From the Ground Up — Doing business at the base of the pyramid

I started when I saw this title on the cover of the Harvard Magazine (Sept-Oct 2015).    Inside, the article Business for the Other Billions explores businesses pursuing profits and social good by selling to the 4 billion people with incomes of up to $15/day, who are in the cash economy, but just barely.

The article describes a course with the same name that one fifth of Harvard Business School (HBS) students take, taught by Professors Rangan and Chu, who are researching business models for operating successfully in these vast, underserved markets.

One result of the class is Tomato Jos, a business started last year by HBS graduate Mira Mehta (’14) and Shane Kiernan (completing a master’s in health policy and management from the Harvard Chan School remotely this year) to produce tomato paste in Nigeria. Nigeria imports $360 million of paste per year and tomato paste is a dietary staple of the country. And yet Mehta remembers driving along roads “literally full of tomatoes” drying in the sun, because markets are inaccessible and farmers have no means to process their tomatoes for sale later.

As you might imagine, it isn’t easy to produce tomato past in Nigeria.  When Tomato Jos started, the well collapsed; voracious borers preyed on the plants; Mehta and Kiernan needed licenses to import traps for the pests; their second hand packaging machine did not work; they had to sell the tomatoes fresh for low market prices; and, once the machine began running, after the growing season, early paste samples had to be submitted as part of the process to register as a Nigerian food-processer.

So why are Mehta and Kiernan even trying?  Tomato Joes is a business rooted in a social mission. It is not an aid organization.  Mehta and Kiernan are entrepreneurs who have raised capital, plan to earn more, and stand poised at the edge of a large, currently untapped market.

If we can set up something sustainable that’s good for the smallholders before the multinational companies turn their eyes to Nigeria, which they will in five years, we’ll be in a position to change the conversation, says Mehta.

Here are two young, bright, hard-working, and well-intentioned business entrepreneurs working in a sector of the world where they have a shot at turning a market on end — creating local jobs, buying locally grown tomatoes, and providing a staple at a more affordable price.  They took a class at Harvard Business School, won $25k runner-up prize in a HBS new-venture competition, and they may just crack the tomato paste market in Nigeria.  I find this exciting.

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