FIP 118: Building entrepreneurial ecosystems in emerging markets with Maryanne Ochola of ANDE

This week on the Finding Impact Podcast, we are starting off a new series to help social entrepreneurs understand and navigate the whole gamut of services and service providers in entrepreneurial ecosystems and we are talking with Maryanne Ochola, East Africa Regional Chapter Manager of ANDE (Aspen Network of Development Entrepreneurs), based in Nairobi. Maryanne shares her views on the different players in entrepreneurial ecosystems, roles they play and services they offer to help social entrepreneurs succeed.

On this podcast, you will learn:

  • Why entrepreneurial ecosystems are important – just like Silicon Valley for technology startups or Hollywood for films, these ecosystems increase the productivity of enterprises associated with the ecosystem, drive the pace of innovation and help stimulate the formation of new enterprises.
  • Learn about ANDE, its focus on Small and Growing Businesses (SGBs), and its work in building strong local entrepreneurial ecosystems – with 8 offices in emerging economies, having 280+ members as service providers providing financial and non-financial assistance to social entrepreneurs and operating in 150 countries.
  • About ANDE’s 6×6 framework or key activity domains that underpin its entrepreneurial ecosystem services, such as: (i) finding entrepreneurs, (ii) training entrepreneurs, (iii) cultivating physical and virtual support spaces for entrepreneurs, (iv) funding support for all types of financing, (v) enabling entrepreneurs with legal, regulatory support, and finally (v) celebrating entrepreneurship and entrepreneurs.
  • How entrepreneurs can find and make use of the different services provided by the ANDE ecosystem and its member organizations – such as networking events, acceleration programs, pitch competitions, funding support, legal services, etc.
  • And finally, how it is also extremely important for investors and entrepreneurial support service providers to be embedded in the local ecosystem and possess an understanding of the local context, challenges, and opportunities in order to deliver maximum value to entrepreneurs.

 

Links to Resources:

 

Connect with Maryanne:

FIP 117: Hardware entrepreneurs II 3/3 – Deploying a network of automated fuel dispensers for clean cookstoves, with Sagun Saxena of KOKO Networks

Sagun Saxena, co-founder and Chief Innovation Officer of KOKO Networks, is a company operating in Kenya and India that builds and deploys a dense network of kiosks inside local corner stores that distribute bio-ethanol for the modern cookers they sell. This is the third episode in our second 3-part series on invention-based entrepreneurs, supported by The Lemelson Foundation. The series aims to provide unique insights into some of the challenges and workarounds faced by entrepreneurs creating hardware products in emerging markets.

On this episode you will learn:

  • A description of the physical product, and how KOKO customers use this on a day-to-day basis. 0:58.
    • KOKO deploys dense networks of KOKOpoints inside neighborhood stores across the city, which communicate real-time with the KOKO Cloud.
    • Customers can buy KOKO Cookers, refill their KOKO Canisters with KOKO Fuel, and access other useful products and services.
  • The India team supports the engineering and manufacturing of KOKO Fuel, and the first commercial market they are targeting is East Africa, specifically Nairobi, which already has 700 KOKOpoint dispensers throughout the city. 3:10.
    • Target is to get around 200-250 households around each dispenser location.
  • Long term goal is to be in at least 40 to 50 major metropolitan areas across Sub-Saharan Africa.
  • How they move highly flammable liquid around the city and partner with large oil companies which already have the infrastructure in place at scale. 6:45
  • Why they decided to manufacture in India versus locally in Kenya. 10:45.
    • Cost considerations, and many other factors including logistics.
    • Pros: engineering skills in product iteration, moving product in and out of India easier for global markets, density of suppliers, stable/cheap energy (electricity), and contract workers. 15:00.
    • Cons: Long logistics chain (India is far away), Kenya import uncertainty especially with import taxes of new products not yet categorized. 18:45.
  • Top level tips on achieving compliance with regulations. 21:15.
    • Chose this market because clean cooking is a priority for the government, Kenya has a reputation of innovation, and other countries in the region respect how the Kenyan Bureau of Standards (KEBs) looks at new technology – a regulatory body that has a rigorous process for supporting innovation and making new products available.
    • Partnerships with established players adds to credibility. Organizations like gearbox (tied to universities), plus commercial partners like Vivo Energies (the Shell brand) which has world class facilities 25:17.
  • How they mobilized capital for hardware with just a prototype. First, articulated a vision, then tried to demonstrate demand (ie. consumer appetite at their price points). 27:20.
  • Co-founders had quit their other activities and their basic consumer demand pilot was self-funded 31:18.

