The Pamela Lodge is a decided upgrade from Hotel at Home. There is a balcony that Dave and Jill’s and Joel and Cynthia’s room open onto where we have breakfast and work. The rooms are larger and Mola, the woman who runs is a really nice and generous with our weird western ways. We’ve worked it out with her to cook meals in her kitchen for a small fee. It’s a little off the beaten path. But it’s a nice relief from Hotel at Home, where the central courtyard attracted lots of people and drinking. Pamela Lodge’s neighbor’s rooster wakes us up at god-awful hours when we first moved in, but I have either gotten used to it, or it was dinner one night. The first night it started crowing at about 4AM I wanted to go kill it, but I’m sure that would have caused a complete financial meltdown to the owner.
Too the weather has changed. Mornings are cooler, and a low-lying blanket of clouds cover the valley to the west. The days fluctuate between cool temps with intermittent thunderstorms and scorching hot sun. We plan for the coming days sitting on our balcony, watching the progression of weather approach and pass us. Dark storm clouds gather to the east, and we can see the rain hit the soccer field 30 meters away, while we sit dry on the balcony. The wind picks up and starts blowing quite hard. The gathering storm almost feels like a tornado, or reminds me of the summer storms on the east coast. A fresh smell to the air, the stiff breeze, then the storm hits with a clap of thunder. A fierce rain comes down, turning the road to mud. People dash for cover and then before it takes hold, it continues on to the valley to the west, towards Rwanda. Then the sun comes out and life in Kayanga continues.
Mr. Blandes joins us in the hotel. He’s a Tanzanian MP on his way to a friend’s funeral. We discuss the project with him. He seems interested in our progress and wants us to keep him informed. He tells us that if there is anything he can do to help to please let him know. He knows Leonard and KADERES and believes in out project. As this is his district he is keenly aware of the people’s needs, and likes the fact that this is designed to help his wards.
We will look for ways to bring the project to the next step, although we seem to be struggling to find a balance between making it sustainable and achieving the widest impact to the community. Leonard from KADERES, our NGO partner looks to get the cost down to the lowest amount, while we struggle with trying to find the sweet spot of income to cover expenses with a little left over to ensure that new lights can be bought. We also want to ensure that we can point to this project as fulfilling the three things needed to attract additional downstream investment; creditworthy community, risk assumption, and profitability.
The next day over breakfast Dave, Joel, Cynthia, Jill and I come up with a new model. The model itself is nothing new, but our application to this project is new for us and better fits Leonard’s idea of how we could see success. The previous model involved a user fee paid to the community bank. The enterprise expenses were then paid out of this income. Then whatever was left over was split between KADERES, the project and ourselves. A lot of money generated was intended for re-invested into the project to grow it. We had a rental amount and a percentage split in mind. After a lot of discussion, and the realization that we would NEVER be able to run the show for the six SACCOs, control the overall enterprise or even be able to conduct the transaction/rental and inventory process, it seemed to make more sense to shift to a lease program. If we lease the equipment to KADERES and let them run the show, they can charge their customers any amount they desire. This satisfied Leonard’s need to control the SACCO’s, kept us out of the day-to-day operation of the SACCO, and kept the enterprise sustainable. This was more in alignment with the focus Leonard wanted and helped us to steer clear of needing to run the show. Based on this new model I craft a term sheet, which lays out expectations.
The following Sunday while eating breakfast we are joined by a young TZ man who is hard of hearing. Jill and Dave sign with him and we learn he makes soap and drums. An interesting combination, but not so surprising as life in these small villages is hard scrabble which necessitates flexibility coupled with an entrepreneurial spirit. Later we go across the street to the Pentecostal Church. There is singing and dancing and some very intense praying. After the service the Pastor invites us up to introduce ourselves. It’s very warm and welcoming. After lunch and a stroll through down the street we come back and start working on the new model.
