The Education Problem: Raj Reddy (Part 13)
Check other articles in the series...Raj continues to address his concept of taking bandwidth to underdeveloped populations.
SM: It is just sunk costs, that should be OK. RR: They just need to bite their tongues and assume it is all lost, and it will come back via economic growth. So, that is the first problem I would like to solve; connectivity of the people.
The second problem is the computing problem. It will be solved, and is being solved, by people like Negroponte and the $100 laptop. They can have a computer and use it in interesting ways. The main things to think about when using a computer in a village is not the cost, $100, $50, or even $10. It is that if I am an illiterate person in the village I am not going to spend anything if I do not see the value in.
SM: There needs to be a kill app, what is the killer app? RR: Not Word, Excel and Power Point. I think it is entertainment, education and medical healthcare. Communication underlies all of them.
SM: I have a different thesis for that. I think micro credit is the killer app. RR: No, I don’t think so. I think micro credit is exactly the wrong type of thing. If you read my other paper I point out the problems with micro credit. It is like a bank, they give you a loan, and then I damn you to pay the 18% interest. If you are trying to create a job for me, which I agree with by the way, what I need is not micro credit, rather micro venture capital. I want you to take the risk with me, and if I loose, you loose too. You don’t get the money back.
SM: Let’s re-phrase it as micro finance. RR: Micro finance is another word for micro credit. I use the term micro equity. You do not take the money from me. If I fail, you fail.
SM: If you go down that path, then equity has it’s issues as well. If somebody has equity, the way to make money is by exiting. There is no exit market for this type of micro model. RR: The important thing here is another concept in venture capital called bootstrap venture capital. There are companies like Mars Candy, Bose Audio, and Math Works, which are privately held companies. They have never gone public. What they do is share in the profits. What I say is that there is no exit strategy for this new populace; all they can do is pay you your share of the profits forever.
This segment is part 13 in a 15 part series Segment 14 →
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