Forget about outsourcing, it’s about “downsourcing”

The more I read up about how the mobile revolution is revolutionizing the world and enabling the B.O.P. Billions the more I realize that future innovation is not really about outsourcing but rather about “downsourcing”.

When I worked for the man we usually had new product presentations internally where we has product manager has to give feedback to the production line as to what would work in our market. I think if we blocked 1% of the products it would be an overstatement. Fact is the production lines were so far removed from us product managers that asking us for the opinions of our local market was like trying to play a cd in a cassette player.But the masters of our products were the consumers and they did have the best feedback. And this was not feedback that could be garnered through massive reports but rather feedback that could be internalized faster than Moore’s Law. Here the service industry is doing a massive task right now. If you look at M-Pesa in Africa going from 40k users in its first month to close to 15 million users 4 years later its clear that they have “downsourced” the knowledge management part of their product offering… to the consumer.

The consumer is gladly willing to spend 5 minutes a day to manage her banking because it saves her the day it used to take to stand at a bank, if there was a bank in the area.

M-Pesa has taken these 5 minutes per day as service payment. 5 minutes from 15 million consumers ads to a considerable consumer investment into the M-Pesa service. So the process of banking services has been “downsourced” to the consumers using the service.

Another fantastic example of “downsourcing” is Ruff and Tuff Jeans in India. This awesome company just could not get price parity. They could not sell high quality jeans for a market acceptable price in India. Their innovative approach led them to source their consumer’s production time by actually selling denim kits. The material, pre-cut, the zippers, the threads. All in one package for the consumer to assemble it themselves and viola, the cost they saved in production by downsourcing their product meant cheaper product and market domination.

I guess most people reading this knows this already, I am just wondering how many process are there that can be “downsourced” to the consumers that we are missing. Mail us if you have some ideas!