July 9-10, 2013
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biNu, the startup that focuses on bringing first-class apps to developing markets, has just extended its feature-phone platform to include Android-powered devices.

This means that folks with spotty cell service and limited access to electricity will be able to use apps like Facebook, download ebooks, and watch video clips on YouTube without putting unnecessary strain on their already limited assets.

biNu’s feature phone app currently has more than 5 million monthly active users (MAUs), mostly in densely populated areas of Asia, Africa, the Middle East, South America, and India — markets where a feature phone is the predominant (and sometimes only) method of accessing the Internet.

While feature phones have maintained their hold in these regions, Android phones, which are becoming cheaper by the month to manufacture and sell, are growing quickly in popularity.

“Certainly, some people in countries like Australia or the U.S. who walk around and see iPhones everywhere don’t understand the scale of the problem and the opportunity,” said Gour Lentell, biNu’s CEO, in a recent interview with VentureBeat. “Lower-end smartphones and feature phones still outsell [smartphones] by about five to one. … “For many of our users, biNu is their first time online. They are accessing books, health information, news, weather — information and education that simply weren’t available to them beforehand.”

However, infrastructure is still a persistent problem, both in terms of the cell networks in these geographic areas as well as access to something as simple as a working electrical outlet.

biNu’s platform dramatically improves Internet access speed and connectivity while reducing power consumption — it’s mobile magic that gives even low-end phones high-end capabilities. Currently, the platform has more than 100 channels, such as social media, search, reference, books, SMS, news, and weather.

Australia-based biNu is two years old and is funded by Eric Schmidt’s TomorrowVentures, 500 Startups, David Risher, Ronal Lauder, Dick Parsons, Paul Bassat and others.

Image credit: Shutterstock

July 9-10, 2013
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Rocket Internet can’t stop churning out e-commerce startups in emerging markets. Today the Berlin-based incubator program announced that Namshi, its Middle Eastern online fashion retailer, has raised $13 million led by Summit Partners to sustain growth.

Namshi features clothing, accessories, and footwear for women, men, and kids from over 550 international and local brands. Like Zappos, the sites offers free shipping and a flexible return policy. The site serves the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Oman, and Bahrain.

According to a statement issued this morning, Namshi has experienced significant growth in the region and this financing will ramp up operations and support the move to a new, state-of-the-art warehouse and distribution center.

The Internet and e-commerce are exploding in emerging markets around the world. Rocket Internet capitalizes on this momentum by incubating and accelerating clone companies based on popular models, like Amazon, Zappos, and Groupon. Its portfolio includes Asian e-commerce portal Lazada, African online retailers Zando and Jumia, Europe-focused Zalando, and Brazil’s Dafiti.

Summit Partners is an active investor in these of companies and participated in the financing of Lazada, Zando, Jumia, and Dafiti as well as Colombian seller of consumer electronics Linio. Before this round, Namshi raised money from Investment AB Kinnevik, JP Morgan Chase, Blakeney Managament, and Holtzbrink Ventures. JP Morgan also likes startups like these and is an investor in Lazada, Dafiti and Zalando.

These deep pockets combined with Rocket Internet’s vision are a major force bringing e-commerce to the whole world. Next up, perhaps, is an e-commerce portal for Antarctica featuring the latest in extreme cold weather fashion.

Photo credit: Eugene Kaspersky/Flickr

July 9-10, 2013
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Online food delivery is a competitive space, with numerous startups trying to edge out the competition.

Foodpanda, based in Berlin, has raised $20 million to continue expanding its delivery service around the globe. In the past few months, Foodpanda and its affiliated brand hellofood entered 15 new countries, and it’s now active in 27 different markets. It also released iPhone and Android apps. This funding will fuel that growth and support Foodpanda’s quest to become the dominant global food delivery service.

The company operates like Seamless or GrubHub. Customers enter their city and browse through delivery options in that region. Before ordering, they can check out ratings, estimated delivery time and fees, look through the menu, and then place the order online. The approach is not only convenient for customers, but also helps restaurants increase their sales and distribution.

There is a massive market for the taking here, and Foodpanda is not the only one trying to capitalize on the opportunity. Foodpanda faces competition from fellow food delivery startups Delivery Hero (also based in Berlin) and London-based Just-Eat, which have each raised over $100 million in venture capital. However, these companies are active in 12 and 14 countries respectively, with a focus on Europe. Foodpanda’s focus is on emerging markets in South America, Asia, Africa, and Eastern Europe, and in a statement issued this morning, the company said it is the leading food delivery app in most of these areas.

This financing will support Foodpanda as it adds more restaurants, countries, and customers into its systems. The startup emerged out of Berlin-based accelerator Rocket Internet, and this round was led by Investment AB Kinnevik and Phenomen Ventures. Foodpanda is based in Berlin.

