Digicel Goes After Green Prairies
My last post was about companies going after the underserved in order to expand the markets available to them. This effort of going after the underserved is what I have deemed pursuing Green Prairies. To understand the name, read the prior post (link here).
Today, I read about Denis O’Brien, the founder of Jamaica-based Digicel, whose company embodies the Green Prairie strategy. He’s set up his cellphone company in places others avoid like the plague, e.g., Papua New Guineau, Wester Samoa, El Salvador, Vanuatu, Haiti, East Timor and 27 other generally impoverished and inhospitable territories and countries. It seems to be working as he’s built a $2.2 billion personal fortune with this business.
O’Brien’s strategy which he articulated in the 8/11/08 Forbes is “Get big fast. Damn the cost. Be brave. Go over the cliff. The competition doesn’t have the balls.” Not the most common way to articulate one’s strategy, but you get the point.
He’s already tackled these poor markets and is making money and is now thinking about entering the USA where only 80% of the population has a cellphone. If he does this, US incumbent carriers may be in for a fight. Digicel has all the attributes of a disruptor. They go after a market which nobody cares about and then move upstream. If they can serve the impoverished profitably, their model can work as they move up the ‘foodchain’.
Digicel’s success is attributable to many things including O’Brien’s understanding of the importance of resource allocation. “If you have limited resources, you have to be more clever, skillful, more defiant,” he commented in Forbes. Digicel demonstrates why today’s little startup gnat can be tomorrow’s royal pain. Although at $2.2B, Digicel is beyond the point of being a gnat.
He also has a penchant for risk-taking. When asked about entering Fiji, he comments, “Everyone was saying, ‘Don’t go. It’s unsafe.‘” Accepting risk is part of innovation and pursuing green prairie strategies. This is why it is always perplexing when companies make risk one of the deciding parameters they use to determine which innovative projects to pursue. They’ll argue that a project is too risky to pursue. To compound things, legal, corporate communications and others who aren’t paid to be innovative will confirm these notions. In fact, if the risk is high, the main dimension to consider is whether the reward is sufficiently large to warrant taking it. You get rewarded for managing risk well. Ultimately, if it’s easy/not risky, others will do it. That’s easy.
Digicel is showing that taking risk and managing it well can be very profitable. At the same time, they’re doing this with less resources. Their established competitors will not be able to go downstream nor will they want to believing it is too risky, too small of an opportunity, etc. In the end, they’ll miss the Green Prairie as Digicell lays claim to it.
