Scaling to Impact a Billion People

Imagine you are part of a startup which seeks to create impact at scale with a novel product. You need to create a business plan to convince investors that you have a scalable product and the right strategy to grow your venture exponentially. Where would you start? Whom do you target first? Which country, which income group, which age group? Where do you go next once you have a foothold in a certain market?These are the challenges many startups face, including the selected group of high-powered entrepreneurs chosen for the relaunch of Singularity’s Global Startup Program (GSP), which kicked off in Copenhagen this spring.

Go where the market will be, not where it has been

The starting point is an understanding of the world of today and its trajectory. To paraphrase the famous Wayne Gretzky quote: You should go where the market is going to be, not where it has been.The world is changing rapidly in myriad ways that impact the formation of a sound business strategy. By leveraging new data platforms like MarketPro.io, unique insights about future trends can be derived from empirical data. Here are several key trends to watch over the next 10 years:

• Population growth: Today, there are 7.6 billion people on Earth. By 2030, there will be almost one billion more people on the planet, as we are adding 80 million every year. However, this rate of population growth will decline. By 2030, we will be only adding an estimated 70 million people annually. It is likely that this growth rate will continue to decline, putting significant pressure on economic systems in many regions of the world.
• Income growth: The world is undergoing a sharp financial shift via the rapid expansion of the global middle class—a group which is growing twice as fast (at approximately 5 people/second) than the overall population. This shift also accounts for why the world reached a tipping point at the end of 2018 when, for the first time, half the population could be described as middle income or richer. This trend will continue, and by 2030 there will be an additional 1.7 billion people in the global middle class. However, most of these people will be at the lower end of the income spectrum in terms of spending, specifically between $11 and $30 per day.
• Shift in age: Wealth is becoming older. People are living longer across the world. As the middle class and wealthier people are likeliest to reach retirement age, consumer spending will grow the fastest among this group of seniors.
• Shift in regions: Approximately 60 percent of the world’s population lives in the Asia-Pacific region, followed by 17 percent in Africa, 13 percent in the Americas, and 10 percent in Europe. Over the next decade, Asia-Pacific and Americas’ populations will grow in line with the global average. Africa’s population will grow faster, while Europe’s will stagnate. Europeans will still become richer and their spending power will increase, but less so than in other regions. Be that as it may, the biggest momentum of the global middle class is happening in only one region: Asia. More than 85% of the next billion people joining the global middle class will be Asian.

Sources: IIASA, UN, World Bank, World Data Lab

Reaching a billion people: a case study

What are the implications of these trends on Singularity University’s aspiration and call to action to impact a billion people in the next ten years? In order to help one billion people by 2030, we’d need to reach approximately 12% of the world’s population, which covers a broad spectrum ranging from poor to rich and young to old and spans all continents. While this is by no means an easy task, solving global grand challenges (e.g., environment, water, and prosperity) calls for solutions at scale—disruptive ideas that can cross boundaries and create higher global standards for prosperity and well-being. Knowing this, how might you proceed if you’re leading an impact-focused startup? First, it’s important to understand that, realistically, it’s only possible to reach one billion people if at least part of your effort is focused on Asia. Second, aging is a key variable for your future business strategy. As population growth is driven not by an increasing youth but rather a higher life expectancy, the silver economy (people 65+) is increasingly essential for a sound business strategy.What does all of this mean, practically speaking? We’ll explore these concepts using a case study approach. Let’s say you are with a startup called “EcoExtend.” You have invented an ecological fertilizer which makes vegetables grow bigger, with a higher number of vitamins and at the same time extends the harvest time to be 15% longer than usual, thereby hopefully increasing crop yield. You are based in Indonesia and have founded your company with the philosophy to make the product affordable for lower-income households. With the slogan “Grow bigger, grow healthier, grow EcoExtend,” you are trying to target consumers aged 30-65 in the lower middle class and those aspiring to reach it (people earning $5-50/day). Under a base case scenario, in 2030 this segment would amount to 530 million people by focusing on two main markets—Indonesia and India—only. Two additional expansions would make it possible to reach one billion people, as follows:

• Geographic expansion: By targeting other key Asian markets such as Bangladesh, Iran, Japan, Myanmar, Pakistan, Philippines, Thailand, and Vietnam, the segment would increase to 841 million people.
• Demographic expansion. By including seniors (65 years and older) in all of these Asian economies in this income bracket, the total addressable market would be 1.005 billion, just above the billion mark.

Source: World Data Lab

This is the ideal case scenario, which assumes that you would be able to sell your product to every person within your target group. But it is also meant to show that the lowest income groups (those earning $0-11/day, $11-30/day, and $30-50/day) would remain the largest in terms of population until 2030. Targeting wealthier income groups would achieve growth for your company, but would make it impossible to reach one billion people.

The entrepreneurial response to scaling to the billions

From the perspective of GSP participants, being able to dig into case studies like this one and play with the data made their own moonshots more realistic. The ability to analyze data to identify market opportunities is essential for any business, no matter the size. However, to analyze data and realize that your startup could positively impact one billion people solidifies the potential for creating true impact. After the session we conducted during the GSP, a small group from the cohort began scenario planning to identify which markets they should enter first and where they might have the most impact with their product or service.Therefore, the aspiration to positively impact one billion people is challenging—but not impossible. In order to lead a business to create impact on the billion scale, it is important to not only focus on your initial niche but to strategically analyze both what is and what will be, in terms of income and demographic dynamics. A growth mindset, a well thought-through strategy, and good quality data can then significantly smooth the path to find, and ultimately reach your billion. Do you have a billion-person problem you’re seeking to solve? Take the next step.We thank Wolfgang Fengler for his contributions and feedback.