UmbrellaTable: From The Shade

Bottom Of The Pyramid: Establish Market, Win Nobel prize?

Posted on December 11th, 2006 by theshade.
Categories: Uncategorized, Bottom of The Pyramid.

Podcast:Listen to this article

In my last post I was pointing out that there are huge markets that are left unconquered. This in response to many who say there is no new frontier except online.

In fact I pointed out a great resource that talked about the ‘Bottom of the Pyramid’ (BOP) concept being worth 2 1/2 times the market capitalization that was lost in the fall of the tech bubble. Or 10 trillion dollars.

Now this figure points to 6 year old data so it is much greater at this point.

Just so happens a few days ago, an economist was given a Nobel Peace Prize for providing micro credit loans to the bottom of the pyramid. Sixty six-year-old Mohammed Yunu and his Grameen Bank.

This has helped millions escape from poverty. The information of this can be referenced here. Thanks to Lisa Bryant for Voice of America.

But don’t panic. This is still a virgin market, and there is still trillions at play that are unharvested. So the challenge still remains. Existing only for you to make a name for yourself I am sure.

In fact Mr. Yunu is not the only one servicing the bottom of the pyramid this way nor the first. Below is an example of another group that serviced BOP in a big way. This is a big market and there are some limited success stories yet the market persists. <

Being first is not always advantageous. Most times it is better to have a little data from the first movers in an area of endeavor. Knowing what doesn’t work can save a lot of time and capital. Also providing a road map of sorts. Often it is the second or third wave that makes the most out of a market.

One of the first to service the bottom of the pyramid lived long ago. The results of their efforts still remain today. The trail that they blazed can serve as a guide as to what to watch out for.

I am referring to the Knights Templar. This is an article on business so I will stick with that. The Knights Templar essentially received the initial funding and commission for protecting pilgrims to the holy land. They grew to much larger influence.

The transformational effect of their organization on the growth of Europe is often downplayed. In fact church historians and others depict the order as being formed by illiterate knights.

These illiterate knights build some grand castles and churches all over Europe and Asia that exist to this day. That often is all they are credited with.

The reasons for those castles and churches is they had a presence in all population centers and along all trade routes. That is multi nationally.

The Knights created a networked organization that used information, trade, commerce and capital to their advantage. They provided security and prosperity in their areas of influence. These illiterate Knights established the first European banking system.

They became a lender for many kingdoms.

However, they created not only the banking scheme to fund kingdoms but also to service the bottom of the pyramid of their day and they crossed geo political lines with their actions.

Much like the present day Walmart effect, the Knights Templar not only created out flows from their operational centers they invested into the local community as well. They spent and lent their capital in their own yard.

They expanded their network, going so far as creating their own linguistics in order to assimilate and transport new technologies, engineering, mathematics, astronomy, herbal medicine, healing skills, manufacturing and farming techniques from more advanced areas into other lesser developed ones.

This enabled the Knights to transition technologies and tactics from one country or cultural division to another. The first multi national.

Many of these tactics were gathered from Asia and other varied areas of their influence. There was no paper or centralized news sources much less trade information. Reliable sources where information wasn’t colored or withheld was hard to come by even for a king.

They used mouth to mouth resuscitation techniques and ‘Note of Hand’ they learned from the Sufis. This allowed them to do a little insider trading if you will.

The Knights expanded the note of hand concept to travel of pilgrims to the holy land. deposit funds locally travels months and several thousand miles, go to a Templar castle, show your note receive funds, pay fee.

Not only did they loan monies to governments or kingdoms of their day. They loaned locally to merchants farmers and craftsmen. This radically changed changed the face of Europe.

The profits from this spurned their growth. They build huge numbers of churches as castles churches and abbeys, they also funded large municipal projects as well as expansion of smaller local industries.

This helped to establish a prosperous merchant class partially by securing trade routes but more substantially by establishing banking and lending facilities for the bottom of the pyramid. Private buildings grew in size as a result. A building boom was on.

When you go to Europe and see the old buildings everywhere much of this is a by product of the templars providing loans and banking.

