Acumen Blog


Paul Polak Responds to Acumen Fund’s Lesson #6 – Great technology alone is not the answer

Acumen Fund is committed to sharing the learnings we have collected over our past 10 years. In this spirit, we have published  a document called “10 Things We’ve Learned About Tackling Global Poverty.” Each week on the Acumen Fund Blog, we will be posting the next lesson in this series of “10 Things,” along with a guest response from a valued member of our community.

6. Great technology alone is not the answer

In my work with a multitude of affordable technologies over the past 30 years, one key feature has become abundantly clear: If you have met the challenge of designing a transformative, radically affordable technology, you’ve successfully solved no more than 10-20% of the problem. The critical other 80% of the solution lies in designing an effective marketing, distribution, and profitable business strategy that can be brought to scale. Of these, perhaps the most important is designing an effective scale strategy.

Some technologies are simply not scalable. They solve a problem that exists only in a village or two but is not applicable to a thousand villages. The first step in designing an effective scaling strategy is therefore to put first priority on technologies that, if successful, can be applied to address parallel problems in at least a thousand villages.

For example, an Engineers Without Borders team successfully fixed a broken motorized pump that supplied drinking water to several hundred families in a village in Rwanda. This mechanized piped water system was too expensive to be implemented in many other villages, but fixing it addressed an important problem in one village. Designing a robust, affordable hand pump, on the other hand, could have addressed a drinking water problem for many of the other families in the village and in thousands of other villages as well.

In many instances, the design of a scaling strategy is not very complicated. What development practitioners usually miss is the importance of building design for scale into a project from the very beginning of the design process . For example, if you need to sharpen ten pencils, the way to do it is simple. If you need to sharpen a thousand pencils, you need to use a different strategy, but it can be done. If you need to sharpen 100,000 pencils, you need a still different strategy. Each of these problems is eminently solvable, but each one requires a different series of logical steps; it’s very difficult to efficiently change from a ten-pencil strategy to a hundred-thousand-pencil strategy if you’ve already committed your resources and your time to the former.

25 years ago iDE (International Development Enterprises) recognized the transformative potential of a simple, $25 treadle pump installed on a tube well. The design of that technology incorporated affordability, easy reparability, and applicability  to millions of small farms. Yet the key challenge was to design the mass marketing and distribution strategy that would make it available to several million farmers. In Bangladesh 25 years ago, there was no pre-existing system of mass distribution in rural villages, and many of the one-acre farmers who needed a treadle pump had never heard of the technology; didn’t know how to read and write; and had no access to mass media. To address the problem of distribution, we recruited 75 small private sector workshops who manufactured the treadle pumps; 3,000 village dealers who sold them at a 12% margin; and we trained 3,000 well drillers through a three-day course with a diploma, who then installed the treadle pump in the field for a fee. This set up the treadle pump market infrastructure, but that alone wasn’t enough.

The next step was to create market demand, so that each of these small enterprises could sell enough volume to make a decent living. For an illiterate population unreached by mass media, flyers, brochures, or radio campaigns wouldn’t work. So we recruited several village troubadour and theatre groups to write songs about the treadle pumps, and had them perform at markets and larger celebrations, incorporating demonstrations of working treadle pumps into their performances. Finally, we created a Bangladesh-style 90-minute Bollywood movie featuring the treadle pump that played off of a truck-mounted projector to an audience of a million people every year, in village open-air settings. Our film was often the first movie that our customers had ever seen.

Without the design of a scalable manufacturing, distribution, and installation network involving thousands of small entrepreneurs, we never could have sold the first million treadle pumps in Bangladesh. Without a large-scale marketing program incorporating activities like the Bollywood movie, neither the 75 manufacturers, the 3,000 village dealers, nor the 3,000 well dealers could have earned a reasonable living by making, marketing, and installing the treadle pump. The design of the mass distribution and mass marketing strategy turned out to be much more important to the success of the treadle pump program than the design of the treadle pump itself. Design of a transformative affordable technology was a necessary, but far-from-sufficient, condition for its success.

The design of an effective for-profit business strategy, of course, pulls all of this together. Every key player in the distribution chain has to make an attractive profit. The most important person in this chain is the end customer. A basic principle I’ve learned over the past 25 years is that for $2-a-day customers, income generation is the single most important feature of a successful technology. I don’t work with any technologies for dollar-a-day customers unless the customer can get three times his money back in the first year by using the technology. A treadle pump installed on a tube well costs $25, including a profit for the manufacturer, the dealer, and the well driller. The average farmer who buys it earns $100 net income in the first year, and could potentially earn $500 a year – 1/5 of purchasers of treadle pumps earn $500 in net income right away.

