The $300 House: Go, Go, Go!
9:53 AM Wednesday April 20, 2011
Editor’s note: This post was written with Christian Sarkar, a marketing consultant who also works on environmental issues. It is the last in a series on conceiving and building a $300 house.
Today, we’re launching anOpen Social Co-creation Contest, sponsored byIngersoll Rand and hosted byJovoto, asking everyone, from designers and architects, students and professionals, to submit their designs in an effort to find affordable housing solutions for the poorest of the poor.
The mission? Design a simple dwelling that can be constructed for under $300 which keeps a family safe, allows them to sleep at night, and gives them both a home and a sense of dignity.
Winners will be selected by the community and a panel of judges and will receive a scholarship to a June “prototyping workshop” led by COMMON, a social business incubator. These scholarships are also being funded by Ingersoll Rand.
At the end of the prototyping workshop, we hope to have a model or two to test in the field, as part of a pilot project.
We’d like you to spread the word, and of course, participate!
The overwhelming response to our $300 House challenge has been a pleasant surprise for us, one which we did not foresee. We’ve now started down the road of making our initial blog post a reality, and we’d like to thank you for all your comments and suggestions. We’re still trying catch up on the emails! But there are two questions in particular that arise in almost every email, discussion or phone call, and we decided we better answer them publicly, so we can all get on the same page.
The first question: Why does the house cost $300?
We started this challenge inspired by the story of the Tata Nano, and decided we needed a price target which was an inseparable part of the product. Initially, we even considered a $100 house, but then decided on $300 as a target to encourage lean design.
Secondly, we envisioned the $300 House as a tiny shelter — a shed — replacing the existing structures we had seen in Haiti. We imagined a durable, sustainable replacement for the poorest of the poor. Following an old “rule of thumb” we decided that if it costs $3,000 in the US, we should be able to get it built for $300 in India.
Thirdly, we looked at Grameen’s poverty metrics in Muhammad Yunus’ book Creating a World Without Poverty: Social Business and the Future of Capitalism. In it, the average house value for a Grameen member who had escaped poverty was $370. So we rounded that number downwards for someone who was still living in poverty and came up with $300 yet again.
And that’s how we settled on $300. Of course, the number is a target, not set in stone. And that’s what makes it a challenge.
Our second question was more technical: How does reverse innovation work with the $300 House?
We agree that $300 might be too low a price point in the U.S. Perhaps we need $3,000 or $30,000 as tiers of affordable housing in rich countries. Despite the political challenges in the US, our point is that innovations required to create the $300 house can be scaled up to the benefit of the $3,000 or the $30,000 house.
Imagine a group of businesses, NGOs, and aid agencies working with their government agency counterparts to build a scalable model for housing development across an entire village of $300 houses.
The lessons learned by building a $300 house in India, Haiti, or Indonesia could be translated back to build a $3000 or even $30,000 house in the U.S. The materials, design, layout, will all be informed by the decisions made in the design of the $300 house.
The opportunities for reverse innovation grow beyond the house itself, to include the ecosystem of products and services initially targeted for the residents of the $300 house, but then scaled up to meet the needs for residents of a $3000 house, and then brought back to the rich countries to serve the affordable housing sector with innovations for a theoretical $30,000 house. In rich countries we’ve seen all manner of “master-planned” real estate communities. Surely we can build communities which help the poor achieve a higher quality of life.
Thus businesses that decide to get involved in creating sustainable solutions to serve the poor will end up learning what it takes to compete across the globe. We see the $300 House as a laboratory for reverse innovation.
We’ll also see the emergence of new business models like collaborative consumption. In fact, many of the services that are available in our village of $300 houses may well be shared services, from shared micro-grids (see Bob Freling’s post) to shared transportation, shared water, shared Internet and telecom services, and of course, shared education. We’re talking about building a public, shared infrastructure where the lack of one today condemns so many innocent people to the vicious cycle of poverty.
And again we ask, will you join us?
- The $300 House: Go, Go, Go! (blogs.hbr.org)