Photo Credit: Prenylastman/Flickr

July 9-10, 2013
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BlackBerry CEO Thorsten Heins has some serious challenges ahead of him. But when it comes to the prospect of selling ultra-low-cost smartphones in emerging markets such as India and Indonesia, he says BlackBerry isn’t going to even try to compete in that segment.

One of BlackBerry’s best bets in making a comeback is to leverage its strength in international and emerging markets. But it wants to own the high-end purchases in these markets rather than the low end.

“[It's important to] understand where you are playing and resist being talked into segments that you know will not serve your purpose and will not result in shareholder value,” Heins said during a question-and-answer session yesterday in Waterloo, Ontario. “You will not see us getting into the 50-, 60-buck phone segment. This is not BlackBerry.”

BlackBerry now sells its new flagship Z10 smartphone in India for the unsubsidized price of 43,490 rupees ($800), and ideally it will attract the interests of wealthy Indian consumers. Cheaper BlackBerry 10 models will arrive, but those will not be in the $50 range if Heins holds steady.

“You will see new products being launched this year based on BlackBerry 10, all fully LTE-capable, the whole 10 yards, that are more geared towards those price bands where people need to be,” Heins said.

Via Bloomberg

Thorsten Heins screenshot via Sean Ludwig/VentureBeat

July 9-10, 2013
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Say what you will about its chances, but Mozilla’s smartphone efforts are off to a pretty good start.

At Mobile World Congress, the company fleshed out its vision for Firefox OS, which is heavily targeting emerging markets.

Early support for the effort looks particularly strong on both the hardware and carrier ends. Mozilla says that it’s partnering with ZTE, Alcatel, Huawei, and LG for the first round of phones, some of which will arrive by the second quarter of this year.

Firefox OS will be pretty well-represented on the carrier end, too. Big names like Deutsche Telekom, Japan’s KDDI, and Telefonica are all committed to pushing out Firefox phones. Mozilla says that 18 network operators are on board, which is a pretty significant feat for new OS with a nonexistent track record.

For the first push, Mozilla is targeting developing markets like Brazil, Colombia, and Poland, all of which are full of people who are looking for powerful, but inexpensive phones. That’s Firefox OS’s sweet spot.

Unsurprisingly, the U.S. won’t be a part of that first push. Mozilla doesn’t expect the first Firefox phones to hit the States until next year, which means it’s going to be a while before we see how the Mozilla fares in the cutthroat smartphone market here.

July 9-10, 2013
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Video delivery platform Vuclip has made its first ever acquisition, scooping up mobile video streaming startup Jigsee.

Vuclip serves videos ‘on-the-fly’ to people on any device in any country. Its goal is to make videos accessible to everyone, and to strengthen the connection between brands and an audience they wouldn’t otherwise be able to reach. The company claims to deliver 25 million videos a day.

In November, Vuclip closed its fourth round of funding from New Enterprise Associates, Singtel Innov8, and Jafco Ventures, bringing its total to $35 million. Now, it is putting some of this money into Jigsee, which makes it easier to receive video on low-cost phones. Jigsee’s technology and team will serve to further engage users in emerging markets. The terms of the deal are undisclosed.

Read more about Vuclip on VentureBeat.

July 9-10, 2013
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Those writing off Apple after its disappointing earnings update are premature.

I’ve done extensive research on the company revealing its ‘Quantum Strategy’ in a paper for Organizational Dynamics, and though Apple’s results saw $50 billion wiped off its market value I don’t feel it is the first sign of strategic weakness as some analysts are suggesting.

Apple reported no rise in profits for the final quarter of 2012 and slightly missed revenue estimates, prompting speculation that its period of hyper-growth is coming to an end.

The company sold 47.8m iPhones over the Christmas quarter, missing a forecast average of around 50m and revenue growth of 18 per cent year on year to $54.5bn was below the $54.9bn forecast, while profits were flat on the previous year at $13.1bn.

But before we write Apple off with premature assessments, we need to appreciate that its so-called disappointing performance is still extraordinary by many measures, and that it has the capabilities to keep winning in its markets, which it may yet redefine with more blockbuster products.

Apple is thought by many to have posted poor results, but this would be a rushed assessment. Apple’s revenues continued growing at a fast pace, with an 18 per cent rise over the previous year and 25 per cent more when adjusting for the fact that this quarter was for a 13-week period while the previous year was for 14 weeks.

Profits were $13.1 billion, same as the previous year, but actually seven per cent higher if the 13 week vs 14 week issue is taken into consideration. Gross margin fell to 38.6 per cent compared to 44.7 per cent year-on-year, but Apple had prepared the market about the lower margin and actually delivered above its own guidance.

