How to make money without charging a premium

TechCrunch points us to Sequoia Capital's elements of sustainable companies.

There’s clearly a lot of wisdom there, but I would take issue with just one of their points:

“Rich Customers: Target customers who will move fast and pay a premium for a unique offering.”

Of course it’s great to build a product or service for which you can charge a premium, but don’t forget that 4bn people on this planet live in poverty. There is enormous potential to help these people, via the vehicle of capitalism, to meet their most basic needs.

“Pick the one thing that is of burning importance to the customer then delight them with a compelling solution.”

How about clean water; food; shelter; medicine? If you don’t have these things I imagine you’d be fairly delighted with a solution that you could afford! You can’t charge a premium, but the market is enormous.

Here's my favourite example of the moment, the LifeStraw - a clean water filter within a drinking straw. Simple, cheap, and can you imagine the impact that this could have upon the world?

This is an area I want to learn more about. I've just started reading "Capitalism at the Crossroads: The Unlimited Business Opportunities in Solving the Worlds Most Difficult Problems"

If you want a quick hit of inspiration, check out Alex Steffen's TED talk I posted a little while back.

Comments

[Ben Matthews]

Hi Tom,

Thanks for reminding us about the wider perspective of life.

As for LifeStraw, I sometimes think that the drinking water in the UK could use a product like that!

Do you have any other recommended reading in a similar vein to Capitalism at the Crossroads?

Cheers,

Ben

[Tom Nixon]

I'm thinking of getting a copy of the WorldChanging book:
http://www.worldchanging.com/book/

[Ben Matthews]

Saw that book too and it looks interesting, but it was published in 2006 so not sure how relevant it still is...

Also, did you see this?

http://images.businessweek.com/ss/08/03/0307_endlesscity/index_01.htm

Cheers,

Ben

[Karl Staib - Your Work Happiness Matters]

Sipping dirty water through a filter straw is ingenious invention. We do need to focus on what people need instead of creating things we think they want.

I aim to help people with my site and right now I'm doing it without making any money, but I soon hope to be making money, just not at the expense of the content. Thanks for the reminder.

Great post!

[Alan Newman]

Hi Tom,

Great comment and I think there are many ways in which technology companies can help charities address these issues by encouraging corporates to take part in the fundraising - either directly or indirectly.

The way I see it is that if we get corporates to provide a means with which their customers contribute by buying their goods and services - then it's a win all round.

The charity gain funds, the corporate gains great PR and the customer gets to buy goods they actually want.

It's straight forward capitalism funding solutions.

[Tom Nixon]

Cheers for commenting Alan. I think the opportunity is even bigger than this. It doesn't have to be charity. We can use capitalism to create new products and services specifically aimed at the poorest people in the world that can lift them out of poverty and make a profit at the same time. You have to check out the Capitalism at the Crossroads book, the possibilities are quite mind-boggling.