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Making a Difference and a Profit OPEN ACCESS

Taking a Cue from Silicon Valley Startups, Lean Design can let us make a Profit while Satisfying Customers in the Developing World.

[+] Author Notes

Douglas L. Van Bossuyt is an assistant professor in the Department of Mechanical Engineering at the Colorado School of Mines in Golden.

Mechanical Engineering 137(11), 38-43 (Nov 01, 2015) (6 pages) Paper No: ME-15-NOV-2; doi: 10.1115/1.2015-Nov-2

This article examines different approaches that could be applied / used by engineers for lean design. Lean design can let companies make a profit while satisfying customers in the developing world.

In developing markets, difficulty in gathering the necessary data can lead to lengthy delays or broad assumptions in the product development cycle. The iterative approach of lean design stresses leveraging sales data, customer feedback, and distributor feedback to evaluate and refine the important metrics of value, growth, and impact of a particular product that could drive the design process and optimize the product. The experts also say that when designing products for the developing world, making money is not the only value proposition. Engineers must keep ethics in mind. Engineers must also understand the social and health consequences of introducing products into the marketplace and ensure that any product does not adversely impact the customer or community. Products must be designed that have broad enough appeal to drive a sustainable market for the company.

In the field of development engineering, the example of the massive donor-funded water project that no one uses or maintains is so iconic that it has become something of a cliché. Ironically, the lesson that the failed water project teaches—that we as engineers need to better understand the people we are designing for—has an application so broad that many of us lose sight that we are designing for real people. Regardless of whether a product is going to be sold and used in Washington, D.C., or Ouagadougou, engineers must keep in mind the context of where a product will be used.

The role of human nature is often overlooked when dissecting design failures in development engineering. Many failures are due to the lack of buy-in from the local communities. Organizations drop in, paternalistically tell people what is best for them, and leave behind a project for which locals feel no sense of ownership nor have any capacity to maintain.

In other cases, products that are intended for the developing world market draw from a universal template. A stove design that works well in South Asia, for instance, may be exported to East Africa or the Andes without regard to whether it makes sense in those places. Fuel sources, cooking styles, and a myriad of other factors change from region to region and even within the same small village. One size more often than not does not fit all.

More generally, the traditional engineering design process, which follows a linear progression from project definition to product definition to conceptual design to product development and finally to product support, may not be the optimum means to create the most value for people at the base of the global economic pyramid. Many of the design methods and funding models used in development engineering ignore the business case. And too often, designers treat the funding agency or some important third party stakeholder as the customer, not the actual end user.

As an alternative, I believe engineers should adopt and adapt some of the practices from Silicon Valley. My research group has developed a method called Lean Design for the Developing World, or LDW for short, which draws from the human-centered design paradigm, traditional product design methods, and the lean startup methodology popularized by Silicon Valley enterprises.

Engineers should adopt and adapt some of the practices from silicon valley.

Customer feedback helped Nokero evolve the design its solar light bulb. Improvements in the N100 (below) led to the N200 (opposite).

Grahic Jump LocationCustomer feedback helped Nokero evolve the design its solar light bulb. Improvements in the N100 (below) led to the N200 (opposite).

Following LDW will provide products that are economically viable for both companies and customers, have strong market growth potential, and have a net positive impact on the customers and their communities. In essence, I believe that a capitalist approach can effectively, efficiently, and compassionately create the kinds of tangible and intangible benefits that NGOs, governments, and the international development community have long striven for.

There is nothing intrinsically wrong with traditional engineering design methods, which are efficient in designing robust, innovative, market-defining products. Generally speaking, traditional design starts with a project definition phase to create a business framework and model that is driven by technology developments, market direction, or product changes. Those drivers push design teams to identify and choose products to develop, after which the next step is the development of a conceptual design which then is refined into a physical product. After the product has been released, the project goes into the product support phase.

In developing markets, difficulty in gathering the necessary data can lead to lengthy delays or broad assumptions in the product development cycle.

Within the overarching design framework that many of us learned at university, there are a number of methods adopted by industry.

One example is a form of analysis known by the acronym STEEP, short for Society, Technology, Economy, Environment, and Politics. STEEP analysis attempts to derive opportunities and hidden needs by identifying broad trends, and relies on the availability of data about the economy and technological state of the target market.

Information is usually easy to come by in Europe, East Asia, and North America—where private companies and public agencies collect all sorts of data. In developing markets, however, difficulty in gathering the necessary data can lead to lengthy delays or broad assumptions in the product development cycle, and cost overruns. It increases the likelihood of project failure.

Another design method is the systems engineering formal stakeholder needs analysis method. As defined by the International Council on System Engineering (INCOSE), this analysis focuses on surveying key stakeholders to elicit formal requirements. This technique assumes a stakeholder that is well-informed and able to articulate her needs in appropriate, often technical language. Many developing world stakeholders do not have the technical background necessary to effectively communicate with engineering design teams adhering to the methods advocated by INCOSE.

