After five guest interviews packed with insights, host Inder Singh takes a step back to explore a key concept in market shaping—and what is often the first move. Across the interviews this season, regardless of sector, the first move has been remarkably consistent: effective market shaping begins by building, aggregating, and harmonizing demand to create buying power. And the organizations we've spoken with have done this through a "buying club." A buying club brings together buyers who are each too small to matter on their own, aligns their interests, and turns them into something the market has to respond to. In this episode, Inder breaks down why forming a buying club is often the first step in effective market shaping, and how to do it well. The Market Shapers Podcast is a production of Inder Singh and is produced by University FM.
After five guest interviews packed with insights, host Inder Singh takes a step back to explore a key concept in market shaping—and what is often the first move.
Across the interviews this season, regardless of sector, the first move has been remarkably consistent: effective market shaping begins by building, aggregating, and harmonizing demand to create buying power.
And the organizations we've spoken with have done this through a "buying club." A buying club brings together buyers who are each too small to matter on their own, aligns their interests, and turns them into something the market has to respond to.
In this episode, Inder breaks down why forming a buying club is often the first step in effective market shaping, and how to do it well.
The Market Shapers Podcast is a production of Inder Singh and is produced by University FM.
Buying power isn't just about finding buyers
06:52: Buying power isn't just about finding buyers. It's about getting three specific things. First, you need buyers who want the same thing . Every buyer has slightly different preferences, different specifications, different features or functionalities they want. The work is getting them aligned around a shared target, specific enough that a supplier knows what to build.
Why do markets still get stuck even with real demand?
09:19: Building, aggregating, and harmonizing demand, often through a buying club, is just the first move. It's not the last one. Because even when you've done all that work, even when the demand is real, even when you've aligned the buyers, markets can still get stuck
The power of a buying club
08:46: Without proof that real buyers with real budgets were in the room, the negotiation would have never happened. And the tool that does all of this is a buying club. I know that sounds a little ridiculous. It sounds like getting discounted mayonnaise at Costco. But in practice, it can be enormously powerful. It takes buyers who are each too small to matter on their own and turns them into something the market has to respond to. CHAI called theirs a buying consortium. Kim Carnahan at the Center for Green Market Activation calls hers a buyer alliance. Rich Powell's organization is literally called the Clean Energy Buyers Association. These are different words but the same concept.
(Transcripts may contain a few typographical errors due to audio quality during the podcast recording.)
[00:00:00] Inder Singh: Welcome to Market Shapers, a podcast about harnessing capitalism for good. I'm Inder Singh. Over the years, I've had the privilege of working with incredible people, building products, forging deals, and shaping markets that have impacted millions of lives.
On this show, I sit down with the leaders, innovators, and behind-the-scenes deal makers who've changed the way markets work, often in ways most people never see. We'll unpack how they did it, what they learned, and how those lessons can help tackle the big challenges ahead.
Hi, everyone, this is Inder. Last time, I talked about how building a buying club is often the first move in effective market shaping. Finding buyers, building and aggregating demand, and harmonizing it, getting enough buyers aligned around a shared goal that suppliers have to respond.
Now, like any tool, it's only as powerful as how well you use it, and we talked about what that takes. But even when you get it right, that's not the finish line. Today, I want to go deeper into the part most people never see. It's not something they talk about in business school or in economics. In those worlds, if there's demand, someone will service it, and a market will form.
Now, sometimes that's true, but sometimes a market can stall even after demand is real. You have buyers, you have suppliers, both sides want to do a deal, and somehow nothing happens. This is especially true in the markets like the ones we've been talking about all season, where the public benefit, real or perceived, outweighs the private return, even when that return is still big.
We can get into the underlying reasons for why that is later, but for now, let's talk about what gets in the way, because remember, this podcast is about the how, the tactics, and the approaches that make things work.
Across all our conversations this season, and in my own experience, two problems come up again and again. They're not the only ones. Sometimes it's a financing challenge, sometimes it's a regulatory one. But these two are close to universal in young markets, and if you don't solve them, nothing else matters.
The first is trust in the product itself, its quality, and performance. Let's call this quality and performance assurance. Does this thing actually work? The second is simply the ability to transact. We'll come back and unpack that. Let's take them one at a time.
In a new market where the technology is unproven, where there aren't standards that exist that assure buyers that they're getting what they expect, buyers face a really simple problem — how do I know that what I'm paying for actually does what it says?
Now, this probably sounds obvious, but in a new market, it can be really hard. So, to illustrate this, let's talk about a story that I'm familiar with. In the United States in the early 1900s, before the U.S. Food and Drug Administration, the FDA, existed, the drug market was genuinely the Wild West. Medicines had unknown ingredients. There were outrageous claims. Snake oil was really being sold. It wasn't a metaphor, it was a business model. And the solution didn't come from the government.
