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TECH TALK: My Mental Model: requires Ecosystems

December 11th, 2003 · No Comments

One of the things I have realised with the expense of some time and cost that it is not good enough to just have an innovative product or service. When one is targeting nonconsumption markets, just solving one problem may not be good enough. Let me explain with an example, and then we will get to the deeper learnings.

When I started thinking about the SME growth problem, my initial belief was that what they needed was a low-cost eBusiness software just like the big enterprises. But as I looked deeper, I realised that even if I created the mini-ERP software, there were not enough computers in the enterprise to ensure they made optimal use of it, and more importantly, for me to make money at that time, the plan was to rent the software to them because they would probably not have interested in (or would have been incapable of) making a single, large upfront payment. So, now, I had to look at both the computer penetration and enterprise software problems.

As time elapsed, we created a solution for the computer penetration problem thin clients, server-centric computing, open-source software and remote management. We also developed an integrated server-software solution, to ensure that the backend infrastructure for messaging and security would be good. We were ready to sell our software to SMEs. So, who would do the selling?

It was then that I understood that the problem was much bigger than I had anticipated as a technologist. There is no software distribution network for SMEs. There is no way for SMEs to be educated on the potential for using computers to their full potential. There is a channel, but it largely consists of hardware resellers, who are not sophisticated enough to talk to end-customers about the solutions for their business growth. The realisation slowly dawned on me that we needed an SME Penetration Ecosystem, rather than just the hardware-software bits that I was trying to put together.

I could have saved myself quite some trouble had I been a student of economics or read Bhaskar Chakravortis book The Slow Pace of Fast Change. In economics, there is a concept of co-ordination failure. This is dealt with by Debraj Ray in his Economics textbook Development Economics.

This insight came to me as I understood Atanu Deys plan for transforming rural India by setting up RISC (Rural Infrastructure and Services Commons) centres to concentrate investment from multiple infrastructure providers to create a common platform for service providers. The way to address the co-ordination failure in rural India was to bring all the entities together at the same time, and demonstrate how they could all benefit if each of them did exactly what their business was.

Tomorrow: requires Ecosystems (continued)


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