Resources from this episode:

Connect with Sagun:

Simon Oshera Finding Impact Podcast

FIP 116: Hardware entrepreneurs II 2/3 – The inventor who’s creating Africa’s first CNC machines, with Simon Oshera of Proteq Automation

Simon Oshera is from Proteq Automation in Nairobi. We talk about Simon’s invention that is set to propel manufacturing in Kenya to compete with the likes of China and other industrialised nations. Proteq Automation builds CNC machines, which are computer numerical control machines. CNCs control machining tools (drills, boring tools, lathes) and 3D printers by means of a computer to alter a blank piece of material (metal, plastic, wood, ceramic, or composite) to meet precise specifications by following programmed instructions and without a manual operator. This is the second episode in our second 3-part series on invention-based entrepreneurs, supported by The Lemelson Foundation. The series aims to provide unique insights into some of the challenges and workarounds faced by entrepreneurs creating hardware products in emerging markets.
On this episode you’ll learn:
  • Simon was motivated to solve the problem of not being able to manufacture high–precision products in Kenya. 3.50.
  • He realised he needed to approach bigger contract manufacturers who had existing contracts, and could help them achieve better per unit costs with his machine. 6.04
  • Helping companies with their problem of long turnaround times of sending parts outside Kenya to be manufactured 8.59
  • Simon started with an engineering degree, moved into programming, and making his own electrical circuits.  11.11
  • He wanted to make enclosures for his circuit boards, so got into vacuum forming, which needed wooden moulds, and he needed a machine to make the high precision wooden moulds. He built one at home over the course of a year, whilst working a full time job 14.37
  • His first client was a university who used it for educational purposes. He did a lot of research online to figure out what parts he needed to make his machine, and which suppliers to order from. He chose US suppliers because they contained alot of content and how-to guides on their website 20.48
  • His first commercial client was a manufacturer with a contract from General Motors who had to improve their turn around time for custom parts  29.47
  • Simon’s proposal to the manufacturer included a design to improve turnaround time, which the manufacturer won the tender on. He received a 50% down payment to build his CNC machine for that client 33.04
  • Training staff is key to the business, as it’s a unique skill set, and he has a bespoke training scheme for new staff that takes a year. 35.12
  • Simon doesn’t have competition and he doesn’t see it coming, because of the processes and training required for a successful service business 38.48
Resources from this episode:
Connect with Simon:

 

FIP 115: Hardware entrepreneurs II 1/3 – Creating a smart gas meter for the BoP, with Mike Hahn from PayGo Energy

This week on the Finding Impact Podcast, we are continuing our second series on hardware entrepreneurs, this one with Mike Hahn of PayGo Energy about his hardware development journey. This is the first episode in our second 3-part series on invention-based entrepreneurs, supported by The Lemelson Foundation. The series aims to provide unique insights into some of the challenges and workarounds faced by entrepreneurs creating hardware products in emerging markets. As many will know, from episode 44 with Mike’s Co-Founder Fausto, PayGo Energy has created a smart meter that sits on an LPG gas cylinder, that lets customers pay on a PAYG basis.

