Sekhar Suryanarayanan - Guest Blog

Joel, my predecessor in Tanzania for the last several months, described Africa to me as “an entrepreneur’s dream”. This description piqued my interest – as a former consultant to Multi-National Corporations (MNCs), an entrepreneur’s dream was exactly what I hoped to find here. After my first month on the ground, I see that Joel was absolutely right.

I had expected to have a few skills to offer and many lessons to learn through the challenges that I would face in Tanzania. The most significant challenge and learning experience has been the struggle to balance MNC practices – which are geared toward efficiency in large-scale settings – with local entrepreneurs’ practices. I may have a tendency to revert to MNC practices for the sake of efficiency, but the need to develop relationships with local entrepreneurs requires me to adjust in a variety of ways:

§ Uncertainty of timelines: Uncertainty is ubiquitous for both MNCs and Tanzanian entrepreneurs, and timelines are always unpredictable. The difference here is in the response to uncertainty. MNCs tend to respond to uncertain timelines by making assumptions, setting deadlines, and adjusting as the assumptions are proven or debunked. Many of our business partners in Tanzania respond to uncertainty by waiting to find out more information. This sense of waiting is something that I have never been comfortable with, so I am learning to balance both approaches

§ Informality: MNCs, naturally, tend to have a more formal culture than small organizations, but there is another layer of informality to entrepreneurs in this region. This informality is refreshing in some ways, but certainly takes some adjustment for someone from the MNC world. Communications are ad-hoc, records are sparse, and the concept of action items is foreign. The result is that projects require close monitoring to ensure success

§ Tolerance for approximation: Decisions here are often made based on approximation, or even gut feel. Since I am used to substantiating every decision with a financial model and PowerPoint presentation, I welcome the reduction in carpal tunnel-inducing activities, but am uncomfortable with the wide ranges of estimates that can come from entrepreneurs’ guts. This is an area in which there is certainly some benefit to additional rigor

§ Role of trust: Our Tanzanian counterparts are able to succeed in spite of all the above, because of the role of trust. When a long-standing customer and close friend tells an entrepreneur that he will pay “soon”, the uncertainty, informality, and lack of precision are smaller considerations than the fact that there is a pre-existing trust-based relationship. These relationships play a critical role for entrepreneurs, and it is our responsibility to develop those relationships as well. Since my priority has always been to trust a number on a spreadsheet rather than the person with whom I am working, this is where I must learn to adjust most

It is clear that MNC practices can be beneficial to entrepreneurs in Tanzania, but these practices cannot be imposed upon them. The proper balance is something that I am still eager to discover. 

Kathryn Nevard - Guest Blog

Nothing in a developing country is ever easy, even if it looks clean and clear on paper, once in the field the troubles always begin. It sounds straightforward to businesses in America; stop using kerosene; use an LED light that is not only more inexpensive-but also better for one’s health and the environment. It is convincing people who have never seen or heard about these consequences, what is right and what is wrong. I have seen situations like these in Tanzania before, too many times-and it still gets me. In The Gambia I lived it as a Peace Corps volunteer where I sat by a fire nightly with my host family, holding discussions focused on not about what they want but what they need. A rural village of twenty; using kerosene at night unaware of all the health consequences, the ground filled with polluted debris being used as the children’s playground, unsanitary drinking water from an uncovered well, and barely having the funds to afford a bag of rice while living on ground zero for the food crisis. 

In Nepal as a volunteer teacher I lived in a similar poverty stricken environment at a school in the Himalayas. The only power source was from miles away, no studying; our only option at night was to sleep. The children, most refugees from Tibet, and I slept on a wood floor. At night I heard stories of their life without light, water, and power; something that Americans couldn’t fathom to live without. To us these are necessities; to them a convenience. At sunrise the children and I walked a mile to bath at a community well, the line of villagers wrapping around the hillside and the foul smelling well being the only water source in town. All these countries and projects produce difficult challenges and endless questions. With these discussions and experiences, I have learned to make every effort to understand these communities’ values, expectations and strategies that they develop to meet their daily needs. With this understanding, we can then learn how to implement projects that will be sustainable and vital to the energy poor communities. 

Unfortunately, I have also observed the effects of failed projects in the field. The solar panels that become broken and unused, computers that crash due to lack of power, water pumps damaged and in need of maintenance, water filtration devises that become toys for the young children, books that develop into the source for a families cooking fire; the list is endless. How do we produce clean technology without further polluting the planet and stop producing technology trash in developing countries? It is disappointing to see projects fail. Many failures come from lack of community surveys and ignorance on the villager’s culture and values. These daily challenges that the energy poor face- one can only learn how to attack this challenge by working out in the field where the obstacles begun. Asking the local’s, going to the villages, and learning their lifestyle to figure out how to implement the appropriate project in that developing country.  It is imperative to remember that even if projects sound flawless, it may not be suitable for the selected community.

