paragraphs break automatically.

More information about formatting options