On this podcast, you will learn:

  • How the idea of PayGo came about: started in 2015 with an observation that, on a daily basis, lots of people were lining up at petrol stations to buy kerosene or diesel fuel for cooking and they were bringing small vessels to carry this fuel home, despite there being a liquified petroleum gas (LPG) option 10 meters away. This spurred our question about why aren’t people cooking with LPG? It’s clean, fast, and convenient.
    • This idea came about while all of the co-founders were working for different organizations within the informal settlements of Nairobi, Kenya.
  • What their first basic prototype looked like: technical discovery “can we turn gas on and off with a text message?”
  • How their diverse group of co-founders with diverse skill sets helped: technology development, understanding the market/operations, etc. and this blend of personalities and experiences gave them an advantage early on.
  • For their first prototype they used BRCK components (see episode 111 with Erik Hersman, Co-founder of BRCK) in order to test how to get some level of accuracy of measuring gas vapor (actual flow) to the stove, and then send that data remotely to a server while including the ability to shut that gas flow off.
  • Why he uses SolidWorks for designs and recommends GrabCad for downloading files that other people have made based off of the real object. It makes it easy to plug into My Assembly so you can build something around it, and spatially you are in the right ballpark.
  • Why he decided to buy a 3D printer instead of using 3D printing services: it’s incredibly fast and convenient to do it by yourself, especially if you aren’t sure how many iterations will be needed, and you’re learning about the design as you’re making it.
  • How they raised their seed round: having a physical prototype and a real functioning unit in someone’s home along with comprehensive market research and a business modeling effort prepared them for that seed round. Also having a couple backers from very early before the seed round helped instill confidence.
  • When working with manufacturers it’s a good indicator when you get to meet directly with the CEO.
  • Advice for those in the hardware development process: get yourself into it, fake it until you make it. (But his design background at Rhode Island School of Design also helped.) Don’t be afraid to ask for help. Talk to people, work with in the past who are willing to pick up the phone. i.e. how to do contract with a contract manufacturer.

Links to resources:

Connect with Mike:

FIP 114: Why you need a clear fundraising strategy before going to market with Solonia Teodros of The Change School

This week on the Finding Impact Podcast, we are talking to Solonia Teodros, Co-founder of The Change School, who describes why social entrepreneurs need a clear fundraising strategy and goal before starting their fundraising activities. Solonia shares her journey of fundraising for The Change School, with lessons from her experience of almost closing a fundraising deal, changing course and walking away from the deal and coming back to it later with a clear strategy.

On this podcast, you will learn:

  • How Change School helps transform organizations and individuals by helping them re-connect with their values, re-design their work and re-define success as authentic leaders. Change School thus equips and empowers people to navigate uncertainty and embrace change during the transition or transformation that they are going through.
  • About Change School’s journey of testing various offline business models such as: creating immersive retreats for people to re-connect with themselves while enabling a peer-to-peer and community learning experience; to creating Change School mind gyms for bite-sized learning to develop mental resilience; and creating bespoke experiential transformation programs for organizations.
  • How the founders encountered the growth and scale challenges of Change School by evolving and developing an online delivery model of working with its vast pool of trainers and experts while drawing from the expertise of its offline immersive retreats and retaining the Change School brand personality.
  • Why social entrepreneurs should have a strategy of pro-actively approaching investors for funding and alignment with business growth plans rather than just nosediving into fundraising re-actively in trying to impress investors, while not losing focus on the business vision and operating matters such as managing cash flows properly.
  • Finally, you will learn about Change School’s online courses and tutorials for anyone needing resources and additional support to managing change and transitions. Check out the free online course at https://findingimpact.com/changeschool, which is a 5-day visioning challenge for teams or individuals to help find clarity of vision in careers or lives.

Links to Resources:

Connect with Solonia:

FIP 113: Funding for when things go wrong, with Caroline Bressan of Open Road Alliance

This week on the Finding Impact podcast, we spoke with Caroline Bressan, Director of Social Investments at Open Road Alliance. This incredible service at Open Road Alliance provides capital (loans or grants) to social impact organizations (non-profits and for-profits) facing an unexpected roadblock during implementation.

