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Jun232015

Technological Innovation Alive in Brazil

Tuesday, June 23, 2015 at 9:06AM

The growing digital economy in the global South is giving rise to a new generation of entrepreneurs and innovators.

A University of California paper by Naazneen Barma found explosive potential in poorer countries to innovate, and challenged the view of developing countries as passive market places for products innovated in the industrialized world. She said that “in terms of their market power and their production and innovation possibilities, emerging economies are positioned to increase their presence in the digital era … poor consumers are increasingly driving modular innovation in production technologies, business models, organizational management, and marketing and distributional strategies.”

It has been estimated that the number of people with equivalent to US $10,000 in annual income will double to 2 billion by 2015, creating hundreds of millions of new consumers for digital products.

Two cutting-edge innovators from Brazil are tapping into this growing market. Both FunStation and Zeebo have developed technology specifically wrapped around the needs of Southern consumers and are growing across the South as a result.

FunStation’s (http://www.funstation.com.br/blog.php) simple motto – “Touch – Get – Enjoy” – hides a savvy technological innovation aimed at the growing army of digital downloaders on the march across the South. Sao Paulo’s FunStation entertainment kiosk system serves up video, audiobooks, songs, and ringtones to mobile phones and MP3 (http://en.wikipedia.org/wiki/MP3) players. Customers just need to plug into one of the large futuristic white kiosks, scroll through the choices, select what they want, pay and download. By going to the kiosk, customers avoid the need to download from the internet, which can take a lot of time depending on the connection and bandwidth. The kiosk is speedy, with 14 musical tracks downloaded to a device in 10 seconds.

Apart from the convenience and speed of the kiosks, they also have other benefits: customers do not need to register with a download site like iTunes on the internet. This means they do not have to run the risks of giving away bank details or other personal information.

Customers buy something called a Funcard which is similar to a pre-pay phone plastic phone card, with a PIN number. Cards are sold with values ranging from US $2 to US $50. The user just punches the number into the kiosk to pay for the download.

The kiosks are being located in high-traffic places like festivals, airports, universities, retail shopping centres and transport systems.

Founded in 2007, the company is a partnership between Bruno de Marchi, 35, computer science student Armando Perico, 24, and 60-year-old Marcos Maynard. The company already has the rights to sell half a million items and has 55 kiosks operating in Brazil, mostly in the country’s north. “People are poorer in those places,”de Marchi told Monocle magazine. “Usually they have an MP3 player but no computer.”

The FunStations have also been successful outside of Brazil: 50 kiosks were sold to Mexico in March. It is launching in Chile later this year and in the United States in 2011. Always evolving, the business is also working with the University of Lugano in Switzerland to develop new software and keep the kiosks fresh and lively.

Another Brazilian technology pioneer is Zeebo (http://www.zeeboinc.com). The brainchild of Reinaldo Normand, 34, Zeebo is a game-playing console that doesn’t require a CD or DVD, or connection to landline internet. It downloads games directly from remote servers using wireless 3G technology (http://en.wikipedia.org/wiki/3G) embedded in the console. It exploits the fast-growing penetration of mobile phone wireless networks across the South to download the games on the consoles.

It has its eyes firmly on the global South’s rising middle-class families, who will use the consoles for game-playing and educational applications. It is currently available in Mexico and Brazil and is preparing to roll out across Asia. Normand studied at Tectoy S.A. in Sao Paulo, Brazil, and is a life-long gamer, entrepreneur, journalist and forward thinker. He conceived of a new 3D system for the developing world and contacted American company Qualcomm. He partnered with Mike Yuen at Qualcomm in San Diego, California, who was exploring new forms of gaming using innovative technologies.

As Zeebo’s mission states, it is “tailored specifically to the economics and market realities of emerging economies. The Zeebo system fills an enormous unmet need in these regions. At the same time it opens an immense new market for interactive content and products.”

Normand is ambitious and wants to reach a vast market of 340 million Chinese families. “By 2011, I want to close deals in China to manufacture televisions with this technology built in, therefore entering the homes of millions of families,” he told Monocle.

