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Washikala on Finding Impact

FIP 108: Last mile distribution 3/3 – How to pivot from a cash-based to a PAYGO model, with Washikala of Altech

This is part three of a 3-part mini-series on last mile distribution. This series is a collaboration between the Finding Impact Podcast and the Global Distributors Collective (GDC). The GDC is a collective of last mile distributors around the world, with over 140 members in over 40 countries, who cumulatively have sold more than 8 million life-changing products to last mile households.

The GDC is dedicated to supporting and representing last mile distribution companies to help them reach underserved customers with life-changing products like solar lights, clean cookstoves, water filters and nutrition products. The purpose of the GDC is to make last mile distribution the first priority so that life-changing products can be made affordable and available to all.

This episode is with Washikala, Founder and CEO of Altech, who operate in the Democratic Republic of Congo. Altech is a distributor of solar lamps, working to enable off-grid households and institutions to have access to modern energy.

On this episode you’ll learn:

  • Washikala got started by focusing on cash sales in his own village, but found the upfront cost of the product too high for the target market;
  • They focused first on selling to schools and their teachers, and to health centres and their health workers, giving credit for two months, and the school administrator would be responsible for collecting cash. Insight here is to start with the most trustworthy groups in the community to build traction.
  • Next they opened it up to all households through a solar ambassador model, recruiting young people from the communities, to recruit households on credit, and collect money on a daily basis. This was essentially an early PAYG model without the technology. They encountered significant ‘leakage’ (cash disappearing), and it was a cumbersome process.
  • They heard about PAYG in early 2017, and an enabler called Angaza. Altech were selling d.light lanterns but back then, they had no PAYG solar lamp option. So they selected suppliers for a pilot and ordered a small batch of PAYG lanterns.
  • They started the pilot in Jan 2017 in two areas in the DRC, with 50 products, 10 sales agents/solar ambassadors, 5 products each. The Angaza app was managed in the office, and solar ambassadors had the app on smartphones.The payment collection process was end-to-end. i.e. No “leakage”.
  • Some initial problems included having to buy smart phones for solar ambassadors, but it later became part of the recruitment criteria; data is expensive; needed to connect the lamp to the smartphone using bluetooth, but initial equipment was faulty and didn’t connect so had to replace; there were regular internet shut downs, so when customers called they couldn’t go and activate lamps; sending money using mobile money was a challenge, as some agents had no liquidity so they couldn’t deposit money.
  • Previously, their office would send daily sales reports to sales manager, who checked collected money agrees with report and collects money from solar ambassador; then sales manager sent money to the Altech office via a local bank branch. It was a very cumbersome process but now they’re using mobile money.
  • There was a close collaboration between the tech guys and people in the field, so they could change inputting errors to eliminate differences in the app and cash collected. They setup Whatsapp groups so they could connect on issues immediately.
  • Angaza were very much involved in the training of their team, which included technical info and how to market the product to households.
  • Altech competes with international companies in the same space by having more local people on their team who know the market very well. Also they focus on distribution, not the design of new products. Solar technology is changing so fast, and it’s not easy for vertically integrated companies to change product tomorrow but Altech can switch suppliers very easily.

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FIP 107: Last mile distribution 2/3 – How to manage a merger of like-minded social enterprises, with Sita Adhikari and Alexie Seller of Pollinate Group

This is part two of a 3-part mini-series on last mile distribution. This series is a collaboration between the Finding Impact Podcast and the Global Distributors Collective (or the GDC). The GDC is a collective of last mile distributors around the world, with over 140 members in over 40 countries, who cumulatively have sold more than 8 million life-changing products to last mile households.

The GDC is dedicated to supporting and representing last mile distribution companies to help them reach underserved customers with life-changing products like solar lights, clean cookstoves, water filters and nutrition products. The purpose of the GDC is to make last mile distribution the first priority so that life-changing products can be made affordable and available to all.

This episode with Pollinate Energy in India and Empower Generation in Nepal is on how partnerships between distributors can leverage economies of scale and maximise impact.