Lower margins would be expected given Apple’s rising sales in emerging economies, introduction of iPad mini and appearance of more competing products that are much cheaper. The 38.6 per cent margins in the markets where Apple operates are still extraordinary.

Speaking of emerging markets, Apple’s higher transparency in reporting sales by geography shows that its revenues in China went up 67 per cent in this quarter compared to last year, with a huge potential upside. Further, its products are on different stages of the product life cycle, a pretty robust risk management strategy.

Even if in the long term Apple has lost some of its innovative edge, its substantial liquid assets still give it an advantage in the technology market.

The main issue for the medium and long term is whether Apple has sustained its innovative capabilities, which seems likely given that it’s part of the company’s DNA. But the proof will be in the pudding, and we’ll know over the next 12 to 18 months.

What many forget though is Apple’s safety net of $137 billion in cash and liquid assets. Apple could easily buy any new technologies that appear to pose a threat to it, that offer synergies to its own offerings, or that can open up new markets for it.

Stock markets react, and sometimes overreact, immediately, but what matters is the big picture and Apple seems to be on a solid footing by that measure. Even though its shares fell based on the earnings announcement, this could be a useful correction.

Loizos Heracleous has authored six books and over 50 articles published in leading journals including the Harvard Business Review and MIT Sloan Management Review. His research has been honored by three noted Best Paper awards from the Academy of Management and received an Emerald Literati Award for 2007 for his research on the role of biometric technologies in service excellence, a second Emerald Award in 2009 for the Paper with the Best Practical Implications for his work on human resource strategy at Singapore Airlines, and a third award for the Paper with Best Practical Implications in 2010 for his article entitled “Can business learn from the public sector?” Loizos has trained or advised executives from several leading corporations including IBM, Total, Rolls-Royce, KPMG, Standard Chartered, O2, and Bank of China. He has been listed in the Marquis Who’s Who in the World since 2003. Before joining Warwick Business School, Loizos was Reader in Strategy at the Said Business School and Official Fellow of Templeton College at Oxford University, and Associate Professor of Business Policy at the National University of Singapore.

July 9-10, 2013
San Francisco, CA

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The twists and turns in the cheap iPhone saga are enough to give you whiplash.

Reuters this morning announced that it has withdrawn a story that said Apple marketing head Phil Schiller had dismissed the idea of a cheaper iPhone. The news organization cited “substantial changes” to the report the story was based on from the Shanghai Evening News.

Update: In a new story this afternoon, Reuters points out that the Shanghai News story was changed to remove references of cheaper smartphones. The story’s headline was changed from,  ”Apple will not push a cheaper smartphone for the sake of market share,” to “Apple wants to provide the best products, will not blindly pursue market share.” Apple confirmed with Reuters that Schiller did chat with the Chinese paper, and that it contacted the paper about making the changes.

By rescinding the story, Reuters continues to fuel the rumors that we’ll see a cheaper iPhone sometime this year.

In our coverage of the Shanghai Evening News story, our own John Koetsier noted that Schiller’s comments weren’t trustworthy. Apple may not want to build a “cheap” and flimsy iPhone, but the company may well decide to make a less expensive iPhone to increase its penetration in China.

Recent reports from the Wall Street Journal and Taiwanese news site Digitimes sparked this latest wave of cheap-iPhone speculation. Apple’s cheapest iPhone at the moment is the iPhone 4, which is free with a two-year contract in the U.S. But it’s still pretty expensive off-contract, costing $450 in the U.S., $490 in China, and $750 in Brazil, according to AppleInsider.

There’s no doubt Apple will want to drive down the cost of the iPhone for markets like Latin America and China.

July 9-10, 2013
San Francisco, CA

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With a keen eye for technology that could benefit users in emerging countries, Google today launched Gmail SMS, a service that will let you send and receive messages from your Gmail account via text messaging.

The service, which will initially be available in Ghana, Nigeria, and Kenya, lets users tap into the much more ubiquitous (and reliable) voice cellular networks, instead of relying on Internet connectivity. It’ll open up Gmail to people who only have feature phones with basic voice and texting capabilities, and for others it’ll be a useful fail-safe for dealing with shoddy network infrastructure.

The service shows that there’s still plenty of life in SMS in emerging markets, even as consumers move to data-based messaging tools like iMessage and Facebook Messenger in more developed countries. There’s little overhead with SMS, since it’s a core part of most cellular networks, and it remains essential in countries that don’t have significant mobile web coverage.

After signing up for Gmail SMS, your e-mail messages will show up as text messages automatically. You can reply to e-mails directly through texts, and you can also use commands like “MORE,” “PAUSE,” and “RESUME” to control the flow of messages.

