Good story, but a strange guy. Also, he could probably do more good for his country by selling his product. He would actually disrupt the industry, instead of creating yet another charity project.
The way to fight poverty isn't to give poor people poor solution. The way to think about it is that you need to level the playing field, so even Indians would laugh at making their own napkins. If you told a white American do make their own napkin, they'd laugh if your face. But we seem to think it's reasonable for an Indian to do it. That's absurd.
If he creates a better industry, he can keep the profits in India. He can then employ persons who will be rich enough to afford to not make their own napkins. That money will trickle out in to the economy and create a richer India. The only solution to poverty is economics. And you can't become an economic super power on charity.
You can stop reading if you get the point, the rest is a rant:
Another example that everyone loves of agriculture. Have you ever heard of a success story through teaching farmers to use non-industrial machinery? Hell NO! You can't win that way. You need to find a way for farmers to compete in the real world, not coddle them. Microfinance them or something. Maybe teach them to partner with a company with the money to buy all the right supplies (tractor, fertilizer, etc) that can actually turn his land in to profit. Then he isn't charity, he's a businessman. Charity is not the solution for people like me (by which I mean a healthy person that can work, since there's no difference between me and another 23 year old in any country in the world).
There are many wealthy Indians in India already - what India needs is a middle-class - i.e. people that have a roof over their head, with their basic needs taken care of and that are empowered to create their own wealth.
To the poster below me: he is selling $2500 machines. The people he sells the machines to sell the $.25 napkins but the machine can make 1000 napkins a day. One machine properly worked could turn a gross profit of $91,250/year. He has sold 600 machines so far so that is $1.5 million that the inventor has grossed.
Maybe they aren't super rich but I am sure the napkin makers and the inventor are both doing better then they would otherwise and more importantly they are keeping the money in India.
You need to divide $91,250 by 8 (=$11,406.25), because the napkins are typically sold for $0.25 for 8 of them. Then, subtract out the costs of energy and raw materials and divide the result by 4 (the number of people it takes to work the machine), and each operator makes perhaps $2000. Based on some of the comments in this thread, that's still not bad for rural India, but it's not nearly the numbers you report.
I think the OP meant to suggest that increase wealth of poor people and make them middle class. You can definitely not create wealth by selling 25 cents napkins.
You can definitely not create wealth by selling 25 cents napkins.
Are you sure about that?
If every (menstruating) woman in your village purchases their sanitary napkins from you every month because you've got the one machine within 25 miles, you may have a compelling small business, especially when adjusted for cost of living and ease of labor.
Now that I re-read that sentence, it's not well written. When replying to the parent comment, I wanted to clarify that these napkins will create wealth and help poor people move to middle class. I meant to say that you can not become filthy rich selling 25 cents napkins.
Filthy-rich has different thresholds in different parts of the world. $50k may be a middle class income in Arkansas in the US, but it would be a ridiculously huge amount in small-town India.
It's a case of one wealthy indian vs many empowered indians. And from the financial model of this guy (selling his machines through rural women) he obviously prefers latter.
I can't tell what your nationality is, so my apologies if you have had experience in the developing third world, but it sure doesn't seem like you do.
I used to work in the 3rd world, and I can tell you that most people who have long-term experience in doing relief and development work in developing countries will tell you that the most sustainable way forward are locally targeted initiatives, with simple machines that step a local group forward, generally along the same lines that innovations happened in the developed world. For example, in Afghanistan, the best thing to happen to the infant mortality rate in several regions has not been the creation of a new, relatively modern hospital, but instead mid-wife training programs. (I'm sorry I don't have citations at hand, I was at some presentations in country when I heard this) Especially in places like rural India that have the potential to be conflict zones, this man inventing a cheap, simple machine and selling the machine instead of selling napkins, is an overall net win, it will make him money eventually and it will increase access to sanitary napkins.
