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DA Reflections - Episode 4 : Design for extreme affordability

Design! What does it really mean to design and what does it mean to design for extreme affordability? I came across that phrase at a St...

Design! What does it really mean to design and what does it mean to design for extreme affordability?

I came across that phrase at a Stanford GSB event earlier this year where someone was talking about Stanford’s D-school and how they teach their students “Design for Extreme Affordability”.

I left that program fascinated about that and started some research into that area. Surprisingly, this concept had been all around me but I never realized it!

You might be lost and would really want to understand in the first place how design for extreme affordability works. Let me put it like this: it is simply using design thinking methods, to develop products and services that serve the needs of the world's poor.

This is a business strategy which when applied to already existing products result in a surge in revenues and profits. Many times, when we think of innovation we think it means coming up with an entirely new product. Innovation can simply be selling old products in a new way!

What key examples of this strategy can we find around us?

• Sachet powdered milk vs tin powdered milk (Peak, Cowbell);
• Sachet alcoholic drinks vs bottled alcoholic drinks (Alomo, Ogidiga);
• Bobo vs Viju;
• Satchet bleach vs bottled bleach (Hypo, Jik);
• And more recently, the new 25 naira gala and the concept of micro insurance!

How does this strategy really work?

I would explain this with a very basic illustration:

A tin of powdered milk costs N1,000 and lasts for 50 days. Ade is a welder and is into body building so he is required to have some milk in his diet regularly. However, he has one challenge – finance. He is paid a daily wage of N200 and cannot shell out N1,000 immediately to buy a tin of milk even though he really needs it.

With products designed for extreme affordability, companies now package milk in smaller packages – sachets. This way, Ade can buy his milk on a daily basis for N30.

In a fifty day cycle, Ade spends N1,500 on milk and even more expensive than N1,000 for a tin of milk but he doesn’t care. The new products meet him at his level.

At the end of the day, the milk manufacturer makes more money off Ade.

To think that there are billions of people in the world who are poor, this new way of thinking helps both parties – the companies and the people.

The task for you is simple. How can you deliver current services which are needed by the world’s poor but are too expensive for them to afford? How can you use technology, design, creative problem solving to help the world?

Think on these things.


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