Re: [GKD-DOTCOM] Is Profitability Essential for Sustainability?

[Jeff Cochrane]

Answer: Of course not. But it might be the best answer in many more
cases than we think.

***

Take any given activity deemed socially worthy -- an educational radio
boradcast, for example. If it is socially worthy, then by definition it
**should** happen. How, then, shall the costs of making it happen be
afforded?

There are likely many possibilities, each likely to succeed to some
extent. Sustainability is presumably part of the definition of success.

Of course profitability is not essential for sustainability. Kassides
at the Bank is an economist who argues essentially that there will
always be some services ripe for public-sector management. That's
perhaps another way of saying that some population broader than the
immediate consumers of a good should pay for its production, if only
because the benefits of the good flow beyond the immediate consumers to
that broader population. So, if profitability is not essential for
sustainability, there are of course successes out there that do not rely
on profitability.

Nonetheless, I do think that in some circumstances a solution based on
profitability can be the optimal one. In those circumstances, the
challenge seems to be finding an innovative business model that targets
the poor as consumers. The emphasis is on **innovative**.

While I do not know what form that kind of "profitability" answer would
take, in the case of the program Michael Bosse describes (below) in
Nepal, which has to do with education carried out by broadcast radio for
a large number of very poor people, I have heard (through Digital
Dividend and elsewhere) that there are interesting ideas worth
exploring. Many of these move beyond the conventional advertising
models perfected in the West for wealthier audiences.

The innovators will essentially ask, "If the traditional advertisers see
no market through our radio programs sufficient for them to pay a lot of
money for 30-second spots, then is there some other group out there
willing to buy time on our show in order to meet some other market
demand for their products?"

Or perhaps more cleverly they might ask, "Is there some entirely new way
of using broadcast radio that can generate revenues sufficient to cover
costs in a way we've never even thought of before?" In Mali, I hear
birth, death, and wedding announcements generate the big bucks. In the
USA I see we get the consumers themselves to pay for some programming.
I'm sure none of these are the right answer for Nepal, the point merely
being that the key can be finding the right business model.

Or stepping out into the bold new frontiers of innovative questioning,
"Is there some way to tap the collective wealth of the very poor in
order to provide our educational product while covering costs, whether
with broadcast radio or without?"

And then there's the "supply-side" question: "Are we truly selling a
worthwhile product? Was our determination of "social worthiness" for
our educational program properly done at the outset?" That's all part
of the business model, yes?

Thus the crux of the matter for me boils down to this:

How do we set about the task of first unearthing, and then exploring,
those innovative business models that can make profitability work for
the poor, not necessarily in every case, but at least in more cases than
we're seeing now?

My personal sense is that standard approaches to program development
cannot cope.

Cheers!
Jeff
  

Bureau for Economic Growth, Agriculture and Trade
Office for Energy and Information Technology RRB 4.06-066
1300 Pennsylvania Ave NW, Washington, DC 20523-3800
Tel +1 (202) 712-1956, Cell +1 (301) 728-2160
Email [EMAIL PROTECTED]
http://www.usaid.gov Keyword:InfoTech



On Tuesday, November 16, 2004, Michael Bosse wrote:

> I'd like to share a wonderful story about the concept of sustainability
> and profitability in the area my organization 
> works, providing information and education to rural and under-served
> communities by broadcast technologies. It's also an idea and short-cut
> for measuring sustainability where there is large reach. Equal Access
> uses audio programs (radio) but the central challenge presented applies
> to anyone who measures impact and profit beyond the direct price paid
> for services delivered (as Lee Thorn and others have suggested, profit
> can be much more than monetary).

..snip...



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Re: [GKD-DOTCOM] What Do We Mean By "Poor"?

[Gary Garriott]

Colleagues:

In previous posts Cornelio Hopmann has placed a heavy emphasis on the
need for before-after or target-control group evaluations and analysis
when designing interventions using ICTs. When we are talking about the
rural poor, I am wondering if there are limits to our ability to make
such assessments sufficiently predictive to be useful in multiple
venues.

The reason is that even (and perhaps especially) in "poor" villages
(however defined) the economic-socio-cultural milieu is, surprisingly,
extremely complex and dynamic. So the best we can do using conventional
methods is to take uncertain snapshots at a point in time which may not
be particularly valid. Given that the ICT "knife" (or any technology)
cuts both ways (it is both a creator and destroyer of values and norms),
perhaps it is not so surprising that sometimes ICT is the most
"cost-effective" solution and other times it is not, as Cornelio himself
reports. Add the usual socio-political manifestation of the "Heisenberg
Uncertainty Principle" where the act of observation itself changes what
is being observed and a fair question is, "what have we learned that is
truly useful?"

