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PROXIMITY DESIGNS BUSINESS MODEL

HELPING RURAL FAMILIES IN MYANMAR

More and more people today decide to leave their countries and move to South East Asia (SEA). We happened to know some of them: for most, this journey has never been an easy task. As a matter of fact, it requires adaptation, flexibility, ability to get proximate to radically different cultures and open mindedness towards alternative ways of living.

It was 2004 when Jim Taylor and his wife Debbie Aung Din, after extensive development work in Mississippi and traveling experiences across SEA, eventually decided to move to Myanmar (or Burma). At that time, the country was among the poorest and more isolated in the world. Thus, adaptation and flexibility were definitely required here. The reason they moved in Myanmar was one and only: generating positive social impact while addressing rural poverty.

This is how “Proximity Designs” was first conceived. Since its inception, this Yangon-based social enterprise creates and delivers affordable products/services to help low-income farmers move out of poverty. Until today, the company worked in over 10,000 villages, reaching roughly 75% of Burmese farming population.

Problem in context

As always, let’s first discuss what social problem this enterprise decided to tackle. As mentioned earlier, co-founders Tylor and Din wanted do address rural poverty. But precisely, what’s “rural poverty”? And who are the “rural poor”?

According to FAO, roughly 580 million poor live in rural areas and strongly depend on agriculture. Unfortunately, they often lack skills, knowledge or resources to make the most out of their land, so they end up having limited productivity and low salaries/income. Scarse economic resources mean impossibility to afford proper diets, safe housing, better education, opportunities to reinvest money to grow entrepreneurial activities. From there, the concept of “rural poverty”.

In light of the above, rural poverty definitely sounded like a difficult mountain to climb. So, the couple identified its root causes. In particular, they noticed that in Myanmar many underserved rural families didn’t have access to technologies, machineries, equipment available to farmers in developed countries. As a consequence, Burmese smallholders were ending up engaging in unproductive agricultural practices, with reduced yields and productivity. That was the time when they realized the impelling need for affordable agricultural products, services and assistance.

Proximity Designs business model

Finally, Tylor and Din dived into this challenge and accepted to grasp the nettle. They were firmly convinced that setting up a charity or a traditional NGO wouldn’t have been enough. Instead, they adopted an entrepreneurial mindset and founded Proximity Designs.

The team first started with field observations, engaging with locals and designing prototypes along with beneficiaries. From there, the company began manufacturing and selling affordable agricultural tools and systems, such as water pumps and irrigation systems. Later on, Proximity further expanded its offering, providing local farmers with agronomy as well as financial services. Today, the company offers a wide range of versatile products and flexible solutions to its target, with more than 1 million farm families already served.

If we try to de-code Proximity Designs business model, we can consider it as a combination of “product model” and “solution model”. As a matter of fact, both models fall into the framework of “beneficiary as customer” business models, in which beneficiaries and customers are one and the same. Yet, Proximity combines two different logics here. On one hand, the company sells standardized irrigation systems and tools. On the other hand, it offers agronomy services and farm finance solutions that are tailored to the specific needs of each farmer. Because of that, we can claim that the firm incorporates components of “product” models (standardized offers sold to beneficiaries) with those of “solution” models (customized offers sold to beneficiaries).

Proximity Designs: Social Business Model Canvas

Just like we did in previous articles, we now use the Social Business Model Canvas to further analyze how Proximity Designs creates, delivers and captures value. Thanks to this tool, we can indeed quickly visualize the core logics and mechanisms of Proximity Designs business model. But without further ado, let’s break down every section of the Canvas!