On this episode you’ll learn:

  • Before the merger, Pollinate Energy was working primarily in urban areas serving families in slums with no access to electricity or other services. Empower Generation would work with women entrepreneurs in rural areas and train them to sell solar lanterns.
  • Empower could see huge potential for their model to reach all rural areas in Nepal, but needed funding and technology to help them scale, and partnership was a possible option for this. Likewise, Pollinate were looking for funding, but also recognised there were many new entrants to the last mile distribution sector who were competing for the same funding, which felt counter-productive.
  • An added challenge faced by Pollinate was the difficulty in growing their ‘pollinators’- the people who sold the products – due to the stigma of working in slums and engaging effectively with women as potential pollinators.
  • A group of four women-led organisations at the Miller Centre engaged and found out more about each other’s organisations, recognising there was an opportunity for greater collaboration. They all declared an interest in greater impact over preservation of their brand or unique knowledge.
  • They held regular phone calls, and shared a spreadsheet around to collect details on each others’ organisations, such as type of technology systems, extent of fundraising capacity, etc. They also sought board approval to continue with the exploration. An external facilitator was involved at this stage.
  • The process comprised of two parts, each with a decision point to move ahead: one to develop a joint business deck to figure out how the company would look in the future, and second to go deeper into due diligence and take site visits to each organisation. There was also the significance of have a strong gut feeling when visiting each others teams and offices, since many mergers fail because of an incompatible culture.
  • There were man fears faced by both parties, including whether the company cultures would fit, whether internal teams would get behind the merger. This included whether both boards would come together.
  • A sticking point was when the lawyers got involved, who wanted an MoU but which management didn’t, and how the board would merge with a clear path forward to good governance and compliance.
  • The whole merger process was split into 90 day phases. First there were legal and compliance issues to overcome, which were relatively simple and straightforward once a commitment to merge was made.
    Merging systems and finance between India and Nepal was the next issue to overcome, which they set themselves 90 days to do.
  • Then the next 90 days was focused on people and culture, where they took the opportunity to amplify Nepal’s training of women entrepreneurs, which Pollinate saw as valuable to India operations.
  • The final 90 day phase was spent in tying up loose ends.
  • They made the conscious decision to move the question of ‘which brand’ to the end, rather than let it hold things up – since it’s the most emotional aspect of a merger.
  • Pollinate Energy and Empower Generation is now Pollinate Group, and they re-named their Indian local brand. The Nepal arm retained their local brand.
  • Both feel the merger has breathed life into the organisations. For Sita, the merger has meant she can focus more on scaling the model across Nepal, with a stronger proposition for funding. For Alexi, the merger has forced them to open up to changes in their model, rather than focusing solely on the model they grew up with.
  • Alexi’s advice to others is for trust and authenticity to be key for the leaders going through the merger. Also, to run as fast as you can rather than getting paralysed over every decision.
  • Sita’s advice is to say your concerns up front, as it helps you come up with a solution. Also to engage with all of the team, to help you understand the company culture and how to proceed in the future.

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FIP 106: Last mile distribution 1/3 – How to pivot a distribution model from door-to-door to retail, with Philip Wilson of EcoFiltro

This is part one of a 3-part mini-series on last mile distribution. This series is a collaboration between the Finding Impact Podcast and the Global Distributors Collective (GDC). The GDC is a collective of last mile distributors around the world, with over 140 members in over 40 countries, who cumulatively have sold more than 8 million life-changing products to last mile households.

The GDC is dedicated to supporting and representing last mile distribution companies to help them reach underserved customers with life-changing products like solar lights, clean cookstoves, water filters and nutrition products. The purpose of the GDC is to make last mile distribution the first priority so that life-changing products can be made affordable and available to all.

This episode with EcoFiltro, a distributor of water filters in Guatemala, focuses on how distributors can improve their sales efficiency by pivoting their distribution model.