If uncertainty is an inherent feature, what is the alternative? I recall
that nearly thirty years ago when I was involved in an academic
competition involving renewable energy projects, an engineering
professor strongly suggested that instead of analyzing and optimizing
sub-systems individually, that we simply sequentially change input
variables (such as the average tilt over time of a solar collector
facing the sun) for the entire system taken as a whole to see what
happens to the output. In others words, treat the entire system as a
"black box" without worrying much about what was happening between and
among the various subsystems inside the box. At the time, this approach
created such an epiphany for many in his audience that he was bombarded
with requests for copies of his presentation which I have kept to this
day. What the professor described, without access to the lexicon we have
available today, was a practical way to deal with a "complex system."

Fast forward about twenty-five years to the advent of the concept of a
"development dynamic" described in the Digital Opportunity Initiative
. This "new paradigm" was based in part on the
recognition that both the new network dynamics made possible by ICTs as
well as development dynamics were complex and could only ever be
partially understood. So the emphasis was placed instead on exploring a
"strategic framework to guide action." The field of action for the DOI
was at the national level, but I think the same principles could be
applied at local levels as well.

If we were to do this, we would more willing to try different approaches
(obviously informed by past experience, knowledge, and context) and to
allow those to be "tweaked" until we and our partners get it right for
that particular milieu, ie, vary the inputs (eg, more community
discussions which could lead to more computers in schools available for
use in the evening), one by one, to obtain the desired output (eg.,
greater adult computer literacy). Another situation/venue would likely
require a different mix to achieve the same result, not to mention a
different result. But we would cease to be so preoccupied with applying
the ultimate in evaluation methodologies because we would realize that
prediction and description are only partially achievable at best anyway.
So we would take risks and focus on action. Not all risk-taking efforts
would lead to desired results, but we would be "doing something" instead
of holding endless meetings and intellectual discussions that do nothing
except set the stage for the next round of meetings and intellectual
discussions. I do not think we have this luxury anymore.

We are losing the race toward achieving the MDGs. Poverty is rampant and
growing. Everywhere the "have-nots" are increasing along with the
attendant despair and violence. Quality of life disparities between
"rich" and "poor" are greater than ever before. Our exquisitely planned
and intricately analyzed interventions are not working.

The Undecidability Theorem in mathematics suggests that the fastest way
to test software code is just to run it and see what happens. It is also
impossible to wring out uncertainties in applying technology without
also eliminating creativity in a development context. Perhaps the
corollary in the development game given the present exigencies is to
"just do it."

There is a wonderful graphic at
 illustrating that "living
systems thrive in a narrow band between chaos and order." I think that
development also happens in this "narrow band." Unless we are willing to
spend the energy and take the risk of using technology to find this
region wherever we are working (and doing it over and over again,
however imperfectly), ICTs as significant poverty-busting tools a

[GKD-DOTCOM] Social As Well As Business Metrics

[Al Hammond]

Vickram Crishna and others have written on this. From the perspective of
our research on successful BOP business models, we think that the
companies who have really done well have had both business and social
metrics, the latter articulated at the very top of the company. They
take the form of "We ought to serve poor rural customers to help build
our country--we have an obligation--but we will do it as a profitable
business". We think that the social metric is what empowers the company
staff to think outside the box, to work with and listen to community
groups and NGOs, to figure out more inventive approaches--so that they
can become sustainable (eg, profitable) while generating needed services
and the capacity to buy or make use of them. So we see these metrics as
not either-or, but as complimentary.


Allen L. Hammond
Vice President for Innovation & Special Projects
World Resources Institute
10 G Street NE
Washington, DC 20002  USA
V (202) 729- 
F (202) 729-7775
[EMAIL PROTECTED]
www.wri.org
www.digitaldividend.org




This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative
Agreement with AED, in partnership with World Resources Institute's
Digital Dividend Project, and hosted by GKD.
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Re: [GKD-DOTCOM] Is Profitability Essential for Sustainability?

[John . Rogers]

Dear Colleagues,

Vickram Crishna's comment "But only if I wasn't prepared to think that
maybe there are other paybacks taking place, just that my monetary or
even my measurement system hasn't learned to be flexible or inclusive
enough" is my cue to introduce myself.

My name is John Rogers. I am coordinator of the Wales Institute for
Community Currencies working in the former mining and steel-making
communities of South Wales which drove the Industrial Revolution in the
UK for 200 years.

Working here in a 'post industrial' context we are experimenting with
the tool of 'community currencies' to regenerate social networks in
depressed communities with high unemployment and sickness rates.

The concept of a 'community currency' is deceptively simple. Sometimes
known as 'complementary currencies' they are local, regional or sectoral
currencies designed to work in parallel with rather than to supplant
national currencies. The problem with national currencies is their
in-built scarcity due to factors of central control. Complementary
currencies offer a different 'measuring tool' for effort, skills and
value at the *local* level and they can be used by individuals, groups
and businesses.

