Social Enterprise: Proximity Designs
Social Entrepreneur(s): Jim Taylor and Debbie Aung Din
Sector(s): Rural Development, Agriculture, Technology
Combine world class design talent with local manufacturing and multiple distribution channels.
The Innovation Explained
In less than ten years, Proximity Designs has built a local manufacturing base from scratch inside Myanmar that produces high quality, affordable agricultural equipment. Even more impressive, it has developed four distribution and sales channels that together cover 80% of the country, despite poor infrastructure and difficult terrain. “Having a local supplier allows you to be very hands-on and implement changes quickly in the design,” said Jim Taylor. “You’re designing for manufacturability, and you can control quality as you scale production.”
Today, Proximity Designs views its design and manufacturing process as tightly integrated. The founders collaborate with leading universities such as Harvard and Stanford, initially commissioning graduate students at the Stanford Design School, who took existing technologies like treadle pumps and irrigation systems and worked directly with farmers to improve their durability and bring down costs. “Our design capabilities are important to our success,” explained Debbie Aug Din. “Since we design on location, it’s pretty easy to take prototypes to users, ask them to try it, and get quick feedback. Our typical product takes 18 months from inception to commercialization.”
But the Promixity Design team quickly discovered that design is, as Debbie Aung Din put it, “10% of the challenge. We have to produce large qualities of consistently high quality, do it on time, and sell them nationally. That’s a huge effort.” Proximity Designs uses four major distribution challenges to get their products to farmers: a sales force of 135 people; a network of 840 independent sales agents, mostly farmers themselves who demonstrated enthusiasm about Proximity Design’s products; agent kiosks, which are mom-and-pop shops in towns and villages that act as ‘sales anchors’ by displaying products in stores; and 1800 village committees.
Different products, like irrigation, agricultural financing, pumps, and solar, are sold to varying degrees across the four channels, but “you have to provide the right incentives for your different channel partners and you have to be careful that they don’t compete directly with one another,” explained Jim Taylor. “There’s a reason why these channels don’t exist for other commercial goods. As a social entrepreneur, you often have to pioneer new channels, the economies of which are really difficult. We are constantly looking at sales by territory to improve the efficiency of our distribution network.”
To date, Proximity Designs has impacted more than 500,000 people, increasing farming income by more than $170 million.
Why This Matters
Many developing countries have agriculture-based economies, where there is widespread poverty among farming communities. Small-plot farmers are trapped in a downward spiral of declining yields and low prices for their output. To increase their incomes, they need access to technology, financial credit, and markets. Beyond agriculture, Proximity Design’s model illustrates how important – and difficult – it is to get the balance right between global expertise and local knowledge.
“A lot of local NGOs have deep knowledge, but they don’t have international connections to the right kinds of expertise and capital,” said Jim Taylor. “And international organizations often lack the local understanding of problems and issues. In the end, it takes deep knowledge and understanding of a particular context to solve problems of poverty, but it must be connected to the broader world and the best ideas out there.”
Design is essential. “Design thinking has a lot to contribute to economic development and poverty reduction,” says Debbie Aung Din. “Design is very empathy-based and user-centered. Sometimes engineers and investors create things in a vacuum, but’s is very important to be close to your customers and to be held accountable by them.”
Harness the discipline of the market. “NGOs care about their customers and their products, but because they are not getting signals back from those customers, they can sometimes get away with sloppy services if people aren’t paying for them,” said Jim Taylor. “You need to rely on market signals and business principles. Treat people as customers like any other business would. Make yourself easy to do business with, and ensure strong business experience is part of your organization’s DNA.”