An Expedia for Development?

Will the successful aid agency of the future look more like Expedia – a platform on which users can make their own choices – and less like the travel agent of yesterday, experts to whom the public was willing to delegate decisions?

That is Owen Barder, writing about the transformative impact that transparency of information - in conjunction with new technology - will have on international aid.  No one has better insights into this topic than Owen.  Two points bear particular emphasis:

a) Information from beneficiaries and users about project execution and quality is key to motivating real change.  Much of the effort to date has focused on releasing information about spending rather than results.

b) Donor agencies are not best placed to decide the format of data reports.  The most effective data tools will be created by others using raw data provided by the agencies.  In that context, I was pleased this week to attend the ceremony announcing the winners and runners up of the World Bank's Apps for Development contest.

You can read more from Owen on this topic here.

When Users = Funders

If there’s a bug in EpiSurveyor, our paying users will email us until it’s fixed, sometimes several times.  Or more. 

A few months ago, I met Joel Selanikio, founder of DataDyne, a non-profit "social business" that creates mobile data and communication tools, primarily for public health.  Joel is a practicing pediatrician and former CDC epidemiologist who has seen the power of good data in improving health and saving lives.  Yet poor data collection leaves huge gaps in health care, especially in developing countries.  Instead of just accepting these gaps as a fact of life, Joel did what entrepreneurs do: he set out to do something about it.  

Like many social entrepreneurs, Joel has had his challenges with funding from fickle foundations.  Though DataDyne's basic product is free to promote wide dissemination, Joel was forced to introduce fees for higher-end tools to help cover costs.  Datadyne has generated some revenue from these premium tools, but maybe even more important has been the customer feedback the company is now getting.

I asked Joel to describe the unexpected outcome of his fees, and here is what he told me:

From Joel Selanikio, CEO of DataDyne

At DataDyne, we create software to support public health and international development. Our mobile data collection product, EpiSurveyor, is the most widely used such software in international development, with users in more than 170 countries. 

 Making them pay  

We got this far with funding from great organizations like the United Nations Foundation and the Vodafone Foundation, but at a certain point we realized that we needed to diversity our funding in order to make sure we were truly sustainable (it can be pretty precarious depending on one or two grants to survive!). After much thought, about a year ago we decided to start using the “freemium” pay model, where you give away a basic version of the software and charge for a higher-end version. 

This approach is controversial in international development: many foundations only fund tech projects if the software is given away for free – even though the mobile phone, the most successful technology of all time in poor countries, is itself sold to the poorest people on earth, not given away. And even though many organizations using our technology have millions of dollars in funding. 

Our results are promising:  within 2-3 years our sales revenue will be enough to sustain us completely. After that, we’ll be able to provide excellent and affordable mobile data collection software to every single organization in the world that wants it (EpiSurveyor is a web application, so it scales really well). Without more grants. 

Who’s the boss?  

Revenue and sustainability turn out to be only part of the benefits of the charge-the-user model: since we started charging some of our users, our user feedback has increased tremendously. It turns out that if someone is paying for something, they feel they have the right to criticize (and we agree). 

If there’s a bug in EpiSurveyor, our paying users will email us until it’s fixed, sometimes several times.  Or more. 

If there’s a feature they want, we hear about that, too. And because we get more and more of our revenue from users, rather than foundations, our very survival as an organization is now dependent on responding to the needs of those users. As they say in business: “if you don’t please the customer, someone else will.” 

The bad proxy  

This is all very different from being supported by grants, because when your money comes from a foundation your survival depends on pleasing the foundation – not necessarily the users.  And people at foundations, who are as motivated and well meaning as I like to think I am, are nonetheless a poor proxy for what health workers on the ground in sub-Saharan Africa want or need (for example).   The organizations that are now our customers, and that use EpiSurveyor to collect their critical data, are likely to be a better proxy because they’re our users and funders, not just our funders.  Not a perfect proxy, but better: they use the software themselves, and they know when it needs improvement. 

The educated-consumer model  

As our funding model changes, and we take our marching orders directly from users, it’s made me think about how the source of funding can affect the quality of a development project.  Foundation grants surely have a role to play: we never would have gotten to the revenue-from-users stage without seed grant money. Long-term, though, I believe it is better for sustainability and quality if at least a subset of the users pay for the services provided. 

