Frog Leaping

Sometimes innovation flows in the opposite direction. Africa has inspired new global startups more than once.

Before Lyft was Lyft, it was ZimRide, a carpooling service for college students looking for rides back home. Although one of the co-founder’s name is John Zimmer, it would be a mistake to believe he named the company after himself. In fact, his co-founder, Logan Green gave it its name after taking a trip to Zimbabwe, where he saw gypsie cabs offering shared rides, charging less per ride per customer. Logan Green took an innovation created to drive affordability from Africa, and applied it to the United States. Frog Leaping, which is a term I use to describe transplanting innovations from the developing world to the developed, is the mirror image of Leap Frogging. Leap frogging is where businesses launched in developing countries seem to skip technology stages. In africa, there are over 200 million users of mobile payments, more than ever owned a bank account. Zipline, a drone delivery company operating in Rwanda, leap frogs decent infrastructure; their life saving deliveries arrive at their destination in 19 minutes, compared to four hours when the deliveries are made by land.  Beside Lyft, there are other examples of frog leaping at play in the USA. Bulletproof coffee serves coffee with a layer of fresh butter on top. This delicacy in Ethiopia has now been deployed with aplomb to the delight of consumers Los Angeles.  Often what drives the success of frog leaping is not novelty, but affordability. An entrepreneur that I respect, Samuel Alemayehu, a stanford graduate launching a $130m waste to energy plant in Ethiopia, gave a stirring keynote at an Africa conference recently, where he said that innovation in africa is largely driven by affordability. Pay-as you go solar rooftop has been a resounding success in Africa, where entrepreneurs have raised over $500 million for the sector over the past few years. Micro-lending and its older brother microfinance provide bite sized loans to micropreneurs in Africa.  An innovation that is close to home for me, micro-packaging makes global standard products accessible to consumers, adapting to their day to day purchasing habits, by breaking products into individual servings. The best example of this is Unilever’s singe serve shampoos, which sell hundreds of millions of units per year in India. As I learned from one of my business school professors, the iconic management thinker Clay Christensen, disruption comes from targeting non-consumption and from new markets. Disruptive innovations seek to provide products that are “good enough,” at lower cost that do do not attract larger players. They also target consumers who are otherwise priced out of a category. Chirp phones, which offered a service to low income consumers, drove the uptake of mobile phones in the early stages of wireless.  In essence, affordability is a large part of disruption. For a product or service to take off for the mass market in developing countries, it must be affordable.  While no longer a developing country, China has influenced innovation in the USA for quite some time. Most recently, dockless bike sharing companies such as Ofo and Mobike, which raised billions of dollars in China have influenced the creation of LimeBike, Bird and Jump. In India, the e-commerce company flipcart, which raised billions of dollars chasing the dream of delivering products to the growing middle classes in that fast growing country, which not incidentally required innovations for affordability such as motor bike delivery, preceded the creation of Instacart and GrubHub, Uber Eats and GrubHub in the US. Global investment firms and innovators benefit from seeing what happens in other countries and learning from what works best. Beyond geographic arbitrage, disruptive innovations in the developing world, necessary for mass market uptake, can be readily applied around the world.