Many of our assumptions need to be refined – through meeting with Leonard and newly understood aspects of the enterprise. Costs are different in reality than what we thought we knew from the comfort of our SF office. Food and lodging is very cheap. Internal transport is very expensive. Things are very slow. For example I ordered 90 lights from Barefoot Power to run a pilot program. I had anticipated setting this pilot up while we were here. I wanted to see how the transaction would work, how the SACCO’s would account for the inventory, account for the payments, and how the technology would work. I pulled the trigger to have them shipped from Uganda, where they were sitting as left over from another order. I though the four weeks of time to get them a couple hundred miles would be enough, but DHL (DHL is not my friend) still has not gotten them to our destination address. As of today the lights are somewhere between Dar and Bukoba. They had gotten held up because DHL had no record of the duties being paid. In fact they had, and DHL f*&^%ed up. Needless to say this was a hard lesson to learn; things not only move very slowly in Africa, even what one might consider as a developed world vendor assumes African timeframes. If it’s this long for 90 lights I can’t imagine what our order of 3,000 lights will be like to get through customs and overland across the country.
We’ve met with Leonard again and based on some of the points realized in this meeting we’ll need to re-work the model. He believes that basically the model will work. He thinks the people will like the lights. He thinks the initial amount of lights is too small. He also has some very definite ideas in mind that we will need to use to re-craft our model around. However, based on our very preliminary market research there is much more “elasticity” in the market. True - fuel prices are coming down, but the quality of light is vastly improved by using our LED lights. Currently people pay between $2.20 and $5.00 per month on kerosene. Samuel pays $2.50 every month for candles. (In fact we’ll make a present of one of the lights to him.) We anticipate coming in well under that price point. But the price Leonard desires will make the project fold after 18 months. No one wants that and we are trying very hard to find a sweet spot we can all live with. This is a very hard problem to solve. There is a tension between the “free money” of the grant, and creating a sustainable model that will grow to access a growing number of people over time. We start with 3,000 but have modeled it to grow to 12,000. This isn’t just solving for the technology gap, but also the dominant paradigm. We all work under certain assumptions and conventional wisdom. Reality often reinforces this, but if you look deeper there are numerous examples of how to succeed working around barriers created by assumptions that don’t really fit. “Poor people can’t pay their bills” and “poor people don’t understand credit” are two ideas that we’ve seen numerous examples of not being true. Karadea, the solar training center here in Karagwe uses credit and has an almost hundred percent re-payment record. Layaway and micro credit are used in lots of transactions. Even the service model that we thought would be a difficult hurdle to overcome is readily accepted by almost everyone we speak to. “Aid and assistance is the only way to get people out of poverty” is another example of an outdated mode of thinking. We are fighting this today. Lower the price to save poor people money versus creating opportunities to help people create their own wealth seems to be the tension we are experiencing. Additionally, I see a cultural difference between looking for today, tonight, tomorrow, and maybe next week. But there is less focus on next month or next year. It’s not quite as bad as Haiti where people struggle to put food on the table that day and so can’t think about tomorrow. Here there is more stability, so that people should start planning. However, as many people are still used to aid, (which is critical in many communities), wealth building opportunities are still somewhat foreign. The common model for outside help is a donor model and not a financial model
The trip is wrapping up and we are looking forward to the final week in TZ spent on safari (which is a Swahili word for journey). Safari is in fact the correct word for what the past four weeks have been like. I have made many new friends; Joel and Cynthia, Samuel, Robert, and Olivia as well as re-enforced old friendships with Dave and Jill. I learned a ton about Kayanga and working here in Africa. I’ve learned about lights, lighting, power and electricity. I’ve also learned about the people of Kayanga and of Tanzania. They have been warm and inviting. Everyone I’ve met has welcomed me and stopped to listen to my story. I’ve learned about their lives and about my preconceived notions of people from another culture. It’s been a fantastic experience and I look forward to learning more as there is still much to do.
Some of our new friends include:
Samuel teaches us Swahili. He has a quick smile and an infectious laugh. His small boy is a little tubba bubba and a wonder to us as Samuel is so skinny.
Robert is a wealth of connections and information. His reassuring “for sure, for sure” has taken hold and we find ourselves saying it to one another. Robert drives us around, and helps is get the African price for things versus the mazungo price, which is considerably higher.
Olivia is a beautiful little girl who’ mom cooks at the Roida Café Annex. She is so sweet and always with a big smile. She teaches us Swahili words and loves having her picture taken. She always yells out after us Sin-tia as she waves hello.
Mola at the Pamela Lodge takes very good care of us, lets us cook in her kitchen, and tolerates our endless time on the balcony.
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