Tiendatek - Mobile Business Tools for Micro-Entrepreneurs - Colombia

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Tiendatek - Mobile Business Tools for Micro-Entrepreneurs - Colombia

Colombia
Organization type: 
for profit
Budget: 
$500,000 - $1 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

We bring affordable, high-impact technology to low-income entrepreneurs in emerging markets to help them increase the profits of their businesses, access new credit sources and connect with educators, suppliers and each other.

Our main product is a point-of-sale application (Tiendatek) that runs on Android smartphones and is designed specifically for "mom-and-pop" shops in Latin America. The long-term vision is hundreds of thousands of shopkeepers using our technology to run their businesses more efficiently as well as using Internet-enabled tools to network, negotiate and communicate with a wide range of actors and fellow entrepreneurs.

About Project

Problem: What problem is this project trying to address?

Our end users are typically mom-and-pop shops in poor urban neighborhoods in Latin America. Most of these shopkeepers have no access to technology – the best ones use only a notebook to manage their finances and inventory – and they run their businesses without having a clear sense of their performance. Moreover, their daily gross profit is often not sufficient to cover their daily expenses, resulting in a high number of store closures every year. To compensate, they work very long hours in order to keep the store open as much as possible.

Solution: What is the proposed solution? Please be specific!

First and foremost, this type of technology has never been available or accessible for our target users – point-of-sale applications have typically been designed for bigger retailers and consequently run on computers or expensive stand-alone systems. Second, as all of our phones have an Internet connection, we are able to connect micro-retailers with micro-finance companies, suppliers, and NGOs as well as easily introduce new software solutions. Third, our methodology requires us to design and develop our mobile solutions in collaboration with our users which is an approach that few companies use today. Fourth, we've had to structure our operations to provide sales, training and support to low-income communities in an efficient way that also protects our brand, and unfortunately there are not a lot of good business models to look to for guidance here. The time required to train and support a shopkeeper varies depending on their profile -- their age, size of the store, etc. -- but we are getting better at providing support modules in the phone itself in order to limit the amount of time we need to visit shopkeepers in person.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

We have developed a point-of-sale application for smartphones designed specifically for micro-entrepreneurs that allows them to better manage their inventory, track their finances, review educational modules and access other value-added services. Our company is organized by activity. The design group is constantly interacting with shopkeepers to improve both the usability and utility of our mobile application. The technology group is developing and maintaining the product as well as creating value-added services. Our operations group finds and supports micro-entrepreneurs who are interested in purchasing and/or using our software (we have 80+ users so far). Our sales group talks to consumer packaged good companies, microfinance institutions and other for-profit partners who are interested in working with our technology and network to improve their own operations.
About You
Organization:
Frogtek
About You
First Name

Mark

Last Name

Pedersen

Twitter
Facebook Profile
About Your Organization
Organization Name

Frogtek

Organization Country

, BDC

Country where this project is creating social impact

, BDC

How long has your organization been operating?

1‐5 years

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Innovation
What stage is your project in?

Operating for 1‐5 years

Share the story of the founder and what inspired the founder to start this project

The founder (David del Ser) worked for six years at Vodafone in Spain designing applications for mobile phones for large companies in Europe. While there, he got interested in social enterprise and later experienced first-hand the technology disconnect between emerging markets and Europe while backpacking through Latin America. As a direct consequence David decided to study social enterprise at Columbia Business School and got involved in a consulting project there with Women's World Banking (WWB) in Colombia to help them develop a new technology tool that later become Frogtek.

At the time, WWB credit agents were using palm pilots to do real-time credit assessments for mom-and-pop retailers in Bogota; through a simple survey tool each credit agent could estimate the cash flow of a particular shop in situ. The shopkeepers responded that they had never seen their cash flow in their life and inquired where they could buy this hardware and software. David's consulting project was to help WWB determine how to evolve this project.

This project eventually spun out of WWB, principally because they are not a software development company and David was well-positioned to develop the product and business model.

Social Impact
Please describe how your project has been successful and how that success is measured

First and foremost, we gauge our impact by measuring the cash flow of our shopkeeper users before and after using our technology. As our point-of-sale application synchronizes with our servers in real-time we literally have a wealth of detailed, granular information on every one of our users. Our best users have told us in interviews that their profits have increased more than 20% due mostly to better inventory management and the goal is that every user sees such an impact. We also have anecdotal quantitative information that supports this finding (although its not a statistically significant finding yet as we need to analyze our sample vs. a control group for a long period of time).