I believe dissigno is on the right track; to implement small businesses and work with local entrepreneurs to create a sustainable lifestyle and environment. By providing the entrepreneurs with the skills and technology, the entrepreneur can then proceed to take control of the evolving situation by using their own problem solving techniques and providing the community with reliable income flow. This project, like all, will take steady monitoring, assessment, and on site revisions in order to succeed. If managed properly and assessing the local’s needs, I predict we will come closer to our goal of helping developing countries create a sustainable, healthy, and safe environment that before long will stand on its own. 

World Bank Energy Week

Last week I went to the World Bank’s Energy Week in DC. It was an exciting event in which the WB hosted “energy and finance industry executives, senior donor and developing country government officials, stakeholders and leading-edge thinkers of the energy sector”. Seminars discussed energy efficiency, rural electrification, alternative energy resources, and climate change. The Global Energy Assessment was an interesting topic discussed by US RE trade organization and private sector. If you’ve been paying attention RE there was nothing new, except the passion to engage the emerging markets.

• Solar PV construct is fast, uses established technology for low risk project development and is highly dependent on project financing
  
• Subsidies distort market
  
• Bio-Mass is highly risky and often needs to be balanced against the impact on the environment and food
  

However, a new bit of info was China considering or enacting a “feed in tariff” to spur RE development.

The Rural Energy Access seminar discussed the biggest pollutants among the poor as being bio mass stove cooking. Haiti is the classic example of bio mass usage gone wrong. Nearly 90% of Haiti is lost to deforestation. To compare nearly 90% of Tanzanian’s uses bio-mass to cook with, but re-growth is quick, and coverage extensive. dissigno’s project in TZ focuses on kerosene lanterns as a source of indoor air pollution. We didn’t really think to address cooking. Most of the cooking I saw was done in another area or room, away from the family area. But I imagine that the woman cooking inhales quite a bit of particulate and smoke while making meals.

Based on this I attended a seminar on cook stoves. The technology spans improved stoves made from locally available materials such as those created by a Grameen Shakti enterprise to a German company making efficient stoves and importing them to Africa for sale. Gramen Shakti’s model is impressive. Not only do they have the backing of the Grameen Bank’s network (impressive to say the least), but they use local vendors, local materials and enable the local community to gain value from the supply chain, manufacturing and service. To me it seems ideal. However, I’m sure the German stove will give it a run for their money. Their stoves appeal to the middle class as an aspirational product.

Other areas of interest included rural electrification. Grid connection is notoriously poor throughout Africa. Tanzania for example is around 22% depending on whom you talk to. In addition, just because a community has a grid penetration, doesn’t mean everyone in that community has power at their house. Connections are expensive. The waiting list for the utility to make the connection is long. Often time people take it upon themselves to make their own connection. Even if they do have power it might not be reliable. Kenyan Power and Lighting Company is estimated to have around 11,000 outages per month.

I did hear someone mention power pooling, power trading, and harmonization for power traded between countries in Africa. Many countries supply power to their neighbors already. Organizing power commodities market in Africa would be difficult but it would certainly make investment vehicles and deeper grid connections easier. Pre-paid electricity, similar to pre-paid cell phone minutes is something that Eskom does already in South Africa and could easily be expanded to other communities and countries. It would reduce some risk for the utility to connect houses and re-coup it’s investment.

Finally the solar home system (SHS), which I am somewhat dubious of, was discussed. Grameen Shakti is also involved in selling and financing these systems for individual use. When asked why he thought it was more effective as a program in Bangladesh than Africa, Mr Dipal Barua said that the proximity to communities between the sales shop and end-user made the early concerns addressable. Maintenance and the small usual start up issues were quickly solvable. Whereas in Africa in general, communities were so dispersed that it might take a few days to get a technician to a home to fix an error. In addition he suggested that Bangladesh had a history and culture with micro finance. Small loans linked with the equipment made it easy to get SHS’s into people’s hands.

Finally, a World Bank presentation showed that they were still working on the link between energy and poverty. To make a correlation is easier. However it is much more difficult to show that poverty and power are a direct consequence of one another is difficult. Monitoring and evaluation are essential elements of out Tanzania project and we are very concerned with data gathering to full understand the impact of lights and power on the communities we are working with.

Lights: LED's, Batteries, and Charging Stations

Catapult Design has a really cool logo. Heather Fleming and Tyler Valiquette began Catapult with a real interesting design solutions model and the passion to make it work. Their business model is to design products specifically for emerging markets. As they say on their website “Catapult Design is a non-profit design consultancy that provides engineering and implementation support to organizations in need of technologies or products capable of igniting social change.” Heather and Tyler met through Engineers Without Borders. We began working with Catapult Design a few months ago, engaging them to help us decide which lights to buy for this project. I’ve actually know Heather for a few years, from her days running the Appropriate Technology group at Engineers Without Borders.