On this episode you’ll learn:

  • EcoFiltro started with a micro-consignment model in which they’d give hundreds of community entrepreneurs across Guatemala five filters to sell in their community, and they’d earn 10% on each sale.
  • The model proved unsustainable due to the cost of pre-financing the filters which would often be paid back over two years, the cost of collecting the money from customers, and the low sales volumes achieved by community entrepreneurs.
  • They tried a number of different things to try and improve sales, such as training, offering incentives and encouraging referrals, but all their efforts only yielded a few extra filters sold per month.
  • They spent 18 months designing a new model, which involved speaking to retailers all across the country, and ultimately selected a few to be key distributors of the filter.
  • Retailers were happy to sell it because the filter had a strong brand, since it had been sold for a long time in big shops in urban areas and received good PR from a school donation programme.
  • Retailers were required to invest in 20 filters at a time for a $500 investment, so were motivated to recoup their investment.
  • The school donation programme, where filters were donated to local schools, was channelled through the local retailers, so they received the attention and drove customers to buy from them locally.
  • They now have around 100 local distributors and they’re targeting 270 by June 1st, 2019, which will be about 20-25 distributors per sales agent.
  • They’ve strengthened the brand by investing in their sales and marketing collateral, so all retailers are giving the same message to customers. This enables them to more easily measure sales of each distributor every month

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FIP 95: The ingredients of an effective government partnership with Ruth Ngechu of Living Goods

This interview will help you put yourself into the shoes of government so you can work with them effectively. Ruth Ngechu is the Deputy Country Director in charge of partnership with Living Goods in Kenya. Ruth shares her strategies and tactics she’s developed over the course of her 17+ year career working in Public Health, which includes some time within the Ministry of Health

On this episode, you’ll learn:

  • A different engagement strategy is needed in every county or district you work in, because each one has their own policies and priorities. They’re like separate governments. Ruth’s role is to understand policy frameworks to make sure Living Goods approach is aligned in each county.
  • When Ruth was in government, and NGOs would make requests for collaboration, Ruth would look for support to help them execute some of the initiatives they had going on, since government budgets were quite thin.
  • Governments have their own priorities and agendas. When you approach government you have to align your approach with them. So first thing to do is to find out their needs and priorities. Because government only supports the things that they think are contributing to their priorities.
  • A bad example of an organisation approaching government is when they come with a ready made plan that does not align with the needs of the government.
  • Living Goods’ model has evolved. A key reason for this is the changing priorities and capacity of government.
  • Living Goods’ tailor their program to the needs of the government. For example, in one county, the government is paying a good stipend to their community health workers, so Living Goods provides other support.
  • Champions are needed to support an effective partnership with government. Ruth stresses the need for champions within technical departments but also from elected leaders. If you don’t build several good relationships, your programme could be seen as a political initiative and your support stops when the elected leadership changes.
  • Investing in time is also important. You can’t try to go faster than government – this is a recipe for disaster. So invest time into building the relationship.
  • Also take stock of the government level of preparedness (i.e. their capacity or level of skills and experience) to ensure it is adequate to engage. So this needs to be understood: what their priorities are, what infrastructure is in place, and the capacity of the infrastructure (like HR support).
  • Ruth recommends we need to listen more and let government move at their pace. Invest time in co-creating projects that address the needs of government.
  • NGOs and social enterprises sometimes see each other as competitors, competing for the same resources and attention of government. They need to speak and work out ways of collaborating, to support government in the best possible way, by leveraging each others strengths, and work together.
  • Ruth urges all NGOs and social enterprises to support systems strengthening, so for example, helping government to establish policy frameworks. This is essential for sustainability as well, since without these strong systems in place, the work of the NGO or social enterprise can easily be undone when leaders change.

Links to resources

Connect with Ruth

FIP 65: Profit vs Impact Series 1/3 – with Arjun Bolangdy

For the first episode in our three-part series on “Profit Versus Impact”, today we hear from Arjun Bolangdy, Associate Vice President – Strategic Projects of Pollinate Energy, with a mission to improve the lives of India’s urban poor. Through providing energy products to BOP markets, Pollinate Energy works to improve their customers everyday lives, while at the same time empowering local entrepreneurs in India and raising awareness of social business across the country.

