Tata Announces World's Cheapest Water Filter - BoP Strategy

The new buzz word (acronym) I’ve been hearing over and over again is BoP – Base of Pyramid.  According to a World Bank report, there are 1 billion people living on a dollar a day or less. More importantly to the concept, however, there are 3 billion people that live on $5 or less a day.  BoP experts believe that this massive group of people have urgent needs that need to be fulfilled, and they also have some form of income to provide in exchange for the fulfillment of these needs.   I recently had the opportunity to speak with Josh Tetrick, the founder of 33needs.com - and his main argument is that it can be profitable for companies and startups to focus on this segment (the BoP), and is passionately working to convince companies to do so.  You can learn more on his venture at 33needs.com

Seems like the idea is taking hold – Tata launched the world’s cheapest car a few years back, and has now announced the world’s cheapest filter.  894 million people lack access to clean water  - a clear need – and this filter aims to provide families with clean water for 200 days.  The filter is estimated to cost 21 dollars, or approx 10 cents a day for clean water.

Another startup targeting the BoP is D.Light, which sells solar powered lanterns, which also double up as phone chargers.  “One in four people don’t have electricity in the dark” is the lead quote on their website – and if they can create a dependable source of light for cheap enough, this provides a massive market opportunity.

Ultimately I wonder if startups alone will be able to fulfill these needs – there are few if any good distribution systems in third world countries, creating a massive barrier to the selling of these BoP solutions and products.  Nestle  has one of the world’s most expansive and robust product distribution networks in the world – if it were to volunteer its distribution platform to such startups, I think we’d have a winning strategy.  Without the ability to leverage these existing and costly distribution networks, I’m not sure how a startup for profit company could quickly make it to breakeven….

Here's what the filter looks like :