Finally, check into the Howard G Buffet foundation for modern success stories on teaching farmers to use non-industrial techniques, and check out a UNDP project, I think in Loghar province in Afghanistan, where they spent time teaching farmers some American 1930s level farming techniques to increase crop yields three fold without machinery and in a fairly sustainable fashion. (Again, I don't have a citation because this came from talking to a project guy in country, I can't even remember who he was working for now)
Basically, what this inventor is the right way to create a sustainable, inexpensive way to increase the usage of sanitary napkins throughout India. Your way might make more money, but has problems if the goal is to increase women's health, which this man's goal clearly is.
"You need to find a way for farmers to compete in the real world, not coddle them. Microfinance them or something. Maybe teach them to partner with a company with the"
Actually, forcing third world farmers to compete internationally on the global market is what bankrupts them and pushes them into financial slavery. They do just fine without industrialized machines otherwise.
So the only way for farmers to survive is to subsidize them? The only way is to spend government money to prop them up? If what you say is true, then other solutions need to be explored. Like I said, maybe partnerships or something so they can compete. It's not economically viable otherwise. It's a waste of capital. It's like funding the music industry because their business doesn't work. Music industry, agricultural industry are both industries. They do compete one way or the other. I have a feeling we're way too far apart on this issue to bother though.
You're advocating a complete overhaul rather than iterative improvement. Complete overhauls are nice, but iterative improvements tend to work better.
Oh, you're scrounging for rags and ash to catch period blood? I have a machine here you can buy that will let you make napkins from tree bark. I'll even show you how to use it. That's not a subsidy, and it is very much improving the technology at their disposal in a very intentionally iterative way. This isn't a subsidy.
The same goes for teaching farmers sustainable practices. Much of the developing world's issues with hunger are due to poor land management, not a lack of technology. Buffer zones to prevent erosion and good irrigation need to be subsidized in the short term, but in the long term they're going to be self-sustaining.
In general, you're talking about this as if it's a straight giveaway. It's not. It's coming in and saying "you are having health issues/money issues/food issues because you are doing x, y, and z wrong. Here's how you can do it better." Some technology is definitely helpful. But western-style factory farming isn't the obvious solution for subsistence farmers, not by a long shot.
Unsubsidized farmers competing with subsidized farmers are likely to lose. If you can't stop subsidizing foreign farmers, then the Nash equilibrium is to subsidize your farmers too.
Why? Just let your people go into other industries, give the countryside over to nature or golf courses, and enjoy the cheaper food thanks to those stupid governments that subsidize their farmers.
It is not an easy path, though. "Lack of awareness is the major reason, next to the apathy of NGO’s," [...] rural women are clueless as to how to use them, think twice about spending even the small amount of money to buy a packet, and sadly have a devil-may-care attitude about their health
He must have assumed that everybody is as driven as he. I think he's learning the hard way that the problem with poverty isn't necessarily high prices or profit. The biggest shortage is proactive people. You can choose to distribute the wealth, but having observed the general propensity for defeatism in people, I've gradually become an advocate of rather giving means (money, time, resources) to the handful that break from the mold and get things done.
In addition to allowing him to get more done, I also believe that turning in a profit would help him acquire enough notoriety to break down some of those cultural barriers.
Why does everyone forget education, especially highly basic education like what psychotherapy provides?
Letting people rot in misery increases human misery because those people multiply. I agree that throwing money at the problem is not a solution. But in the West, we have hordes of people who are trained to help others help themselves. Why aren't we throwing psychologists at the poor?
Inner city American ghettos are filled with single mother families that find it psychologically and culturally impossible to make use of the educational opportunities offered to them because before a human can learn intellectually, they need to learn basic emotional skills. They need to learn basic character and coping skills, which is what psychologists teach to those individuals whose parents failed to teach them.
Intervention in poverty should be tasked to the psychologists primarily. Educators make no inroads. Entrepreneurs rarely do either. You rightly pinpoint the issue as defeatism and other psychological disorders -- we have hordes of people who know how to fix this. Let's use them.
My exact thoughts. Once again, you also explained it a whole lot better than I did (http://news.ycombinator.com/item?id=3370197). Being raised in lower income family in India, I have certainly seen how capitalism could lift people of poverty.