The first challenge for all of us (and the biggest) is to recognise the
hegemony of mono-national currencies, not just over trading
relationships, but over politics, economics and, most difficult of all,
over our thinking.

Once we admit the possibility of parallel currencies all manner of
creativity and 'thinking outside the box' is made possible. In fact
whole new worlds of relationships can be created which are not possible
with single currencies.

In systems-thinking terms this is a matter of creating measuring tools
which capture 'local variety' to complement the 'national variety' which
national currencies measure.

All for now. There is much, much more to say on this and lots of
possible links to leading writers in this field.


John Rogers
Cydlynydd Prosiect
Project Coordinator

Sefydliad Arian Cymunedol Cymru
Wales Institute for Community Currencies

Canolfan Dyfeisgarwch   Innovation Centre
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This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative
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Re: [GKD-DOTCOM] How Can ICT Create New Business Partnerships?

[Valentina Taseva]

Dear GKD Members,

I work with Semos, Macedonia's largest IT training company. In order to
develop, Macedonia has to address one of our most critical needs -- the
need for better management skills among companies and young people
coming out of school. Macedonia now has over 35% unemployment and we
have many people living in poverty because they cannot get jobs or
because they start a small business but do not know how to run it
effectively. A large portion of the unemployed are young and in some
areas of Macedonia unemployment among young people is 50%.

As a for-profit company, we believe that we can help make businesses in
Macedonia more successful, increase jobs and reduce poverty by helping
to improve management skills throughout Macedonia. We are working with
a USAID project in Macedonia called the e-BIZ Project to set up an e-BIZ
Center that will use distance learning to provide high quality
management training, with a focus on business executives, managers and
entrepreneurs. The e-BIZ Center is for-profit, and offers fee-based
services. We want to be sure that very small companies, entrepreneurs
with low incomes or facing other obstacles (such as women who cannot
travel for training) can have access to the management training, so we
are working with the e-BIZ Project to offer vouchers or discounts to
selected groups. We are also setting up partnerships with small
cyber-cafes and other companies around Macedonia, so that they can offer
the online courses and also make a profit. Since they know their local
market very well, they are able to market the courses much more
effectively than we could do, and since they get a percentage of the
revenue, they are highly motivated to market the courses effectively.

We are developing our business plan, with the help of the e-BIZ project,
and plan to offer a range of distance management training courses as
well as other courses, especially in IT skills and courses for local
government. We believe our competitive advantage will be to offer high
quality courses, as there are training courses in Macedonia but they are
usually not high quality. Some of our courses will use videoconferencing
to "bring in" recognized international experts. We will work with these
experts to ensure that their sessions are relevant and useful to the
Macedonian audience. These sessions will also include translation and a
question/answer period. We plan to charge sufficient fees for the
sessions so that we can pay a speaker fee to the international expert,
and generate enough revenue for both ourselves and our partners to cover
our costs and eventually make a profit. Other courses will use Web-based
training or CD-ROMs, again of high quality. Our initial market testing
indicates that there is a market for these types of high quality
training at prices that will generate target revenue levels. In
addition, we plan to offer other video conferencing services (e.g.,
company meetings, sales presentations, and family meetings) to help
generate sufficient revenue.

We believe this model will make it possible for us and our local
partners to provide a valuable service in Macedonia and also make
sufficient revenue and profit to continually provide and improve the
services. Because we are just starting out, we are looking for help,
advice and partnerships. We would very much like to hear from GKD
members who are experts in distance training (videoconferencing,
CD-ROMs, Web-based, etc.) that is fee-based and for-profit. We would
also like to hear from experts in developing other practical revenue
sources from video conferencing (e.g., company meetings, sales
presentations, and family meetings).

We are also looking for all topics of management training courses that
can be delivered effectively online, especially interactive materials,
with an emphasis on sales and marketing training materials. We would
also like to get courses in other areas, especially IT or training for
government employees. We would like to enter into a partnership with the
owners of the content so we can offer the courses in Macedonia. In
addition, we would like to have a relationship in which we can translate
the material into Macedonian and pay a portion of the revenues from the
Macedonian courses to the content owner. Finally, we are seeking someone
with experience in for-profit distance management training who may be
wiling to come to Macedonia for 4-6 weeks as a volunteer (we can cover
costs of travel, lodging and food expenses).

Thank you to everyone who will provide advice and information to help us
make the Distance Training e-BIZ Center a success.


Valentina Taseva
Managing Director
Semos Education
<[EMAIL PROTECTED]>




This DOT-COM Discussion is funded by USAID's dot-ORG Cooperative
Agreement with AED, in partnership with World Resources Institute's
Digital Dividend Project, and hosted by GKD.
http://www.dot-com-alliance.org and http://www.digitaldividend.org
provide more information.
To post a message,