After all, that is exactly what the mobile phone companies are doing – in what may be the most important new technological rollout since the invention of the printing press – and the competition for customers’ money is forcing tremendous innovation and price reductions. Maybe we could use some of that in international development, too.

A Tale of Two Tails

This past weekend I took my three and a half year old son to Princeton to a colloquium on foreign aid.  Speaking were senior people from both the aid industry (including Raj Shah, Administrator of USAID) and academia (including Angus Deaton, one of the best professors I have ever had).  There was a spirited discussion of whether aid "works."  

Afterwords, my son asked "Dad, doesn't the distribution matter as much as the mean?"

"Yes," I replied.  "It does. In fact, the distribution may be more important than the mean. Professor Deaton would be proud of you for pointing that out."

Fig 1: What aid cheerleaders believe

Let's assume that aid impact can be measured on a scale of -4 (horrendously harmful) to +4 (miraculously wonderful).  Figure 1 shows the implicit belief of most aid cheerleaders.  The average impact is +1, with most of the impact greater than zero.  The cheerleaders say "Yes, there is a small part of aid in the shaded area under the curve that has negative effects, but those examples get too much publicity.  We really need to do a better job of publicizing and explaining the large area under the curve that represents positive impact."

Fig 2: What aid critics believe

By contrast, the critics feel that Figure 2 is more accurate.  They believe that the average impact is -1, with the vast majority of projects (the non-shaded area under the curve) having an impact less than zero.  The impact of some projects even approaches the nightmare of -4.  Most critics will concede that there are some projects (the shaded area) that have a positive impact, and if pressed they will offer some personal examples.  (Professor Deaton offered certain health projects, for example.)

The important question is not whether aid as a whole "works," which has been the subject of a large number of papers in recent years.   The real question is what the distribution of impact is.

So, readers, here is your homework assignment: 1) Do you consider yourself a cheerleader or critic? 2) Please download a blank version of the graph here, fill in your own guess at the distribution and email it to me.  3) Describe what types of projects you feel fall into the category of effective.  I will post a follow up with selected responses and insights.

Happy is as Happy Does

Artists create and critics analyze; few artists analyze well and few critics create good art.

That was my reaction to Martin Seligman's new book Flourish: A New Understanding of Happiness and Well Being, due in bookstores on April 5.  Seligman, the godfather of the positive psychology movement, shows that he is an artist rather than a critic or theoretician.

In his new book, he sets out to expand the concepts outlined in his 2002 book Authentic Happiness. The earlier book described happiness as a combination of positive emotions, "flow," and meaning. In his new book, Seligman adds two more elements he considers critical: accomplishment and personal relationships. Together, these elements add up to well-being. Mix in some some self-esteem, resilience, and optimism, and you get flourishing.

If that sounds a little confusing, that's because it is. Conceptual coherence and theoretical frameworks are not this book's strong points. Seligman describes several exercises that are easy to do and result in a significant and lasting effect on people's self-reported sense of well being. (For example, each night, write down three things that went well that day and why.) Coming up with these exercises is high art - the description of their effect is compelling and left me promising myself to do them.

But instead of arguing his case by demonstrating it, Seligman spends too much of the book looking over his shoulder at his more theoretically inclined psychology colleagues, who are the high priests of that discipline. Seligman openly discusses the inferiority complex that lurks in the psyche of many experimental scientists such as himself, and he sets out to settle some scores with past and current colleagues. While this makes for entertaining reading for those with experience in the academy, most readers will be bored and distracted from the main question: what can people do to flourish by their own standards?

A quick look at his website suggests that the book could have been a great evidence-based how-to manual. And some of his insights could really lead to greater well being for society as a whole over the long term. But Seligman seems to feel that how-to manuals are not academically respectable, even if they are backed up by good evidence. This led him to write a book that is neither fish nor fowl. It is part theoretical, part instructional, part storytelling, part selling, and part personal introspection. Seligman admits that he refused much editorial assistance or feedback on the book, and it shows.

Though the writing and structure of the book are irritating, I wonder whether there is not something to  Seligman's approach. There is a whole new genre of writing on science and social science that feels almost formulaic in its style. As much as I love books like Nudge and Freakonomics, there is something predictable about them. The cover design and colors, the tone, the just-so turns. A friend the other day described some of these books as fast-food reading: they taste great and go down easy and give you the illusion of learning. But the next week you actually don't remember much other than you were delighted by reading them. By contrast, readers who persevere will remember many of the points that Seligman made in this book - and will act on at least some of them.