Archive for May 2015
The Lesson of “Don’t forget all the parts move”
Today’s WSJ has a book excerpt about the demise of RIM/Blackberry. It is a fascinating story but also has a core lesson for product managers (including myself) which is the lesson of “don’t forget all the parts move”.
While hindsight is always 20/20, when you are faced with a potentially disruptive situation you have to take a step back and revisit nearly all of your assumptions, foundational or peripheral, because whether you see it or not, they are all going to face intense reinvention.
In disruptive theory we always talk about the core concept that disruptive products are better in some things but worse in many of the things (tasks, use cases, features) that are currently in use by the incumbent product. This is the basis of the disruption itself. In reading the excerpt it is clear that out of the gate this reality was how the RIM executives chose to view the iPhone as introduced as targeting a different market segment or different use cases:
If the iPhone gained traction, RIM’s senior executives believed, it would be with consumers who cared more about YouTube and other Internet escapes than efficiency and security. RIM’s core business customers valued BlackBerry’s secure and efficient communication systems. Offering mobile access to broader Internet content, says Mr. Conlee, “was not a space where we parked our business.”
There’s a natural business reaction to want to see a new entrant through the lens of a subset of your existing market. Once you can do that you get more comfortable doing battle in a small way rather than head-on. You feel your market size will trump a “niche” player.
The problem is that such perspective assumes a static view of the market. You’re assuming that all the other attributes of your implementation will remain advantaged and the new competitor will fail to translate that single advantage into a broader attack.
What happens, almost all the time, in technology is that disruptive entrants gain ecosystem momentum. There’s a finite bandwidth in the best people (engineers, partners, channel) to improve, integrate, promote products. Once the new product appears compelling in some way then there’s a race to gain a perceived first mover advantage. Or said another way, the leaders of the old world were already established and so a new platform yields a new chance to a leader. There’s a mad dash to execute whether you’re building leather cases, integrating line of business systems, or selling the product.
When I read that first quote, I thought how crazy to think that the rest of the internet, which includes email and messaging, would not race to try to establish new leadership in the space. The assumption that everyone is sitting still is flawed. Or just as likely, many of those incumbents will choose to assume their small part of the blackberry world will move ahead unscathed.
In a platform transition, everything is up for grabs. If you’re the platform you have to change everything and not just a few little things. First, no matter what you do the change is still going to happen. It means that you don’t have the option of doing nothing. Once a new platform gains momentum and you start losing your partners (of all kinds) or can no longer attract the top talent to the platform you have seen the warning sign and so has everyone else.
As Blackberry learned, you can’t take the path of trying to just change a few things and hope that taking what you perceive as the one missing piece and adding it to your platform will make the competitor go away. You can see how this worked in the example of the Storm device introduction, which aimed to add a bigger screen while maintaining the Blackberry keyboard feel. In other words, the perception was that it was the screen that was the thing that differentiated the device.
The browser was painfully slow, the clickable screen didn’t respond well in the corners and the device often froze and reset. Like most tech companies launching a glitchy product, RIM played for time. Verizon stoked sales with heavy subsidies, while RIM’s engineers raced to introduce software upgrades to eliminate Storm’s many bugs. “It was the best-selling initial product we ever had,” says Mr. Lazaridis, with 1 million devices sold in the first two months. “We couldn’t meet demand.”
Storm’s success was fleeting. By the time Mr. Balsillie was summoned to Verizon’s Basking Ridge, N.J., headquarters in the spring of 2009 to review the carrier’s sales data, RIM’s senior executives knew Storm was a wipeout. Virtually every one of the 1 million Storm phones shipped in 2008 needed replacing, Verizon’s chief marketing officer, John Stratton, told Mr. Balsillie. Many of the replacements were being returned as well. Storm was a complete failure, and Mr. Stratton wanted RIM to pay.
Of course we know now that there were many more elements of the iPhone that changed and it was no single feature or attribute. Every platform shift involves two steps:
- Introduction of a new platform that does some new things but does many existing things in a suboptimal way.
