Over two quarters, students hone a process for making useful designs for the very poor.

The pedal-driven extrusion mill rumbles like a runaway cable car barreling down Nob Hill. Graeme Waitzkin, MBA Class of ’10, shouts above the cacophony and points to the tiny pellets popping out. Made from biomass and agricultural waste, the pellets can be used to fuel cooking stoves in rural Ethiopia, he explains, where women now spend 20 percent of their waking hours collecting firewood.

The pellet mill and a business plan for it are the final product of a team of Stanford graduate students from the engineering and business schools. Theirs is one of 10 teams that has just finished a two-quarter class called Entrepreneurial Design for Extreme Affordability. The goal for each team was to come up with a service or product, like the mill, designed for specific cultural contexts.

What exactly does designing for a cultural context mean? It’s easier to explain what it doesn’t mean. Take the example of a charitable organization that ordered a gas-powered corn miller to help Rwandan women grind cornmeal faster. It worked until the first tank of fuel ran out, and the group didn’t have any money for more. Over the years, charitable organizations trying to improve the standard of living in extremely poor communities have discovered they often fail because Western-designed and -built products and services often don’t fit the needs of people in other cultural contexts.

“Extreme Affordability has fundamentally changed the way that I think about and tackle problems,” says Jane Chen, MBA ’08, a student from two years ago whose team developed a portable incubator for infants that is being further developed outside of the classroom. Her success story is inspiration for the 40 students of the 2009 class who have designed things like water pumps, stoves, affordable battery-operated devices, and systems to fortify water and flour with micronutrients.

Yes, the course has bragging rights for being the birthplace of successful products, services, and companies that impact the very poor in predominantly rural areas. Without undercutting that point, however, the class exists to provide a collaborative experience where students learn to solve complicated problems, a skill that can be applied to a variety of scenarios. “You can’t be a good product manager if you don’t understand manufacturing,” says Laura Jones, MBA ’09, who took the class knowing she wants to pursue a career as a product manager.

The course—open to medical, business, law, education, science, and engineering students—kicks off in the winter quarter at the Hasso Plattner Institute of Design, or d.school for short. Co-taught by the Business School’s Jim Patell and the Engineering School’s David Beach, with assistance from design fellow and former student Erica Estrada, classes are held near the center of campus in a beige stucco building that belies its colorful, near whimsical interior working space. Couches, rolling white boards, breakout meeting rooms, and a Chinese gong: Is this really the environment that serves as an incubator for concepts to be taken to market in developing countries?

Empathy training, an early-on requirement, places students behind the counter at the GSB’s Arbuckle Cafe taking sandwich orders or assisting the Stanford Police Department on calls. Through listening and asking the right questions, they are able to understand workers’ needs, needs that are often not well articulated because they have become embedded in everyday routine. Professors call this need-finding, a conscious period of observing and listening that proves to be critical to success. For example, in rethinking a former class project—a solar-powered LED light—students found customers needed not only a light to replace lamps fueled by costly kerosene, but also a rechargeable battery that ran other devices. By asking the right questions, the team was able to come up with a battery that powered not only efficient LED lights but also a radio, fan, and cell phone.

A big step between need-finding and the actual development of a product is prototyping. Students get their feet wet literally in the first week of class: Limited to using $20 worth of materials such as tarps, duct tape, and Styrofoam boxes, they try to trap water from a simulated monsoon in Patell’s backyard. Collecting the most water is each team’s goal, but observing the process and examining all the prototyped water collectors is a prime opportunity to learn from each other.

By the final weeks of the first quarter, students are familiar with need-finding and prototyping and have been introduced to design concepts associated with the developing world. They have broken off into 10 teams, each having at least one GSB student. Two members of each team use the break between quarters to visit partner organizations that will set up meetings with potential customers.

Their trips to Rwanda, Ethiopia, Myanmar, India, and Nepal involve multiple interviews with subsistence farmers, flour millers, shopkeepers, and women who cook for their families. A farmer from Myanmar tells Laura Jones, “I can’t even buy food, so why would I buy anything else?” Daunting words for a team trying to come up with a low-cost product or service, but it shows that every cent matters to these customers.

Returning from their trips invigorated, the students kick off the second quarter by sharing information gleaned from their journeys. The teammates that didn’t travel for the class need to be attentive, as they will make presentations to the entire class about the trips.

In the weeks following, teams hone their points of view, basically mission statements for the products or services they will produce. As they become more focused, the prototypes change. One team originally thought it would explore trough gardens that would hang on the side of a home or sit on its roof, allowing for more growing space. Now it is working on fortifying well water with micronutrients. Another team was going to explore the manufacture and sale of water pumps but changed course when it observed women in the marketplace manually shredding and pulverizing chili peppers.

The flexibility offered in the class, which allows teams to wander from initially intended projects to an area where they might see more need, often sparks ideas that stick. “It doesn’t matter which idea you choose,” Patell tells the class, “as long as you’re passionate about it.”

Once teams establish the product or service they will pursue, they go through rounds of design reviews, where members from other teams, as well as faculty, critique and question not only the prototyped products but also the business plans presented. There are no secrets and there is no competitiveness among teams, just shared learning. One team is working on shredding peppers and another on exhaust hoods for cook stoves, yet they still ask each other pointed questions to better understand their own customers.

“How do you get creative accidents to happen on schedule?” Patell asks the class during one discussion. Through trial and error, he says. Not only do teams continually rewrite business plans, they also constantly refine the functionality of the products and services being designed. Guest lecturers talk about manufacturing in foreign countries or about product design.

The second quarter of the course is a haul for everybody involved. The class reaches a fever pitch in its last weeks, and several students say they average 30 hours a week on this class alone, while faculty, staff, and volunteers on call to be resources or sounding boards often sacrifice Saturdays to meet with and coach the teams. The prototypes and a viable implementation plan will count toward a grade. Final presentations are polished for delivery to faculty, staff, fellow teammates, potential investors, and the partner organizations each team paired with during the course.

As the hundreds of guests trickle out of the studio after the final exposition, there’s a feeling of closure as students toast each other and ask where they’re off to after graduation or during the summer break. The 20 weeks of class, the student trips, and the constant interaction with partner organizations and fellow teams is now history for many. The ideas and prototypes that line the tables, however, will live on, some with the help of students from the class, some through the partner organizations with which each team initially paired, and some a year or two later, when a new team from a future class revisits an idea.

The academic component benefits 40 students. The products produced as a result of the class, however, could ameliorate the lives of hundreds, thousands, and, hopefully, millions of people in other cultural contexts. 

Stanford Business magazine Associate Editor Arthur Patterson closely follows the Entrepreneurial Design for Extreme Affordability course in his online journal.