CAN THE GLOBAL HOUSING PROBLEM BE SOLVED?
In thinking about addressing the housing problem and entering this market, it is rather spontaneous to think of technical issues of materials and production methods. However, innovative business and financial models and strategies are at least as important. The business problem is based on: 1. How to make money, be profitable in participating in this problem, 2. A corollary, how to promote or improve the company’s business (which is another way to get profits).
Here are a few questions to ask:
● The problem is that these people have little or no money. Do they have anything that is of value to our business? Can they get money?
● Our help can assist people to create wealth. For example, our demonstration house in Nicaragua cost 600,000 cordoba and had a market value of 3,000,000 cordoba (based on cost and value at the time it was built). This included the cost of labor at its then current rate. The campesinos could not have done this without any outside help. We provided some technical assistance and $300 in cash. However, that small investment allowed the campesinos to produce housing with a rather high value. If we can help them create wealth, can we share in that benefit in some way?
● Can we help people set up businesses? If so, can we get some benefit from that? We can provide technical assistance, organizational assistance, business planning and execution assistance, financial assistance. It would be reasonable and fair to get some payback for that. Is there a way you can think of to do so?
● Micro loans,
● In the Nicaraguan example the campesinos had land for their homes through the agrarian reform. In most cases poor people would not have access to land or natural resources. Would it be possible for someone were to invest in the land, allow these people to use it to create value on the land and then share in the value created?
● Is there a business payoff in helping projects of this kind in good will, new connections, new markets? See strategic philanthropy above.
● Can local people trade something for what we sell them. Something that will be worth their while (i.e. better than making what they need themselves). Dana Bookbinder gave an interesting example. Pepsi in the 80s wanted to sell Pepsi in the Soviet Union. The Soviets didn’t have much hard currency. Pepsi solved the problem by trading them for Russian Vodka. Pepsi sold the vodka (brokered it or whatever) and thereby got paid for the Cola they sold.
● Can we help local people sell their products? For example, how would you help the Nicaraguan campesinos gain the most income (and therefore become good customers) from their coffee? Produce organic? Sell direct (over the internet)?