- Evolution of the new platform to achieve all those old scenarios but in new ways that often look like “hey we had that back then”. For example, consider the rise of secure messaging, mobile device management, and new implementations of email. All of these could be viewed as “Blackberry features” just done in a totally different way.
That’s why all the parts are moving, because everything you ever did will get revisited in a new context with a new implementation even if it (a) means the use case goes unanswered for a while and (b) the execution ends up being slightly different.
On a personal note, I was a Blackberry user from the earliest days (because our team made Outlook and the initial Blackberry was a client-side integration). When I saw the iPhone I was one of those people fixated on the keyboard. I was certain it would fail because I couldn’t peck out emails as fast as I could on Blackberry. In fact, I even remember talking about how Windows phones at the time had touchscreens so if that became popular we would have that as well. That summer, I waited on line to pick up my iPhone and was convinced of the future in just a few minutes.
You would have thought I would have been prepared. Previously, I had experienced a similar lesson. I had yet to be convinced of the utility of the internet on a phone, which the iPhone too solved. Of course my lens was clouded by the execution of the phones I used most (Blackberry and Windows) and the fact that the internet didn’t want to work on small screens and without Flash. I would visit Japan several times a year and see the DoCoMo i-mode phones and was a big skeptic—my friends from Japan still make fun of me for not seeing the future (by the way, at that time SMS had yet to even gain traction in the US and friends from Europe found that mysterious). What I failed to recognize was that in the i-mode implementation a full ecosystem solved the problem by moving all the parts around. Of course i-mode got disrupted when the whole of the internet moved to mobile. So perhaps it wasn’t just me. No matter what happens, someone always said it would. But saying it would happen and acting are very different things. Though I do recall many exchanges with Blackberry execs trying to convince them to have a great browser once I used the iPhone.
The lesson always comes back to underestimating the power of ecosystem momentum and the desire and ability of new players to do new things on a new platform.
A while back I made a list of all the moving parts of the Blackberry collapse. You can read it here, Disruption and woulda, coulda, shoulda.
A Product Person’s Perspective on Enterprise Selling
An architectural diagram for enterprise selling. ↗️
Many of the technical founders I have the opportunity to work with are well-versed in the architecture and features of their products (and products in general), but when it comes to possessing a similar view of the sales process there’s a good chance they are staring at a blank whiteboard. That’s to be expected because the skills and experience to do enterprise sales, and to do it well, are earned in the trenches over many years. Selling, specifically enterprise selling, is not something that comes naturally to most product-minded people.
Note: This post originally appeared on a16z.com on May 20, 2015.
Just as with code, one can devise an architectural view of how enterprise selling works. And like code, it is best to approach the process of selling using an architecture, rather than just diving in and writing code. Unlike code, if you act in haste or otherwise squander an enterprise opportunity there’s not really a chance for a rewrite or undo so it is best to approach with caution. Of course I’ve made many of my own mistakes and have also had ample time to learn what it was I have done wrong or what invalid assumptions I held. This post is a framework to help make sense of all the motions and actions that go on in the scope of enterprise sales.
Most technology leaders are consistently amazed at the depth and sophistication in enterprise selling. Since most engineers or technologists have little experience big-ticket selling, other than perhaps buying a car, this isn’t a surprise. While you might not be a designer or engineer, as a product person you have an empathy or sense of the skills, roles, and processes used. The same usually can’t be said for sales and selling.
There’s really only one key factor that distinguishes enterprise selling from everything a product person knows, and that is enterprise selling ends with the product and starts with the enterprise. Of course that is the complete opposite of what one might normally think where everything starts with a product. Even with the most amazing and inventive product ever conceived, selling at the enterprise level and enterprise scale requires inverting your perspective. There’s an analogy many often understand. Most product people know you don’t build a product by starting with a specific technology just because it is new, cool, or novel. Rather one starts by solving a problem of some sorts where applying a technology creates an amazing new experience that addresses a need or solves an articulated problem. Enterprise sales is similar in that you don’t start with a solution (your product) and then get to the problem (customer need, articulated or not).