Second, we visit our best users constantly to do qualitative surveys on satisfaction, impact and ease of use. Our users here say they feel empowered and in better control of their businesses when before they were a bit overwhelmed.

Third, we measure success by the evolution of our business model -- whether our sales process is getting easier and we are providing services that are in demand from third-parties. We are tracking metrics such as visits/sales and support calls per client which allow us to determine if and how we're getting more efficient.

How many people have been impacted by your project?

101-1,000

How many people could be impacted by your project in the next three years?

More than 10,000

How will your project evolve over the next three years?

Our primary goal in the next three years is scale -- reaching and supporting thousands of new users in as efficient and high-impact way as possible. We will achieve this goal primary via alliances – consumer packaged goods companies will help us reach new users and NGOs, government entities and others will help us increase impact.
We are primarily focused on expanding in Mexico and Colombia where we already have team on the ground but will expand to other countries as opportunities present themselves.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

Our biggest challenge is developing and strengthening partnerships that will allow us to scale efficiently. While our technology provides numerous benefits for both for-profit and non-profit organizations, assembling the right combinations of products, services and prices is always a challenge, and especially when negotiating with large multinational firms.

Moreover, the cost of hardware and data plans can also be prohibitive for many micro-entrepreneurs. To reduce the cost of the phone our clients sometimes subsidize the hardware so it is more accessible to our target customers; in exchange these clients receive free market research and/or other services for a defined period. With respect to the cost of data plans, fortunately the price is dropping rapidly in the countries where we operate and we are also negotiating special plans with mobile operators.

One note on the hardware: we are using smartphones because, while they were expensive, they allow us to combine power and ease-of-use. For example, with touch screens we can create big icons with little text to guide a user through the application, and with the processing speed and Internet connection we can provide all of the sophistication that a point of sale system needs.

Tell us about your partnerships

We have a number of important partnerships. In Colombia, we are working with the largest microfinance network in the country – Bancamia – to identity shopkeepers who may be interested in our point-of-sale solution. Also in Colombia, we are working with a poverty lab associated with Harvard University called Ideas42 to measure the impact of our technology on businesses.

In Mexico, we are working with a large NGO called Fundes to both reach new users as ell as develop new educational modules. Moreover, we will partner with industry leaders like Coca Cola and Movistar (a mobile operator) to reach shopkeepers quickly.

Explain your selections

We are a for-profit social enterprise which we run as a business -- we have raised money from private investors to launch the company and we are currently in the process from shifting from an investment-funded organization to a customer-funded organization. As we feel our main social impact is built into the software itself, and we also provide value to for-profit companies, we feel our scale model should be similar to other private sector product launches.

How do you plan to strengthen your project in the next three years?

We will strengthen the company primarily through growth -- thousands of new shopkeeper users, new staff to support those users, and new clients and investors to help us scale and establish partnerships.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Lack of access to information and networks

SECONDARY

Lack of skills/training

TERTIARY

Lack of visibility and investment

Please describe how your innovation specifically tackles the barriers listed above.

By providing shopkeepers with in situ business tools, we are giving them real-time, customized information on their business which they can use to increase profits (e.g., via better inventory management) as well as increase their general business knowledge via mobile educational modules. Moreover, if the shopkeeper gives us permission, we can share their (anonymous) data with microfinance companies to help get them a loan.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

SECONDARY

Enhanced existing impact through addition of complementary services

TERTIARY

Grown geographic reach: Multi-country

Please describe which of your growth activities are current or planned for the immediate future.

Today we are primarily focused on bringing our current technology to new customers in countries where we are already active -- in Mexico and Colombia alone there are millions of potential shopkeeper clients. At the same time, we are constantly thinking about other value-added services we can provide for both shopkeepers and potential clients such as consumer packaged goods companies (e.g., market research, online ordering, an advertising platform).

We are also constantly evaluating opportunities to expand to other markets.

Do you collaborate with any of the following: (Check all that apply)

NGOs/Nonprofits, For profit companies.

If yes, how have these collaborations helped your innovation to succeed?

NGOs primarily help us by providing networks, educational content and expertise to help us reach new users and measure the impact of our tools. For profit companies obviously help us generate revenue which we use to grow, and they also help us reach new clients via their sales and marketing networks. Universities are primarily helping us to analyze data to increase impact as well as connecting us with potential clients and partners.