Frugal Innovation: Five approaches to simplification

One of the essential steps to successful frugal innovation — and providing benefits that are otherwise too costly — is focusing on what’s really essential.

Determining what is “essential” goes beyond providing goods manufactured with the cheapest materials. There are always trade-offs. In the U.S., back when AT&T had a telephone monopoly, they provided users with rugged, relatively expensive phones. The purpose was to avoid the expense of service calls since customers did not pay for these. (Many of the first phones made available after the company’s breakup had more functions, but were much more fragile.)

The best way to simplify for frugal innovation is to look more broadly. This may go beyond devices and services to culture, resources and completely different ways to provide equivalent benefits. Cost savings can be achieved by many different approaches, including removing function, comfort and convenience; substituting labor for automation; taking advantage of a “platform”; and encouraging helpful behaviors.

Go basic. People have been selling stripped down versions of cars — that is cars without any of the expensive options — for years. That’s going further than removing the chrome and going for cloth rather than leather upholstered seats. Cut the air conditioning. Cut the radio. In some markets, forget the seatbelts.

It’s a little like going back in time. None of these options existed on the first cars. A horn was an option. A windshield was an option. Did you want a spare tire? It’ll cost you.

PhonesSo, imagining devices as they originally appeared is one way to simplify. This is exactly what is done for older people who are befuddled by smart phones (and get ones that only make calls) or challenged by computers (and have email only devices with few options). More in the line of frugal innovation is actually collecting mobile phones from people who have moved on to smart phones and providing them to people who need simple phone service to place emergency calls.

Just add people. Husk Power took advantage of low cost labor — people considered unemployable by many companies in India and using them, instead of automation to load and operate power-generating machines. They also collect fees from customers the old-fashioned way, going door-to-door. The humans in the loop are less expensive and more effective. And the company provides needed employment.

Dual duty. Have you ever had to type in what you see in wavy letters to prove you’re human? I do this virtually every time I buy tickets online. The application is called CAPTCHA, and it does more than show I’m not a computer. It can also help digitize books. Such dual duty can be fun. Kicking a soccer ball around can create enough charge to light the night, thanks to an invention called Soccett (which, as if the wordplay were not already going to far, is getting Kickstarted).

Plat-formation. Awareness of what already exists that can be taken advantage of is one of the most important things to keep in mind. No one would set up a power system to provide electricity to a new lamp. You’d just plug it into the wall. And those who created smart phone apps and mash-ups take advantages of templates, modules and standardized data sources. Looking at platforms that are available and thinking about them creatively is equivalent to doing an inventory of available resources and skills before doing the design.

Culture. Many companies have saved money by getting customers to do the work. In some cases, such as Automatic Teller Machines, people eagerly do the work so they can skip lines and have services available 24 hours a day. (In my area, ATMs are often free, while customers pay for working with a human teller.) More subtly, people can be encouraged to help each other out. Many customer services answers I have gotten come from fellow customers. At one point, a company was having a difficult time providing manuals in different languages. Solution: building a site that allowed bilingual people to voluntarily provide translations. The work became available much more rapidly and at no cost to the company.

Finding simpler, less costly approaches is not always better. Compromising safety (e.g., by leaving out seat belts) is a mistake. Frustrating and irritating customers (by not providing expertise when needed) opens the door to competitors. Cutting investment in formal innovation and relying exclusively on ad hoc, voluntary teams, is short term thinking that will doom a company. But creatively serving under-served niches, especially where funding is an issue, is proving its worth every day as frugal innovation becomes a force for change.

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