In 1905, the American Medical Association created something called the Council on Pharmacy and Chemistry. Their job was simple, review medicines and tell physicians whether they actually worked.
If you met the standard as a supplier of those medicines, you could advertise in the AMA journals. But if you fail, you got named and shamed publicly. That worked because physicians trusted it and because suppliers had no choice but to respond. These were real physicians saying, "Hey, your medicines don't work."
The FDA came later, and when it did, it built on this framework that the AMA had already created. But this pattern, a trusted third party stepping in to build standards and evaluation frameworks before government can act, turns out to be really common.
You can find it with organic foods before the USDA certified them, and with fair trade certifications. And Kim Carnahan is doing the exact same thing today for sustainable aviation fuel and low-carbon cement.
Most of the companies she works with want to reduce their carbon emissions. But as Kim put it, they're banks that fly a lot or retailers. They're not experts in sustainable aviation fuel. They don't know which fuel is genuinely sustainable or which suppliers to trust. So, Kim's team writes the criteria, they vet the suppliers, they even run the procurement.
They are effectively the standard. And without it, nothing happens. Buyers are paralyzed, not because they don't want to act, but because they have no way to know if what they're buying is real, if what they're buying does what it says.
The second problem is the ability to transact, and this one's much harder to see, so let's talk about it.
Sometimes, buyers and sellers both want to do a deal, so demand is real. There's a willingness to pay. Heck, the product might even exist, but the deal still doesn't happen. Why? A common reason in young markets is because there's not the plumbing to do it. There's no standard contract. There's no established way to account for what's being bought and sold.
This sounds abstract, so let's make it concrete. Some of you have probably heard of SWIFT. This is the global banking system that allows for international transactions. Before it existed in 1973, banks wanted to move money across borders but had no standard way to do it. Each transfer was a tangle of incompatible systems and manual messages. So, SWIFT saw the opportunity and built the plumbing, and a global market for international banking formed and is still used today.
Kim described a similar problem in climate. Most of the companies she works with want to reduce their carbon emissions in their supply chains. But here's the problem: in industries like aviation or cement, the actual emissions aren't happening at the company. They're happening three or four steps down the supply chain at a supplier that that buyer has never met and certainly has no contract with.
As Kim put it, “Does your supplier even have enough influence on the next guy to tell him anything? Probably not.”
So, how does a buyer purchase that benefit? How does the buyer's money find its way to where the emissions actually need to be reduced? The solution sounds a little weird. You separate the environmental benefit from the physical product entirely.
They created what's called a book-and-claim system in climate. The money finds its way to where the actual work of decarbonization is happening, even when there's no direct relationship between the buyer and the supplier doing that work. Kim called it helping the money find its costs. Without this approach, this book-and-claim system, the buyer's money, and the supplier with the solution simply have trouble finding each other.
The market doesn't function. Maybe individual deals get done here and there, but there is no centralized market forming, and it's certainly not forming fast enough. One of the challenges that all of these third parties faced was building a market fast enough that it could take root.
CHAI's work in global health faced a surprisingly similar problem just a decade earlier, but in a very different context. CHAI's work was, in large part, shuttle diplomacy. This is the term often used for what CHAI did. They flew to manufacturers of medicines with market intelligence and demand forecasts, and then they flew back to buyers and donors with information on the risks and costs suppliers face.
They formed a connective tissue that enabled them to broker massive price reductions over really short periods of time and make the market move fast. This was a different sector, a different decade, but it was the same fundamental challenge, getting the money to find its cause.
Rich Powell described something similar in clean energy, with a corollary that I think is really fascinating and one I want to talk about.
The Virtual Power Purchase Agreement, the VPPA, was itself an innovation. It was a new contract structure that had not existed before. They created it to allow these transactions between buyers and suppliers. But here's the part that's super interesting. The contract itself enabled deals with buyers who were not motivated by climate goals.
These contracts gave large electricity buyers a long-term fixed price energy contract, essentially a hedge against future electricity price swings. Now, this was valuable regardless of whether you cared about carbon at all.
So, good transactional infrastructure, good contracts, good plumbing doesn't just enable the deals that you planned for. It creates conditions for deals you didn't anticipate, and the market grows in ways you couldn't have predicted, and it grows faster.
So, quality and performance assurance, and the ability to transact. These are two problems that come up in almost every new market. Addressing these issues reduces the friction and transaction costs between buyers and suppliers. And again, these aren't the only problems. To do this work well, to do the work of a market orchestrator, you have to understand the incentives and costs and risks that buyers and suppliers face in that particular market. And you fix things or address things along the way to enable deals to be done.
Now, let's zoom out for a moment because I think there's a bigger question underneath all of this. Who actually does this work? Now, I've been calling them market orchestrators all season long. But when you step back and think about what these organizations are actually doing, it's kind of insane. You have to build trust on both sides of the market simultaneously. You have to develop standards that buyers will believe and suppliers will accept.