On this episode you will learn:

  • The story behind why it was set up: founded in 2012 by psychologist and philanthropist Dr. Laurie Michaels to address the need for contingency funds and the absence of risk management practices in philanthropy. It originally started as a grantmaking organization and then moved on to recoverable grants, and finally in 2018 launched Loan Fund Open Road Ventures which is a $50 million dollar commitment towards short term loans on solving these unexpected roadblocks and cash crunches. To date they have put out $18 million towards that $50 million target.
    • Half of their portfolio is in East Africa.
  • Fast response: from initial request to decision being made, it’s a period of 6 weeks.
  • Examples of:
    • Some organizations receiving bridge loans for accounts receivable and / or a large purchase order, and
    • When social entrepreneurs are raising money, it’s been committed, and there’s a delay in disbursement.
  • The Roadblock Analysis Report which has around 150 data points which shows (among other things) that about half of these cash crunches are caused by funder created obstacles.
    • E.g. An agricultural social enterprise in Kenya can look at the report to see what are the top three risks likely to occur so that they can put a contingency plan in place.
  • Caroline’s advice from the entrepreneur side: when talking to investors, first make sure they have already raised their funding and ask if they have made their first deal out of their new fund yet. Impact investors, particularly in East Africa, could do a better job about being clear and transparent regarding their application process, their timeline for disbursement, and criteria they use to make decisions.
  • Open Road Alliance criteria for social entrepreneurs applying for funding:
    • 1) It has to be mid implementation (ie. you had all the money you needed and then something happened).
    • 2) An “unexpected” criteria (ie. something external outside of the management teams control, like a funder pulling out, the government changing a policy, or an office being robbed, etc.).
    • 3) Discreet criteria (ie. need to be able to fully solve the problem at hand, for example, the average loan is $300k and if you have a million dollar gap, Open Road Alliance won’t be able to fund you until you find that first $500k).
    • 4) Catalytic impact criteria (ie. does this model have the potential to be system changing either in design or scale, and what is the probability of achieving that impact?)
    • **Geography is not important.
  • The process: an entrepreneur-centric approach. It typically takes 4 to 6 weeks, although the fastest they have ever moved is 7 days. You can connect through an existing investor or reach out to the funding@OpenRoadAlliance.org email to start an initial conversation to talk through your model, ask questions about the roadblock(s), and Open Road Alliance can give a diagnosis to how well things are fitting into their criteria. The next stage is the application which is 4 pages and asks about your model, the roadblock, the solution, and the impact. Open Road Alliance can have a 1 hour call to give feedback to make the application as strong as possible before moving to the investment committee. Then a decision is made after that within a week. In between Open Road Alliance will check references, talk through repayment structures, etc.
  • Open Road Alliance has only had 1 loss out of 60 loans.

Links to Resources:

Connect with Caroline:

FIP 112: Tips for Social Entrepreneurs Wanting to Apply to an Accelerator

Many social entrepreneurs will consider applying to an accelerator to help grow their business, so we reached out to a range of accelerators to hear what tips they have for people putting an application together. These tips come in three buckets – one on selecting the right accelerator, next on what will need to go into your application, and third on how to deliver a great application.

On this episode, you’ll hear from the following:

  • Allie Burns – CEO of Village Capital: get clarity on the key milestones to grow your business i.e. building your team, validating your value prop, refining your product or sales process. Then ask how an accelerator will help. And then do your research to find out which accelerator will help you reach those milestones.
  • David Bartram – Director of Ventures at UnLtd: Three key things. 1- be really clear what you want to get out of the programme; 2- think about what you can give back i.e. to other cohort entrepreneurs or the accelerator organisation; 3- don’t change your idea to fit the needs of the accelerator.
  • Siobhain Dullea – CEO of MassChallenge: Be clear about what problem you’re trying to solve and why your product is the solution. Share your numbers (churn, revenue, profit), traction (interest and demand), go-to-market strategy or product development process. And your team – why they’re the winners.
  • Ben Powell – Founder and CEO of Agora Partnerships: Articulate three things. Your market opportunity or idea (sustainability), quality of your team, quality of your impact. Be sure to highlight your core values and the kind of culture you hope to build. Talk with maturity, and openness and some vulnerability on how to build culture and attract the best people.
  • Paul Miller – CEO of Bethnal Green Ventures: Tell us something about the problem we don’t know. Explain why you’re the people that understands this problem, in a way that people haven’t understood it before.
  • Luni Libes – Founder & Managing Director, Fledge: Applying to an accelerator is like an elevator pitch. Balance giving enough information in a clear and concise format. in just a few paragraphs. also convey how far along you are. where you are. how fast you want to grow. where to get to.
  • Ryan Kushner – The Accelerator Guy: put yourself in their shows. How you’ll be evaluated. Are you in scope for that program. Do you tick the boxes. If so, lay out the team, technology, promise and your social impact. Put it in their language.
  • Tom Rippin – CEO and Founder of OnPurpose: demonstrate your interest, tailor your application, and don’t just write a “me, me, me” cover letter. Say why you’re interested in doing this and why YOU.