On this episode you’ll learn:

  • Arjun explains how Pollinate Energy’s unique fundraising model – with a non-profit enterprise in Australia which wholly-owns a for-profit in India – allows for the organization to scale to different cities and finance other value-addition activities.
  • How to low income customers pay for these products? Arjun details how Pollinate Energy extends credit to make their products affordable to their customers and how that relates back to making the company financially sustainable in each city.
  • Arjun details the overall model of the company, including the different and important roles of Pollinate Energy Australia and Pollinate Energy India and how the integration of these roles supports a growth model that covers Pollinate Energy India’s costs during the 18-24 month period it requires to breakeven in new cities.
  • What are other interesting aspects of Pollinate Energy’s model? Arjun shares about the company’s multiple fellowship programs that include “scout” fellows to map urban slums in new cities, as well as city “co-founders” to lead Pollinate Energy’s expansion into the city.
  • Arjun talks about the importance of balancing impact versus growth, for which the company uses city financial sustainability as a key metric. He explained the enterprise’s strategic decision to pause expansion for 2018 to focus on deepening its impact in the communities it already serves versus continual growth.
  • Finally, Arjun also spoke to some of their impact measurement tools, which center on customer surveys on direct impacts (shifts from kerosene-based to solar energy use) and indirect impacts (such as improved health, education outcomes, etc.), and how that data relates back to their fundraising model.

Links to Resources:

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andrew-youn-finding-impact

FIP 56: David Auerbach Interviews Andrew Youn of One Acre Fund

David Auerbach of Sanergy has taken the mic this week, not only to give Andy a vacation after a full year of non-stop podcasting but also to dig into a topic he’s pondering with Sanergy right now. He’s interviewing his old buddy Andrew Youn of One Acre Fund about decision making. But he also covers what led him to start One Acre Fund, how they think about scale and expansion, about failure and how their general partnership co-ownership structure has created the right conditions for leadership cohesion within the organisation.

On this episode you’ll learn:

  • Andrew’s path to founding One Acre Fund was studying at Northwestern Business School, working as a Management Consultant, and then Founder of One Acre Fund.
  • Andrew feels that being in business school was a safe place for him in which he could experiment with entrepreneurship and find out whether his idea is promising enough to turn it into a full time job. The same was true for David who started Sanergy while at business school, and felt that if all fell through, he still had an MBA to fall back on. He calls this ‘afraidycat entrepreneurship’ ?. Andrew believes you don’t need to go to business school to experiment with a new idea but it can be done whilst doing a full time job.
  • One Acre Fund measures themselves against scale, impact and cost effectiveness. They currently have around 7,000 staff, providing services to 600,000 farm families each year, who are seeing approximately 50% improvement in their profitability. But this is small compared to the size of the problem, which they estimate at 50 million small holder farmers in Sub-Saharan Africa that they could support.
  • Social entrepreneurship models like those of Sanergy’s and One Acre Fund’s are promising, but they’re currently a drop in the ocean compared to the size of the problem. Andrew believes you should think about the stage of a social enterprise in terms of decades, since you can expect it to be a marathon, instead of a short term sprint, to solve such a problem.
  • How a project went wrong at One Acre Fund, of introducing passion fruit to farmers’ crops. It was too complicated, too costly and disrupted their focus. He learnt the lesson to always deliver as much impact to farmers for as simply as is operationally possible, to support scale.
  • To avoid rolling new things out without sufficient attention to the impact on cost, operations and scale, One Acre Fund have setup a trial pipeline. In terms of expectations, the team knows that anything that gets tested won’t have any meaningful impact until at least 3-4 years later.
  • How One Acre Fund made the mistake in their first few years of over promising to funders, but they’ve now learnt to set realistic targets and routinely beat them.
  • The key is to be really ambitious over the long term but not the short term. Instead, be really realistic that short term goals can be surpassed, which also contributes to good morale internally.
  • David talks about how Sanergy are approached constantly to expand to new countries, and he wants to hear from Andrew, how they think about expansion. One Acre Fund has four principal expansion strategies. (1) Expansion to support existing operations in a really robust way; (2) expansion to support more families with their existing operations and footprint. (3) expansion within existing countries. (4) expansion to new countries.
  • New country growth investigations start with a desk study, then a three month field visit, a pilot with hundreds of farmers, then thousands of farmers.
  • We talk about One Acre Fund’s expansion into Rwanda through a government partnership. They look for systems change programs where they can plug into.
  • We discuss how One Acre Fund manages differing opinions within the team, and ensures that everyone moves in the same direction. Andrew puts much of the cohesion of the senior leadership team down to nurturing talent from within, despite the temptation to bring in highly skilled international hires.
  • One Acre Fund believes they will grow faster when there’s a high degree of ownership amongst the 18 key leaders of the organisation, which is why One Acre Fund is structured as a general partnership. This also helps with decision making, so general partners are trusted and responsible to make the right decision for the company.
  • Andrew’s advice for decision making for early stage entrepreneurs is (1) try and (2) patience. “Try” meaning to keep learning and test before moving forward. And “patience” because it might seem slow at the beginning but in the grand scheme of things, scale comes much later. Andrew’s mantra has been “it’s a gift to have a really huge problem when you’re small.”
  • Instead of reading many books to learn, Andrew tries to have at least one advisory call each week with someone he’s trying to learn from.

