I’d like you to meet the local cobbler or ‘mochi’. He will repair your shoes for a few US cents. His business is established (street side) and he has a couple of stools and the paper so his customers or his friends can just “drop-in”. While watching him, he took a call, pulling his quite dirty old Nokia out of his pocket. A headset was attached very twisted and, as he fumbled with it, he answered the call.
I’m fairly certain the cobbler doesn’t desire a smartphone tomorrow. A music phone, yes. His business is good enough that he could probably afford one and may have already bought one for his son or daughter. For him, a call is enough and calls coming to him don’t cost him money although those calls and his availability may help him make money.
So is our Mochi the smart phone user of the future or not? I suspect traditional items (lights, a fan, TV, refrigerator) are higher on his list of purchases. And putting money into his children’s education. The smartphone likely remains both daunting technologically, and represents a luxury item. For entertainment (if he even finds the time after getting home around 10 pm) TV provides a better option. He might like games but has little experience so he remains quite happy with his Nokia with FM radio onboard.
He represents a real smartphone challenge. One I’ve not seen answered. The smartphone doesn’t appear to provide him with an economic advantage. Even as smartphones evolve towards payment device he will continue to prefer cash payments. His little street-side business has no collection or delivery function. By contrast the ironing man or Dhobi finds his phone makes pickup requests easier. A larger store takes phone orders and sends them home. Even the rickshaw-walla will tell you his phone makes for better business.
Observing the Mochi and his behaviour made me think. The sweet spot for creating value out of a smartphone is in it helping the small businessman or entrepreneur, the petty trader, or the skilled labourer, be in the right place at the right time. Being networked, where networked economies improve both service, efficiency and build relationships may create a value equation where the bottom of the pyramid begins to embrace the smartphone.
However, there are some pre-conditions to make this happen. The majority of customers must have a smartphone and the business must have some form of service / location dimension that puts our BOP (bottom of the pyramid) at the right place at the right time to make more money than they might have before. I feel an example like Uber (now testing in Bangalore) may well spread in time. To participate you must be part of a crowd-sourced economy, the transaction setup driven primarily by notifications and or relationships.
The local street Mochi isn’t ready for big data, doesn’t have digital information to share across devices. He’s still set up for a world in which business comes to him. It would be nice if the smartphone brought more although today it appears that it is still the phone call that is most useful to him.
Realistically, we are also many years away from the point and time where taking payments electronically becomes attractive or mandated for him.