One of the first questions I ask clients when they are looking at “productising” a custom solution is, what’s in it for the customer? In a highly engineering-oriented industry like satellite, it can be too easy to forget about the customer and what benefit he or she will derive from purchasing our products. At the recent PTC Conference in Hawaii, I too was reminded of the importance of remembering the customer. There it was about laptops, but the insights could be applied to rural access networks and even your own business.
I’m a fan of Rural Access Networks. To me they not only drive up satellite communications revenues but also do good by your fellow man. As a communications enabler, rural access networks create opportunities for communities to overcome their isolation through improved delivery of education and medical services and even broadening their horizons. At their best, rural networks can stem the tide of young people drifting to urban centres by enabling them to participate in the online economy.
What caught me unaware however, is that you ignore the human side of implementing these technology initiatives at your peril. By human side, I mean factors such as jealousy, the fact that people come and go, notions of fairness and so on – all factors that have nothing to do with getting the Internet to work or bring able to make phone calls, but will ultimately determine the success of your project.
In her presentation on the implementation of four OLPC (One Laptop Per Child) projects in Papua and New Guinea and the Solomon Islands, Dr Laura Hosman from the Illinois Institute of Technology highlighted how these external factors can greatly impact what happens on the ground.
You may have heard of the One Laptop Per Child (OLPC) project. OLPC’s mission is to create educational opportunities for the world’s poorest children, by providing each child with a rugged, low- cost, low-power, connected laptop – a great initiative. The challenge for OLPC however, is that there is often not enough laptops to go round. This results in a certain class within a certain school, within a certain district receiving the initial deployment of laptops. And this is where the human side comes in.
What happens to those who miss out?
Hosman reported that whilst initiatives such as OLPC bring great excitement to a community, their implementation can cause disruptions. Some projects suffered issues with jealousy amongst siblings that missed out, or even teachers whose classes that weren’t selected. Others had lost momentum with the departure of a key staff member, or equipment failure.
Hosman’s findings mirror my own experiences deploying communications to isolated Aboriginal communities in Australia. These projects struggled not because of the technology, or funding, but because they were not integrated into the overall environment of the community and did not adequately take into account the incentives of the stakeholders involved.
It would be easy to say: it’s all too hard, if you can’t provide every student with a laptop, or have an integrated curriculum – i.e. perfect conditions, don’t bother. That would be shame, as benefits can still be derived from a few laptops; it is also unnecessary.
Allocating scarce resources is not a new problem – we just need not be afraid to apply “hard” economic principles just because we are trying to do good things.
At times like these, ask yourself what would the Under Cover Economist do?
The Under Cover Economist, otherwise known as Tim Harford writes a column in the Financial Times. There he reveals the economic ideas behind everyday experiences; such as why you pay more for a cup at London’s busy Waterloo station than in nearby coffee shops. How might an Under Cover economist approach the problem of allocating laptops?
Assume it’s your job to decide who gets the laptops and you want to maximise the flow-on benefits. Unfortunately, there are not enough laptops to go around, so you can’t give one to everyone. How can you maximise the benefits derived from the laptops?
You could run a competition. This would enable you to identify the smartest, brightest, quickest or whatever ‘est students in the school to give laptops, but would potentially deny those children who would make best use of the computer.
You could auction rights to the laptop – let the market decide. Those who valued using the laptops the most because of the perceived benefits should be prepared to pay more. The problem is that these communities are often very poor and such a auction is likely to be even more divisive than allocating them using the competition method.
Here’s my “Under Cover” suggestion: What if you pooled the laptops and gave each student ten tokens per week for laptop access? This would enable laptop access to be shared across the student population, but still would not necessarily mean that we are maximising the benefit derived.
Giving customers choice
One of the challenges of laptops in remote schools is that the curriculum has not been designed to cater for them – i.e. the challenge is to find meaningful things for the students to do. Let’s assume that the teachers at this time can find effectively utilise five tokens worth of laptop access per student during school hours. This would leave five tokens spare per child.
You could then open access to the laptops after school hours to the community? We could have red tokens for in school use and blue ones for afterschool use. The danger in making valuable items available after hours is theft, so we have to protect against this. Let’s make every student contribute one blue token towards a person who will always be present when the centre is open; but make the remaining four blue tokens tradeable.
The students can now make choices based on the value they place on using the laptops. Students and other members of the community, who valued the use of the laptops, now have additional access after hours. Those who value it less, or have higher priorities, can trade their chips for something else. Importantly we have also created a job as the centre attendant, with the salary generated from the one chip levy, which would also be traded.
How can a story about laptops increase your bottom line?
Well, if you are a service provider for example, replace laptops with bandwidth, tokens with QOS (Quality of Service) and make the School day, business hours. Now you have the elements of a secondary market in off peak bandwidth. Position yourself in the centre as the market maker and you can improve your bottom line and maybe even do some good in the community.
Customers can now offload excess bandwidth – not for an extra bowl of rice, or use of a tractor, but for credits on their monthly bill in the same way people with solar panels can feed back into the electricity grid. This off peak capacity can be used by others (e.g. mining companies) for secondary uses like providing enhanced bandwidth for staff welfare communications, at reduced rates.
Best of all you are in the middle. Your customers are now more likely to take increased bandwidth allocations, comfortable that they can offload excess capacity, or alternatively have access to more bandwidth should they require it. Any provider, who has purchased a VSAT hub in the last few years, will likely have the capability to implement such a system. Even if the trades don’t directly add to your bottom line, it will provide a point of differentiation in a market generally short on points of differentiation and is likely to reduce churn.
And for those who would like to assist those trying to improve the lives of less fortunate, but don’t know how: why not get your customers to donate their excess bandwidth to serve rural access networks? This bandwidth could be used to refresh local school caches each night with say, the top 100 news and educational websites. Then those dozen or so laptops can really start delivering value!
Talk to AUSPresence about improving your bottom line today!
Inquiries: Chris Frith
Singapore: +65 9169 4607
Australia: +61 2 8002 8200
About AUSPresence: AUSPresence is a professional services firm catering to buyers and sellers of satellite communications services and equipment. Based in Singapore for the Asia-Pacific, our business consultancy practice provides advice and support in the areas of strategy, marketing and product development to help sellers achieve their objectives more quickly. Our brokerage service Satcomms CHOICE, enables carriers and end users purchase the right service at the right price. Check out www.auspresence.com to make the most of satellite in your business.