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$. Also, I think it's easy to underestimate how much effort is required to reach different parts of India and selling the concept of these machines.
2. Create machines on his own (using outside investment if needed) and create cheap napkins afforded by economies of scale. He can use the money from the sales and extend it create a better process, better machine and drive prices even lower. He can now rely on an existing vast distributor network to spread these products all over India [I refer you to my shampoo sachet example in this comment: http://news.ycombinator.com/item?id=3370219]. Heck, he can now even export it to other developing countries.
If the goal is to make napkins available to more women in India (and everywhere else), I think that 2nd approach is vastly superior than first. What do you think?
A centralized factory is going to need to pay for shipping across India which would increase cost. Rather than dealing with such issues himself he can get people to create franchises and supply the first machine and then sell them more after things start to scale. The end result is to create a domestic industry which will then continue to drive costs down and promote adoption though advertising etc.
PS: If there is a viable market, I suspect some of those groups will start to grow and you may end up with the type of large company you want him to build.
It's better to help the poor become rich than it is to give the poor a bobble and have them stay poor.
It's essentially teach a man to fish, except with business. He can reinvest, grow the country, then they can all afford the doodle. It's a win for India, and the world! Maybe he sells to North America, and is able to make more money for his country than would ever have been saved by the poor using his cheaper napkin. (I mix doodles and napkins, but it's all the same). It's economics.
Now, his idea is that lot of NGOs in various villages have to make this investment of 1200$ (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.]