Google is offering Gmail SMS for free, though of course you’ll have to watch out for standard texting fees.

July 9-10, 2013
San Francisco, CA

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With the next iPhone on the horizon, all signs point to an imminent demise for the iPhone 3GS. Apple, however, has other plans.

Apple’s aging third generation smartphone will live on as the company targets emerging markets not dominated by the iPhone 4S, AppleInsider reports, based on a note from Jefferies Analyst Peter Misek.

But does the notion hold any weight?

While Apple rules the higher-end, contract-fueled part of the smartphone market, the lower, emerging end is dominated by feature phones and less-advanced Android devices. This leaves Apple without a real contender in the low-end space.

“Emerging,” in this case, refers to a market’s general potential for growth. Emerging markets are untapped ones, and, as a result, are the very kinds of markets that growth-focused companies are constantly looking it.

One of the most significant emerging areas are prepaid markets where consumers are less likely to sign pricy two-year contracts. These types of consumers are more sensitive to price in general, which is why its key here to keep low the prices of off-contract phones.

Currently $375, the off-contract iPhone 3GS is far, far north of an attractive, mass market price point. This is why Apple would likely push that price down to roughly $200, making the device the same purchase price as an on-contract iPhone 4S and double the price of an on-contract iPhone 4. (Apple already offers the 3GS for free in America with a two-year contract.)

One problem, though, is age. Released in June 2009, the 3GS is at this point almost three years old. That may not seem too old, but smartphones age fast, and three years is basically decades in technology time.

This means that, as cheap as a developing market 3GS would be, the device’s age would very rapidly show, especially as Apple transitions to the next version of iOS.

The trick, then would be figuring out a way to update the device slightly while keeping it at a price friendly to more price-sensitive consumers.

Photo via Flickr user MJ/TR. 

According to Frogtek, a Mexican stall-like, microretailer stocks an average of 1,000 products from 25 vendors and is often managed with nothing more sophisticated than a paper notebook. Frogtek wants to change all that with the help of the $206,000 (150,000 EUR) prize.

The product consists of a bar code reader connected to a mobile application running on an Android smartphone. Every product sold is scanned and tracked by the application. This means that shopkeepers can, often for the first time, track inventory, calculate daily sales, identify best and worst selling products and order online from vendors. Access to these simple metrics can be nothing short of revolutionary for shopkeepers.

The inspiration for the product came  from micro credit agents in Colombia who, 5 or 6 years ago, started using PDAs to record data from credit rating interviews with applicants who ran shops. “For many of the shopkeepers this was the first time they had seen their numbers” says Frogtek CTO Guillermo Caudevilla. “And they said ‘I want something like this for my business.’” Founder David de Ser heard about this project and saw that since Android phones had become available he could make an application accessible to these shopkeepers.

The first market was Colombia, where Frogtek has run pilots for 2 years, and the startup hopes to be in 500 shops by the end of the year. Mexico is now also a focus, with 120 shops already up and running. According to Caudevilla, 1 in 100 people in Mexico run a shop, and microretailers are responsible for 5 percent of GDP. Worldwide there are more than 40 million microretailers.

Microretailers are of great interest as distribution channels to large vendors like Coca Cola and Procter and Gamble as well as banks, mobile payment companies and micro-credit institutions. However, because of the owners’ informal or non-existent accounting systems, accurate data on their activities can be hard to come by. Frogtek’s business model is based on selling that data as well as getting a commission on online orders made via the application. Big companies will also often purchase or subsidize the phone and bar code reader. “We are starting a trial in Mexico with Coca Cola.” explains Caudevilla. ”We just signed an agreement with the third biggest company in Colombia to have another pilot and the second phase of that would aim to reach 120,000 shops in Colombia within 5 years.”

Subsidization is certainly necessary since the cost of the equipment, $100 for the bar code reader and $200 for an Android smartphone, is still prohibitive for most microretailers. The big challenge for Frogtek in the future is therefore to create partnerships with large companies who reach thousands of microretailers.

Most of Frogtek’s competitors make applications on PCs for larger retailers like minimarkets. “We are the only people doing this on a phone, which is 2 or 3 times cheaper. The application is completely tailored to the needs that they have in emerging markets,” insists Caudevilla.

A big issue for all social enterprises is how to measure their social impact. Often they use a combination of breadth, the number of people reached, and depth, the impact on individuals. When it comes to gauging depth, Frogtek has an advantage. “We are making a measuring tool.” Caudevilla says. “At some point we can measure if they are selling more, reducing expenses, increasing margin, whether they have given up selling bad products. What we are doing is giving these people the power to make the best decisions.”

