Category Archives: self-organization

Hyperbusiness Opportunity #3

The town of Wilcannia, at the edge of Australia’s Outback, has never been big enough to attract the attention of Australia’s supermarket oligopoly. There is a single market in the town center, privately owned, and frequently accused of price-gouging. As the nearest supermarket is 200 km away in Broken Hill, unless Wilcannians favour a four-hour round-trip drive, they have had to make do with what was on offer.

On the 8th of August, ABC News reported that Wilcannia’s grocer had locked its doors – without any warning, or any explanation. Suddenly, townspeople were unable to buy over-the-counter medicines (including insulin, a real worry), to say nothing of fresh produce. No one had any idea when or even if the grocer would reopen, a blow from which Wilcannia could not easily recover.

Australia’s gigantic supermarket chains – Coles and Woolworths – both offer online shopping experiences: select your items, go through checkout, and arrange a convenient delivery time. Unfortunately, neither company’s delivery area covers Wilcannia, but that’s a problem easily solved by aggregating individual purchases into a single delivery (perhaps one delivery every other day) which would easily cover the transportation costs.

The biggest issue overall would be one of access. Wilcannia’s residents are generally not well-to-do, and many don’t have smartphones. The town may not even have 3G mobile broadband. The number of Internet-connected computers would be low. Here, there’s room for a service that used human power to aggregate the order-taking; order-takers could travel from household to household, helping each household place and pay for an order, in return receiving a payment for this work. Between the distributed order-taking and the additional transportation costs, purchases would be a bit more expensive than if made directly in Broken Hill, but when time and petrol are factored in, it would probably be a bit less expensive than an individual trip to Broken Hill – and far less expensive than the now-closed town grocery store.

This is the kind of vertical specialization that can thrive in connected markets. Everyone needs food, making it possible to create a framework to aggregate and fulfil that need. In this case, it doesn’t even require that everyone have a mobile, or the latest mobile, or access to high-speed networking. Human networks can fill in where telecommunications do not yet (and may never) reach.

This co-operative model could work for any community in rural Australia which wants the benefits of big-city markets within the comfort and community of a small town, bringing jobs to those areas, providing needed competition to monopoly vendors. It would take a bit of groundwork to bring such a system to Wilcannia, but once perfected there, it could quickly be replicated across the nation. It’s the appification of the supermarket.

Markets Are Everywhere…

photo: v1ctor

Coconuts can be good business. In the southern Indian state of Kerala, families have planted coconut trees for countless generations, always keeping a close watch on them — as coconuts fall from ten meters high, they become dangerous projectiles. At some point someone decides something must be done, and someone gets dispatched to find the coconut picker. A village might have a few coconut pickers – wiry men with good balance who can scale the heights, snip the branch, and catch the coconut before it falls – but pickers can be very hard to reach. A good coconut picker will be up in the trees most of the day. Since he depends on customers coming to him, he has to hope his customers hear through the village grapevine who’s tree he’s climbing that day.

One day, in one village somewhere in Kerala, one of the coconut pickers bought a mobile. This wasn’t particularly unusual – India has nearly a billion mobile subscriptions – but it led to something completely unexpected. Now that his customers could reach him all the time – mobile reception is particularly good at the top of a coconut palm – he got a lot more work. Within a few days all of the other coconut pickers in the village were going wanting for work, because it was just too easy to make a call to the picker with a mobile, and too hard to search through the village looking for any of his competitors.

In a case of adapt-or-starve, within a few days all of the other coconut pickers in that village had their own mobiles. Now villagers could reach any of the pickers at any time, arrange a mutually convenient time for the picking, perhaps even engage in a little friendly negotiation – when your competitors are no more than a few digits away, your customers are more likely to shop around.

Now that almost everyone, everywhere has a mobile, everyone, everywhere is able to trade anywhere, at any time. The market has always been a place and time where people came together to do business. The mobile has made taken the market and amplified it, made it pervasive and ubiquitous. You don’t have to install a market app onto your smartphone, because we are the market makers. Teach a man to fish, and you’ve fed him for the rest of his life. Sell someone a mobile, and you’ve turned them into an entrepreneur.

Once a whole nation has mobiles, and everyone can do business, all sorts of businesses become possible.

In present-day India there’s a shortage of coconut pickers – the job lacks prestige, and a new generation of better-educated Keralans prefer to find their opportunities closer to the ground. But the demand for coconuts has continued to grow. Marico, an Indian manufacturer of health and beauty products, struggled to source a supply of coconuts – either they had to deal with unreliable middlemen, or establish relationships with hundreds of thousands of individual pickers. Neither alternative gave the company any sense of security regarding its supply chain.

Marico asked coconut pickers to register their mobile numbers with them; in return, each morning Marico sends those pickers a text message with the price it’s willing to pay for coconuts, and the pickers decide for themselves whether it’s in their financial interest to fulfill Marico’s order. Working directly with the pickers, Marico modulates the supply of coconuts harvested to meet its demand with small variations price it offers pickers. No middlemen, no supply chain headaches, and no infrastructure – Marico treats each picker as an entrepreneur, and everything else just happens, almost magically.

This capacity for self-organization is one of the benefits of pervasive markets. Marico advertises its need to the people capable of meeting that need, and the web of communication and connections does the rest. It’s an ‘invisible hand’, of sorts, hard to distort or disrupt, and easy to duplicate. Marico’s competitors for coconuts will need to make sure they get the numbers of those pickers, so they can make their own offer – on some days, a competitor would want to wait until after Marico’s sent their offer out, so they could better it. On other days, you might see price wars breaking out, as the competitors overbid each other into a market bubble, or price collapses, as competitors underbid one another in a search for the bottom. After such a collapse, you might even see a network of pickers band together in a syndicate, setting their prices and establishing long-term production contracts with coconut-consuming businesses. All of this is now possible – even easy – because markets are everywhere, even in the tops of trees.