Links to resources

Connect with Andrew Youn

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GAURAV MEHTA dharma life finding impact

FIP 53: Distributing Social Products to Rural Markets with Gaurav Mehta

Dharma Life supports women and subsistence farmers to sell products such as solar lamps, stoves and sanitary napkins to villagers to improve their quality of life. They recruit people with a basic education, who are in need of money and don’t have a full-time job. Guarav Mehta founded Dharma Life in 2009 during his MBA in London.

On this episode you’ll learn:

  • How they’ve achieved a 65% women entrepreneur rate, despite men stepping forward in villages to take on the role. So they took steps to counter this self-selection bias by working with women’s families to help them understand the benefits.
  • How the minimum retail price in India is creating better incomes for village entrepreneurs, so they’re passing on 60-70% of the margin.
  • The complexity of selling products that improves people lives requires behaviour change and marketing efforts, which helps entrepreneurs make the sale.
  • Products are selected through a consumer study which involves analysing deaths in a community, their causes, and matching products to solve the problem. These make up the core basket of goods.
  • Other products are added based on a selection process, which must be socially neutral, it mustn’t have a negative impact, and which enhance the income of the entrepreneur.
  • How Dharma is structured, to ensure the company drives for impact rather than profits.
  • How Dharma provide research and marketing services for companies “across the adoption process” to diversify their revenue streams.

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Steve Andrews Finding Impact

FIP 46: Tackling Unit Economics with Steve Andrews

This week’s Finding Impact Podcast (FIP) features, Steve Andrews, Founder and CEO of NewLight Africa. After spending years in the solar industry, Steve found himself asking what else did his customers need? Since 2010 Steve has been hard at work bringing life-enhancing products to rural people across Africa. Frustrated by the challenges of scaling up through the existing (non-profit) model, Steve is pursuing a for-profit model with a strong focus on marketing and solid distribution network, in order to rapidly scale-up impact. With around 600 million people living without electricity in sub Saharan Africa alone, and the off-grid population outgrowing grid expansion, there is an enormous opportunity to create a sustainable business whilst creating incredible social and environmental benefits.

On this episode, Steve will show us the benefit of taking time to understand the unit economics surrounding your business. We’ll also learn more about:

  • The importance of listening to your customers and selling what they need in a way that works from them
  • Can community based models be scaled? Is there a limit to their growth?
  • What are the benefits to starting small with a focus on unit economics?
  • Does each decision you make impact the potential profitability for your company?
  • When is it okay to turn down opportunities that you feel may not be right for your business?
  • If you can build it and make it profitable in one county, you can do it in two and if you can do it in two….
  • How can a cookie cutter core model work for your business?
  • How to develop a financial model for scaling your social enterprise.
  • How do you choose your unit economics? (county, state, city, country?) what will be right for your business?
  • When does a change of direction become a distraction and how to keep simplicity at the forefront of your plan.
  • Are your KPIs ‘vanity measures’ or are they helping your business to grow?
  • When is your model tested and ready for the “replicate” button?
  • The importance of a realistic and generous margin for error