While it’s the most important, for the ultimate purchaser alone to earn a profit is not enough. The manufacturer has to make an attractive enough profit that he is likely to continue making the treadle pumps. Each dealer has to sell at least 20 treadle pumps in a season to earn enough income so that it is in his interest to continue to market treadle pumps to customers, year after year. And finally, the well driller must install enough treadle pumps in a season to make it worth his while to continue installing them. All of these active participants in the supply chain need to earn attractive profits before the technology can be successful.

A successful social enterprise serving $2-a-day customers begins with the design of a radically affordable, scalable, transformative technology. But this is only the beginning. It will fail to make a meaningful impact unless 80% of the designer’s energy is successfully turned towards designing a profitable business capable of reaching a million customers through an effective branding, marketing and distribution system.

Paul Polak is the Founder of International Development Enterprises (iDE) and author of Out of Poverty.


10 Books We’re Reading This Summer

What are you reading? It is a common question here at Acumen, an organization full of avid readers constantly trading favorite book titles that discuss leadership, impact, development and branding. Here are 10 stellar books we’re reading this summer. These books and others provide a framework of thinking, a spark of new ideas, a platform for debate. So, what are you reading? [Read More]

How Acumen Brought Back my Fire

Eda is an East Africa Regional Fellow from Nairobi, Kenya and is the Founder and Director of Halisi Trust, an organization that seeks to challenge the vices that plague society and encourage transformational development in Kenya’s youth. When Eda applied for the East Africa Fellows Program, she felt disillusioned and stuck. Below, Eda discusses how Acumen’s Regional Fellowship Program brought back her fire. Now, Eda has engaged nearly 6,000 people through outreach events and the Mkenya Halisi movement continues to grow. Acumen is currently accepting applications for the next class of East Africa Fellows. APPLY TODAY! [Read More]

Imagining the world as it could be

Christine Gitau is an East Africa Fellow and an enterprise coach at Craft Afrika, which provides business support services to craft entrepreneurs, enabling them build viable and thriving businesses in Kenya. At Acumen we often use the term “Moral Imagination” when talking about leadership. Christine wrote a reflection on how this concept has shifted her thinking. We could not be more proud of what she is building! [Read More]

How two Acumen Fellows are disrupting the education model in India

Whether its running youth soccer programs, providing vocational training services, or transforming the education system in India, Acumen India Fellows are driving real change in their communities.  Abbas Dadla and Abhilasha Sinha are India Fellows who are addressing the teacher shortage in India through the use of technology and peer collaboration. Find out what they are building below.  If you have grit, resilience and a commitment to creating change in your community in India, East Africa or Pakistan, we encourage you to apply for the Regional Fellowship Program! [Read More]

Meet Manjushree Patil, Founder of Aatman Academy

This month saw violent tragedies in Pakistan and Kenya, regions where Acumen works and which five classes of Acumen regional fellows call home. Among them there are dedicated teachers like Acumen India Fellow Manjushree Patil, crusaders against sex trafficking, builders of government, creators of liberating mobile medical technologies, and curators of slum sports programs. The need for strengthening the connections between those who are working for positive change against seemingly impossible odds has never been greater. We at Acumen have never been prouder to be the thread tying together these courageous individuals. Read more about Manjushree and how she is changing her community in India below! [Read More]

No, not silence again!

The Acumen Fellowship’s Cambridge Leadership Associates (CLA) training is notorious for digging deep, breaking Fellows down to reveal their deepest fears, identifying the sources of resilience that will fuel them with the tenacity to continue along the path to social change. Kahabi G. Isangula is an East Africa Regional Fellow living in Tanzania and recently participated in our CLA training. Get an idea of what it is like, below!  [Read More]

Announcing the Class of 2015 Acumen Global Fellows

Acumen Global Fellows are architects for the impact sector. They are innovators, game changers, visionaries, with various professional experiences looking to make substantial change in the world. They have thrived in companies such as Google; they have started their own companies in Sri Lanka and Canada.  They are choosing the challenge of working alongside our portfolio companies and immersing themselves in a rigorous leadership training. [Read More]

Welcoming Ajit Mahadevan as Acumen India Country Director

We are pleased to announce that Ajit Mahadevan will be joining Acumen as India Country Director. Ajit joins Acumen from Ernst & Young, where he has served as Advisory Partner & Leader (Life Sciences) for the past six years.  At EY, he was a strategic advisor to the leadership of some of the leading Indian and global life science and healthcare players with the focus being business transformation and growth.  Prior to his time at E&Y, Ajit was President of Piramal Healthcare, one of the leading pharmaceuticals companies in India, where he built the international business from inception in 2002 to $300M by the end of 2008. Ajit held multiple leadership roles across strategy, M&A and business leadership. During his tenure at Accenture’s Strategic Services practice in UK and India, he led the development of one of the firm’s largest and most successful internal projects – the Offshore Development Centre in 2001, which has now grown to about 100,000 people across multiple cities in India. Ajit has worked in an advisory capacity to Acumen in the past, most recently participating in Regional Fellows selection panels in Mumbai. [Read More]