Is it taking advantage of poor people to try to make money from them? And do they even have any money to give?

I run a for-profit business that delivers products and services to customers earning less than $6 a day in West Africa. When I tell people this, I frequently encounter disbelief or concern. The three most common responses I hear are:

Surely you can’t make money working with people who are so poor?

Don’t you feel like you are taking advantage of these people by making money from them?

Wouldn’t charity do a better job of meeting their needs?

While these questions are well-intentioned, I initially found them upsetting because they go far beyond a healthy skepticism about my business model. They made me doubt whether I should be working with poor consumers at all.

While I stayed the course, I fear that many will simply choose a simpler path of building a startup in developed markets. The absolute worst thing that can happen for the poorest people on Earth is that the next generation of superstar entrepreneurs ends up in Silicon Valley making iPhone Apps, rather than trying to address the problems of the 4 billion people who need them the most.

So next time you overhear one of these questions, do the world’s poor a favor and shoot it down. Here’s how:

1: SURELY YOU CAN’T MAKE MONEY WORKING WITH PEOPLE WHO ARE SO POOR?

Even the poorest people are still consumers. Like you and I, they make decisions about what to buy each and every waking hour. Collectively they spend over $5 trillion dollars a year, roughly equal to the GDP of the third largest economy in the world.

There is an obvious market opportunity here and Coca Cola is a great example of a company that has seized it. Coke is the biggest employer in Africa, and you can often find a bottle of Coke in a village where basic medicine is not even available. Coke is hoping to reach 106 million households in Africa by 2014 and plans to spend $12 billion this decadeto fuel its growth on the continent.

If Coke can make money selling sugary soda at 40 cents a pop to villagers who don’t need it, there is plenty of room for companies selling much more meaningful products they actually do need.

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2 Responses

  1. Brian Kiambati

    Beautiful article, next time someone approaches me with such questions about doing business with the poor, i will be sure to front the argument that has been documented here. I loved this article very much, thank you for this.

    Reply

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