Looking at the lights from the perspective of end-user is amazing. I imagine that I live on $100 a year and look at a light that might cost anywhere from $15 to $35 dollars and imagine what the risk is for me to make the purchase. Even financed I imagine that this would be comparable to me buying a house. If I’ve done my due diligence and spent the time and money researching the house, the plumbing and the electrical I might be lucky and not be forced to make renovations right after closing. But that’s assuming that I have access to these tools and the extra cash to perform this necessary protection. And if there is some major flaw I have recourse through our legal system. However, if I’m a poor person in Tanzania and I’m spending 20% of my yearly income on a single light and I break the PV panel or drop the light or it gets wet, or dusty, or someone steals it I’m out the $20! This could be a major set back to my controlled and limited annual budget.  

No light is perfect. After reviewing the many lights available on the market that we hope to use for our needs, there is no perfect solution for us. Some are bright, but don’t last very long. Some last a long time, but are not made sturdy enough for the constant abuse doled out as people disconnect the lights from the battery and bring it to our charging station for re-charging. Other are just too expensive, even for us, and I wonder how the makers plan to sell them to poor people! How hard is it really? The technology and the mass manufacturing exist, so why can’t there be the perfect light available? There are companies that have been around for a few years, and have been tested through various groups focused on the developing world. There are also other companies just out of the starting gate and ready to go with some interesting models, which could make them stand out, if they can attract the market growth needed for new companies. Some excellent resources like The Lumina Project by Evan Mills, and Arne Jacobson are a good place to begin the search. It seems that with the current economic crisis there is renewed attention on the BOP markets.

New Blood

I posted an intern notice to find a new intern to travel and stay in Tanzania for three months, replacing Joel as he comes back to the states. Within 3 days I received almost 150 CV’s. It was an unbelievable turnout that attests to this new generation of people interested in social enterprise as a career. The vast majority of respondents have been those in or just out of school. There has been a good mix of MBA and design students and a few people interested in changing career paths. We’ve even had a few people who are retired or semi-retired looking to give back to the world. After a long search I finally settle on Sekhar Suryanarayanan and Kathryn Nevard. Sekhar has worked for a large consulting firm on projects all over the world. He desired to practice his Project Management skills without the safety net of a very large MNC before accepting the challenge of an MBA program. Kathryn is a Peace Corp volunteer currently working in the Gambia. It’s amazing that these two people, who have very different work background both found a sense of purpose in desiring to work in Africa for this project. The combination of the two of them fulfills the specific needs of this particular type of work. I think it takes a combination of real world, on the ground implementation from ground up and top down. In this case the top down is large MNC projects with budgets 100X plus ours. The ground up is working and living in the Gambia in a community of a couple of hundred people. It’s a combination of dirt under your fingernails as you drag the parts together in the middle of nowhere and boardroom financials, spreadsheets, and PnL statements. I’m excited to have them work together because I think they are both highly motivated, really smart, and passionate about changing the world.

The First Customer

Joel is doing amazing work in Karagwe. Against all odds he put a pilot project into place with a local entrepreneur. Today Runyoro Shops in Kayanga Town signed up their first customer. Joel negotiated the term sheet, brought the lights into TZ and to the store, and set up the transaction for the enterprise. This will go a long way to proving community uptake and capacity. It will show that we can remove much of the project risk and that they projects are profitable. We can then secure other investment with which to expand this project and bring in additional products and services. This pilot will also allow us to test the lights themselves to see if people like them. This pilot will also exemplify that this type of service enterprise can work; people pay their bills, the transaction operates properly and the technology fits a need. 

The store is in Kayanga town. It is connected to the grid. Customers include other vendors’ currently using kerosene, as well as people just outside of town that are not connected to the grid and still rely on the small, handmade lanterns. Robert, who owns the store, plans a radio advertisement. I hope Joel can get a recording of that! Joel managed to put into action all that Dave and I have been discussing for the last 12 months at his kitchen table. It’s an exciting time for this project. Despite a difficult time adjusting expectations to the African way of doing business, and despite the hiccups that we experienced with large bureaucracies, we are fast on our way to accomplishing the short term strategic goals for the project and long term goals of lighting our small piece of Africa. A lot of “ifs”, more than our share of dubious looks, and many knowing smiles got us this far. Together with the many people on the ground in Tanzania as well as all those working hard here in the US we will realize our project plans.

I can hear in Joel’s voice however that he is ready to come home. I can hear too that he is anxious to finish the action items he has left. He is committed to this project through his real time on the ground experience and seemingly won’t rest until he can feel he finished his part. It’s exciting to me to have inspired that level of commitment. Among the dissigno team he has the most real, on the ground experience of any of us and has become a valuable asset! I hope that we can formulize his experience so that we can capture the lessons learned. They have been hard fought ones. Joel has the scars to prove it, and I hope that we are able to put them into processes so that this becomes if not easier, certainly at least understandable. He has really made the process up through his experience on the ground.