Links to Resources:

 

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FIP 40: Cash Flow Fundamentals with Alex Eaton

Growing up on a small farm in the US, Alex Eaton was raised with a sensitivity to the reality of smallholder farming. It’s no surprise that after 8 years of leading the International Renewable Resources Institute, Alex, a serial entrepreneur, built Sistema Biobolsa in Mexico in 2010 to enable farmers to use biogas solutions to improve agricultural outputs and provide cleaner cooking. At that time, social enterprise was a contradictory term: people looked down upon entrepreneurs trying to make money off the poor. Since that time, Sistema Biobolsa’s product has extended its reach as far as Asia and Africa.

On this podcast, Alex gives entrepreneurs a reality check about maintaining a laser-focus on achieving market returns by leading their companies to do one thing, do that thing well, and sticking to cash flow fundamentals. We’ll specifically cover:

  • Sistema Biobolsa’s origin story and early-stage roadblocks, from designing the product and business, to the journey from non-profit to social enterprise, including what stopped Alex from giving his patented design away.
  • Understanding how, because of funding mechanisms in the sector, social enterprises are not responding to normal market conditions or industry competition, nor are they learning from the well-known mistakes of the INGOs that preceded them.
  • What it means for social enterprises to “stay hungry,” why that’s a necessity for financial and social success, and how Alex practices this with his team.
  • The advice Alex has for his younger self, from appreciating the mundane to not recreating the wheel.

Resources:

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Jim Taylor Finding Impact

FIP 32: Designing an Organisation that People Love to Work For with Jim Taylor

Proximity Designs started in 2004 in Myanmar as a social enterprise focusing on the rural sector. Starting out with smallholder farmers, they first introduced a simple pump that dramatically improve water use and boosted productivity and incomes. They’ve since moved on to launching many products and services that can touch thousands of villages and millions of lives. Currently, their products are available to about 80% of the rural population with customers in over 10,000 villages.

On this episode you’ll learn:

  • How Proximity Designs have structured their distribution network to reach millions of farmers in their villages.
  • Jim believes that the management and operational workforce needs to be made up by local staff otherwise you miss out the nuances and parts of the culture that are critical to serving customers.
  • Where skills are unavailable locally, Proximity Designs judiciously uses international experts to embed in the organisation and train staff, who will then do the training company wide.
  • They run an in-house training facility, called Proximity School, whose core course is difficult conversations. These are inevitable to any organisation, more so when the culture is about avoidance of confronting problems. The course aims to separate the emotion from the facts.
  • Proximity Designs teach staff using 10% classroom time, with the rest on the job learning, of which formal and informal feedback via managers is critical.
  • For example, frontline sales staff are trained in sales methodology, and their managers are trained in coaching. Managers ensure a structured conversation, called a “clear conversation”, on a regular basis, with their staff.
  • To attract great staff, they offer people the opportunity to find meaning and purpose in their work, and a great work culture that supports individual learning and development.
  • To keep a finger on the pulse of a large organisation, Jim stays in close contact with manager, plus they use an intranet to encourage discussion across all levels of the organisation.
  • Culture is paramount. If someone is a high achiever, but does not fit with the values, they’ll prefer to let them go than disrupt the culture.
  • One of Jim’s roles as CEO is to ensure people are engaged. Jim measures employee engagement to keep a track of the health of the company. It’s an intentional process, not just an email that goes to staff.
  • Results of employee engagement are published internally, and broken down by different department and location.
  • Jim talks about having learnt so much about organisations and their shortcomings before starting proximity designs, so recommends learning those failures early on in your career, if you intend to lead an organisation.
  • A story of failure Jim recounts, was about how the private sector started serving the rural energy sector much more efficiently than they could, so they exited that part of the company to focus their scarce talent and resources on other more important areas, like farm finance and advisory services. It was a difficult decision that paid off.

Resources:

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