Understanding the need to design for extreme affordability is giving birth to a new generation of entrepreneurs. These are entrepreneurs with a social conscience who are motivated by the desire to do good and do well at the same time. They are finding new ways to empower the poor by satisfying their basic needs for safe water and electricity in emerging markets.
According to Wikipedia definition, a social entrepreneur is someone who recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Unlike a business entrepreneur who typically measures performance in profit and return, a social entrepreneur assesses success in terms of the impact s/he has on society. While social entrepreneurs often work through nonprofits and citizen groups, many work in the private and governmental sectors.
The main aim of a social entrepreneurship as well as social enterprise is to further social and environmental goals. This need not be incompatible with making a profit, but social entrepreneurs are often non-profits. Social enterprises are for ‘more-than-profit’.
In addition to their inner desire to help others while also helping themselves, what has encouraged such entrepreneurs is the successful penetration of the mobile phones among the poor in India and Pakistan, many of whom subsist on less than a dollar a day. The rapid growth of cell phones among the rural poor in South Asia has shown that even the poorest of the poor are willing to offer several months' earnings for the benefit of connectivity. By doing so, they have demonstrated their potential as consumers of affordable products that offer them real benefits, such as a glass of safe drinking water and a bright source of light at night.
Safe, Clean Water for the Masses
Saafwater, Inc. is a startup helping people in Karachi, Pakistan with access to safe drinking water. The company founders, Sarah Bird, Saira Khwaja and Khalid Saiduddin, emerged as finalists in Massachusetts Institute of Technology’s 100k Entrepreneurship Competition in 2007, and received $10,000 to put the concept of SaafWater into practice. 
The company's first product is SaafWater Daily Capsule - a simple capsule of chlorine solution that can treat one family’s daily supply of drinking water. SaafWater’s mission is to provide affordable clean water to low-income communities in urban areas. Their goal is to create a profitable distribution network that can supply billions of people with clean water.
The company has worked closely with the US Centers for Disease Control’s Safe Water System which has been responsible for pioneering this technology and reaching an estimated 16 million users worldwide. With their help the company has learned from their experiences and to ensure that it meets all the relevant World Health Organization Guidelines for Drinking Water Quality.
Going door-to-door, SaafWater representatives sell daily chlorine capsules, which can be immersed in a family’s water container rendering the supply free of contaminants in 30 minutes. Sales representatives offer a week’s supply for about 30 rupees, the rough equivalent of U.S. 40 cents. SaafWater also plans to launch independent programs with existing NGOs to help create self-sustaining water purification programs throughout Pakistan.
Saafwater's vision is to build and extend this network to include many other life-saving and life-enhancing products such as clean-burning fuels, sanitation, renewable electricity, refrigeration, eye-glasses, multi-vitamins for mothers and children, and construction materials to name but a few.
Bright Light for Night
D.light, founded by two Stanford graduates, marries next-generation light-emitting diodes (LEDs), proprietary power-management tools, and increasingly cheap solar panels. The founders, Nedjip Tozun and Sam Goldman, attended Professor Jim Patell's Stanford Business School class called Entrepreneurial Design for Extreme Affordability, highlighted recently by Fortune Magazine. 
As a result, D.light is able to offer poor communities an affordable alternative to kerosene, which is ubiquitous but hazardous. The quality of the kerosene lamp light isn't good, it emits pollutants, and it's just plain dangerous. "You travel around these villages, and everyone has a story of a child being burned or a house destroyed by fire," says Tozun, speaking to Fortune by phone from his office in Shenzhen, China. "And yet in some places we found that people were spending 15% to 20% of their income on light." The world's poor spend about $38 billion a year on kerosene for lighting, according to the International Finance Corp.
According to Fortune magazine, the D.light lamps sell for about $25, steep for someone earning $1 per day, but the D.light team quickly found that the quality of light was so good that people with the D.light lamps were able to do more work at night and increase their income. Two families in New Keringa, a village of 47 families in southern India, took the plunge on D.light lamps. Says Tozun: "All of a sudden the two families were able to work at night," mostly weaving banana leaves into plates. "Their average monthly income increased from $12 to $18, and they could save the time spent traveling to buy more kerosene." Within a few days the entire village had sprung for the lights. "These people are great customers if you give them a clear value proposition," Tozun says.