I've only had the chance to visit once, but it's wonderful! The best news I've heard is that (i seem to remember) 80% of people that live in slums (slums all over the world), only live there for 1 generation. That means in 80% of cases, people get out of the deepest poverty (people usually come to slums from rural areas, so slums don't shrink). The world is getting better, but it does take a LONG time.
I don't have all the solution. But poor people are people too. They're not going to like a solution that makes them know they're poor. Like if you tell them they can't have a flush toilet. A solution to toilets must make people feel respected, and not have shame.
His solution is great because napkins is the best known product, and he's able to make it available to all. He isn't telling them to use a hose or some shit. Sure, a hose is reusable, but fuck that!
Is the idea really for people to make their own napkins? I thought based on the article that the point was that napkins could be manufactured cheaply in the village, rather than on half-million dollar machines owned by multinational conglomerates.
Well, he solved the problem of creating a machine which costs around 1,200$ instead of 600,000$, the machine used by J&J and P&G.
Now, his idea is that lot of NGOs in various villages have to make this investment of 1200$ (which is a LOT of money for people living in villages), install the machine, make the napkins and then sell them.
What the OP and I suggest is that he should create/install machines in his own factory, optimize the process even further and then using economies of scale create cheap napkins which every women can afford. Having a central location to drive the prices lower is much easier than installing machines in a country as big as India. And I think he should be able to easily get Investment because his invention is featured at the national level. [And if he can't get Investment, I will start a kickstarter project and send him the money.]
Yes , he may be able to optimize the cost of the napkins even further. But currently , they're cheap enough.
The real problems are marketing(which the article says is a huge problem) and distribution(which from what i read about india, is a huge problem too).
The franchise model seems like a good way to solve those problems, and from what i read about this stuff it's pretty common as a way to solve marketing and distribution in india.
Or self fund since it sounds to be a profitable idea.
His plan is bad because he creates yet another cause to give money to. With a business, he gets the same outcome and doesn't need help. It's a win-win-win!
Create affordable sanitary napkins for women in India.
To achieve this goal, he worked hard to master the first step i.e. to be able to manufacture the napkins at low cost. Great.
Now there are two approaches:
1. Sell machines to different NGOs so that they can create their own napkins. As I mentioned it requires hefty investment of 1,200$. Also, I think it's easy to underestimate how much effort is required to reach different parts of India and selling the concept of these machines.
2. Create machines on his own (using outside investment if needed) and create cheap napkins afforded by economies of scale. He can use the money from the sales and extend it create a better process, better machine and drive prices even lower. He can now rely on an existing vast distributor network to spread these products all over India [I refer you to my shampoo sachet example in this comment: http://news.ycombinator.com/item?id=3370219]. Heck, he can now even export it to other developing countries.
If the goal is to make napkins available to more women in India (and everywhere else), I think that 2nd approach is vastly superior than first. What do you think?
A centralized factory is going to need to pay for shipping across India which would increase cost. Rather than dealing with such issues himself he can get people to create franchises and supply the first machine and then sell them more after things start to scale. The end result is to create a domestic industry which will then continue to drive costs down and promote adoption though advertising etc.
PS: If there is a viable market, I suspect some of those groups will start to grow and you may end up with the type of large company you want him to build.
It's better to help the poor become rich than it is to give the poor a bobble and have them stay poor.
It's essentially teach a man to fish, except with business. He can reinvest, grow the country, then they can all afford the doodle. It's a win for India, and the world! Maybe he sells to North America, and is able to make more money for his country than would ever have been saved by the poor using his cheaper napkin. (I mix doodles and napkins, but it's all the same). It's economics.
You can stop reading if you get the point, the rest is a rant: Another example that everyone loves of agriculture. Have you ever heard of a success story through teaching farmers to use non-industrial machinery? Hell NO! You can't win that way. You need to find a way for farmers to compete in the real world, not coddle them. Microfinance them or something. Maybe teach them to partner with a company with the money to buy all the right supplies (tractor, fertilizer, etc) that can actually turn his land in to profit. Then he isn't charity, he's a businessman. Charity is not the solution for people like me (by which I mean a healthy person that can work, since there's no difference between me and another 23 year old in any country in the world).