Frogtek was founded in 2009. Its 18 employees are based in Spain, Colombia, Mexico and the United States, and the company is currently angel-funded. One of the investors is Josh Mailman, the first investor in Grameen Phone, the biggest mobile operator in Bangladesh.

Newzoo’s data shows that gaming is spreading rapidly around the globe, thanks to online play, mobile games, and new ways to pay for games such as free-to-play games with micro-transactions.

In Brazil, gamers are expected to spend $2 billion on games in 2011. Online and mobile gaming accounts for 68 percent of time spent gaming and 51 percent of spending.

“Brazil is leading Western countries when it comes to the popularity of new game platforms and business models,” said Newzoo chief executive Peter Warman. “Even with the current economic growth, paying more than $50 for a game is out of reach for many game-crazy Brazilians.”

The growth in Brazil is due to the uptake of social, mobile and massively multiplayer online games, all of which depend on free-to-play business models, where users play for free and pay real money for virtual goods.

Games on Facebook and the Google-owned social network Orkut account for 11 percent of spending, while casual game sites account for 15 percent. About 16 percent, or $320 million, is spent on MMOs. Mobile devices generate 9 percent, or $180 million. Consoles account for 34 percent of spending, but a big part of that goes to used or pirated copies.

Brazilians spend about an equal amount on boxed PC and Mac games as they do on digital downloads. But $48 million of the boxed spending goes to pirated or used games, which generate no money for game publishers. Of 23 million Brazilians who download games, 64 percent admit to piracy.

By comparison, spending on games in Mexico will reach $1.2 billion in 2011, according to Newzoo. Game preferences there and spending behavior are similar to the U.S. Mobile and online games account for about 60 percent of the time and 31 percent of the money spent on gaming.

In Russia, gamers will spend $1.5 billion on games in 2011. MMO and PC gaming account for 56 percent of spending. Casual, social and mobile account for 48 percent of the time spent gaming. And 49 percent of Russia’s 38 million gamers are female.

The most expensive part of making a mobile call from a remote area is generally the backhaul, i.e. the connection between the local mobile base station and the mobile carrier’s central core network. Backhaul is often done over an expensive satellite connection. Altobridge’s Data-at-the-Edge technology reduces the backhaul requirements by at least 50 percent by providing more functionality locally, especially when the call is being placed to someone else in the local network.

Reducing backhaul communications can also ease data congestion, which can become a problem in high growth, emerging markets. The new investment will be used to scale up the business and develop the technology to further reduce backhaul costs. Altobridge also recently demonstrated a low-cost mobile broadband solution.

Altobridge’s main markets are emerging countries, in particular in Africa and Asia. A mobile base station was traditionally an expensive piece of kit. Altobridge base stations often run in remote areas that have no access to power. As a result, the company also offers a cheap, solar-powered base station that can be carried on the back of a truck to the target location. The Altobridge lite-site install has lower power consumption than other products and can serve 100 to 1,500 people.

The company’s main competitors are traditional wireless network vendors such as Huawei, some of which also license Altobridge’s technology.

Altobridge was founded in 2002 and employs 130 people globally at its headquarters in Kerry, Ireland and in Malaysia, Indonesia, China and the US. The company has previously received funding from Enterprise Ireland and various private investors.

Chipchase’s job as Frog Design‘s “Director of global insights” takes him all around the world and into the most private areas of people’s lives. The aim of his research is to understand what makes people tick and how that knowledge should inform the design of products and services. Frog Design works for big companies who want to know where the future business opportunities lie and what disruptions are coming. I talked to him about love, money and design in the developing world.

Chipchase is not a believer in design at a distance. “If you spend time out in the places where people do the things they do, you get a different perspective. You get a much richer, more nuanced perspective way beyond any marketing, statistical insights,” he says. Much of his time is spent in emerging countries.

There has been a historical tendency to lump people in emerging countries together — in particular bottom-of-the-pyramid (BOP) people. “China is not a country, it’s a continent,” insists Chipchase. “India is not a country, it’s a continent. China has a bigger middle class than the entire population of Europe. Anyone who doesn’t try to break those down is a fool.” BOP people usually form the largest but poorest group in a country.

Companies also need to understand their obligations to their customers. “When you go into the BOP, your obligations are that much clearer. Your responsibilities as a corporation are that much greater because the people you are effecting with your products and services tend to have lower margins for error” he explains. “What is so compelling about what you produce that someone is willing to put so much on the line? Can you really imagine (the equivalent of) giving up your car for this product?”

One of the biggest mistakes companies make, according to Chipchase, is assuming they can just sell the same thing in emerging markets. “There are certain companies who would put out one phone for that entire market. There are other companies which have done a fantastic job of targeting products at the aspirers within those communities, at the entrepreneurs, the stay at home Mums. These niches are hundreds of millions big.”