Enterprise selling ends with the product and starts with the enterprise.
There are tons of amazing resources on enterprise selling. Resources go from the specifics of sales motions for a single sales person all the way to models for setting quotas, organizing resources, and training the sales organization. Most every seasoned enterprise sales person has their favorite toolset and part of hiring and managing a team is empowering them to make use of the tools they are comfortable with (just like you would for engineers). One resource I value is the book SPIN Selling, which is sort of a classic and spawned a whole ecosystem of supporting tools and guides.
A framework for product people
At an abstract level you can think of enterprise selling as following three steps:
First you set out to build a relationship with the enterprise customer that rests on a foundation of a deep understanding of their unique context. This relationship is formed by learning about the customer and organization, including how they do what they do, what they are struggling with and where they are heading. The biggest risk in most enterprise sales cycles is assuming you know these things—that one bank is like any other bank, that all Oracle shops are similar, or that everyone is trying to rip out SAP or move to the cloud. Almost all failures in enterprise selling, or at least all deal closing crisis moments, are caused by rushing this step or failing to learn all that needs to be learned about an enterprise.
Second, you articulate your vision or view of the “world” and how given your understanding of the enterprise you can begin to talk about a view for how to add value to an organization. The notion of “adding value” is key to this dialog as “solving problems” can set you up to fail too early in the process. The reason for this is that enterprise IT knows all to well that any new system begins with sunk costs, reduced productivity, and in general a period of investment. All this happens before the return or value is brought to the enterprise.
Finally, the last step is to establish a partnership, based on a mutual understanding. You understand the enterprise. The enterprise understands how you aim to aid value to their organization. The partnership process itself is how you go about going from pilot to implementation to expansion, sometimes called land and expand.
Let’s dive into each of these briefly with the goal of offering a flow or outline of the sorts of actions and motions that should take place. It is worth emphasizing that there’s a lot of unique value in how a given enterprise account manager approaches a specific customer with a specific type of product — so I’m not implying this is a one-size-fits-all model.
Relationship
The goal of the first milestone is a strong understanding of what things are like within the enterprise you are selling. To a product person this is very similar to those first ideas in developing a product-market fit and needing to assess the potential for the market. Much of the early effort will be consumed by understanding if you’re even working with the right team or people within an organization, and often there are multiple parties. Too often a product person believes you start at the CEO and shortcut this step, but an experienced account manager knows great deals can die in the middle of an organization just as easily at the top.
Culture. First you want to understand a bit of the culture of the enterprise. How risk averse they might be (for example, where do regulations fit or how leading edge is the organization as a whole)? You want to understand a bit about how decisions are made and how technologies and products are evaluated. You want to make sure you are sensitive to the basics of how the company likes to do business (how formal, what times do meetings take place, where do coffee, meals, drinks fit or don’t fit, and so on). This is especially true as you venture to industry segments that are unfamiliar to you. If you’ve ever done business in a different country before a good mindset to get in is to treat the initial contacts with an enterprise with the same level of cultural sensitivity and learning—better to learn rather than assume when you’re in an unfamiliar environment.
Organization. Every enterprise sales person I have worked with begins to build out the physical and logical org chart from the first engagements. You want to learn the management reporting structure as well as the power You want to understand the budget and decision making processes. Great enterprise sales people also know that you invest in the full org chart and don’t just focus on the areas of most authority and power—you never know where an advocate or obstacle might appear from as a deal progresses.
Infrastructure. IT is all about infrastructure and understanding how the company really works will be key to speaking their language. Not only are all enterprises subtly different in infrastructure, they take great pride in the differences they maintain and the rationale behind those differences, no matter how odd or crazy they might seem. I remember once pitching Office to an enterprise customer that had customized the installation of Office uniquely for over 100 different job functions. Not only did I think this was nuts, it created a massive support burden for the company. But in their world this was key to their productivity and my job was not to “save” them but to show them how I made their job even easier with a new product (all that comes later, in this step you’re just learning). You need to understand all the basics of infrastructure from authentication, networking, BYO, approved apps, messaging, email, and more many of these environmental variables will almost certainly impact your solution’s applicability and deployment.