FIP 111: Hardware entrepreneurs 3/3 – Creating a device to solve last-mile connectivity issues in Africa, with Erik Hersman

The Lemelson Foundation LogoThis is part three of a 3-part series on invention-based entrepreneurs, supported by The Lemelson Foundation. The series aims to provide unique insights into some of the challenges and workarounds faced by entrepreneurs creating hardware products in emerging markets. This third part episode is with Erik Hersman, co-founder of BRCK, which creates a modem-cum-router device aimed at solving last-mile connectivity issues in Africa. We’re going to talk about the early prototypes, how they funded manufacturing and validated the market, some of the challenges they had along the way, and how the product evolved into what it is today.

On this episode you’ll learn:

  • Erik’s mantra about why “experience is knowing what not to do.”
  • “Managing expectations:” for BRCK version 1 it took 15-16 months to get a prototype working, then another 12-18 months to build it for the market. In hindsight, how could it be done quicker?
    1. if you really know what you’re doing (ie. what materials should be used, etc.
    2. if you’re well capitalized (ie. have the money), and
    3. if you’re not based in Africa (which has increased costs and time).
  • How did he validate the market to make sure people will buy it? By using Kickstarter, the crowdfunding platform, which is a great way to find out. They raised $170,000 then decided to create the for-profit company to raise additional capital.
  • Early stage companies (particularly in hardware) have to find a balance of when to pull the trigger on shipping.
    • The internal messaging was that it is not acceptable to miss deadlines.
    • The external messaging to stakeholders was that you try to deliver when you say you’re going to.
  • Some of the initial problems (that went wrong) and why initial timelines were pushed back: “end of life” manufacturer (ie. they don’t make it anymore), testing at scale, user experience, etc.
  • The decision to move from selling a product to moving to a service: the internal conversation within the company on whether they are solving the real problem of how do you get people online? It resulted in business model innovation (more so than technology innovation) which led to Moja wifi in Kenya and Rwanda which serves up free internet to half a million people.
  • Linear versus non-linear growth: when you’re getting venture-backed finance or choose to take venture funding, they are looking for non-linear growth.
  • Why BRCK became a vertically integrated company—they discovered value in building everything in house—helps with risk mitigation, agility, and the ability to respond to customer needs.
  • How Moja wifi is funded.
  • What Erik knows now that he wished he knew back then?
    1. Realize earlier that they needed to build a platform on top of the hardware since the hardware is just a means to an end.
    2. Focus more capital on the SupaBRCK earlier (their next generation device) since it was delayed 6 months.
    3. Hiring the right people: maybe hired too fast in some positions and didn’t get the right people.

Links to Resources:

Connect with Erik:

FIP 110: Hardware entrepreneurs 2/3 – Creating electronic hardware products for businesses in East Africa, with Mary Mwangi

This is part two of a 3-part series on invention-based entrepreneurs, supported by The Lemelson Foundation. The series aims to provide unique insights into some of the challenges and workarounds faced by entrepreneurs creating hardware products in emerging markets. This part two episode is with Mary Mwangi of Data Integrated Ltd., and we are going to hear about her electronic hardware development journey on manufacturing products to improve security in public transport, and to reduce financial leakage. Data Integrated Ltd. is creating electronic hardware products for businesses in East Africa to help business owners keep track of money, whether that is transport companies keeping track of passengers, or point of sale (PoS) devices for retail businesses taking cash and mobile money payments.