In November, D.light raised $6 million in venture capital funding from Draper Fisher Jurvetson and Garage Technology Ventures, among other venture capital firms, to ramp up production and get its lamps into markets, initially in India and Africa.
Empowering would-be customers is one of the mantras of Patell's class at Stanford. Each year some students, like Goldman and Tozun, take their ideas and try to build businesses. Patell doesn't expect every student to start a company, but he does demand that every product in the class offer poor consumers tools for their own microenterprises. "We want to design things so that a farmer can decide to leave his farm and support his family selling water pumps or drip-irrigation tubing," Patell says. "We want things to be sold at a price that covers the cost of manufacturing and distribution."
The need and the opportunity for social entrepreneurs have never been greater. Both SaafWater and D.light are examples of what the institutions of higher learning can do to encourage such entrepreneurship catering to the needs of the billions of poor people in Africa, Latin America and South Asia who can potentially become a huge new lucrative market. What is needed is for the budding entrepreneurs to recognize such opportunities to offer highly useful and essential products at extremely affordable prices. Educational institutions in Pakistan and India can and should play a leading role to encourage and prepare them to do good and do well, and investors should open their minds to see the great opportunities that lie ahead for them to make good returns on such investments.
Related Links:
Supporting Youth Entrepreneurship
iGenius Goes Big in Pakistan
India's Innovative Social Entrepreneurs
Youth Engagement Services (YES) Network in Pakistan
Water Shortage in Pakistan
United Nations World Water Development Report
Water Resource Management in Pakistan
Water Supply and Sanitation in Pakistan
Light a Candle, Do Not Curse Darkness
China Profile
Safe Drinking water and Hygiene Promotion in Pakistan
UN Millennium Development Goals in Pakistani Village
Orangi Pilot Project
Three Cups of Tea
Volunteerism in America
Dr. Akhtar Hamid Khan's Vision
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9 hours ago
8 comments:
The problem in Pakistan and many other arid countries is not of making water safe to drink. Most of the time the problem is finding water. Scarcity of water is the issue, not making it potable and safe. Pakistan is confronted with the major issue of bringing in pipes and pumps to get water to the areas where water is not available. This assumes that there are enough reserves of water available to pump it from one place to another. Nowadays there is not enough water in the lakes and rivers for even agriculture. Water management in Pakistan has been very poor since 1947. In all major cities the water distribution infrastructure needs to be revamped to account for the current population. Larger underground pipes and bigger pumps are required in most areas. Some affluent areas ( DHS etc) have improved
Moin:
Water and sanitation related diseases are responsible for 60% of the total number of child mortality cases in Pakistan, with diarrheal diseases causing deaths of 200,000 under-five years’ children, every year.
So, the problem goes beyond water scarcity. Water safety is a huge issue, in Pak and many other developing nations.
Riaz:
You are right in emphasizing the aspect of water sanitation. It is a two pronged beast. Water availability and water sanitation are both Pakistan's problems.
In Bangladesh where water is abundant and freely available in most areas the main issue is that of water sanitation. I have spent a lot of time in Bangladesh and was back recently to study this issue of water sanitation. Chlorinating water to make it safe does help in lowering diseases but not by much. In my study I found that the fundamental things that have the most impact on the well being of a community and that bear lasting effetcs is personal hygiene, basic training in cleanliness and training in proper dsiposal of garbage.
You know that it is very difficult to maintain personal hygiene without the availability of water.
Water in a container may be chlorinated and safe to drink But if people cannot keep their hands and utensils clean they will keep infecting each other.
Moin,
There's no one silver bullet. The best way to solve the problem is to address each piece of it. When Pakistan has the highest infant mortality rate in South Asia (99 per 100,000) and diarrhea a known killer of about 200,000 children, one can not argue that clean water issue should not be addressed as a priority. Studies by US CDC involving 16m people in the dev world have shown the effectiveness of chlorine in fighting a lot of stomach ailments common in Pakistan.
Poor sanitation is also a big issue. There is an example of another Pakistani social entrepreneur Akhtar Hamid Khan who has shown that the problem can be addressed by community based efforts. He did the Orangi Pilot Project, whose link I have included in my post, along with links to the issue of water scarcity.
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Anyone who has seen the blockbuster film “Slumdog Millionaire” would remember the “potty scene” where the young Jamal is shown relieving himself in an open pit. The scene caused a lot of adverse reaction in India as unrepresentative of true India. But according to a joint study conducted by the World Health Organization and UNESCO, 665 million Indians, or nearly two-thirds of them defecate in the open. I am not sure if these 665 included people using indoor toilets without plumbing; if it did not, then the number of Indians defecating in an unhygienic manner is even greater.
Dr. Pathak is an Indian social entrepreneur addressing India's sanitation crisis.
He has founded a movement called “Sulabh International” and developed a simple, low-cost toilet which cost approximately Rs. 700 and could be installed anywhere, including villages without any plumbing. This toilet uses only 1.5 liters of water for flushing as against 10 liters by a conventional toilet. The toilet “system” consists of two pits: when the first one fills up, it is closed and the other one is used. The closed toilet dries up in two years when it is ready to be used as fertilizer and for conversion into biogas for heating, cooking, and generating electricity.
http://www.riazhaq.com/2009/10/fixing-sanitation-crisis-in-india.html
Here's a ranking of ease of doing business in South Asia that puts Pakistan well ahead of India:
Bangalore: The business environment in Pakistan and Bangladesh is far better than in India. According to the latest 'Doing Business Index', India's business environment has become tougher during the years compared to other nations.
Economies are ranked from one to 183 on the basis of their regulatory environment being conducive to business operations. All of India's neighbors except Afghanistan have been ranked better. While India is ranked 133, Pakistan is ranked 85th followed by Sri Lanka (105), Bangladesh (119) and Nepal (123).
"India is a consistent reformer for the past many years. A country's rank in the index is an average of 10 indicators, each with 10 percent weight in the index. India increased the number of judges in the specialized debt recovery tribunals, which led to a major removal of blockages. While India reformed in the area of insolvency, other countries reformed in more than one area," World Bank's Senior Strategy Advisor, Dahlia Khalifa told Economic Times explaining why India has been overtaken by other nations.
The 2010 Doing Business Report prepared by World Bank and the International Finance Corporation averages a country's percentile ranking on 10 topics, made up of a variety of indicators. This includes examining a country's business environment in terms of starting a business, dealing with construction permit, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.
The first place is occupied by Singapore, which is followed by New Zealand, Hong Kong and the U.S.
To see complete rankings and report, click here: http://www.doingbusiness.org/EconomyRankings/"
Here's traveler-blogger Sean-Paul Kelly talking about lack of sanitation in India:
In my opinion the filth, squalor and all around pollution indicates a marked lack of respect for India by Indians. I don't know how cultural the filth is, but it's really beyond anything I have ever encountered. At times the smells, trash, refuse and excrement are like a garbage dump. Right next door to the Taj Mahal was a pile of trash that smelled so bad, was so foul as to almost ruin the entire Taj experience. Delhi, Bangalore and Chennai to a lesser degree were so very polluted as to make me physically ill. Sinus infections, ear infection, bowels churning was an all to common experience in India. Dung, be it goat, cow or human fecal matter was common on the streets. In major tourist areas filth was everywhere, littering the sidewalks, the roadways, you name it. Toilets in the middle of the road, men urinating and defecating anywhere, in broad daylight. Whole villages are plastic bag wastelands. Roadsides are choked by it. Air quality that can hardly be called quality. Far too much coal and far to few unleaded vehicles on the road. The measure should be how dangerous the air is for one's health, not how good it is. People casually throw trash in the streets, on the roads. The only two cities that could be considered sanitary in my journey were Trivandrum--the capital of Kerala--and Calicut. I don't know why this is. But I can assure you that at some point this pollution will cut into India's productivity, if it already hasn't. The pollution will hobble India's growth path, if that indeed is what the country wants. (Which I personally doubt, as India is far too conservative a country, in the small 'c' sense.)
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