You should also never underestimate those BOP consumers, he says. “Five years ago I was in Uganda before any of the mobile money services were around, before M-paisa (the pioneering P2P mobile payments service in Kenya), and one of the things I saw in a Ugandan village was people had created their own mobile money service.” People were trading airtime as a form of currency. ”If that kind of thing can naturally organise, what role do we have as designers?”

Frog Design just published some research from Chipchase on mobile money services in Afghanistan that illustrates the complexity of designing services for such markets.

Local mobile carrier Roshan recently introduced M-Paisa there. “Somewhere like the U.S., mobile money is just one step away. In Afghanistan, it’s probably 3 steps away. The 3 steps are textual literacy, mobile literacy and financial literacy (e.g. understanding the concept of “interest”). That doesn’t mean that people are not going to use it. It just means that they have to be even more motivated.”

Male literacy in Afghanistan stands at 43 percent, female at 13 percent. How do you design mobile services for people who can’t read? Apparently, illiterate people often have “proximate literacy” where friends and neighbors who can read help out. Trust is a more difficult barrier. “There is close to zero trust in institutions in Afghanistan,” Chipchase told me. “The mobile carriers have more trust than the banks. On the M-paisa agent’s commission, we have heard of customers saying ‘The agent wanted a bribe’. ”

Afghans hold their wealth in “portfolios” of goats, gold, commodities and various currencies including dollars. Roshan pays 10 percent of its workforce using mobile money, and they immediately trade it for something tangible. In such a society, “Imagine going back home to your household” says Chipchase “and it’s pay-day and the head of the household says ‘Where’s your money? You say ‘It’s on here (the phone)’. ‘Fool!’ says the patriarch’” You can see how this would seem like trading the family cow for the magic beans in the Jack and the Beanstalk fable.

Afghanistan is also a country with relative geography. “So if I was to describe this hotel in Afghanistan it would be … Go to the coast, find a big roundabout, head north towards the sun until you find a little lady selling vegetables and ask her if she will point you to the right alley.” Even locating an M-Paisa agent in this environment could take several hours the first time.

As Chipchase describes it, illiterate BOP people can learn anything, but they need to be sufficiently motivated. The dating etiquette in Afghanistan involves buying airtime, and possibly a mobile phone, for your beloved. “The mobile phone makes love marriages possible,” said one young Afghan. There’s nothing more motivating than love.

Kazi Islam describes his job as “implementing the future”. He is the CEO of Grameen IT which runs the IT services of Grameenphone, Bangladesh’s biggest mobile carrier. Islam grew up in the U.S. become returning to his home country.  ”I lived in the future. I went back into the past. My job is to implement the future” he says. Islam is convinced that emerging countries like Bangladesh will determine which technologies survive and dominate in that future. I talked to him about how technology has transformed his country and why tech companies need to pay attention.

Grameenphone is a billion dollar business in a country where the average revenue per subscriber is 1 or 2 dollars. One of company’s first innovations was the Village Phone scheme, established at a time when a mobile handset still cost $1000. The program gave villagers access to micro credit to buy a mobile phone that could then be rented out to other villagers. Islam told me that 10 years on Village Phone has become a victim of its own success as handsets and minutes dropped in price. Now you can buy a handset for 10 dollars.

“The village phone concept completely changed a nation through a technology. The measuring stick  is how many people are using mobile phones today. 12, 15 years ago if you were telling me that 60 million people (in Bangladesh) would have a mobile phone, people would just laugh at you.” he explains.

GrameenPhone now provides a range of services which go way beyond the traditional scope of a mobile carrier. One of the most popular is BillPay. Paying a utility bill in Bangladesh, and many emerging companies, is an arduous business involving hours of queueing to pay the bill and then queueing again to confirm that the money was received by the utility.

BillPay allows instant payment via mobile. Islam told me that a surprising side effect is that “people are voluntarily going and paying. Before people would put it off. From the government side their revenue went up significantly.”

Buying a train ticket used to take a whole day. Now 50 percent of all train tickets are sold through mobile services and a huge number of tickets can be sold in a matter of hours. Grameenphone also provides a hotline where farmers can get advice on problems with their crops. “60 percent of our employment is agri-based. If your crop is infected, for example, you have no way of finding out what is really happening. You can make a phone call and describe. You can take a photo on a mobile phone and send it in an MMS”.

Mobile healthcare is also an important focus, in a country where 390 out of 1000 women die due to complications in childbirth and access to basic health information is limited. “On average our very optimistic number is that we live to be around 62 years. That means compared to the U.S. we live 10 years less. A significant part of that is because their mother was not healthy and their birth was not perfect. So we start with birth.”

