How to Give a Billion People a 5% Raise
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The document discusses using SMS platforms to directly connect hospitals to national blood banks to help with blood donations. It then discusses using airtime credits distributed via mobile phones as a way to instantly give a 5% raise to over a billion people in developing countries, noting that mobile subscribers in emerging markets already spend about 10% of annual income on airtime. The document calls for mobile operators to partner to distribute airtime credits worth $45 billion to over 2 billion people, which would require much less money than the $220 billion spent annually on advertising globally.
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How to Give a Billion People a 5% Raise
- 2. but I like air conditioning…
- 4. Gold Star for Bravery
- 5. …too many Gold Stars.
- 6. Hospitals need Direct Connection to National Blood Banks: SMS to the Rescue!
- 7. A Clever Solution that was a Complete Failure
- 8. I just didn’t get it ?
- 9. SMS Platforms aren’t Fair.
- 10. Airtime to the Rescue
- 11. A Switch Flipped
- 12. The Title of the Talk… How to (almost) Instantly give a Billion Peoplea 5% Raise
- 13. Airtime = Money (at least in small denominations) Mobile phone subscribers in emerging markets spend an average of 10% of their annual income on airtime.and .
- 14. Anyone got $45B lying around? 5% Raise * 1,000,000,000 people = $45B
- 15. $45B is much less than the $220B spent on advertising…
- 16. From Billboards to Phones?
- 17. 232 mobile operators now onboard!
- 18. Compensate 2.1 Billion People
- 19. Call to Action
Editor's Notes
- I hate needles. I hate getting shots, I hate having my blood drawn, I’d be a horrible junky. So you’d imagine my consternation when I was approached by two panicked nurses in a rural Kenyan hospital claiming they desperately need my blood for an emergency transfusion.
- This was back in 2006, I was living out on the Kenyan coast and a major reason why I was hanging out in this small hospital in the first place was because it was one of the only buildings that had air-conditioning. I helped out with IT, and the hospital staff let me use an office.
- But there had been a traffic accident and the local blood bank in our small hospital had been depleted. And when you’re living in a rural Kenyan village and a pair of Kenyan nurses approach you saying there has been an emergency and your blood is desperately needed –
- Well, there is only one thing you can do, despite the needle phobia – you suck it up, give blood, and then you feel extremely heroic afterwards – showing off your bruise and telling your story of bravery to anyone who will listen.
- But when exactly the same thing happened 3 weeks later, and then again a month after that – my arm seemed continually bruised, and really out of my own self-interest more than anything else I started looking into what the deal was with blood banks in Kenya.
- It turned out one of the major problems was latency: the Kenyan centralized blood banks needed more up-to-date information about the blood levels in the remote hospitals they served. So I built a SMS-based system that allowed rural nurses to text in the blood supplies in their local hospital.
- I felt quite good about the clever fix for this problem – and for the first week the system has a huge success. However, by the second week, about half of the nurses stopped texting in the data – and by the end of the month virtually no nurse was texting in the data. The system was deemed a complete failure.
- The SMS bloodbank didn’t failure for any technical reason, but rather because of a fundamental lack of understanding on my part. The system failed because I didn’t understand the relative value of a SMS in Kenya.
- The price of sending a text message represents a fairly substantial fraction of a rural nurse’s day’s wage. Asking them to send a text every day was essentially asking them to take a pay cut – something that was fundamentally unfair.
- At the time I was also working with the incumbent mobile operator, Safaricom, so I was able to add an additional piece of functionality to the system – for every properly formatted text message with the day’s blood supplies, we would credit that rural nurse about 10 cents worth of airtime – enough to cover the cost of the SMS and about a penny extra to say thank-you.
- A switch fundamentally flipped. For the opportunity to earn one cent of airtime, every rural nurse re-engaged with the platform. This experience led me to quit my day job as a professor at MIT and start exploring other ways airtime could be used to both compensate as well as to enable people’s voices to be heard.
- Which leads me the title of this talk: I think mobile phone airtime may be able to literally provide a billion people with a 5% raise. To follow my line of reasoning, you need to know a couple of facts:
- In most emerging markets, the average mobile phone subscriber spends 10% of her annual salary on pre-paid airtime scratch cards. So if we can figure out a way to subsidize half of this airtime expenditure – averaging about a buck a week – we can provide her with a 5% raise!
- Giving her airtime lets her keep that extra dollar in her pocket rather than spending it on yet another scratchcard. But the kicker is that there is well over 2B pre-paid mobile phone subscribers living in emerging markets today. To provide a billion of them with this 5% raise, all we need is around $45B of airtime.
- So we can deliver instant economic empowerment on an unprecedented scale for the low, low price of $45B! Now put this number in context: An estimated $130B is currently spent on market research and advertising in the developing world – estimated to grow to $220B over the next 5 years.
- All we need to is re-direct about a quarter of the money being paid to traditional billboard companies and other ad channels in emerging markets – directly to the individual consumer. And in exchange, we can actually have their voices heard: gaining a better understanding and building a unique relationship with these next billion consumers.
- We’ve already laid the groundwork – the compensation engine that I integrated at Safaricom to compensate those rural Kenyan nurses -- as of last week we’ve now installed this system into the backend billing systems of 232 mobile operators in almost 100 countries.
- This enables us not only to communicate, but to compensate, 2.1 billion people. My hope is that by developing the platform that enables people’s voices to be heard without engendering cost – and also being able to compensate them for their input – we can do something that changes the world.
- If you’re sitting the in the audience with a mandate to go out and learn about and engage with consumers in emerging markets – I think there is an opportunity to not only solve your problem, but also provide unprecedented economic empowerment.
- I’m well aware of loads of potential ways this idea could fail – but frankly, there aren’t many opportunities you come along that can improve economic livelihoods on this kind of scale. Together we may very well have a chance to provide a 5% raise to a billion people. Certainly it’s a goal worth risking spectacular failure.