They brought new ideas into play taking cross cultural tactics and applying them to lesser developed industries. But also expanded the application of the new techniques into other industries as well.

Unfortunately they were a victim of their own success. They held too much influence and were not controlled by any monarchy. They had a lock on the money supply at a time when governments wanted that control.

The French king of the time owed them large monies and was also broke. This is before fiat currency, when a government could just print more and spend all they wanted. Then just as now governments stayed in power by placating the people. Unfortunately currency was actually gold in those times.

They were jailed, killed, overthrown and all their lands confiscated. A majority fled. Curiously the treasuries were found empty. Some speculate that the Swiss banking system came from this exodus. The foundation of the Swiss nations occurred shortly after.

The point is they influenced the world. This was enabled partially by profits from serving the bottom of the pyramid.

Of course we don’t have to provide the network. We have the internet. We don’t have to worry about many of the things the templars did. I believe we can forego the building of castles and churches. Which is where a great portion of gold was spent.

By providing services to the bottom of the pyramid in the form of financial assistance, primarily loans. We can encourage growth in our sphere of operation.

If we share and/or provide information, techniques and tactics, cross culturally as well as cross industry we can enhance that sphere.

It is easier to farm than it is to hunt.

That statement is not meant for you to encourage hunters to work the soil. It means that as you assist bottom of the pyramid micropeneurs with finance and improving their market position you are growing your expansion.

As you become trusted and valued you gain ingoing business. Your existing clients bring referrals and their own ever increasing volumes. This can be started locally and expanded ecologically. Crossing cultural barriers and borders as long as political and religious tolerance is adhered to.

Think on that for awhile.

I will expand this in future posts. Look to the right there is a Post To Email box. When you put your email you won’t miss any future posts.

Stay tuned

from the shade

One of my favorite quotes follows.

“But it does me no injury for my neighbor to say there are twenty gods or no God. It neither picks my pocket nor breaks my leg.”

-Thomas Jefferson, Notes on Virginia, 1782

If taking successful tactics from one industry and applying it to others appeals to you. Check out the following.

Cross Industry Advantages and Selling Houses

Secret Strategies To Sell your House

basicstostartwith.com: from prime

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Quest 2007: Untapped Market Worth 10 Trillion USD 6 Yrs Ago

Posted on December 8th, 2006 by theshade.
Categories: Opinion, Bottom of The Pyramid.

Podcast: Listen to this article

This time of year most people start looking back over the past year. You’ll see lists of milestones and past occurances. Personally I prefer to look ahead this time of year.

While everyone has their head turned looking over the shoulder at unchangeable events, I am looking ahead at things that can be influenced.

So as I am looking forward to where the new horizons are, it strikes me that the online world is only a piece of the macro view. There are multitudes of factors to be considered.

Firmly believing that massive opportunity exists in the international growth areas that are catching up to the first world, that is where the search began. It took me only a few minutes to come across a wonderfully detailed article that revealed the virgin market mentioned in the title.

By comparison “the total loss of market capitalization in the 2001 “tech bubble” crash was just over four trillion dollars.” quoted from resource linked below.

This mention is for the young turks that I recently witnessed stating that the only new frontiers exist online. While I agree that there is great potential in the online virtual frontier and have as of late written much to that effect. That doesn’t mean I believe there are no real world bricks and mortar, tires and pavement type opportunities and challenges requiring a pioneer.

The resource that I am quoting from is so detailed and the challenge so massive I am still trying to obsorb it all. That is why I call it a quest.

So if you feel there are no new real world horizons that haven’t been conquered I urge you to pick up the challenge of the article on TSC Daily written by Peter F. Schaefer titled The “Next Big Thing” for Global Business

If you feel that your business skills are untaxed. You wish there was a place to make your mark. Think on this awhile.

For those of you already hip to this and working on it. I salute you. You will hear more from me on this. I am opening a new category “Bottom of The Pyramid”

Look ahead to the year before you.

Tempus Fugit

From the Shade

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