I queried Islam on the biggest misunderstanding on how new technology is used in emerging markets. “The biggest misconception is that there is no business opportunity. In my mind that misconception comes from laziness.” He also thinks that making fast money should not be the first priority of an entrepreneur. In his opinion, this is one of the reasons that most startups focus on the US and European markets. “Worry about people first. Whatever technology you build if it is people-focused and ultimately people embrace it, you are going to make a decent living” he insists.

Islam also condemns technology companies for not taking the emerging countries, home of half of the world’s population, into consideration when designing new products.

“In none of them you will see a criterion which says that this particular product has to be applicable to emerging countries,” he says. “If you forced innovators to think about this the world would be different. That particular tick box is missing. If companies are still not thinking about emerging markets and emerging market populations, they are committing two big crimes. One is to themselves; they are missing out on the financial opportunity. They are also depriving these people of the benefit of this technology.”

When I asked Islam about the technology sectors in which emerging countries will lead his answer was emphatic: “Everything”. While developed countries have made huge investments in infrastructure like fixed line telephony, emerging markets are an open field. “In Bangladesh there are less than 250,000 fixed line phones but there are 66 million mobile phones. Emerging markets will dominate in line of what innovations succeed in the future. Mobile is a big example of it”. Bangladesh also has one of the largest deployment of individual solar home systems covering 300,000 rural homes. How is this possible when people are only making a dollar a day? According to Islam, entrepreneurs have developed new business models as well as technology to sell to this market.

One technology which Islam predicts will create an explosion of new business is mobile finance. Bangladesh is a cash-based economy where very few people have bank accounts. “The moment you solve the mobile financial part of it, your service industry is going to explode since the service providers can collect the money.” Grameenphone is planning to introduce P2P mobile payments and other financial services.

“If you look at Bangladesh, 10 years ago our per capita income was 200$. Today our per capita income is around $900. Can you imagine in the US people’s per capita income going up by 500 percent in 10 years? It is happening because of technology” Islam concludes.

The company tags pharmaceutical products in emerging markets with a scratch-off code which is verified by sending a text message to Sproxil’s product authentication service. Sproxil was one of two companies to receive an honourable mention from the judges in the recent IBM smartcamp global finals (having previously won the Boston competition) and was one of the most talked-about startups in the competition.

The World Health Organization (WHO) estimates that less than 1 percent of drugs in industrialized nations are counterfeit but that rate could be as high as 50 percent in some developing countries like Nigeria and Congo. WHO calculates that 200,000 of deaths caused by malaria alone could be prevented if all antimalarials were genuine. The U.S.-based Center for Medicines in the Public Interest (CMPI) projects that in 2010, counterfeit drugs will be a US $75 billion business, an increase of more than 92 percent from 2005.

Drug companies have developed myriad methods to verify the authenticity of their products including RFIDs, barcodes and holograms on packaging, chemical tests and laser scanning. Unfortunately, most of these methods have either been compromised or are too expensive for use in emerging markets. Sproxil uses simple scratch-off codes, of the type used to top up pre-paid cell phones, attached to either the drug blister, packet or an entire pallet depending on who needs to validate the product’s authenticity. The code is single use and is sent by text message to Sproxil’s authentication service. In Nigeria, more than 1,400,000 pharmaceutical items have been labeled with Sproxil’s technology.

I talked to Sproxil’s CEO Ashifi Gogo about the market and business model. According to Gogo, Sproxil can provide the mobile authentication technology more cheaply than the pharma companies themselves, because it can aggregate multiple pharma clients. When asked about the other authentication methods most likely to compete with Sproxil’s technology, Gogo mentioned barcodes but pointed out that many phones in developing countries are not yet capable of photographing the barcode and sending it for authentication.

Currently, clients pay a few cents for each code and for the text messages. Since Sproxil currently gets a fee even if the user does not text the code, it generates revenue from unused texts. Gogo intends to switch from this flat fee model to a per transaction fee as the business grows. Sproxil also sends targeted ads to users who have authenticated a code. These ads have increased sales by 10 percent for one client in Nigeria in only 3 months.

Gogo foresees the authentication technology being used for other items such as wines and spirits (fake versions are a major problem in Asia, apparently) and luxury goods. Initially though, Sproxil plans to expand into Kenya and eventually India which has a huge counterfeit drug problem. Sproxil is not the only company out there using cell phones for verification. MPedigree operates a similar scheme in Kenya.

Sproxil was founded in 2009, has 12 staff members and offices in Somerville, MA and Lagos, Nigeria. The company is privately funded and, according to Gogo, profitable.

July 9-10, 2013
San Francisco, CA

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Chinese mobile phone manufacturer Umeox just introduced one of its latest models, the V206, with little fanfare at the MEDPI tradeshow in Monaco. But the V206 is no ordinary phone; it’s a low-cost, ruggedized and waterproof handset powered entirely by sunlight.

