You may be surprised to learn that the world’s 4 billion poor are the largest untapped consumer market on the planet with more buying power than any other group. Would you also be surprised to learn that of the $1.1 billion people who live on less than $1 a day, more than 70% are small farmers on rural, often unproductive land in Sub Saharan Africa? But here’s the shocker. The cost to get one family out of poverty forever is only $300! For one person, only $60! And here’s the best part of all, none of them are looking for a handout; they simply want the opportunity to make money.
How do I know all this? KickStart founders Nick Moon and Martin Fisher, who had both spent years working in traditional public aid programs, decided they could change the business model for how you enable people to become self-sufficient. Working with world-famous design company IDEO, they developed a water pump that was suited to the needs, budget, and environmental conditions of Kenya. It was designed to employ manufacturing capabilities already available in Kenya; it cost less than $150 and could survive the harsh Kenyan environment. Initially they sold more than 24,000 pumps in Tanzania and Kenya, approximately 70 percent of which went to female entrepreneurs who used the pumps to produce $30 million per year in profits and wages. That was back in the 1990s. Fast forward to today and KickStart can proudly report that as of February 2012, they’ve sold almost 200,000 pumps, created 128,400 new businesses, and moved 641,800 people out of poverty. (I think the U.S. government could learn a lesson here!).
Martin and Moon accomplished this by developing a scalable and repeatable business model that is the result of 5 questions they ask themselves.
- What business will be profitable for these people, in this place?
- What new tools will make this possible?
- How can we produce these?
- How do we convince someone with little money to make a big investment?
- Is this going as we planned?
All the profits they make from sales are reinvested to develop new technologies that start the process all over again. They calculate that every $1 of donation produces $15 in profits and wages. That looks like an awfully good return on investment.
Thousands of miles away in rural East Africa, KickStart is a fantastic demonstration of how the private sector in the form of one entrepreneurial non-profit can do more to create jobs and raise the standard of living than all the government aid programs you can name. Check out their site and help them help others become entrepreneurs and take charge of their lives.