Blog 1: Social Innovation in Low Income Areas

Having to come up with an idea for a social venture was a lot more difficult than I had anticipated. The ideation process was useful in thinking up lots of possible directions, but narrowing down the options into one which I was confident in was a tough decision. I finally chose to build on my previous experience working in slums in Kenya and India and growing up in Kenya, by choosing an idea in the field of slum redevelopment. This is what I am interested in pursuing, however making revenue in low income areas like slums can be very difficult and this is where I am still unsure about whether the venture would be able to support itself. I have worked in improving sanitation in slum areas, and this work was partially funded by the government. As the residents do not have a huge source of income, they are often overlooked by entrepreneurs.

60% of the population in Nairobi, Kenya, lives in a slum. This is a huge opportunity. Walking around these areas, I have seen a huge amount of solid waste which causes a range of health and safety issues. Having taken some classes in energy, I thought that a waste to energy plant may be applicable in this area. There are a couple of different technologies which need to be decided on, but I think the main challenges will be logistics of the waste collection and transport as well as funding and making money from this idea. 

Another challenge I anticipate is in regards to Stakeholder Discovery as it will be difficult to reach the people I am trying to impact, so customer interviews will not be easy to conduct. I am also finding that a lot of our readings mentioned that to solve a problem, it is best when you yourself have suffered from that problem and can relate to it. I have not lived in a slum in Kenya where I am trying to work on the solid waste problem, though I have experienced the environment during my work. I know this means I will be faced with limitations in experience and knowledge, though I hope that by speaking to people I can overcome this. Ideally, this project would be conducted in Nairobi which would make these issues easier to deal with. 

For my seminar on Innovation Management in Practice, I was tasked with studying a company's approach to innovation. I found out about a  Kenyan company called M-Kopa (www.m-kopa.com) which provides affordable solar energy to the poor of East Africa and has found a way to make money. The founder has the mind-set that low income people should be treated "as customers, not charity cases" and this inspired me to re-evaluate previous ideas I had on slum redevelopment and how they could make profits whilst helping residents. Having also recently watched a documentary called 'Poverty, Inc.' where the issues of international aid are explored, and the importance of homegrown companies which build local capacity in reducing poverty in developing countries, I have come to look at development in low income areas in a different light. 

In M-Kopa's case, which is relevant for most companies working in a similar area, the main challenge is not technology, but financing. The customers are charged small amounts over the span of a year, making the solar kit affordable. I think that this may be an option for the idea I have, though this does add a lot of risk and impacts cash flow. My question is for those looking to work in low-income areas. How do you plan on making money in these situations and how did you come up with these ideas? In a fields where most organisations run on aid and donations, how do you compete without being charity driven?