Needs. Once you understand the culture, organization, and the technical infrastructure you have the foundation to be able to understand the enterprise’s needs. This is often the trickiest part of the first phase because it turns out enterprise IT, even though they are experts in technology, most often express their needs in terms of their own understanding or expectations of what products can do. As you catalog and understand needs what you are really doing is learning how to bridge from the solution your advocates believe they want to a solution that might be a much bigger leap (and much better, but very different) than expected. The pressure to listen to customers and act directly on needs (often described as requirements) is intense and during the course of product development and sales will be a significant challenge to just about every company.
My earliest days working with enterprise customers taught me a lesson that I have to admit still makes the “here and now” product person in me a bit uncomfortable. It was told to me by a former IBM field sales engineer who said “I sold more product today based on selling the future product than I ever sold by just selling what was ‘in my bag’.” While that’s most decidedly a cynical view, the reality is that enterprise selling is never about what a product can do right this moment—that’s just practical given the purchase, deployment, and training cycles within a large organization. Therefore a huge part of enterprise selling is articulating your unique technology/world view in the context of the relationship you have developed.
Vision
To many this can sound like selling vaporware, an old term for software that never shipped. That isn’t true at all. This is about selling a broad concept that will both endure for years and take years to fully realize, but can start delivering ROI in the near term within a known time period and cost. Putting this in the context of startups, this is much like when you hear venture capitalists talking about the investment in the team relative to the idea or invention—everyone knows the maze from idea to product to business will change and scope the initial idea, but the bet on the team and people will endure.
Inspiration. What is your inspiration for the product? This is where you talk about the experience that led you rethink the landscape. In the enterprise space this is most often about revisiting assumptions that the industry has made about costs of technology, where there is hardware versus software, or some massive shift such as the move to mobile or the cloud. Relative to a startup, you can think of this as the founder’s story—what led the founder to start a company is very much in line with what inspired the creation of a new enterprise product or service.
Uniqueness. While your inspiration is important it is likely that may people will have the same inspiration. In fact, enterprise products often appear in waves when it appears as though many are doing the “same” thing all at once. If you are in enterprise IT, then for sure every single vendor meeting you have these days is about cloud, mobile, BYO, security, and more. In a sales motion, you don’t want to spend a lot of time being the umteenth person touting the “changing world” but want to quickly articulate the insight, secret ingredient, or radical implementation that you have that you believe is unique. Too often this can be viewed as marketing, but really this needs to come from your product core—what is it that you see that no one else sees (to paraphrase Peter Thiel). Building a better mousetrap is great, but ROI in the enterprise does not come from rip and replace getting you a 10% improvement, so your inspiration should be pretty significant.
Competitors. You are not alone. No one in enterprise IT believes you built the one and only product that does most of what you do. Coming to an enterprise sales engagement with a detailed understanding of competitors shows respect and acknowledgement of reality. There are two types of competitors you need to understand fully. First, you need to be versed in the current marketplace competitors and how you compare to them. Often the best tool to view this is a classic “magic quadrant”—just be forewarned you have to substantiate claims carefully and be prepared for the “fans” of competitors to confront you (and be prepared for your competitors to sell against your characterization). If you’re doing this right, you are not creating new comparison criteria but using incumbent/competitor criteria as a starting point. Second, you need to be versed in how the enterprise is already addressing (or trying to address) the problem space. This is just as much a competitor—in enterprise software the easiest product to buy is the one you’ve already got in place and no one gets fired for doing that. While you might be negative towards your market competitors, it is incredibly important to be respectful of implemented competitors or homegrown solutions even if some in IT might mock their own choices.
