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Designing a digital piggy bank


What do you get if you combine the world’s top business schools, one of our toughest social issues, and a one million dollar prize to whoever designs the best solution? All I knew back in the fall of 2012 was that I was going to find out. I asked a couple of classmates from my Master programme in San Francisco to join me in answering the seemingly impossible Hult Prize challenge: “How do you create food security for 20 million people living in urban slums?” Coming from a more traditional political science and economics background, I had previously dismissed much of the Silicon Valley startup scene as mainly a producer of photo sharing apps and candy crushing games that never really paved way for much meaningful human progress. However, as we started taking those same principles of innovation that had created these apps and applying them to the profound issue of urban food security, we quickly came to realize that design thinking and lean startup methodologies are an extremely powerful tool for addressing social issues. By tackling the issue of food security as a design challenge that we could «discover – ideate – and prototype» human centered solutions to, we saw that we would produce far more relevant products and services for our users. With this approach in mind, we set out to create a product that would help families in urban slums eat better, but with no idea yet of what it would actually look like. This marked the beginning of what the design firm IDEO (a pioneer in this field) would call the discovery phase. 

In our case, discovery meant to actually flush out what is already known about food insecurity. I had studied famines for a couple of years, and after reviewing the dominant literature on this topic it was clear that food insecurity in most cases was not a direct result of there not being food available in the markets. The problem was that people’s purchasing power was both too low and too unpredictable, resulting in very inconsistent access to quality food. If we wanted to improve food security we had to start by doing something about purchasing power.

With a few theories in mind about possible solutions, we flew to India, where food security continues to be a massive issue, and we had a large network of contacts. We spent most of the summer sitting in dimly lit corner stores and chaotic markets observing how people spent money in the slums of Ahmedabad, Northwestern India. It turned out that most households depended on daily wage workers, like rickshaw drivers and construction workers, for their income, so that some days there would be work, some days there wouldn’t be. After interviewing many of these families, we found that it was the fluctuations in income more than the level which caused the most issues. Since most people lacked safe and convenient ways to save, and instead saved in open plastic cups at home, it was hard to ration out the extra income that was made on the good days, given the high risk that it would be stolen, borrowed, or misspent on alcohol or candy.

Going into the ideation phase, we started playing around with the concept of a savings account to smooth out the income rollercoaster most families were on. We also thought it would be a good idea to try preventing money from being misspent by making the savings only available for spending on a network of food stores. We had already observed people’s willingness and ability to save with local cooperatives and vendors, but knew inconvenient locations and opening hours reduced users’ interest in saving.

As is increasingly true in most developing countries today, almost every family in India owns at least one feature phone. Having seen the success of mobile money systems elsewhere, we wanted to create a mobile based savings account that would work on any basic phone, and would facilitate saving and spending in the stores where people already shop. Pulse was born.

After months of troubleshooting, we had created a basic SMS-transaction system set up that would work on any feature phone, allowing users to save with any vendor on the Pulse network.

Beyond the current practical issue with saving, there was another challenge we wanted to address: People just can’t motivate themselves to save. We have all heard of impulse shopping, but we rarely hear of impulse saving. We knew that if we wanted to make people save more, we had to change it into an act of spending. With Pulse, we made saving possible by buying a gift card that would load credit to your savings account. And because these cards were visible in the places where people were already shopping, it could compete with products for purchase, enabling people to start saving on impulse. Now, instead of getting your change back in the form of candy, you could spend your change on a savings card and put it into your mobile savings account. The savings could then be spent at any of the stores in the network, and only on what you earmarked it for. This earmarking of savings made it a more tangible and motivating form of ‘pre-purchasing’ something useful, rather than just an act of ‘not spending’. Also, since you couldn’t simply withdraw the savings in cash, you had imposed a form of self-discipline that prevented the savings from being wasted.

A group of women vote for their preferred user interface, choosing between fully voice- and number activated to SMS-based menus.
A group of women vote for their preferred user interface, choosing between fully voice- and number activated to SMS-based menus.

Ideas are cheap, they say, and at this stage we were little more than just a somewhat verified idea. To progress beyond that, we entered the prototype phase, and begun testing our assumptions through a series of experiments with a group of thirty women. One of the biggest questions we had was whether the women were comfortable enough with the technology to trust it with their money. To test this, we followed the advice of Y-combinator founder Paul Graham, by ‘do[ing] things that don’t scale’. Instead of building an automated SMS-system to confirm saving deposits and payments on users’ phones, we simply saved a few standard messages in the local language that we sent out manually to users every time a transaction was made, and thereby simulated a user experience identical to that of a fully developed product. Thanks to our ability to test the product before it was actually built, we realized that a finished product would need to account for the high levels of illiteracy in our target market by enabling voice based commands. We also saw the need for moving a larger share of the responsibility for the transaction over to the vendors, who were trusted by the locals and generally were more comfortable with this type of technology. We held workshops in collaboration with community groups in which we used drawings and role plays to present a wide range of user experience scenarios, in which they selected the type of menu system they wanted, and how they wanted to settle their accounts. These were quick and dirty experiments that gave us a ton of insights, and enabled us to make vital changes to our product before investing time in something that could end up being a poor fit for our target market. In a brief two-week pilot, users of our product saw food budgets increase by 10-15% after using our product and expressed excitement about having the ability to easily save and earmark their income for things that matter to the family’s well-being.

We found that ‘kirana’ stores already have many informal credit systems in their stores. We wanted to create one that was universal and available right in the palm of our customer’s hands across all stores.
We found that ‘kirana’ stores already have many informal credit systems in their stores. We wanted to create one that was universal and available right in the palm of our customer’s hands across all stores.

While we still have big hurdles to cross both in terms of customizing the product to the illiterate, as well as building a trusted presence in the areas we are going to operate, we have definitely created the beginnings of a product that can significantly improve families’ ability to manage their personal economy through dedicated saving accounts for the things that matter. By approaching the issue of food security and purchasing power as a design challenge that needs several iterations to work, we turned the product design phase into an interactive process with our users. My team and I have learned a ton throughout this experience, and central to our lessons have been that the effectiveness of the lean start-up methodology should not be underestimated. In fact, as more organizations start to approach development challenges with this mindset, we are likely to see fewer ready-made solutions that fail due to a poor fit, and more constantly evolving prototypes that adapt to changing times and contexts. If we are ever going to solve age-old problems, we need to use new approaches.