Ecosystem Mapping

Our business is doing business with the poor – we believe that the ‘value’ of a product or a service is built only when the consumer pays for it. Payment of course could be in the form of services, money or goods. But one needs to understand that for most communities, the value is purely monetary to begin with. For example, when we try to approach a slum community that is rebuilding its houses and talk to them about Airlite sheets or about cleaner energy through solar power, the community members calculate the interventions thus – what is the cheapest solution – metal sheets for the house with kerosene lamps, metal sheets with solar lamps or Airlite sheets with solar lamps? More often than not, making them feel the monetary value in the transaction is what makes the difference. And if our solution is not the cheapest, we have a hard time convincing them.

Similarly, working with micro entrepreneurs and designing solutions based on existing business models is not the easiest process. Understanding the economics of a ‘poor’ household is a case story in assumptions. A micro entrepreneur can only give us assumed figures – how much she/ he sells, spends and makes. Markets work on trust and word of mouth and calculations work on comparisons to household items. So it is perfectly acceptable for a micro-entrepreneur to add her family’s food expenses to her food business. Or for a micro-entrepreneur to provide business services to pay off an older loan. Or for an entrepreneur to calculate the weight of a raw material in comparison to another common household item. Accounting for all such informal practices in a business plan makes that extra difference in bringing an element of reality to it.

Savings is the most ephemeral concept for the ‘poor’. Ten years ago, a slum demolition mandated that all those wads of notes saved under beds, inside pillows and within roof sheets got destroyed. Savings were often also calculated in the form of loans to others, typically friends and relatives who would then loan back during an emergency. Today with the large number of bank accounts, this may be less of an issue, though from experience, we still know that most poor function with loans from their own families.

Then come the business decisions. Understanding local contexts and practices is critical to making successful business plans. In many cases, even if an investment makes perfect business sense, an entrepreneur can reject or put something on standby simply because a ‘well-wisher’, older brother, father, husband etc said no to the idea. Often, as has been noticed in the case of the Roti rolling machine installation, the entrepreneur waits for over a month for an auspicious day to actually start using the machine – how that impacts her first instalment of the loan to the bank is critical.

The fact, as was evident in the first example with the Airlite sheet, that a better quality sheet and smokeless lights mean that your construction lasts longer and therefore you save money is a conversation that is difficult to have with the poor. It is far more difficult when it is a migrant community that clearly says that it is here for a short while – albeit the fact that the short while could be well over 10 years! How does one convince a community that the water they use for drinking needs purification, even if the health impacts are not immediate? Unless children get diarrhea every now and then, no community will suddenly invest in purified water. Would someone pay for clean water just because consuming un-treated water for ten years would lead to swollen and mis-shapened joints in old age? How do we explain expenses on water as compared to expenses at the doctor’s?

Explaining asset expenses and intangible returns to a poor family – that is the essence of doing business with the poor.

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