Roadmap. The key deliverable for a vision is your roadmap of where you are heading. A roadmap to a product person might look like a schedule and features and some in IT most certainly would love that sort of information. In practice, the sort of tool you want to employ is much less detailed and granular than a product roadmap. Instead, you want to use a roadmap to establish a credible view for how you intend to both refine your existing proposition and expand your solution space. Why is this so critical? Enterprise IT is all about planning and long term within the organization. Budgets, headcount, organization, and internal service relationships all depend on “knowledge of the future”. At the same time, IT also wants to build new capabilities within the company and your roadmap can become a part of the IT roadmap. Obviously everything here is a fine balance between “promise and deliver” and falling into the trap of “over-promise and under-deliver”. One personal example was the introductions of both Outlook and Sharepoint and how adding them to the roadmap caused significant consternation in how IT thought of Office, which then crossed from personal productivity to messaging and then server infrastructure. In hindsight, the introduction of a product literally brought together parts of IT that previously never worked together!
Partnership
Transport yourself a couple of months (!) from that first opportunity to meet a potential customer and you’ve got a chance to really start to sell a product. For most product people, this is about deployment but to an enterprise account manager this last phase is about building a partnership. There is a distinction. The goal is to become long term partners and the tactic is to get the software into deployment and usage, not the other way around.
This phase always takes a bit longer than expected and for the first customers of a new product is a great deal of collaboration between engineering and sales. In later stages this repeatable process tends to become the role of Customer Success. For early stage products and companies, this phase is the equivalent of product-market fit as you work with the customer to refine the product (and pricing and more).
Proof. The first step is literally a proof of concept. The goal is to get the product up and running in their environment which could be as simple as single-sign on or a few dedicated clients or as complex as deployment or an isolated network with server hardware. It is likely during this stage that you will need to gain access to data, users, and systems that make the proof more relevant. It is important to be flexible and patient because for many pilots this is the most frustratingly slow part of the process. Do keep in mind, most every IT organization routinely does dozens of PoC, proof of concept, deals a year across many departments so be careful not to count this as “done” but do count it as “success”.
Implementation. The implementation phase is the time when you go from PoC to a deployed solution, aka production, within a department or company. For those building their first enterprise product, they are often shocked at how long it takes to roll out a new service or system within an enterprise even after it is running and working. We often compare this to signing up for a new SaaS service when in reality most companies are filled with employees that are far more worried about failing to get their work done than they are excited to try new tools and change the way they work. While many think most of the learning happens during the PoC, the astute enterprise product person knows that the real learning and informing of future product features takes place during the phased-in implementation when the product is in use by a wider audience outside of IT (if applicable).
Expansion. From a business perspective, the implementation counts as “land” and the next step is to “expand”. Once you’ve landed and seen early success, your advocates within IT will want to explore different ways to expand—remember IT is like everyone else and when something goes well they want to get credit and get visibility for the solution. Expansion is really the accelerator for a business and as most experienced people will tell you, there’s almost always more revenue with customers already paying you than with starting all over again with new potential customers. Enterprise products should be equipped in both the business and the product to expand in depth and breadth of usage to maximize this phase of growth. There’s potential for a bit of friction here as sales wants to keep the price down and not partition product value in order to land the deal. Management incentives across sales, marketing, product, and engineering play a critical role in finding this balance.
Replacement. The very last step in the partnership with an enterprise customer is replacing an existing system. I purposely put this last because most every product person thinks that when you have a new product the first line of sales is to explain what the customer can replace or decommission if they buy the new product. Every IT person knows that this is exactly the very last thing you do and that the long tail on usage for any implemented system before actual replacement, no matter how inevitable. This is important to internalize in terms of building a partnership because every running system has a champion or advocate who bought and deployed the system so a poor selling technique is to challenge that person too early. If you play everything correctly, someday you will be the system that keeps running long after it should—that’s something to keep in mind!
* * *
If all of this seems like a lot of work and a great deal of calendar time, well then you read it correctly. Average enterprise sales cycles for seven figure sales are easily 3 months and often up to 9 months depending on pre-existing systems. While every once in a while there are shortcuts or magical products, by and large this is how enterprise selling goes. It also makes a lot of sense because you’re going to collect a lot of money every year and your product will become an important part of a business.
