Ashifi Gogo, the CEO of counterfeit-fighting Sproxil, knows he’s up against a powerful and ancient racket.
"Counterfeiting has been around for thousands of years," he tells Fast Company. He points to the example of fine wines in ancient Rome that bore insignias on their corks to assure customers of their genuineness. Sure enough, spurious signed corks sprung up: Counterfeiters were a problem even in the days of Caesar. "To say that we’re going to make counterfeiters turn into dinosaurs is quite a bold projection," says Gogo.
Perhaps Sproxil won’t eliminate counterfeiting anytime soon. But Gogo’s company, which uses a system of scratch-off codes and verified text messages to establish that medications and other goods are the real deal, is at least giving the bad guys a run for their money. Sproxil, which is already active in Kenya, Ghana, Nigeria, India, and the U.S., is gearing up to enter two more markets soon. With around 2.5 million unique users and 120 million codes generated, the company (recently dubbed one of this magazine’s most innovative) just won a Patents for Humanity Award from the U.S. Department of Commerce last week.
Though known mostly for its efforts to fight the scourge of counterfeit medicines, Sproxil doesn’t stop there. Just about anything that can be knocked off, Sproxil can verify. Fake brake pads? Sproxil’s on it. Dummy mattresses? Those too. Electrical wires? Cables? Gogo’s been contracted to work for those manufacturers, as well. "We’ve even signed on a company that uses our solution for verifying underwear," says Gogo, confessing he "did not see that one coming."
"I don’t know what the consequences of counterfeit underwear are," he says, declining to specify just which men’s underwear company has contracted him (lest counterfeiters rapidly flood the market with their supply before Sproxil’s solution goes live). "But apparently there are pain points involved" with knockoff briefs, he says.
As Sproxil grows (and its been roughly doubling or tripling its operations each year), Gogo is working out a theory of counterfeiting, why it happens, and what technology can or can’t do to combat it. He specifies three questions that lead a consumer to care whether a good is counterfeit or not. First, does it affect the consumer’s health or safety? Then by all means, real goods are preferred. Does it impact the consumer’s wallet? (That knock-off mattress may flatten out more rapidly, meaning you didn’t get true value.) Likewise. Third, and most intriguingly—does the counterfeit good do damage to a person’s pride? Will the fake makeup run? Will the knock-off Gucci be called out by one’s friends? If so, then again these are cases in which the real deal has an advantage.
But there are also instances when none of these conditions exist. "Counterfeit DVDs don’t burn your eyes out," explains Gogo. In cases like these, he concedes that there may be no technological solution to counterfeiting.
Counterfeiting is such big business, it sometimes infiltrates the ranks of the people tasked with stemming it. Gogo reports having encountered a brand manager within a company that was getting ripped off who appeared to be in bed with the counterfeiters, himself. "We walk away from those things, once we discover it’s toxic," Gogo says. As a small startup, Sproxil doesn’t have the resources at this point to launch legal battles in such cases. "If we were to go and blow the whistle, and the multinational starts putting lawyers in the mix, we’re not as capitalized as they are to run the marathon," he says.
It’s a puzzle: how to do as wildly ambitious work as Sproxil does, while being as small and vulnerable as it is. Despite taking on some powerful, seedy people, Gogo says he thankfully hasn’t gotten anything like death threats—"yet." He tries to keep a low profile when taking meetings. "I don’t go around with a T-shirt saying, ‘I am the Sproxil guy,’ and I use nondescript vehicles to get around to do business," he says.
The more you study and engage with the problem of counterfeiting, the more you realize its daunting scope. In the counterfeit drug market, the bad guys insinuate themselves at every step of the supply chain, sometimes even all the way upstream, at the factory. Consumers’ own complacency can be part of the problem. Sproxil has found that especially with some medicine that is only sporadically purchased, consumers will scratch-and-text once or twice, but then assume that the product is safe merely because of the Sproxil label on the box (a dangerous assumption, since that can be counterfeited, too). Sproxil is working to create incentives—free minutes on cell phone plans, for instance—to keep consumers texting to verify.
The good news is that Sproxil’s tech is in some cases smoking the bad guys out of their holes. Not long ago, 3,000 packets of an antimalarial drug were stolen from an Indian manufacturer that works with Sproxil. Sproxil was able to tweak its technology so that consumers who wound up purchasing these goods and texting a verification were greeted with a text message explaining that the medicine had been stolen. Within days, Sproxil was able to pinpoint the locations of pharmacies that had bought the contraband goods. "You can imagine the uncomfortable conversations between brand owners and the shopkeepers who claimed innocence."
The battle rages on. Sometimes Gogo speaks of counterfeiters with a bizarre mixture of loathing and admiration one reserves for an arch-nemesis: The wily counterfeiter is the Moriarty to Gogo’s Sherlock Holmes. "The fact is that counterfeiters are well-resourced, incredibly crafty, and smart. If only they’d use their resources for good, is what I lament," says Gogo. "Because they’re really good."
[Image: Flickr user midorisyu]