Not far away, prototypes of a multiple-fuel stove for the rural poor are being tested by a large multinational corporation. The potential consumers of this stove typically use cow dung and biomass (sticks and grass) for cooking fuels. These fuels are inefficient, and the smoke from indoor fires can be harmful. With the “combination chula” (chula is the Hindi word for stove), a housewife can switch from biomass to natural gas instantly, depending on her budget and priorities (for example, whether she is cooking dinner for family or making tea for an unexpected guest). The cost of the combination chula is less than 1,000 rupees (about US$20). If it succeeds in India, it will be rolled out across multiple geographies, with potentially immense impact on the quality of life of people throughout the developing world.
Innovations like these are not just technological or market breakthroughs. They change people’s lives. The hotel, by facilitating travel for many more businesspeople, could greatly expand commerce in India. The stove could improve the lives of millions of people. The process for designing both of these breakthrough innovations started with the identification of the following four conditions — all of which are difficult to realize, even when taken one at a time:
The innovation must result in a product or service of world-class quality.
The innovation must achieve a significant price reduction — at least 90 percent off the cost of a comparable product or service in the West.
The innovation must be scalable: It must be able to be produced, marketed, and used in many locales and circumstances.
The innovation must be affordable at the bottom of the economic pyramid, reaching people with the lowest levels of income in any given society.
In countries like India, with 700 million bottom-of-the-pyramid consumers at varying levels of income, the need for innovations that meet these criteria is now becoming obvious. The seemingly impossible demand of a hitherto unserved customer base — a $20 hotel room in an environment of $250 to $300 hotels, or a cookstove for use by an impoverished villager — became, in this case, a specification for starting the innovation process.
This approach could be called an innovation “sandbox” because it involves fairly complex, free-form exploration and even playful experimentation (the sand, with its flowing, shifting boundaries) within extremely fixed specified constraints (the walls, straight and rigid, that box in the sand). The value of this approach is keenly felt at the bottom-of-the-pyramid market, but any industry, in any locale, can generate similar breakthroughs by creating a similar context for itself. In India, several such breakthroughs are taking place now, in a global industry that is otherwise plagued by high costs, stultified traditions, a variety of regulators, a perennially dissatisfied customer base, and a reputation as an exceptionally difficult venue for business innovation. That industry is health care.