Africa’s Mobile-Sun Revolution
Solar panels are a part of the landscape in southern Africa. Here, two boys ham it up for the camera while playing around a large-form factor panel.
The transformative potential for mobile communications is upon us in every aspect of life. In the developing world where infrastructure of all types is at a premium, few question the potential for mobile, but many wonder whether it should be a priority.
Note: This post originally appeared in Re/code on April 29, 2015.
Many years of visiting the developing world have taught me that, given the tools, people — including the very poor — will quickly and easily put them to uses that exceed even the well-intentioned ideas of the developed world. Poor people want to and can do everything people of means can do, they just don’t have the money.
Previously, I’ve written about the rise of ubiquitous mobile payments across Africa, and the work to bring free high-speed Wi-Fi to the settlements of South Africa. One thing has been missing, though, and that is access to reliable sources of power to keep these mobile phones and tablets running. In just a short time — less than a year — solar panels have become a commonplace site in one relatively poor village I recently returned to. I think this is a trend worth noting.
Could it be that solar power, potentially combined with large-scale batteries, will be the “grid” in developing markets, perhaps in the near future? I think so.
It is also the sort of disruptive trend we are getting used to seeing in developing markets. The market need and context leads to solutions that leapfrog what we created over many years in the developed world. Wireless phones skipped over landlines. Smartphones skipped over the PC. Mobile banking skipped over plastic cards and banks.
Could it be that solar power, potentially combined with large-scale batteries, will be the “grid” in developing markets, perhaps at least in the near future? I think so. At the very least, solar will prove enormously useful and beneficial and require effectively zero-dollar investments in infrastructure to dramatically improve lives. Solar combined with small-scale appliances, starting with mobile phones, provides an enormous increase in standard of living.
Infrastructure history
Historically, being poor in a developing economy put you at the end of a long chain of government and international NGO assistance when it comes to infrastructure. While people can pull together the makings of shelter and food along with subsistence labor or farming, access to what we in the developing world consider basic rights continues to be a remarkable challenge.
For the past 50 or more years, global organizations have been orchestrating “top down” approaches to building infrastructure: Roads, water, sewage and housing. There have been convincing successes in many of these areas. The recent UN Millennium Development Goals report demonstrates that the percentage of humans living at extreme poverty has decreased by almost half. In 1990, almost half the population in developing regions lived on less than $1.25 a day, the common definition of extreme poverty. This rate dropped to 22 percent by 2010, reducing the number of people living in extreme poverty by 700 million.
Nevertheless, billions of people live every day without access to basic infrastructure needs. Yet they continue to thrive, grow and improve their lives.
This UN Millennium Development Goals infographic shows the dramatic decline in percentage of people living under extreme poverty. (United Nations)
While the efforts to introduce major infrastructure will continue, the pace can sometimes be slower than either the people would like or what those of us in the developing world believe should be “acceptable.”
A village I know of, about 10 miles outside a major city in southern Africa, started from a patch of land contributed by the government about six years ago, and grew to a thriving neighborhood of 400 single-family homes. These homes are multi-room, secure, cement structures with indoor connections to sewage. The families of these homes earn about $100-$200 a month in a wide range of jobs. By way of comparison, these homes cost under $10,000 to build.
While the roads are unpaved, this is hardly noticed. But one thing has become much more noticeable of late is the lack of electrical power. Historically, this has not been nearly as problematic as we in the developing world might think. Their economy and jobs were tuned to daylight hours and work that made use of the energy sources available.
Solar-powered streetlights have been installed recently — here under construction — increasing public safety and providing light to the community.
Several finished homes around a nearly complete streetlight installation that also illuminates a drinking-water well, enabling nighttime access to water.
In an effort to bring additional safety to the village, the citizens worked with local government to install solar “street lights,” such as the one pictured here. This simple development began to change the nighttime for residents. These were installed beginning about nine months ago (as seen in the first photo, with a closer to production installation in the second).
