This article first appeared in the Harvard Business Review.
On February 10th, Silicon Valley legend and Facebook board member, Marc Andreessen sent out a tweet:
I now withdraw from all future discussions of Indian economics and politics, and leave them to people with more knowledge and experience!
How did Andreessen arrive at such a moment? His Twitter fumble was in fact part of an important week for Facebook, India, and the debate over internet access in emerging markets. It started on February 8th when news broke that India's telecom regulator had decided against allowing Facebook's Free Basics service arguing in part that it would make it hard for smaller providers to compete and that the service violated basic principles of "net neutrality," which is the idea that all internet traffic should be treated the same. The Facebook service was designed to offer free access to a select set of websites to those without internet access -- but Free Basics had been equated to colonialism by its many critics.
Andreessen's part began when he sent out a very ill-advised (and now deleted) series of tweets, including one that read: "Anti-colonialism has been economically catastrophic for the Indian people for decades. Why stop now?" Not surprisingly, a firestorm of criticism followed. Mark Zuckerberg himself called the message "deeply upsetting."
Andreessen's misguided actions are a lesson for Silicon Valley innovators preparing to win over the next billion users: more than just coding intelligence, you need "contextual" intelligence; the complex histories, economic disparities, politics, and socio-cultural mindsets in the developing world shape success just as much as the product does.
The factors that define the "context" are different across the developing world, but, more significantly, they are different from the environments in which digital innovations are developed -- whether it is in Silicon Valley or in Boston or in tech enclaves in India and China. In these high-tech pockets, context is almost invisible: institutions function, data is the coin of the realm and a digital application's "killer" value proposition rules the day. In this way, tech companies operate from a distance; they are not usually embedded within the local environments.
In contrast, consumer product companies like Unilever or Nestle are often well woven into local environments with sales, logistics, and channel relationships in small towns and rural areas. And even if they do open a local office tech companies like Facebook often lack experience navigating the complexities of local politics and regulations. For digital players, operating within bubble-like office environments, the developing-world context can seem very far removed.
As I've written previously, there are good reasons to like Facebook's Free Basics initiative; I have argued that it is better for a society to provide even limited access to more people, than the status quo where close to 80 percent of the population has no internet access at all -- as is the case in India. Facebook's expensive gamble with Free Basics offers an important opportunity to talk about digital innovators can be more inclusive in their approach to the developing world. Here are a few things to remember:
Context is just as important as code: Facebook did try to simulate aspects of the context of the places it was trying to serve with Free Basics for its employees; it instituted initiatives, such as 2G Tuesdays, where its employees in places far away from the developing world could only use 2G service and personally experience the slow speeds and constraints that will affect the next billion users' internet experiences. But simulations only go so far, especially when there's a world of high-speed internet right outside your door. Companies will have to do more to embed themselves with these future users and understand their day-to-day lives, including their biggest hopes and fears along with their history and culture. Simply having admirable intentions won't be enough to win support for your big idea in developing markets -- even if you're bringing the best code in the world.
Regulators have to weigh both laws and emotions: Digital players must contend with varying regulatory frameworks in every country. In India, for instance, regulations are an outcome of a mix of "rational" economic and legal arguments as well as the country's history and political climate. Indians are particularly sensitive to Western companies that arrive to do business in seemingly innocuous ways -- consider that The British East India Company arrived with good intentions of trading with India, which made way, eventually, for India's colonization. And despite being a country rife with economic inequality, egalitarianism is a concept that matters in India. These kinds of factors are critical to how regulators make their decisions. The Free Basics service had the added misfortune of arriving in the thick of growing sentiment in favor of net neutrality and seemed to violate those norms. India's regulators would have faced difficulty going against popular sentiment on this topic.
Marketing messages must be consistent with the product: When an initiative is presented in one way -- philanthropy, as was the case with Free Basics -- and the service itself contained a "lite" version of Facebook and a selection of other sites, suggesting a different motivation, i.e. to secure profitable future customers, the tide of opinion can turn very quickly. Facebook's attempts to shape the debate and win over regulators by launching a massive marketing campaign ultimately backfired. To get the right message out about your idea, you need to know clearly what you want to accomplish. Even if it's more than one goal, communicate those things in ways that people can trust.
As an example of an alternative, more context-appropriate approach, consider Google's partnership with the Indian Railways to install 400 Wi-Fi hotspots at the busiest railway stations, estimated to give Wi-Fi access to more than 10 million people even with a 100 hotspots. Google's initiative has been received more favorably than Free Basics. The key was Google's promise of a product that seemed to be equitable -- full internet and high speeds, similar to the product enjoyed by those who could pay for it.
Logically, there is an irony in that without Free Basics or the Google initiative, the inequality is even greater with 80 percent of the population without any internet access. However, given the context, the logic is lost.
Facebook will need to recover from the setback in India, its second largest market. Andreessen, Facebook's leadership, and other digital innovators could take a page from Steve Jobs, who once said: "... technology alone is not enough -- it's technology married with liberal arts, married with the humanities, that yields us the results that make our heart sing." Jobs was talking about the iPad 2, but he sounds particularly prescient today as digital innovators consider how to grow in the world's developing markets, with contexts so different from their own.
Bhaskar Chakravorti is the Senior Associate Dean of International Business & Finance at The Fletcher School at Tufts University and founding Executive Director of Fletcher's Institute for Business in the Global Context. He is the author of The Slow Pace of Fast Change.