The concept that great business models can reshape industries and drive spectacular growth seems rather obvious. The drive and the thrill of exploring creative and uncharted business models is at the heart of innovation. However, it appears that many companies find the process of expanding and exploring beyond their current business models difficult. Johnson, Christensen, and Kagermann postulate in Reinventing Your Business Model that managers often do not understand their own existing business model well enough to know whether to change it; if they do change their model, they still do not know when and how they should alter it.
In their article, the authors provide five strategic circumstances that often require business model change. Three of these circumstances are defined as “opportunities”: addressing large groups who find existing solutions too expensive or complicated, capitalizing on new technology or leveraging existing technologies in new markets, and bringing a “job-to-be-done” focus where it does not yet exist. I was intrigued by these “opportunities” the authors identified and immediately considered if and how they apply to a recent innovation that recently received some media buzz, the Aakash tablet.
The Aakash tablet is a 7-inch Android-based device that will be distributed by the Indian government at a subsidized price of $35, making it the world’s cheapest Android device. The general retail price will be about $60, which is still remarkably cheap for such a powerful device. A contract between the Indian government and Canadian development partner Data Wind, will put between 10 and 12 million devices in the hands of Indian students by the end of 2012.
Here is how I see the “opportunities” as they apply to the Aakash tablet venture:
1) Address large groups who find existing solutions too expensive or complicated – India has a population of nearly 1.2 billion and nearly 40% of the world’s poor. A focus of the Indian government and private firms is scaling high-end technology down to make it affordable and accessible to the mass market of at or below poverty. Writer Chikodi Chima of VentureBeat notes, “Tens of millions of people throughout India…likely to use or own the Aakash Tablet will never have used a desktop computer, and it’s possible they never will.” DataWind CEO, Suneet Singh Tuli said, "Our goal was to break the price barrier for computing and internet access…we've created a product that will finally bring affordable computing and internet access to the masses.”
2) Capitalize on new technology or leveraging existing technologies in new markets – The Aakash Tablet is an example of a “leapfrog technology,” a concept where the latest innovations jump directly into areas where legacy technologies never penetrated. The Aakash tablet is a Jugaad (an Indian word which means “to make-do.”) in a very high tech way. The components inside the Aakash tablet are cheap, and easily sourced. VentureBeat’s Chima remarked, “A big problem with the XO, the low-cost laptop produced by One Laptop Per Child for the world’s poorest children was that it was seen as relatively arcane technologically by the time it was actually available. What makes the Aakash tablet different is that its creators did not strive for perfection.” The emphasis was on getting the product into the market quickly so it could be adopted, tinkered with, and improved over time. The Aakash, unlike Apple’s iPad and HP’s TouchPad, invites users to play with its hardware and software to improve on the design and functionality.
3) Bring a “job-to-be-done” focus where it does not yet exist – Data Wind and the Indian government are framing the need for the tablet as an educational tool; the first 10 million tablets are intended for post-secondary students across India. Rather than broadly marketing the tablet as a multi-purpose tool to reach across a wide variety of users (recreational, business, students, government, etc.), the focus is on its potential as a rewarding social investment. As Chima states “When the Aakash tablet reaches villages across India, an entire generation will have instant access to rich educational content such as the Khan Academy. With the Aakash tablet, students across India will be free to do what their global counterparts do with their computers.”
The question I pose for this example stems from the Johnson, Christensen, and Kagermann cautionary counsel about when companies should not be pursue business model reinvention: Will Data Wind’s effort to create the world’s least expensive tablet truly change the entire focus of the industry and market and have profound social impact? In other words, is this venture, in Data Wind CEO’s words, “destined to revolutionize computing and internet access for the world"? Or is technology writer Prasanto Roy correct when he asserts: “Delivering a tablet for $60 has taken hard work, extraordinary sourcing and some innovation. But this is just a part of the uphill road to a successful device that could change education in India. There are many more pieces needed to complete that picture. As the Simputer in India and so many iPad-wannabe tablets in the world have shown, it isn't about the hardware…what you really need are the apps and content ecosystem. While the courseware development happens, the world will move on, with even better tablets that leave the Aakash further behind.”?
Johnson, Christensen, and Kagermann. Reinventing Your Business Model. Harvard Business Review. December 2008.
Chima, Chikodi. Hands On: India’s $35 Aakash Android tablet lands in America (exclusive). Venture Beat. October 26, 2011. http://venturebeat.com/2011/10/26/aakash-android-tablet-exclusive/
Kolawole, Emi. India’s Aakash tablet vs. the iPad. The Washington Post. October 28, 2011. http://www.washingtonpost.com/blogs/innovations/post/indias-aakash-tablet-vs-the-ipad/2011/09/16/gIQAYmshPM_blog.html
Robiero, John. India's low-cost tablet is made by Canada's DataWind. Computerworld. October 5, 2011. http://www.computerworld.com/s/article/9220554/India_s_low_cost_tablet_is_made_by_Canada_s_DataWind
Roy, Prasanto. Does India's budget tablet computer work?. BBC News South Asia. October 14, 2011. http://www.bbc.co.uk/news/world-south-asia-15302663World’s Lowest Cost Tablet Computer Launched. Data Wind Press Release. October 5, 2011. http://datawind.com/pressrelease.html