You have to design contracts that didn't previously exist. You have to understand cost structures well enough to negotiate appropriate pricing with CEOs and CFOs, and you might even need to line up innovative financing, as Alan described in the deal CHAI did to drop the price of contraceptives.
And you have to do all of this while having no financial stake in any individual deal, because the moment you start making money from the transactions you facilitate, everyone on both sides starts wondering whose interests you're actually serving, and the trust that makes everything possible starts to erode.
The organizations doing this work, CHAI and Global Health, CEBA, GMA, and Cascade and Climate, they aren't buyers, they aren't sellers, they're not regulators, and they're not government agencies. I call them market orchestrators. Their job is to see the market as it could be, diagnose what's preventing it from getting there, and fix what's broken one problem at a time.
Dai and I talked about it like an orchestra conductor, someone whose job is coordination, getting every part of the ensemble moving together. Then Dai made a critical point. A good market orchestrator is not neutral. It has a point of view.
As Dai told me, “You have to have a perspective, you have to have conviction. You have to be willing to disagree with people.”
Dai once wrote a memo to Bill Gates arguing that the Gates Foundation was wrong on a critical HIV/AIDS decision. Now, Gates is a huge funder of HIV/AIDS treatment across the world. That's not neutrality, what Dai did. That's conviction, and the distinction matters because what makes a market orchestrator trusted isn't that it has no views. It's that it has no financial stake. Those are two very different things.
Now, here's the truth about why these organizations, effective market orchestrators, are so rare. First, they can't make money from the deals they facilitate, which means they depend on philanthropy or government funding.
And the attention span of these kinds of funders tends to run in short cycles, three, maybe five years before priorities shift. But effective market orchestrators need time. CHAI's been doing this work for over 20 years, and the longer they work a market, the deeper the trust they have on both sides of the market, the buyers and the suppliers, and the more they can do. This requires a funder with genuine patience, and those are really rare.
There's also a talent problem. The skills that this work demands, deep cost analysis, senior relationship management, and high-stakes negotiation, these are exactly the skills that private companies pay very well for. The people doing this work do it because they believe in it, but that doesn't prevent burnout, and the pipeline is thin. They generally take a huge pay cut from the private sector to do this work. A huge pay cut.
When I led CHAI's work, I used to brag a bit about how two-thirds of my group took a two-thirds pay cut to come and do this work. Now, that's changed a little bit since market shaping has become more of a discipline and philanthropists have seen it work, but there's still a massive pay cut to do this kind of work.
And finally, third, there's what I'd call the catalyst problem. To earn trust on both sides of a market and do this kind of deals, you need someone that can open the first door with the leaders of buyers and the leaders of suppliers. You're talking about CEO-level access. For CHAI, it was President Clinton. Anyone who he called took that first meeting. Now, our job was to get the second meeting, to impress them enough to get that second meeting and the third meeting, and allow us to do a deal.
For CEBA, it was the weight of some of the largest electricity buyers in the world walking into a room together. That's pretty powerful when you can say Walmart, and GM, and Google are coming together to buy clean electricity.
Now, once an orchestrator has a track record, they can build on it. But getting that track record in the first place, especially in a sector where nobody knows you, requires a catalyst. And in sectors where there's no catalyst that exists, markets that could be shaped just wait.
20 years of evidence across global health and climate says this approach, this market-shaping approach, works. Build and aggregate demand. Develop standards and contracting mechanisms. Get buyers to make real commitments. Get suppliers to make real commitments in response, price reductions, commitments to make product.
Put that down on paper, ink it, so these commitments are real. They're not just in words. This trusted coordination over long periods of time can make a huge difference in bringing products that we need for the world.
In CHAI's case, we're talking about up to 90% price reductions on life-saving medicines. In the world of climate, we're talking about new products that the world desperately needs.
Now, none of this approach, none of this building and aggregating demand, using buying clubs, the market-shaping playbook, none of this is specific to health or climate. It's a framework, a discipline, one that could work in food security, clean water, domestic healthcare, or pandemic preparedness in a dozen other sectors where markets should be working better than they are for society.
The question isn't whether it works. The question is whether we're willing to invest in building the organizations that do it well. If you're sitting in one of those sectors right now and you see a market that should be functioning better than it is, I hope this has been useful.
In the second part of the season, we're going to dive deeper into the CHAI playbook, how they drove massive price reductions across hundreds of deals in short periods of time.
Thanks for listening to the Market Shapers Podcast. I'm Inder Singh. If you enjoyed the show, please like it or leave us a review and subscribe in your favorite app so you don't miss the next episode. Market Shapers is produced by me with help from University FM.
Special thanks to Renaissance Philanthropy, Griffin Catalyst, and the Digital Harbor Foundation for their support.