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Staying in Close Proximity to Customers

July 22, 2015

How one social enterprise is changing Myanmar through design

In a landscape marked by lush, fertile plains that sit between sculptural mountains, two-thirds of Myanmar’s population of 51 million live rurally where resourcefulness is a way of life. Nestled between global superpowers China and India, Myanmar has been rapidly transforming since military rule was dissolved in 2011. Four years ago marked the end of five decades of economic and political isolation and now rural communities are facing new and unprecedented opportunities to tap into global technologies and systems.

Since 2004, Proximity Designs’ co-founders Debbie Aung Din, a native of Myanmar, and Jim Taylor have embedded themselves in the cultural dynamics and business landscape of the country in order to support rural farmers. Approaching their customers from a human-centered design perspective, Proximity provides new products and services to entrepreneurial farmers eager to improve their livelihoods.

Forging a New Business Model and Mindset

Testing and adapting affordable products to meet customer needs–and for market viability–is at the heart of Proximity Designs. When starting the organization ten years ago, Debbie and Jim set out to be different from development aid. “We knew we didn’t want to treat people as aid beneficiaries or charity recipients,” said Debbie. “Based on Jim’s private sector background, we wanted to treat people as customers and hold ourselves accountable to the market. Then we would get signals right away whether something we provide is valuable or not.”

Proximity tripod pump

Launched as a country office of international nonprofit iDE, Proximity Designs began with 20 treadle pumps from India that were not designed for farming conditions in Myanmar. At that same time, the duo met Jim Patell from Stanford d.School, who had recently launched the now ultra-popular course “Entrepreneurial Design for Extreme Affordability.” The three hit it off and decided to work together on improving their pumps.

Under the guidance of Patell, four Stanford students spent the spring of 2005 in Myanmar adapting a few of the clunky pumps from India into a simpler “snap-and-go” model. By using customer feedback, the students redesigned and relaunched Proximity’s tripod pump, which were selling in rural Myanmar by autumn. Through this class came a long-term relationship between Proximity and the d.School that continues to thrive today. Most importantly, it cemented Proximity’s commitment to a customer-centric approach to product development.

Proximity solar pump_2

One of their newest products is harnessing the power of solar energy to provide technology that improves irrigation capacity and efficiency for Burmese farmers. Over the past year and a half, Proximity has worked tirelessly to design the world’s most affordable solar-powered irrigation pump. Assembled locally in Myanmar and made with custom NASA-grade ceramic parts, the pump is seven inches long by two inches in diameter at its widest point, making it suitable for the narrow tube wells found in Myanmar’s countryside. At 285 USD including solar panels, the pump is an affordable alternative to the costly and polluting diesel engines that are predominant in developing markets. Last month, the first set of solar pumps was given to Proximity’s field staff to conduct final field tests and perfect the demonstration process through which irrigation products are sold. One family has even dug a separate well in preparation for when the new pump is available for purchase.

Expanding From Products to Services

In 2008, farmers in Myanmar’s Ayeyarwady Delta were devastated by Cyclone Nargis—the worst natural disaster recorded in Myanmar that killed over 138,000 people. Although Proximity Designs is not a relief organization, they had worked closely with Delta farmers and their families, and understood what they needed to get back on their feet. Because of this, Proximity leveraged their extensive rural staff network to facilitate the delivery of free seed, fertilizer and tillers to over 2.5 million farmers to get their rice crops up and going again.

Wae Daunt Village (Sar Chet village tract), close to the delta's mouth to the sea, a four hour boat journey from the town of Labutta. More than 300 of the village's 500 inhabitants died in Nargis, a loss of around 60%. The 81 households are more or less split evenly between Buddhist Bama, and Christian Karen. The village recieved no help for 20 days after the cyclone, but then NGOs started to help. They survived by eating the animals that died in the cyclone. After several days some villagers went to seek help from the government authorities in Labutta. The received some food parcel. There are more than 270 acres of rice paddy divided among 23 farmers. IDE has provide shelter and rice seed. The IDE seed has been more successful in germinating than any of the other seed donations. U Tin Win, the village head claimed that 'IDE saved the whole village'.  Here, in the distance can be seen the destroyed rice storage depot and mill.

The three-year period of distributing relief services led to another surprising twist in Proximity’s business offerings. Once farmers recovered from the most immediate signs of Nargis’s devastation, they then began asking for seasonal capital—not for free, but as part of a lending scheme. Although financial lending wasn’t in their repertoire, Proximity knew that farmers were coming to them because they couldn’t access affordable credit elsewhere. So the organization launched a farm lending operation in 2010 with 10,000 farmers—and had a 99.9% repayment rate, solidifying the trust and respect they had built with their customers.

mollyferrillphotos

At the same time, democratic reforms in Myanmar were opening the country to the global market. International micro-finance institutions (MFIs) began entering the country and Proximity assumed that the MFIs were going to provide financial support for the rural farmers that they had been lending to after the cyclone. However, their assumptions were challenged.

After speaking with a few MFIs establishing themselves in Myanmar, Proximity found these financial organizations were not interested specifically in farm finance, and were initially going to offer only traditional, urban-based micro-finance loans. “We thought that no one is interested in this big customer base we have,” said Debbie. “We saw a real need for this innovation.” With a potential market of 34 million rural customers, Proximity made the choice to expand their lending scheme to a fully-fledged farm micro-finance service. Today, Proximity has a loan group of 37,000 borrowers and growing, adding stability to their for-profit offerings.

Learning and Adapting with Rural Farmers

Not all new innovations have worked out so well for Proximity. Nearly 12% of all land in Myanmar is covered with rice farms and many are big, five-acre lots requiring tons of water. Proximity’s pumps were designed for one-acre cash crop growers (think vegetables) and the farmers were asking for larger pumps to irrigate their rice fields. “We decided to prototype a paddy pump,” said Debbie. “We sold about 1,000 but then discontinued the line because it was just too hard to lift that much water with ease… It was a really heavy, Stairmaster type of pump.”

Proximity pump in use_6

Other times decisions the team has made have led to surprising results. The only feasible way Proximity was able to reduce the cost of their treadle pumps further was to change the material. “We had this view that farmers want metal because they want durability,” recalled Debbie. Despite this assumption, Proximity decided to take a chance and developed the Baby Elephant pump out of plastic to reduce the price from $36 to $17. “We saw the price as really critical so we decided to go for the challenge,” said Debbie. “Now it’s our best-selling product.” On average, the Baby Elephant boosts productivity and income by an average of $254 a year, so farmers can easily afford to buy a new one every three to four years.

Trusting and Staying True to What Works

Proximity in field_7
Through ten years in operation, Proximity has consistently stayed focused on rural farmers in Myanmar. This has taken them on different paths—from irrigation products to solar lamps to farm advisory services—that sometimes leave outsiders puzzled. “A lot of people remark that we’re all over the map,” said Debbie. “Well, actually no. It’s all about that particular customer.” With customers at the core of their business, Proximity has been able to remain agile and respond to a fast changing, politically dynamic landscape in southeast Asia.

Do you use a customer-centric approach to your business? Or do you want to refocus in this way? Tell us about your practice in the comments below, or learn more about Proximity Designs at ProximityDesigns.org.

Join us tomorrow for the El Guadual interview en Español!

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