Should Asia's Founders have their own 1-for-1 Giving Model?
The Silicon Valley is more than just innovation: the tech hub has also given us frameworks for tech-enabled social impact. One example is the one-for-one model created by Blake Mycoskie, who founded TOMs shoes far south of the Silicon Valley in Los Angeles, but well within its sphere of influence. For every pair of shoes bought, TOMs donated a pair to a person in need, a giving model that has since been duplicated – especially online – for a myriad of products, which is everything from shirts and socks to toothbrushes and pencils.
Another giving model born out of Silicon Valley comes through the courtesy of Salesforce.com’s Mark Bernioff. His model was 1-1-1: companies would dedicate one per cent of employee's time to volunteering; one per cent of company equity to charitable organisations in need of capital; and one per cent of product to non-profit organisations who could productively use their enterprise software. For instance, Salesforce.com, whose core product is a customer relationship management software, created a similar platform to streamline fundraising.
Tackling VUCA in the ASEAN
In the same way that founders have adopted lean startup principles from Silicon Valley, and adopted it for the unique business landscape of Asia. Perhaps it’s high time we do the same for giving models. Asia, which is increasingly filled with volatility, uncertainty, complexity, and ambiguity (VUCA), local entrepreneurs must take a principled stand on how they can give back. In short, we must strive to not only create innovation, but also to make an impact.
One of the more promising models is from Winston Damarillo, a Silicon Valley entrepreneur, with multiple exits in his belt, who has since turned his attention to ASEAN. His model is also succinctly expressed in number form: 10-10-1. This model was designed for the insurtech industry. His latest startup, Saphron, has created an AI-driven microinsurance platform, but it has much broader implications, just as 1-for-1 was in no way limited to shoes.
Damarillo, who is also a chief strategy officer for Saphron, presented the model at the recently held Global Insuretech Leaders Summit in New York. As originally conceptualised, 10-10-1 refers to: US$10 dollars to buy the insurance product, 10 cents to process the application and transaction, and one minute to enroll. So, how might this model have wider implications for Asia’s founders? Let’s break it down, starting with the US$10 dollars.
This price point is dramatically lower than typical insurance rates. It effectively sachets insurance to a cost that makes it easy for people at the bottom of the pyramid in Asia’s emerging markets to avail. Any social impact model for Asia must have similar sachetisation, and the beauty of technology is that it is easy to accomplish this goal through digital products and platforms.
The 10 cents to process is also notable. Impact models in Asia must be sustainable, and the best way to achieve sustainability is through scale. Founders must not only target the bottom of the pyramid who need better products, but they must leverage existing distribution networks to reduce their go-to-market costs.
The last part of the model – the one minute to enroll – is more complex than it seems. It’s not just a matter of convenience; it’s a matter of opportunity cost. As they lack access to digital products, the people at the bottom of the pyramid routinely have to waste time and money, as they are pulled away from work, with routine transactions. One example is them having to commute and pay bills at a bills center, rather than just paying digitally through the payments app. A commitment to quick, tech-enabled transactions will restore more of their man hours, and in turn, their earning potential.
Unlike the models from the West, where the figures for 1-for-1 and 1-1-1 remain static across organisations, 10-10-1 is more notable for its underlying principles than consistent standardisation. Organisations, after all, may offer products at a different price point than US$10 dollars, spend less or more than 10 cents to process it, and take shorter or longer than one minute to facilitate the transaction.
10-10-1, an Equation for the Last Mile
What’s crucial are the principles. Founders in Asia must strive to make their products accessible to people at the bottom of the pyramid through sachetisation. They must make serving this market sustainable through the scale of existing distribution networks, most commonly those of existing incumbents. And finally given the technologies the founders wield, they must reduce processing time to minimise opportunity cost of their customers, and maximise their earning potential even as they deliver the crucial last mile in basic services.
10-10-1, of course, is not an end-all, be-all model for social impact in Asia, but it’s an important first step. As the tech ecosystem in Asia grows, we must think more deeply about our responsibilities to the markets we operate in and the places we inhabit. It’s no longer enough to just build products; we must serve communities.