The V206 is just one of a new generation of low cost, solar-powered phones that use technology from Dutch company Intivation. Intivation’s SunBoost chip makes it practical and cost-effective to charge small devices like mobile phones via the sun.

A single solar cell of the size that fits onto a phone does not produce enough voltage to charge the phone’s battery. The traditional solution is to use multiple, smaller cells in series, each of which boosts the voltage. This approach has several disadvantages, including sub-optimal performance when some of the cells are shaded, the higher cost of manufacturing multiple cells, and the fact that multiple cells have higher levels of defects that affect performance. SunBoost is a boost converter that amplifies the output voltage from the 0.3-0.6V produced by a single solar cell up to the 1.2-3.7V required to charge the battery. The SunBoost chip also has integrated Maximum Power Point tracking (MPPT), which automatically adapts to light intensity and ambient temperature to ensure that the solar cell operates at close to its maximum effectiveness in all conditions.

While the trend for mobile phones in developed countries is towards more expensive and power-hungry handsets, 1.6 billion people in the developing world don’t have access to a regular electricity supply. Not only is the electricity grid in many emerging markets unreliable, it’s also expensive, with consumers spending 15-20% of their incomes on it. If there is no local power, phone owners have to walk to the nearest town or pay inflated prices to a mobile charging vendor to charge their phone. According to Intivation, allowing customers to charge their phones from the sun boosts ARPU (revenue per customer) by 10-15% in semi-rural areas. Many African countries have more than six peak sun hours per day, making them ideal for solar-charging. Large parts of Asia and Latin America also get more than 4 peak hours per day.

The cost for the solar cell, modified battery, SunBoost chip, and related engineering is under $10 per phone. Mobile carriers don’t subsidize handsets in emerging markets, so it’s vital that the price point is low.Intivation’s Marketing Director Rik Wuts says that the “sweet spot” for a mobile phone in these markets is around $20.

Vodafone added its first solar-powered handset (which uses SunBoost) in its Spring 2010 global portfolio. The Vodafone 247, manufactured by ZTE, generates enough energy from one hour of sunlight to power 20 minutes of talk time from a 20cm2 solar cell. Intivation estimates that an average low-ARPU user should not need more than two hours of charging a day. Since these phones are targeted at particular emerging markets, they often have distinctive features adapted to that market. The ZTE S316, for example, includes an LED torch, a vital necessity in African countries with unreliable power supplies. This model is now being sold via EcoNet in Zimbabwe and MTN in Sudan, bringing the number of African countries using SunBoost-enabled phones to 13 since the first phone was introduced less than a year ago. Phones including SunBoost are now being sold in a total of 17 countries.

Intivation was established in 2003 in Amsterdam, has 20 employees and is privately funded.

Don’t miss MobileBeat 2010, VentureBeat’s conference on the future of mobile. The theme: “The year of the superphone and who will profit.” Now expanded to two days, MobileBeat 2010 will take place on July 12-13 at The Palace Hotel in San Francisco. Register now. Tickets are going quickly. For complete conference details, or to apply for the MobileBeat Startup Competition, click here.

July 9-10, 2013
San Francisco, CA

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Assured Labor, a social network for job hunters in developing countries, raised $1 million in funding from angels including former Skype chief executive and chairman Michael Van Swaiij, Kima Ventures and Nexus Venture Partners.

The New York-based startup focuses primarily on Latin America where it enables low- and middle-income workers to find jobs by creating resumes at Internet cafes and web kiosks. What’s interesting about Assured Labor’s model is that it has the power to make job markets in emerging economies vastly more efficient.

About two-thirds of the people in the markets Assured Labor targets lack home Internet connections, and many job seekers try to find work via word of mouth. Through the company’s Latin American property EmpleoListo, a job seeker can write up their work experience and skills and post it to the site. Employers search for hires by location, education, pay range and skill set; they pay to reach out to prospective hires through text messages.

Founder David Reich, who developed the idea for the company at MIT’s Media Lab, said 60 to 80 percent of job seekers usually respond in less than a day.

After a pilot in Nicaragua over the past few months, the company has attracted 14,000 job seekers and is starting to run tests in other Latin American countries. Assured Labor earns revenue by charging recruiters who want to reach out to applicants.

Don’t miss MobileBeat 2010, VentureBeat’s conference on the future of mobile. The theme: “The year of the superphone and who will profit.” Now expanded to two days, MobileBeat 2010 will take place on July 12-13 at The Palace Hotel in San Francisco. Early-bird pricing is available until May 15. For complete conference details, or to apply for the MobileBeat Startup Competition, click here.