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Al Hammond Shares the Latest in Bottom-of-the-Pyramid Innovations

Hammond says some cutting-edge researchers afraid to "make a technology decision."

Al Hammond Shares the Latest in Bottom-of-the-Pyramid Innovations

Al HammondAl Hammond belongs in the same category with CK Prahalad and Stuart Hart as some of the world’s pioneering bottom-of-the-pyramid researchers and strategists, and Hammond has specifically targeted rural connectivity and health care. From the World Resources Institute, where he authored the pivotal research report, The Next 4 Billion, to Ashoka, where he forges links between private companies and citizen sector organizations, whatever Hammond is working on at the moment is something you know you need to keep your eye on.

In this vein, caught up with Hammond to find out the latest and greatest in the bottom-of-the-pyramid field, and we also got the lowdown on his newest venture, Healthpoint Services Global, Inc.

Tell me about your latest venture, Healthpoint Services Global, Inc.

Healthpoint Services is trying to transform rural health care by providing high quality primary care at prices that low-income people can afford to pay. We use four technologies that did not exist or were not affordable five years ago—advanced water treatment, rural broadband, telemedical software, and advanced point-of-care diagnostics. The key innovation is to put preventive care (access to safe drinking water) together with curative care (access to doctors, diagnostics, and medicines) in a modern, purpose-built clinic in a rural village. We think that most public rural health care systems fail to deliver quality, reliable care, even if they are free, and most other attempts have been what I call Healthcare Lite (the doctor comes once a week, the village health care worker is supposed to do everything, etc.). We invest to build a modern clinic, because we thing that reliable presence (eight hours a day, six days a week) is essential to change expectations and behaviors—which is critical to really changing health care; in India, that means getting people to abandon the quacks—completely untrained people who pretend to deliver health care—and use our services instead. And since there are no doctors, practically speaking, in rural areas, we have to import the talent over broadband (two-way video conferencing, with electronic medical records) from an urban area. This is a fee-for-service, cash business, but the technology enables us to keep costs low enough to be affordable—$1 to see a doctor or have a diagnostic test; $1.50 for a family's monthly supply of water.

We work with governments to extend what their systems can do, but we own and operate our clinics, which mostly employ local people whom we train as clinical assistants, water operators, door-to-door health workers, etc. What's fascinating is how quickly people in the village are adopting our service—women in particular love telemedicine, partly because we can give them access to women doctors, and partly because the doctor is not local and thus can't gossip about them. Our post-service surveys find that people feel we are giving a higher quality service than they can find elsewhere and they think our prices are fair. We still have a lot of work to do to standardize procedures and improve efficiency—to get ready to scale. But people who visit our clinics in Punjab come away fairly amazed at the depth and quality of what we do (we offer 70 different diagnostic tests and stock about 400 medicines, and our doctors have dealt with or detected and referred to specialists a huge ranch of health problems, including cancer, epilepsy, brain tumors, etc.) We have seven clinics operating, more in the pipeline, and have been operating for about nine months.

You seem to have crossed disciplines between tech and innovation, international development, bottom-of-the-pyramid design, and health. How did you create this career path for yourself?

I realized some time ago that what I do best is to start new ventures—this is my 6th—and they have all been what I would now call social enterprises: businesses but with a social mission. I get into an area, learn about it (usually working at an NGO) for 5 years or more, understand what works and what the needs are, then an opportunity or potential solution occurs to me, and I do something about it. I've done that in publishing (public understanding of science, environmental awareness), in rural connectivity, and now trying to do it in health. Throughout I've had a fascination with technology (trained as an engineer at Stanford), so using technology comes naturally. This current venture evolved from studying international development and helping to create the base of the pyramid movement for nearly a decade. Health just happened to be the sector where I found the opportunity.

What is the most surprising result you've seen from your research on wireless technology and adoption in emerging markets?

It's hard to name just one. I think the most amazing globally is how readily and rapidly low-income people have adopted mobiles and realized their value in adding safety and improving productivity. But there are also lots of computer stories too—the slum kids in India who taught themselves to use a computer and the Web in a few months, the fishermen's wives who learned to use computers and NOAA websites to find where the fishing would be good today and then call their husbands on their boats to tell them, etc. Amazing in another way is the work done at Berkeley to develop long-distance Wi-Fi (50 kilometers a link, costs less than $1,000) and the unwillingness of carriers around the world to try it—they are so used to letting others design and build their networks that they are afraid to make a technology decision.

What kind of business models are taking off at the bottom-of-the-pyramid and how do they differ from corporate business models in the same countries?

There are now book-length reports on that topic—we summarized four broad types of models in The Next 4 Billion report several years ago (unique products or services; franchising or agent strategies; enabling access by smaller and more affordable unit sizes or novel distribution schemes or financing; unconventional partnering or hybrid models), and Monitor has just done another study focused on India. New business models are being invented rapidly now, in many sectors. Fundamentally, corporate models don't work unless they are totally re-invented—product, pricing, delivery mode, etc. The BOP is also typically a low-margin, high-volume kind of environment, which is not what they teach in business school.

Is there really enough consumer research coming out of bottom-of-the-pyramid markets to sustain new ventures and ensure commercial success?

Not enough in a formal sense, although large companies are starting to do their own research here. But the real market research is being done by entrepreneurs the old fashioned way—they try something and find out if it works, then if it doesn't they modify and try again. This activity by thousands of entrepreneurs in emerging markets is rapidly creating a deep knowledge pool of what consumers want, what they will pay for, how their perceptions can be changed, etc. But of course this knowledge is not organized—you have to go and find them and ask them.