Because of the paucity of high-quality information and the relative inability of stakeholders to clearly articulate their desires using technical language, traditional engineering product design techniques can be difficult to implement in the developing world and may lead to outright design failures. Failures such as the Life Straw and the One Laptop Per Child initiative—highly publicized projects that never accomplished their ambitious goals—demonstrate the risks posed by misunderstanding the needs and wants of customers, and the failures that can arise from poor or sparse information.

Several high-profile groups have used human-centered design, an increasingly popular design methodology used in developing world contexts. But it suffers from some of the same problems that STEEP or stakeholder needs analysis face, and with added challenges. Human-centered design emphasizes collecting information from relevant stakeholders, translating what was learned via field work into concrete solutions, and delivering those solutions back to the field.

The Lifestraw (above) and OLPC XO-1 laptop (left) were ambitious failures.

Grahic Jump LocationThe Lifestraw (above) and OLPC XO-1 laptop (left) were ambitious failures.

Human-centered design requires a very large and sometimes prohibitive level of upfront investment, both in time (sometimes years) and money, to truly understand customers from another culture and can be limited by the inability of stakeholders to effectively relay their needs and desires to the design teams and ethnographers. Design teams may also over-emphasize what they learn from a small number of users, leading to over-customized products.

Other methods used to design for the developing world, such as co-design, implementation of philanthropic resources, and appropriate technology methods also generally require large upfront investment in time and energy before the first product is released to the market. With long lags between the inception of a product design process and production of the first fieldable product, customers become discouraged and disenfranchised, for-profit companies lose interest or go bankrupt, and funding agencies move on to fund other projects before deployment is complete. The final product is usually not a right fit for the market, and often the project will be abandoned before completion.

At the Colorado School of Mines, associate teaching professor Jered Dean, research assistant Jordan Pease (since graduated), and I began looking at alternatives to those product design approaches for developing world markets. The startup culture of Silicon Valley soon became a source of inspiration.

Startups typically turn ideas into products very quickly, placing products in the hands of customers in order to generate useful data such as customer feedback, indicating what people like and dislike about a given product, and market and sales data, identifying product value. The market and sales data also quantitatively explains potential market demand between varying demographics and regions. Rapidly fielding new iterations of products as consumer needs, desires, and preferences are uncovered is key to the success of many startups.

We asked ourselves how a “lean startup” concept can be adapted to the challenges facing product designers working for the developing world. At the heart of what we call Lean Design for the Developing World, or LDW, is the idea that the market can best identify product value and drive product development. The notion of product value—for the customers and the company— must always remain the focus of the designer who implements market-based approaches to design.

The LDW method has three overarching steps: product concept and deployment; validated learning; and decision making. The three steps are iterative in nature and have a decision point that is adapted from startup culture: the design team has to make a critical decision— pivot, persevere, or cancel the project.

The iterative approach of lean design stresses leveraging sales data, customer feedback, and distributor feedback to evaluate and refine the important metrics of value, growth, and impact of a particular product that drive the design process and optimize the product. A product cannot be introduced to the market if it does not have positive value through return on investment to customers and profit for the company, positive market segment growth to reach many customers rather than just a few, and positive impact on customers and their communities.

The capitalist approach, we feel, provides value by developing profitable products with strong and rapid return on investment for customers, such as by replacing a kerosene lantern that requires weekly fuel purchases with a solar rechargeable electric light system, which does not need external price support or donations as part of the business model.

Product value—for the customers and the company—must always remain the focus of the designer who implements market-based approaches.

At the same time, we insist that products must have a positive benefit on the customer and community through a reduction in existing hazards, risks, or problems found in the customer's daily life. An example of this would be an efficient cook stove with an integrated chimney to remove cooking fire smoke from the home and to improve combustion.

Immediate feedback from users enabled nokero to quickly create another product that more accurately matched market needs.

Nokero learned that its customers were willing to adjust the orientation of the solar panel to get a full charge.

Grahic Jump LocationNokero learned that its customers were willing to adjust the orientation of the solar panel to get a full charge.

For any business to be sustainable, the market for the product must be present and sufficient to support growth. This could mean selling a home water purification system that has regional appeal.

How does LDW work? Already there are organizations using market forces to shape development engineering decisions. D-Rev, for instance, is a small, San Francisco-based nonprofit that designs medical equipment for developing countries and licenses the designs to for-profit distributors in the developing world. D-Rev relies on market-based revenue streams rather than donations or grants for growth. By being sensitive to market forces, D-Rev can create products that have an eye toward providing value to the end user rather than catching the fancy of a donor.

