1/100th the cost

Faithful readers will recall that two months ago I gave in to years of craving and ditched my BlackBerry for an iPhone.   What I’ve discovered since then is that the iPhone is a Trojan Horse, an uber-device pretending to be a phone.  This is why the “there’s an app for that” campaign makes so much sense.  With a big screen, a fast processor, and a 3G network, this device can perform some amazing tricks.

While I’m not a big app user, I can’t help but crow about an app I just found, called MotionX-GPS Drive.   Quite simply, it delivers the full functionality of a portable GPS device – with turn-by-turn directions, a voice telling you when to make the turn, a map that updates your location in real time, etc. – and you can do all this while still listening to music on your iPod.   For my needs, this does essentially the same thing as a $350 Tom Tom for $2.99.  That’s right, two dollars and ninety nine cents.  It costs 1/100th of the price of the product it aims to displace (plus $2.99/month subscription.).

Outside of being excited that I have an additional $347.01 in my pocket, this got me thinking about disruptive innovations in the nonprofit sector.  CK Prahalad introduced the concept of radically lower costs structures as necessary for creating solutions for the poor that will have massive potential for scale and impact — citing among other things the Jaipur foot, an artificial limb which costs $40 and sets an amputee walking again.  But is there really a world of “1/100th the cost” innovations out there, waiting to be discovered, or are the real gems the 1/2 or 1/3 or 1/6th the cost interventions that, if discovered across multiple sectors – healthcare, housing, water, energy, agriculture, even education – together hold the potential for a radical shift in the livelihoods of millions?

Put another way, is “1/100th” the cost just about the economics of Moore’s law and software development, or would we find many more of these if the right economic incentives were in place?

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