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Global Social Benefit Incubator 2008

GSBI Application Exercises Example: BushProof

The following is an adaptation of information submitted by BushProof on Social Edge supplemented with information from their business plan presentation at the 2006 GSBI at Santa Clara University.

Exercise 1: Target Beneficiaries
1.1 Create an estimate of the Total Available Market

Segment	Size	Needs
Madagascar Water Deficient Rural Poor	14.5 Million	Safe and reliable drinking water at a low cost
Madagascar Total Rural and Urban Poor	17 Million	Low cost option for electricity to improve quality of life and increase productivity

1.2 Target Addressable Market (Positioning)
Water Products

Alternative	Characteristics	Size	Positioning
Municipal water systems	High capital and expansion costs, requires minimum population density, high maintenance	< 50% Urban Population < 5% Rural Population	Convenient
Chlorinated tablets	Easy implementation, no capital investment, higher recurring costs	<1% generally emergency use	Convenient, pay by dose costs, no large investment
Non Consumption	No cost, increased disease, lost productivity, death	14.5 million	Default
BushProof	Rugged product Cost low Effective	Target 500k/year	Low cost, highly accessible, simple to maintain

Solar Products

Alternative	Characteristics	Size	Positioning
Hydroelectric and fossil fuel power plants (grid)	Clean energy High capital costs	500k rural	Convenient energy supply
Non Consumption of electricity	Easy to find, lower costs	17M	Default, wood & kerosene
BushProof	Rugged product, cost low, renewable and low impact to environment	Target 100k/year	Low cost, durable, easy to use

1.3: Target Market Segment

	Market Segment Analysis Your social venture: BushProof low-cost drinking water solutions
	Target Market	Compelling Reason for Adoption	Reasons for Non-adoption of Product or Service
1.	Direct Beneficiaries Rural and Urban poor Product: bio-sand filters, low-cost hand pumps, SODIS bags, cost effective solar energy products	Water Products: Prestige; Better taste, improved color of treated drinking water; Convenience; Being perceived as being ‘modern’ and for development; Less effort; Health; Financial savings through less working days lost and reduced medical costs; Being ‘a good, loving mother’. Solar Products: Increased convenience Being perceived as being ‘modern’ and for development; Increased quality of life and productivity	Water Products: Unaware of issues of non- safe water; Other spending priorities; Too poor to even pay for low-cost water solutions. Solar Products: Other spending priorities or unable to pay for solution Access to other energy sources
2.	Indirect Beneficiaries NGOs and Humanitarian Aid Organizations Products: well jetting, low-cost drilling, Canzee pumps, low-cost hand pumps, hand washing bags, SODIS bags, ceramic and bio-sand filters.	Well construction services and water treatment product offered by BushProof significantly increase cost-efficiency and dramatically impact of water interventions planned by NGOs. Well construction techniques by BushProof allow very rapid construction – even when incorporating quality beneficiary participation: very rapid and sustainable results.	Distrust of working with private sector; Smaller NGOs are keen to stay hands-on and rather build themselves (e.g. with volunteer labour) than use contractors. Some NGOs more interested to promote local micro-enterprises than to work with (social) enterprise at national level.

Exhibit 1: Madagascar Demographics

Population:	18,595,469 (July 2006 est.)
GNI per capita:	(US$) 290
Age structure:	0-14 years: 44.8% (male 4,171,821/female 4,158,288) 15-64 years: 52.2% (male 4,809,173/female 4,900,675) 65 years and over: 3% (male 249,414/female 306,098) (2006 est.)
Population growth rate:	3.03% (2006 est.)
Birth rate:	41.41 births/1,000 population (2006 est.)
Death rate:	11.11 deaths/1,000 population (2006 est.)
Infant mortality rate:	total: 75.21 deaths/1,000 live births male: 83.34 deaths/1,000 live births female: 66.84 deaths/1,000 live births (2006 est.)
Life expectancy at birth:	total population: 57.34 years male: 54.93 years female: 59.82 years (2006 est.)
Total fertility rate:	5.62 children born/woman (2006 est.)
Major infectious diseases:	degree of risk: high food or waterborne diseases: bacterial and protozoal diarrhea, hepatitis A, and typhoid fever vectorborne diseases: malaria and plague are high risks in some locations water contact disease: schistosomiasis (2005)

Exercise 2: Value Proposition

In order to reach large numbers of poor people with safe drinking water and energy solutions, BushProof consciously targets two distinct customer groups simultaneously: the poor themselves, and Non-Governmental Organizations (NGOs) that work with the poor.

Components for your value proposition 1: (rural and urban poor)

For rural and urban low-income people,
Who are seeking to protect the health of their family and improve their quality of life,
BushProof offers a range of low-cost household drinking water and solar energy solutions,
That provide increased convenience, a higher social status, and improved quality of life
By providing a healthy, clean and great tasting drinking water conveniently at household level that are privately owned and easy to us without significant recurring costs and by providing cost-effective durable solar energy products

Components for your value proposition 2: (NGOs)

For NGOs with Water & Sanitation projects that target the poor,
Who want to reach more beneficiaries faster, more cost-efficient and in a sustainable manner,
BushProof’s well construction services and appropriate low-cost drinking water products,
Offers the opportunity to achieve higher impact (more people reached more effectively) for less money while reducing overheads and management costs,
Unlike doing it by themselves or using commercial contractors,
BushProof understands NGO needs and is able to work effectively even in remote and difficult areas, where the need is greatest and others can’t reach.

Question 3: Business Model

BushProof revenue fishbone has both anticipated and existing cash flows. BushProof’s expected revenues come from three main sources wholesalers, rural peddlers, and NGOs. Currently, BushProof receives its entire income from NGOs through consulting services. However, anticipates incomes from wholesalers and peddlers in the future. Since the wholesaler and peddler process are not yet implemented, their initial contribution is zero percent, however, BushProof projects that these two revenues will make 75% of the future revenues.

Income Fishbone Diagram

Income Diagram

According to the expense fishbone, the majority of the expenses (70%) are from the production of the products, with the remainder utilized by sales and marketing and general overhead.

Expense Fishbone Diagram

BushProof’s critical success factors are:

Maintaining technical suitability of ‘bush-proof’ product to fit the environment, customer’s needs and budget
Communicating value of product through marketing messages
Ability to manage cash flow due to seasonality of revenue and expenses
Developing effective distribution system for remote areas
Increasing & maintaining effective partnerships to generate demand for products

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by Social Edge — last modified 2007-12-31 21:58

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Global Social Benefit Incubator 2008

GSBI Application Exercises Example: BushProof