Deliver Value to the Poor, Not Yesterday's Technology

Reverse innovation is not about giving yesterday’s technology; it is not about giving cheap products.  It's about giving value because poor people want value.

Deliver Value to the Poor, Not Yesterday's Technology

Poor people don't want yesterday's technology, they don't want cheap products.  What they want is value.  And the question is how can you deliver value?  Let me give you an example, there's a company in India today which is creating exciting growth opportunities in hospital beds, surgical beds, because the hospital industry is a very fast growing industry in India.  And you need surgical beds.  


Now, what this company is doing is the price of a surgical bed that they are able to offer to the hospital is no different than the competitors.  Let's assume for the sake of argument the competitor is offering a surgical bed for $10,000; they are also offering a $10,000 bed.  So it is not about lowering costs. What this company is doing is they are telling the hospital, we can save you 40 percent space if you use our surgical bed.

Now why is space-saving so critical for hospitals?  If anyone has gone to a hospital in India what you see is patients are sleeping all over the place.  It is a highly crowded place.  If you can save 40 percent space on a surgical bed then that means I can put 40 percent more patients into my hospital.  And if I can put 40 percent more patients into my hospital, not only am I treating 40 percent more patients, I'm also getting more revenue because those patients will use my x-ray machine, my MRI machine, my cat scanner etc.

Now, how are they able to save 40 percent space?  Their surgical bed is no smaller than the competitor because patients don't want a smaller bed. They want the same size bed.  So what they have done is they've tried to understand the customer problem. 

In most surgeries when you have a surgical bed and imagine there is an IV machine which is standing outside which is occupying space.  So they built the IV machine into the surgical bed. Similarly, the customer records are kept in a chest of drawers or something, so they built a space inside the surgical bed where you can keep customer records.  Similarly, the disinfectant to your hands is kept somewhere in the bathroom. Many times the nurses don't even go there because it's too much trouble to go there.  They have build the disinfectant into the surgical bed.  Similarly, the patient may bring his clothes and so on and so forth and you are given another space for keeping their bag, underneath the bed.

This is not about low-cost. This is about understanding the customer problem and delivering the best value.  Therefore, reverse innovation is not about giving yesterday’s technology; it is not about giving cheap products.  It's about giving value because poor people want value. They don't want cheap products.  And understanding their problem and solving that is the key for reverse innovation.

In Their Own Words is recorded in Big Think's studio.

Image courtesy fo Shutterstock

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A close up of Bathynomus raksasa

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Volcanoes to power bitcoin mining in El Salvador

The first nation to make bitcoin legal tender will use geothermal energy to mine it.

Credit: Aaron Thomas via Unsplash
Technology & Innovation

This article was originally published on our sister site, Freethink.

In June 2021, El Salvador became the first nation in the world to make bitcoin legal tender. Soon after, President Nayib Bukele instructed a state-owned power company to provide bitcoin mining facilities with cheap, clean energy — harnessed from the country's volcanoes.

The challenge: Bitcoin is a cryptocurrency, a digital form of money and a payment system. Crypto has several advantages over physical dollars and cents — it's incredibly difficult to counterfeit, and transactions are more secure — but it also has a major downside.

Crypto transactions are recorded and new coins are added into circulation through a process called mining.

Crypto mining involves computers solving incredibly difficult mathematical puzzles. It is also incredibly energy-intensive — Cambridge University researchers estimate that bitcoin mining alone consumes more electricity every year than Argentina.

Most of that electricity is generated by carbon-emitting fossil fuels. As it stands, bitcoin mining produces an estimated 36.95 megatons of CO2 annually.

A world first: On June 9, El Salvador became the first nation to make bitcoin legal tender, meaning businesses have to accept it as payment and citizens can use it to pay taxes.

Less than a day later, Bukele tweeted that he'd instructed a state-owned geothermal electric company to put together a plan to provide bitcoin mining facilities with "very cheap, 100% clean, 100% renewable, 0 emissions energy."

Geothermal electricity is produced by capturing heat from the Earth itself. In El Salvador, that heat comes from volcanoes, and an estimated two-thirds of their energy potential is currently untapped.

Why it matters: El Salvador's decision to make bitcoin legal tender could be a win for both the crypto and the nation itself.

"(W)hat it does for bitcoin is further legitimizes its status as a potential reserve asset for sovereign and super sovereign entities," Greg King, CEO of crypto asset management firm Osprey Funds, told CBS News of the legislation.

Meanwhile, El Salvador is one of the poorest nations in North America, and bitcoin miners — the people who own and operate the computers doing the mining — receive bitcoins as a reward for their efforts.

"This is going to evolve fast!"
NAYIB BUKELE

If El Salvador begins operating bitcoin mining facilities powered by clean, cheap geothermal energy, it could become a global hub for mining — and receive a much-needed economic boost in the process.

The next steps: It remains to be seen whether Salvadorans will fully embrace bitcoin — which is notoriously volatile — or continue business-as-usual with the nation's other legal tender, the U.S. dollar.

Only time will tell if Bukele's plan for volcano-powered bitcoin mining facilities comes to fruition, too — but based on the speed of things so far, we won't have to wait long to find out.

Less than three hours after tweeting about the idea, Bukele followed up with another tweet claiming that the nation's geothermal energy company had already dug a new well and was designing a "mining hub" around it.

"This is going to evolve fast!" the president promised.

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Sponsored by Pfizer
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