Field Update from Living Goods

Although I do not have direct contact with Living Goods I have always been interested in their work as the concept is nearly identical to the HealthKeepers of Freedom from Hunger, the market research for that business being the topic of my graduate thesis. I am anxious to see how the models mold as they are refined on the ground. This is a recent update from Chuck Slaughter, the founder and president:

Friends of Living Goods,

Living Goods, known as the “Avon of Rural Health”, is delighted to share the following milestones from this last fast-paced year on our journey to becoming the first fully sustainable system for defeating the diseases of poverty:

• Last May Living Goods and BRAC signed a joint venture agreement to collaborate on building a Living Goods network serving 20+ districts in Uganda.

• The Rockefeller Foundation, Mulago Foundation, Causal Fund and the Horace W. Goldsmith Foundation each awarded core funding to Living Goods.

• Extensive research, field study and customer focus groups helped LG identify its first 28 health products which are now in stock across the LG network.

• In a sizable launch, Community Health Promoters were carefully selected, trained equipped and deployed to serve 200 communities.

• Poverty Action Lab began helping Living Goods design a best-of-class randomized evaluation system to measure LG’s key objectives of dramatically reducing mortality and fertility rates.

• Harvard Business School and the Harvard School of Public Health selected Living Goods to participate in their Project Antares field study.

• Living Goods was awarded an exclusive Draper Richards Fellowship.

• Most recently Living Goods began developing plans to market low cost solar lanterns and high efficiency cook stoves to help poor households dramatically reduce fuel expenses and indoor pollution.

• Chris Elias- President of PATH, Paul Polak - Founder of IDE, and Erastus Kibugu of Technoserve Uganda joined the Living Goods Advisory Board.

We extend our sincere thanks to all who helped LG reach this important juncture. In particular we want to acknowledge the BRAC Uganda team and their exceptional director Mr. Khondokar Ariful Islam. Their commitment, experience and professionalism are unmatched and indispensable.

Of course this is just the beginning. We will add 300-500 more Health Promoters before the end of the year, and scale to 3,000+ in four years serving four million people in Uganda alone. In the coming years LG plans to replicate this model across the developing world with other world class partners and test expanded product offerings in clean water, power and small holder agriculture. In fact a half dozen multinational NGOs are already expressing keen interest in collaborating with LG to implement its innovative system in other countries.

Naturally, along with these opportunities abundant challenges lie ahead. Living Goods represents a disruptive innovation in rural health care that will require considerable trial and error. Building a truly sustainable, replicable business model will be one measure of Living Goods success; the far greater success will be counted in the many diseases prevented, the many children saved, and the many healthy productive years families will enjoy by virtue of having affordable essential medicines within reach.

Please feel free to contact me directly (cslaughter@livinggoods.org) if you have any questions, or are interested in partnering with or supporting Living Goods.

To Your Health,
Chuck

Product Franchising Irrigation Kits and Mobile Movies

This is an old article that shows two possible franchising opportunities. First the “ready-to-use, prepackaged irrigation kits” are a possible candidate for product franchising. Explore around on IDEI's website and particularly look at their product list.

The Bollywood-style instructional video is also a potential franchise business. A franchisee could acquire one of these modified vans and travel to villages to show movies. A primary source of income could be from companies who wanted to run ads before the movie. This could also be a wonderful mechanism to share public health messages.

Bicycle Vendors spreading Nutrition

When I was in Ghana last summer I often patronized Fan Milk bicycle vendors for an afternoon ice cream treat. They represent a highly successful microfranchise model. Fan Milk itself has total assets of US $17.4 million, provides indirect employment to over 8,000 and was awarded the "Business of the Century" Award at the Millennium Excellence Awards in Accra.

An individual can become a vendor for US $22 which goes towards purchasing the bike. They sell a simple line of products, namely yogurt, chocolate milk, ice cream, and fruit popsicles. Each day the vendor buys US$33 of inventory and can make an average daily profit of $5.50 (even higher in the dry season). Vendors have the option of returning the bike if they leave the company. Vendors average 8 years with the company. Vendors can move up in the company or purchase additional bikes and sub-lease them out to new recruits.

As the franchisor, Fan Milk provides free equipment repair, biannual training on product handling and hygiene. They provide the option of health insurance to vendors. They require US$.55 per day in forced savings, which Fan Milk distributes when they leave the company.

This example has so many social benefits: environmentally friendly bicycles, high nutritional product distribution, positive employee packages (insurance, education, etc) and a high provider of employment. My major criticism of the model would be the amount of trash generated and littered from the individual packets. After plastic water sachets, the bright pink Fan Milk packaging was the most common site of trash.

This model reminds me of a couple other projects:
The recent Grameen-Danone yogurt partnership highlighted onDefeatingGlobalPoverty.

Design for the Other 90%exhibit in New York, Transportation section.
Practical Action's collection of bicycle modifications and trailers as well as the idea of a bicycle ambulance.

I think the bicycle vendor model as a microfranchise can be applied to so many different products.

Mobile Library

I have highlighted a number of potential microfranchises that could be termed mobile services. Here is another example from Brazil that partnered with the largest bus company in South America, itapemirim, to create mobile libraries. Also similar to many of the successful models I have highlighted, this project's success is aided by direct association with a private company. If I were to start such a mobile library I would be sure to include Books of Hope in my library which I think is a fantastic model of education and particularly health education.

Ice cream man meets microfinance savings

Another operation that I have envisioned is a savings collection system. I see it as a combination of the ideas of Susu collectors, old-style film drop off kiosks, mobile banking vans and perhaps ice cream trucks.

I think the poor have a greater need for safe savings as opposed to credit, which currently dominates financial services to the poor. From a financial health point of view I would rather have a poor family save and earn interest as opposed to taking on debt and paying interest.

I have seen success in Ghana through Susu collectors. Even large commercial banks in Ghana are trying to harness the power of Susu collectors. The daily savings mechanism allows them to remove the temptation to spend the money themselves or, perhaps an even larger issue in a number of countries, it prevents the money being available for relatives to borrow or 'share'.

The drop box could be placed in area that would both promote ease of deposits as well as security. The drop box would help to lower the transaction costs that are often high for microcredit institutions. I think the security issues could easily be resolved.

The mobile banking units would have to be associated with a reputable bank. They would follow a circuit to pick up from the deposit boxes and then provide some basic financial services. There are a number of successful models and mobile units, both by mini car engineers and armored car manufactures.

All of these points would need to be further discussed and refined but I think the core concept would work. I realize it is much more complicated than this outline as well. But I put it out there for discussion.

Doc-in-a-Box

This is an old article but an interesting model.

Doc-in-a-Box

My first thoughts were: who would staff the mini-clinic? A nurse? Are there enough nurses in areas where these services are needed most? I also wonder if doctors would be threatened by such a clinic and are they powerful enough to see that they are not successful.

I think the self-containment and self-sufficiency in regards to power and water are brillant, as well as the focusing on the key diseases and referring other cases. I was perhaps most surprised, and therefore excited for its potential, by the low cost of building one of these clinics.

It appears the Council on Foreign Relations made this prototype but has no plans of personally expanding the production of the model? Does anyone have an update? Has the idea been picked up by anyone?