When a Bangladesh Economics Professor saw his country experience massive starvation, he dreamed of using his skills to improve the world. “I started to dread my own lectures. What good were all my complex theories when people were dying of starvation on the sidewalks and porches across from my lecture hall?”
Professor Muhammad Yunus went to nearby villages to meet people to truly understand their environment, challenges and dreams. Yunus discovered village women paying loan shark rates for bamboo to make bamboo furniture because banks thought the loans were too risky and too small. Yunus lent $27 (US) of his money to 42 women who eventually repaid these loans generating a $.80 profit for Yunus. This is how micro-lending was discovered leading to the creation of the Grameen Bank. The Nobel Peace Prize was awarded jointly to Muhammad Yunus and Grameen Bank for their efforts to create economic and social development from below.
Yunus’ believed that no matter what is the education level of the individual, each person is resourceful enough to be creative and entrepreneurial. If you give them the money, rather than demonstrating faith by entrusting them with a loan, the inner spirit and pride is never stimulated in a way that the borrower can use to prove they are a trusted entrepreneur in the local economy.
While Yunus felt he understood the Beneficiary (village women) and was an extremely motivated Aspirer, he had to determine how to make his big idea viable. To successfully achieve a dream, big idea or breakthrough innovation, the communication, solution and operational components must be viable.
How would he communicate this to the poor village women and the capital investors to begin the bank? How would a solution determine the desired borrowers, provide money and ensure the money gets paid back? How would he make it operational for it to be scalable, profitable and sustainable to achieve his dream to change the world?
If your dream is to improve a relationship, run a marathon, open a restaurant or become the banker to the poor, Viability Insight will help determine if the Communications, Solution and Operational components are viable.
Communications (Marketing) – Awareness, competitive positioning, dialog, message
Solution (Product/Technology) – Can it be designed, developed and built? Who does it? How?
Operational (Business Model) – Administrative, financial, technology and sustainable
While a dream to improve a personal relationship or run a marathon does not need the business equivalent components in parenthesis, it needs to be effectively communicated to others, a solution developed and the operational effort to sustain the relationship or finish the race.
Like Yunas’ big idea, a breakthrough innovation like iPhone required Apple to first determine the viability of the communication (marketing), solution (product/technology) and operational (business model). Most new products are just improvements to established components to minimize the risks. An entirely new product, or big idea like Yunus’, requires substantial risk in determining viability with so many unknowns within the communications, solution and operational components.
Communications – Yunus was able to convince Janata Bank to provide the initial investment capital. He was able to convince good people to share his dream by accepting a risky job at a new venture to go into poor villages to meet women who needed financing.
Solution – The loans were awarded to five member women groups called “kootas” that meet on a weekly basis to discuss their challenges and collect money for the next installment. His new team offered business counseling and developed trusting relationships.
Operational – Grameen Bank was established in 1976. It has since loaned over $8B to mostly women who repaid over 95% of these microloans. The women greatly valued the opportunity and dignity provided by entrepreneurship. Grameen Bank is 95% owned by the local poor and 5% by the government. The micro-lending model is now serving 100 million people with $25 billion of loans.
If you have a dream, big idea or breakthrough innovation, Viability Insight often requires exploring unfamiliar territory like Yunus and Apple Founder Steve Jobs with the personal computer, iPod and iPhone. While awkward at times, it can provide valuable insight into how to make almost anything happen.
 Banker to the Poor: Micro-lending and the battle against world poverty, Muhammad Yunus
 Microfinance: An emerging investment opportunity. DB Research. 23 February 2012