In his classic book, A Sand County Almanac, Aldo Leopold coined a phrase that would reverberate through history: Thinking like a mountain. He was the first to observe that the extermination of wolves, while solving problems for ranchers, led to explosions in deer populations-and trouble for the ecosystem as a whole. Focusing only on individual species in isolation, he observed, led to bad outcomes when it came to the natural environment. Better to “think like a mountain” by envisioning the holistic nature of natural systems and all their intricate interconnections. Little did he know at the time that his observations about the natural world would one day provide a key insight in the development of sustainable ventures and economies at the base of the world income pyramid in the 21st century.
Like Leopold’s single-minded wolf hunters, too many base of the pyramid (BoP) ventures and initiatives have been “rifle shots”-business strategies premised on the design and sale of low cost products to targeted low income end users. The landscape is littered with the remains of failed BoP ventures focused on the sale of such things as low cost water filters, solar lights, clean cookstoves, and myriad other household goods.
Reasons for failure: product misfire, low sales penetration, high selling costs, and inability to scale.
It has now become increasingly clear that this “pipeline” approach to BoP business dedicated, low-cost supply chains and extended distribution channels-is difficult to scale and seldom produces a viable business case or investment opportunity. Success demands that BoP enterprises create wide and compelling value propositions. For BoP innovators, thinking like a mountain means creating an entire business ecosystem that delivers value to local people and communities in multiple ways, not just through a single “BoP product:’ Indeed, in the underserved, informal, and opaque settings at the base of the income pyramid, BoP ventures enhance their chances for success if they are part of platform matrixes and vertically integrated ecosystems capable of delivering a wide deep value propositions.
The BoP Global Network Summit will explore these emerging strategies for assembling platform ecosystems to better reach and serve the poor, including multi-sector partnerships and cloud-based platforms that enable low-cost scaling through network effects and radical localization of content.