The design process around the Nokero solar light bulb makes for an instructive case study in LDW. Nokero, based in Denver, is a company that designs, manufactures, and distributes lighting solutions intended for regions where an electrical grid connection is costly or non-existent. This market contains an estimated 4 billion people. In many cases, people without access to reliable electricity spend up to 30 percent of their incomes on kerosene lamp fuel.

Nokero is a portmanteau of “no kerosene,” and the solar lantern technologies that the company develops are effective at eliminating the need for harmful and polluting kerosene and other fossil fuels in both the developing and developed world. Without the ongoing expense of kerosene, the consumer can see a complete return on the purchase price of a Nokero solar light bulb in as little as six months.

The design team at Nokero started with three essential hypotheses. There was value in creating a product that would be both profitable for the business and save the customer money by providing a rapid ROI for the customer. Sales growth would stem from local distributor channels and word-of-mouth advertising. And by eliminating the need to burn kerosene fuels, the health and well-being of the customer would be improved, creating a positive social impact.

To test these original hypotheses, Nokero released the N100 solar light. From initial customer feedback, the Nokero team was able to identify where the original hypotheses were invalid. For example, the N100 was designed with panels located on the sides of the bulb and contained four separate panels that all faced in directions 90 degrees apart from one another. The orientation of panels prevented them from absorbing the maximum amount of energy because of their angle with respect to the sun.

The assumption by the design team was that the user would be willing to sacrifice a complete charge in order to eliminate the need to manually adjust the orientation of the panel during the day. In fact, Nokero found that customers were willing to adjust orientation during the day to have a fully charged bulb that lasts longer through the night.

The design of the N100 may have been flawed, but its rapid release was vital to enabling Nokero to test its value hypotheses. While the N100 lacked many of the features that were present on later, more successful iterations, it was vital in confirming some assumptions while dismissing others that Nokero initially viewed as vital to commercial success. The immediate feedback from users of the N100 enabled Nokero to quickly create another product that more accurately matched the market needs.

Faced with a decision to pivot, persevere, or end the project, Nokero pivoted and redesigned the product. The N200, which had a single solar panel located on the top of the bulb housing, was released within a year of the initial launch of the N100. The single panel had greater efficiency and reduced the complexity of the design in addition to allowing for a longer charge when the user took the time to readjust the angle of the panel to maximize solar energy collection.

However, Nokero kept the N100 in production for a time and continued to sell remaining units to customers who wished to purchase them. The sales data for the two models show how both pivoting and persevering on a product line can directly impact sales. After the first month of release, the N200 rapidly overtook the N100 in overall sales despite having a higher price. The decision to increase the effectiveness of the system and negate preconceived notions on what the market was willing to pay enabled Nokero to rapidly expand its business.

Since the release of the N200, half a dozen persevere-style iterations have been completed to further refine the N200 into several successful revised products. In addition, the company has made a number of pivots into other product lines, such as solar-power phone chargers and floating lights for use by fishermen.

Nokero's product lines have rapidly diversified and been refined to meet market needs in a variety of countries and cultures while maintaining company profitability and customer return on investment (some customers have even made businesses charging cell phones with their Nokero solar light bulbs that double as phone chargers), high growth, and a positive social impact through the reduction of health consequences from kerosene lantern soot and smoke.

As the example of Nokero shows, even with welldefined underserved markets, creating a product that provides value and growth prospects is no easy task. Nokero has defined a market and the market's needs to great success via the LDW process. The company can now deliver products to the hands of consumers who can most benefit while proving to be a profitable and viable business.

Market forces are powerful, and they help create incentives that can be used to refine designs. By looking to ensure that everyone in the supply chain gains value—from the manufacturer to distributors and finally the end user—the entrepreneurial or capitalist approach can communicate design successes and failures back to engineers and give them the incentive to make rapid adjustments.

We continue to maintain and emphatically insist that it is important to remember that, when designing products for the developing world, making money isn’t the only value proposition. Engineers in this market must keep ethics in mind. The products must provide positive social impact and return on investment, not just for the end user but for communities as well.

There are deeper ethical issues, too. Engineers must think hard about questions such as what sorts of materials the products are made of, where the best place is to manufacture products, and how products are disposed of at the end of their lifecycle. Engineers must also understand the social and health consequences of introducing products into the marketplace and ensure that any product does not adversely impact the customer or community.

When designing products for the developing world, making money isn’t the only value proposition. Engineers must keep ethics in mind.

Products must be designed that have broad enough appeal to drive a sustainable market for the company. Finally, engineers must design products that rapidly return customer investment and see dividends well beyond the initial purchase period.

Through keeping the three core tenets (profit and ROI, market growth, and impact) of the LDW method at the heart of the design process, and by rapidly pivoting, persevering, or canceling a product, a for-profit company and engineering design team can develop products for the developing world that make a positive difference while also making a profit.

Copyright © 2015 by ASME
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