Giving Compass' Take:

• Ashish Karamchandani offers insights based on years of experience for developing successful market-based solutions in India.

• How can funders build and support market-based solutions in India? 

• Read more about social change and scale in India


Market-based solutions (MBSs) are viable businesses that straddle the worlds of commerce and development by providing affordable, socially beneficial products and services to people with limited resources. Unfettered by subsidies, they have the potential to help tens—if not hundreds—of millions of lower-income households around the world.

Over the past 12 years in India, I have worked on MBSs targeting base of the pyramid (BoP) customers, looking at more than 800 businesses and digging deep at an operational level into housing finance, drinking water, early education, and sanitation. Again and again, I've seen organizations fail at market-based solutions for four main reasons:

  1. They lack robust and innovative business models.
  2. They fail to test and refine their business models.
  3. They overlook ecosystem barriers.
  4. They use inexperienced business leaders.

This is not an easy space to work in, but it is time for those of us who believe in the potential of markets to double down and make them work. Imagine if we could harness MBSs to improve education for low-income families or to help lower-income urban residents escape the cycles of rent and buy their own homes.

My observations may seem obvious, but I still see investments in organizations that haven't addressed them. We can create more and better MBSs if organizations take the time to ask some basic questions:

  • Why would customers buy this product or service rather than other options?
  • Have all the costs of the business, such as educating customers about a new product or building new distribution, been accounted for?
  • How realistic are the timelines to pilot, evolve, and validate the business model?
  • How will the broader ecosystem—from regulations to ancillary businesses—help or hinder your efforts?
  • Do you have an experienced leader who knows how to respond to adversity, take advantage of opportunities, and run businesses in an unpredictable environment with limited resources?

Read the full article about market-based solutions in India by Ashish Karamchandani at Stanford Social Innovation Review.