Historically, this type of infrastructure, street lighting, would come after a connection to the electrical grid and development of roads. Solar power has made this “reordering” possible and welcome. Lighting streets is great, but that leads to more demands for power.
Mobile phones, the new infrastructure
These residents are pretty well off, even on relatively low wages that are three to five times the extreme poverty level. While they lack electricity and roads, they are safe, secured and sheltered.
One of the contributors to the improved standard of living has been mobile phones. Over the past couple of years, mobile phone penetration in this village has reached essentially 100 percent per household, and most adults have a mobile.
The use of mobiles is not a luxury, but essential to daily life. Those that commute into the city to sell or buy supplies can check on potential or availability via mobile.
Families can stay connected even when one goes far away for a good job or better work. Safety can be maintained by a “neighborhood watch” system powered by mobile. Students can access additional resources or teacher help via mobile. Of course, people love to use their phones to access the latest World Cup soccer results or listen to religious broadcasts.
All of these uses and infinitely more were developed in a truly bottom-up approach. There were no courses, no tutorials, no NGOs showing up to “deploy” phones or to train people. Access to the tools of communication and information as a platform were put to uses that surprise even the most tech-savvy (i.e., me). Mobile is so beneficial and so easy to access that it has quickly become ubiquitous and essential.
Last year, when I wrote for Re/code about mobile banking and free Wi-Fi, I received a fair number of comments and emails saying how this seemed like an unnecessary luxury, and that smartphones were being pushed on people who couldn’t afford the minutes or kilobytes, or would much rather have better access to water or toilets. The truth is, when you talk to people who live here, the priority for access unquestionably goes to mobile communication. In their own words, time and time again, the priority is attached to mobile communications and information.
Fortunately, because of the openness most governments have had to investments from multinational telecoms such as MTN, Airtel and Orange, most cities and suburban areas of the continent are well covered by 2G and often 3G connectivity. The rates are competitive across carriers, and many people carry multiple SIMs to arbitrage those rates, since saving pennies matters (calls within a carrier network are often cheaper than across carriers).
Mobile powered by solar
There has been one problem, though, and that is keeping phones charged. The more people use their phones (day and night), the more this has become a problem. While many of us spend time searching for outlets, what do you do when the nearest outlet might be a few miles away?
It is not uncommon to see one outlet shared by many members of a community. This outlet is in the community center, which is one of a small number of grid-connected structures. Note the variety of feature phones.
When there is an outlet, you often see people grouped around it, or one person volunteers to rotate phones through the charging cycles. Above a picture of an outlet in the one building connected to power, the community center. This is a pretty common sight.
Small portable solar panels can serve as “permanent” power sources when roof-mounted. You can see the extension wire drawn through the window.
An amazing transformation is taking place, and that is the rise of solar. What we might see as an exotic or luxury form of power for hikers and backpackers, or something reasonably well-off people use to augment their home power, has become as common a sight as the water pump.
The plethora of phones sharing a single outlet has been replaced by the portable solar panel out in front of every single home.
An interesting confluence of two factors has brought solar so quickly and cheaply to these people. First, as we all know, China has been investing massively in solar technology, solar panels and solar-powered devices. That has brought choice and low prices, as one would expect. In seeking growth opportunities, Chinese companies are looking to the vast market opportunity in Africa, where people are still not connected to a grid. There’s a full supply chain of innovation, from the solar through to integrated appliances with batteries.
Second, China has a significant presence in many African countries, and is contributing a massive amount of support in dollars and people to build out more traditional infrastructure, particularly transportation. In fact, many Chinese immigrants in country on work projects become the first customers of some of these solar innovations.
People are exposed to low-cost, low-power portable solar panels and they are “hooked.” In fact, you can now see many small stores that sell 100w panels for the basics of charging phones. You can see solar for sale in the image below. I left the whole store in the photo just to offer a bit of culture. The second photo shows the solar “for sale” offers.
A typical storefront in this community, selling a variety of important products for the home. Solar panels are for sale, as indicated by the signs in the upper left.