Zeebo makes some games for the console and also buys in other games from big-name game makers like Electronic Arts and Activision. The games are downloaded from the internet using a 3G mobile chip already built in to the consoles. The games are priced between US $5 and US $13.

The Zeebo system will roll out to China, the US and India in 2011, and Eastern Europe in 2012.

By David South, Development Challenges, South-South Solutions

Published: August 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.

Follow @SouthSouth1

Google: https://books.google.co.uk/books?id=7iWYBgAAQBAJ&dq=development+challenges+august+2010&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsaugust2010issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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Crowdfunding Technology Start-up Success in Africa

Tuesday, June 23, 2015 at 8:41AM

Technology is the future for the South, and South African start-up culture is trying to get a foothold on the African continent and forge a more supportive environment for entrepreneurs and innovators.

Modelled on the successful approaches pioneered in U.S. high-technology centres like California’s Silicon Valley (http://en.wikipedia.org/wiki/Silicon_Valley) , Crowdfund (http://www.crowdfunding.co.za) aims to connect start-up technology companies with cash, experience and contacts, helping them get to the crucial prototype stage so that they can go big and go global.

It works like this: in order to build up a fund of cash to invest in start-ups, 1,000 people get together and invest R1,000 (US $128) into a Crowdfund – a pool of investment cash. A board is set up and uses the pooled cash to invest in between 10 and 20 of the best start-up ideas submitted. The ideas are funded and developed into working prototypes in return for a stake in the business. Once the working prototype is up and running, traditional venture capitalists are approached for further funding and usually Crowdfund will then cash in its equity.

The concept of crowdfunding allows groups of people to use the internet to pool their money together to help support a person or a cause (http://en.wikipedia.org/wiki/Crowd_funding) . There are now many variations on the concept, with online services providing crowdfunding for artists, designers, film-makers, causes, scientists and technology pioneers.

As a model for raising funds for small businesses, the concept has a long history in poor communities across the South. Often, it can be a group of poor women pooling their resources to help each other start small businesses. Technology in the form of the internet and mobile phones has helped the concept jump to the next level, and expanded the pool of people who can support a crowdfunded idea around the world.

It is an answer to the need for so-called “angel funding” (http://en.wikipedia.org/wiki/Angel_investor) : somebody with lots of cash who is willing to help a start-up entrepreneur. Crowdfund’s founders felt South Africa lacked enough angel funders to meet the needs of the country’s technology start-ups. This can be a big problem in countries where there is no history or culture of angel funding and searching far and wide for the “next big idea.”

In April of this year, Crowdfund was able to raise R1 million (over US $128,000) from 229 investors.

Venture capitalists (http://en.wikipedia.org/wiki/Venture_capital) – people or investment groups looking for high-growth start-ups to invest in – usually prefer to put their money into proven ideas for big, fast returns. They often lack interest in smaller ideas that may grow more slowly. It is a classic dilemma: how can an entrepreneur know if their idea will work if nobody will give them the cash to prove it?

This is a critical problem in the information age. As broadband technology spreads across Africa, the opportunities for online businesses will just grow and grow. But few will be able to benefit and African start-ups will not stand a chance against global competition if funding is not available to nurture new businesses.

Crowdfund assesses ideas and identifies skill shortfalls. The cash is used to help with the skills shortage, provide office space, bandwidth, hosting and mentorship. The funded team will also have access to legal, marketing and management experts to get through the development stage and avoid costly mistakes. The development process in stage one takes three months. The Crowdfund Board will then search for potential investors to take the start-up to stage two and a working prototype.

By this stage negotiations will take place to set the start-up off on the path to global success. They are helped with the tricky negotiation process with investors.

Apart from the start-up cash, the powerful idea behind Crowdfund is the network of support and advice that comes with it. Two of the board members are South Africans based in San Francisco, USA, and can make that crucial connection with the buzzing U.S. technology scene. Investors are asked to mentor the start-up concepts, meaning start-ups are accessing normally costly business advice.

Crowdfund tries to get a response back to potential start-ups within 48 hours (http://digitalgarage.co.za/2010/04/12/filtering-the-applications-for-funding/) , so, if you have a great idea, get submitting!