The Unexotic Underclass

We learned a few things from actually doing this:

TL;DR its really expensive to make products for the 'forgotten underclass' due to many unforeseen issues.

1) Poor areas are overrun with corruption and graft. Its very hard to do the right thing, when individuals with power will actively work to put a bribe barrier between you and your work. Its like these individuals smell out good intentions and attempt to tax them for the perceived weak-minded good intentions. An example would be, after my brother created several successful startups using ex-cons, he wanted to turn the program over to the City. He quickly learned without a politician attached and 'sitting on the board' you couldn't do this. The price of this? Paying him 70% of the donations coming in to support the program. I have numerous examples more blatant in 2nd and 3rd world nations.

2) Economy of Scale. You must serve more customers in order to make up for lower prices the market will bare. This is easy to say and very very hard to do. As you scale, you can't afford more workers, so your quality inevitably goes down. Other things like support, QA and tasks that don't scale past 1:10 user rations become very poor quality, turning off people to the product and making you ashamed of your work.

3) Not knowing what the problem is. You can guess at problems for a class of people you aren't a part of, but its pretty hard to design a new solution for them. Your instincts are often wrong and you have to do a lot of expensive testing and research you can't afford to get the right solution. See problem 2.

4) Distribution to customers. Want to get the product to this underclass? Do they have smartphones? Do they have computers? Often no. How are you going to ensure they see your product let alone purchase it? Maybe they do have smartphones, but they use everything from dumb-phones to android 2.3 devices to Nokia-whatevers. Development for all those things will cost you 5x as much as just making a food iPhone app. (see 2 again)

5) Value offer. This becomes very very hard when your target market is low on funds and often makes anti-self-interest choices. The individual who uses what little money they have to feed their family with fast food is going to pay money for your education app? Its pretty unlikely, they have more pressing needs in their hierarchy that they are often too scared and desperate to solve properly.

6) Their problems can't be solved with software. Often these people have real-world problems that require hands on work and real product to solve. My brother worked very hard to add software where possible but needed to do mostly 'real world' labor to get to his customers. Software is inherently cheap to produce compared to hardware and manual labor.

Finally, this work will eat you away until you have very little left. Your rent will go up as your friends sell their startups. You won't have time or money to rebalance your life with exercise or entertainment. You will becomes socially isolated from those who have the money to support your work. You will put immense pressure on your significant other to either make up your losses financially or support you. You will put your children's future in jeopard. You won't have children. You will see little return on your effort. You will be fighting a society which applauds your effort but is unwilling to help you continue.

In short, you might become part of the class you are trying to help.

1) Equip them with internet-enabled smartphones 2) Give them software to get things done more efficiently

I just wish there was one more thing:

3) Decentralize the networks so there's no need to pay for an expensive mobile internet plan in order to communicate in your own neighborhood.

The only way to come across these opportunities is to socialize with the wealthy.

http://www.wealthandwant.com/issues/income/income_distributi... (Summary Table 1. Effective Federal Tax Rates, 2005)

The bottom 20% makes around 4% of the total income, so I grant that income is not as lopsided as wealth. And sure, you could potentially build a successful business targeting that. But it certainly doesn't seem like nearly as attractive a demographic to target as the other 80% with 96% of the cash flow.

For what it's worth, I favor a greater amount of wealth redistribution than we currently have not only because I think it's the morally right thing to do, but also because I think it would result in greater overall spending. (e.g. people who have a lot of surplus money now are less likely to spend those incremental savings than those who need more money to live comfortably now.)