Detail from the storefront showing the solar panels for sale. There is a vibrant after-market for panels, as they often change hands, depending on the capital needs of a family.
Like many significant investments, there’s a vibrant market in both used panels and in the repair and maintenance of panels and wiring. Solar is a budding industry, for sure.
But people want more than to charge their phones once they see the “power” of solar. Here is where the ever-improving and shrinking of solar, LED lights, lithium batteries and more are coming together to transform the power consumption landscape and the very definition of “home appliances.”
In the developed world, we are transitioning from incandescent and fluorescent lighting in a rapid pace (in California, new construction effectively requires LED). LED lights, in addition to lasting “forever,” also consume 80 percent less power. Combining LED lights, low-cost rechargeable batteries and solar, you can all of a sudden light up a home at night. Econet is one of the largest mobile carriers/companies in Africa, and has many other ventures that improve the lives of people.
Here are a few Econet-developed LED lanterns recharging outside a home. This person has three lights, and shares or rents them with neighbors as a business. Not only are these cheaper and more durable than a fossil-fuel-based lantern, they have no ongoing cost, since they are powered by the sun.
Several modern, portable, solar-powered LED lamps sold at very low cost by mobile provider Econet. The owner rents these lamps out for short-term use.
With China bringing down the cost of larger panels, and the abundance of trade between Africa and China, there’s an explosion in slightly larger solar panels. In fact, many of the homes I saw just nine months ago now commonly sport a large two-by-four-foot solar panel on the roof or strategically positioned for maximal use.
These two boys were hanging out when I walked by, and quickly chose a formal pose in front of their home, which has a large permanent solar panel mounted on the roof.
Panels are often on the ground, because they move between homes where the investment for the panel has been shared by a couple of families. This might seem inefficient or odd to many, but the developing world is the master of the shared economy. Many might be familiar with the founding story of Lyft based on experiences with shared van rides in Zimbabwe, Zimride.
A trio of medium-sized solar panels strategically placed outside the doors of several homes sharing a courtyard.
Just the first step
We are just at the start of this next revolution at improving the lives of people in developing economies using solar power.
Three sets of advances will contribute to improved standards of living relative to economics, safety and comfort.
First, more and more battery-operated appliances will make their way into the world marketplace. At CES this year, we saw battery-operated developed-market products for everything from vacuum cleaners to stoves. Once something is battery-powered, it can be easily charged. These innovations will make their way to appliances that are useful in the context of the developing world, as we have seen with home lighting. The improvement in batteries in both cost and capacity (and weight) will drive major changes in appliances across all markets.
Second, the lowering of the price of solar panels will continue, and they will become commonplace as the next infrastructure requirement. This will then make possible all sorts of improvements in schools, work and safety. One thing that can then happen is an improvement in communication that comes from high speed Wi-Fi throughout villages like the one described here. Solar can power point-to-point connectivity or even a satellite uplink. Obviously, costs of connectivity itself will be something to deal with, but we’ve already seen how people adapt their needs and use of cash flow when something provides an extremely high benefit. It is far more likely that Wi-Fi will be built out before broad-based 3G or 4G coverage and upgrades can happen.
Third, I would not be surprised to see innovations in battery storage make their way to the developing markets long before they are ubiquitous in the developed markets.
A full-sized “roof” solar panel leaning up against a clothesline. Often roof-mounting panels is structurally challenging, so it is not uncommon to see these larger panels placed nearby on the ground.
Developed markets will value batteries for power backup in case of a loss of power and solar storage (rather than feeding back to the grid). But in the developing markets, a battery pack could provide continuous and on-demand power for a home in quantity, as well as nighttime power allowing for studying, businesses and more. This is transformative, as people can then begin to operate outside of daylight hours and to use a broader range of appliances that can save time, increase safety in the home and improve quality of life.
Our industry is all about mobile and cloud. With the arrival of low-cost solar, it’s no surprise that the revolution taking place in developing markets these days is rooted in mobile-sun.
Photos by the author unless otherwise noted.
Learning by Shipping 