On this episode you will learn:

  • The biggest problem that most small businesses in Africa face is a lack of data. There is not enough information around their payments, about their resources, and services they are being paid for–there is no digitized or automated way of keeping this and it has been very manual and not very productive.
    • Cash leakage and loss of revenue for owners
    • Insecurity
  • Her easy and affordable point of sale (PoS) device for retail businesses taking cash and mobile money payments, particularly small restaurant owners, and making sure it would work for the local African market.
    • Integrates with mobile money providers, card payments from the bank, and cash payments all captured in one place.
    • Keeps track of inventory that has been paid and gives data back to the owners in an easy to read dashboard so they can make better decisions.
    • Raspberry pi – premade hardware kit for simple programming.
  • One of the biggest challenges she faced was the long development cycle, having to send electronic boards to China, create a prototype, test, iterate, and send back again for testing. Each iteration can take over two months to get the next version back.
    • No printed circuit board (PCB) manufacturer exists in East Africa that can create such small PCB units.
    • Mary recently bought a 3D printer to shorten casing time.
  • Her struggles with sourcing good local talent so people can help create these PCBs. Since there is no industry in East Africa, there is not as much local talent nor expertise, and people are finding the tools online to teach themselves, so there is a lot of trial and error going on. Her advice is:
    • Get referrals from local universities
    • Recruit young people keen to learn
    • Accessing experts on LinkedIn, YouTube videos
  • How she is financing her business with this long development cycle. It is really difficult to get funding for hardware development, so they label themselves as a software company, since they create connected devices for software solutions.
  • How she creates partnerships in order to find hardware solutions and to iterate the product with them, then sell it onto other customers. Once you are able to do it with one company, then you find similar ones that also want the same solution.
  • Finally, you will learn about the new actionable playbook for invention-based entrepreneurs based on interviews and discussions with leaders in the field, delving into the challenges of bringing physical products into the market. The playbook prepared by Finding Impact will provide actionable content around issues such as workarounds, hiring teams, raising funds, creating minimum viable products and launch strategies, to help entrepreneurs on their invention journey. Click here to sign-up for the playbook.

Links to resources:

Connect with Mary:

FIP 109: Hardware entrepreneurs 1/3 – Creating tools for manufacturing in Africa, with William Maluki

This week on the Finding Impact Podcast, we are kicking off a new series on hardware entrepreneurs, this one with William Maluki of Gearbox about creating tools for manufacturing in Africa. This is the first episode in a 3-part series on invention-based entrepreneurs, supported by The Lemelson Foundation. The series aims to provide unique insights into some of the challenges and workarounds faced by entrepreneurs creating hardware products in emerging markets.

On this podcast, you will learn:

  • Why and how William invented a marvellous machine called KunjaBot that is an automatic pipe bender specifically designed for people in the Juakali (informal manufacturing) sector in Kenya. The KunjaBot provides the Juakali sector with access to mass manufacturing capabilities at affordable costs while improving quality and profit margins and allowing them to compete against imported products.
  • About the pay-as-you-bend (akin to a pay-as-you-go) business model of the KunjaBot that enables the Juakali to avoid expensive purchasing costs of manufacturing equipment and absolves them of the costs for operating and maintaining the equipment.
  • How William has dealt with barriers while building the KunjaBot such as customer demand, lack of awareness among the Juakali, business model changes, manufacturing challenges, commitment and lead times from suppliers and contractors, as well engineering and accounting skills to get his project off the ground, etc.
  • About the Gearbox initiative in Kenya and how it enables and provides incredible support to hardware entrepreneurs and inventors to design and build their products through capacity building, maker spaces and engineering and technology support.
  • Finally, you will learn about the new the actionable playbook for invention-based entrepreneurs based on interviews and discussions with leaders in the field, delving into the challenges of bringing physical products into the market. The playbook prepared by Finding Impact will provide actionable content around issues such as workarounds, hiring teams, raising funds, creating minimum viable products and launch strategies, to help entrepreneurs on their invention journey. Click here to sign-up for the playbook.

Links to Resources:

Connect with William: