At Least a Million
For many years I have been a vocal advocate for what I call the “Don’t Bother Trilogy” in the practice of design, which states:
1. If you haven’t had good conversations with at least 25 customers before you start 2. If the product or service you design doesn’t pay for itself three times in the first year 3. If you can’t sell at least a million of them: DON’T BOTHER!
So it’s not surprising that six years ago, I challenged my friend Jordan Kassalow to set a target of selling at least one million affordable eyeglasses. Jordan is the founder and CEO of VisionSpring, which sells high-quality, affordable eyeglasses to the poor people in the world who need them but don’t have access to them. Two weeks ago, I was delighted to hear, from Jordan and his COO Peter Eliassen, that they had just sold a pair of eyeglasses to their one millionth customer.
They reached this goal by adhering to the three key strategies for businesses serving customers living on $2 a day:
1. Small Margin x Large Volume = Attractive Bottom Line
The eyeglasses market is traditionally a high margin/low volume business. This has resulted in an enormous untapped market of hundreds of millions of potential customers who can be activated through a high volume/low margin approach to glasses sales.
2. Design for Radical Affordability
What is more radically affordable than reading glasses? While VisionSpring sells both prescription and reading glasses, their most affordable reading glasses are sold for the equivalent of 3 to 7 days of the average income of their customer in India and Bangladesh is U.S. $2 to $4.
Based on a University of Michigan study on the impact of reading glasses, VisionSpring has been able to calculate that a pair of their reading glasses yields a 26 percent annual return on investment and pay for themselves within weeks of purchase.
3. Implement Profitable Last Mile Supply Chains
Developing new practical and profitable ways to cross the last mile and reach the remote rural places where poor families now live and work is the first step towards creating vibrant new markets that serve poor customers.
VisionSpring has approached last-mile distribution implementation in two ways:
1. In India and El Salvador it established proprietary distribution channels to provide BoP customers with access to glasses and eye care. In El Salvador it developed a hub and spoke retail model with an optical shop centrally located in urban areas. Every day, teams of trained local vision entrepreneurs associated with each of VisionSpring’s five shops travel to peri-urban and rural areas selling reading glasses and referring customers back to the shop for prescription glasses and advanced eye care.
In India VisionSpring has been reaching the last 500 feet through a mobile optical store model that brings eye care to remote villages selling both prescription and reading glasses. Later this summer, VisionSpring is opening its first fixed location optical shop in India modeled after their hub and spoke approach in El Salvador.
2. VisionSpring also works with partner organizations like BRAC and Living Goods to leverage existing networks that are already reaching BoP consumers at the last mile with goods and services. Through this approach VisionSpring is selling reading glasses in 18 developing countries.
So how can they reach 10 million?
The Last 500 Feet
There is a huge unmet demand for affordable distribution of a wide variety of branded consumer products to small village shops. Ten million small shops in villages all over the world are waiting for viable business models to distribute a cornucopia of branded income generating products and tools for village shops to sell to poor customers. These shops sell items like cookies, soap, cigarettes, spices, cooking oil, soda, and mobile phone credit — why not reading glasses?
Aspirational Marketing and Branding
If you succeed in designing a radically affordable technology, you still have addressed only 20 percent of the problem. The other 80 percent is designing and implementing a strategy for packaging, branding, and mass marketing. Without a successful branding, marketing and distribution strategy, the technology will fail to make a meaningful impact.
A recent study released identifies the primary barriers to the purchase of eyeglasses in India. The study indicates that while 30 percent of those who could benefit from eyeglasses didn’t buy glasses because they couldn’t afford them, 23 percent cited a lack of “felt need” for glasses, meaning that they understand vision loss can be corrected with glasses but never felt it necessary to get their eyes examined.
Every day, bottom of the pyramid customers are exposed to a variety of products that they may or may not need, ranging from aspirationally branded soft drinks and jeans to mobile phones. Imagine if a fraction of the money spent convincing an individual to drink a certain brand of soda were used to demonstrate how eyeglasses could improve and simplify their lives, transforming a utilitarian tool into a highly desirable product associated with status and success. We have to pay a lot more attention to aspirational branding as an integral component of these micro products that have a positive, mass impact on bottom of the pyramid customers. We need nothing short of a revolution in how businesses currently design, price, market, and distribute their products. Jordan, congratulations on your success in reaching a million customers! Your next challenge is to sell 10 million glasses; I’ll expect your call in five years.