Jun 15

Nat Torkington

Nat Torkington

Commercial OLPC Opportunities

A quick Google hasn't turned up any hits for this, so I'm turning to the World-Wise Web. I'm generally a socially responsible hand-wringer, but you'll have to forgive me for a second while I go evil and channel my inner predatory capitalist ....

The OLPC (update: One Laptop Per Child aka "the hundred-dollar laptop") is set to go out to millions of kids in developing nations later this year. These are kids who, by virtue of their education and the rising tide of lifestyle in those nations, will be the new affluents. Brands like Coke, Marlboro, Toyota, Disney, and Evangelical Churches would surely love to reach those kids, to seed their brand with the kids and their parents.

If that's true, then we should see some things:

  • Companies sponsoring curriculum materials. ("Jenda has five delicious smoky Marlboro cigarettes ...")
  • Companies building applications such as casual games for the OLPC platform (e.g., by taking the OLPC programming tutorial at OSCON)
  • Companies stepping up to fund the distribution of these machines to kids, as a way of raising brand awareness.

But I haven't seen these things. For example, signups at the OLPC tutorial aren't huge and I haven't seen any reports of companies stepping up to help create branded content. Is the success of the OLPC too uncertain? Is the success of the OLPC kids too uncertain? Or is it just that nobody has thought of the filthy capitalist implications before?

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Comments: 13

  grayputer [06.15.07 02:14 PM]

Or may be it is that the target market is people with out electricity or money?

What's a coke retail for today, 30-35 cents (think 6/12 pack)? What's the daily (household) wage in some of those distribution areas, one dollar a day, less? So someone gives you something worth half a years pay and adds a logo ad for a product that would cost you say 40% of a days wage and you think it is good marketing?

What's the average reader of this site make (household), 50K, 100K / year, more? So let's see ... that's a 25K-50K free item with an ad for say a $200 ipod on it.

Tell you what, you buy me (and all the other readers) a nice new car and we'll be happy to take an ad for an ipod on the trunk. Let's see if you get your money back.

Works for me! Anyone else want in?

  Coleman [06.15.07 02:23 PM]

Nobody wants to invest in it because nobody knows where those computers will end up. The governments of third world countries are not going to give the computers to the kids in their countries.

  gnat [06.15.07 02:34 PM]

Sure, most people in developing nations don't have disposable income. But the active word is "developing". China and India are working hard to move the prosperity into the countryside. When income levels do rise, the kids and their parents will have choices about which tractors they buy, which soap they buy, which clothes they buy. I'm not talking Abercrombie and Fitch and premium brands, I'm talking basics.

Perhaps it's because American brands aren't able to reach the developing world. Maybe such traction would come from Indian and Chinese brands like Tata and not American brands like Coke and Marlboro.

  gnat [06.15.07 02:38 PM]

Regardless of whose hands the computers end up in, if they have useful software with advertising then it's valuable for the advertisers.

  bart [06.15.07 02:43 PM]

What is OLPC? I know, there's google, but a link would be nice. (The tutorial blurb just says it's "one of the hottest things in the open source community today.")

  grayputer [06.15.07 02:50 PM]

Sorry, work intruded and I hit send to avoid losing it:). To continue:

So the above/previous is boardroom argument 1, the basic 'the damn thing comes with a crank/peddle to generate it's own electricity and you expect to sell stuff to that market' argument.

I'm going to hurry through the other cases I thought of, not as much graphic detail as case 1.

Argument 2 - if we do that it may generate a LOAD of negative PR about taking advantage of the poor third world citizens.

Argument 3 - Why buy 1 million units at $150 each, pay to add logos etc. Why not write a $10 million check to 'charity X' and spend another $10 million on PR and net more sales in first world countries.

Argument 4 - Who knows what these will be used for or if they will get to where they should, you want our logo on the news when a dictator gives these out to his pals instead of the kids?

Argument 5 - at least upgrade to the Intel project as it is targeted to first and second world countries with electricity.

I'm sure there are many other ideas/reasons. But those are the first I thought of.

  Wayan [06.15.07 03:12 PM]

What an interesting alternate OLPC financing idea that we didn't think of when we did a brainstorming on this very topic:

No one thought of this probably because from what we can tell Negroponte & the rest of the OLPC leadership would rise up in revolt if a company tried to brand anything with the laptop

  Michael R. Bernstein [06.15.07 03:26 PM]

The OLPC project is breaking a lot of new ground, so it seems a more risky than it really is. I think a lot of folks who would pursue projects like you describe (ie. ones that are non-altruistic) are waiting to see these things deployed and receiving actual content and code updates in the field before they try to exploit them.

Because making a major financial commitment to just preload them won't fly in today's market.

  Michael R. Bernstein [06.15.07 03:28 PM]

Wayan, after the XOs are deployed in the field, advertisers can cut deals directly with the national governments.

  monopole [06.15.07 04:48 PM]

Erm... Coke, Marlboro? Why not toss in lead paint while we're at it. I mean, what better way to bring down universal disapproval than selling cancer sticks to schoolchildren? This makes Channel One junk food ads look good.

But... There are two forms of commercialization that would work.

Country ads: Take a good look at all those bags of surplus grain that gets delivered to famines, an notice the big USA and flag/shield (I assume the EU does much the same with their food aid). Paying money to have what may be a child's most precious possession stamped with a US flag could really pay off 20 years down the road.

Mechanical Turk & Micropayments: Use the system to allow for "mechanical turk" piecework (limit duration and make the problems educational to keep it from being a sweatshop). Distribute and collect from a wifi bike (etc.) after work has been verified pay with e-books and comics (vetted with appropriate educational content). This couples immediate profit with positive impact.

  Gregory Raiz [06.15.07 06:17 PM]

I actually got to play with a prototype of the OLPC today.
A) It still has a way to go to get to production quality. But it's a start, a good start.
B) They don't have any official deals signed and sealed. (AFAIK)
C) A lot of the education content sounds like it will be web-based. There are a couple client side educational applications but given the limited storage and capabilities a developer community hasn't been a focus.
D) Usability still needs a lot of work.
E) Price point is not yet on target.
F) Regardless of the OLPC success it has already moved the market as MSFT, INTL and many others are now working on similar initiatives.

  Rob [06.15.07 10:52 PM]

Interesting you brought this up Nat. On Thursday at the Auckland Web Meetup, Terabyte presented details of their ElectroCity project - an online SimCity/Civ-esque game focused around energy. It was funded and produced for a New Zealand power company, and targeted at school age children.

The idea originally came from the agency, and they pitched it to the client. While they were interested, it took a heap of work to get them excited and to see the potential, even though education was one of their goals. But they're stoked with the results.

What I took from that was that companies who could sponsor OLPC apps & content (or general corporate/education linkages) probably haven't thought of it or had it pitched to them, but that they may be very open to it. Games and other apps are not that expensive to produce compared to plenty of other advertising/marketing endeavours, but they're a relatively unexplored one.

My 2c, anyway :)

  Akiva [06.17.07 11:59 AM]

Fortune 500 companies don't to cutting edge, and definitely not bleeding edge. While there's a potential benefit of future income of hundreds of millions of dollars, there's a risk of brand damage that could blow multi-years complete advertising budgets (call it several billion dollars) if say, a series of such laptops turned up on the US street having been resold by the governments in Africa, or in schools in Iran.

If you can't measure a benefit of 5 to 10x the risk, then it's just not worth it. After all, what will happen to this quarters stock price if some analyst get word the company has taken a risk (gasp).

So much for the big boys. They'd do better to canvas medium sized companies, where a future market and or the PR would be worth considering.

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