Out of Africa - Wrapping Up Details 11-8-08

11-1-08

The music from the ICC club, not more than a few hundred feet from the Pamela Lodge lasts until about 2 AM. The good news is that it’s really good; bongo flavor, afro hip hop music. I want to go over and find out some of the artists, but the club doesn’t give off the warm fuzzy feeling that would invite me to go alone. We actually stopped in a few nights ago and had a nightcap. It was devoid of decorations. A plain cement floor, a simple counter and a wrought iron fence delineating the patrons from the bartender. When you order a beer or drink, it’s passed through a square opening in the bars after you hand over the money.

The next day I send Leonard the new term sheet and we all go for a long hike into the valley to the east. We follow a dirt path that people in the valley below use to get to town. The descent is very steep. We drop perhaps 1200 feet in a very short time. The view is stunning. No high tension wires, no planes, no roads, nothing but scrub land, patches of trees, and houses scattered through the huge valley. There is evidence of a river where a lighter green snakes away from a large lake at one end of the valley and we mistakenly believe that we can make it there and back before dark. The descent takes us past a small community of perhaps fifteen mud huts. The path actually takes us between the huts, which are round and have thatch roofs. It’s so very cool. They stop and stare and break out into huge smiles and waves when we say Mambo, or shikumoo (respectful greeting) We stop, a little lost as the path gives out, and a young girl points the way to continue down into the valley. It’s almost like a re-creation community from Plymouth Rock in Massachusetts, but this is the real deal.

The path leads us down to the valley floor. We walk past other houses and a few people out tending to their banana trees. Everyone stops and waves hello. Not many people hike through here, let alone white people, so we attract a lot of attention. Threatening rain clouds and the late hour force us to turn around before reaching the river. Walking past a little down town (I use that term very lightly) we are invited to join a group of people drinking a white milky liquid from coke bottles. It’s obviously some sort of home brew, but we are afraid of asking too many questions as this might lead to an invitation to drink we’d find difficult to refuse. A store keeper brings out cokes and fantas and we sit and drink. Our Swahili is not good enough to communicate very well, and their English is nonexistent. A young man comes over and introduces himself with some English. He tells us that we are very welcome here. He is happy that we are here visiting and tells us that these people are happy to see us. We feel no hostility or resentment. Though curious, people are very easy going and full of smiles and shikumoo’s to us. Children may stop and stare, but as soon as you smile at them they light up with a bright smile back. Adults wave and yell Habari easily and often.

On the way back from the hike, we are sweaty and hot and greedily take the African “not so hot” shower. It feels great. We watch the news over dinner and hope for Obama. The country is on the verge of imploding, the financial crisis seems to be an unending nightmare, and we are here in TZ planning this business and a safari to the Serengeti.

The next day, wandering around Kayanga I stop into a little shop and discover lanterns. These lanterns are all made from cut up cans. I realize that I have been looking for the glass jars I saw in Haiti. Because glass is a pretty valuable commodity on it’s own, people make lanterns out of cans. I start buying these lanterns and show everyone else. We amass a collection to take back with us; beer cans, aerosol cans, used oilcans, tomato cans, coffee cans are the most popular versions. Some are quite nice. The top of the aerosol is cut off and attached upside down to the bottom so that it acts like a little elegant stand. These lanterns are inventive and unique. We’ll take back as many as we can and hopefully use them as a marketing tool to get attention to the project.

The news of the war breaking out in the DRC confirms that the flashes we saw a few weeks back on the horizon was artillery or some other explosions. I noticed them first, then Cynthia and Joel noticed them from their room at Hotel at Home. We rationalized that it must have been lighting, even though they were orange and in the general direction of Rwanda. There is a surreal disconnection sitting in this little quiet community. Even though we know the border is a mere 200 km from where we are, and we’ve heard stories about refugees and guerilla fighting, it doesn’t seem real. We three, (before Dave and Jill show up) discuss the escape route and wonder or rather hope we’ll never have to use it. Now at breakfast we hear on the radio that the fighting has erupted in the DRC and threatens to spill over into Rwanda. Dave and I talked about the risks with these projects while safe and sound in SF. Currency fluctuations, political disruption, theft, and war. All of these problems were abstract prior to coming here. We understood them and made contingency plans should anything happen, but it’s like any insurance. You are betting against ever having to use it. Now, watching the flashes again on the horizon and hearing the news on the radio it starts to make sense to get the US consulate’s phone number plugged into your cell phone. Like a scene from a movie, we sit on the hotel balcony playing Gin Rummy and discuss who the first people each of us will call to help pave the way for us to get to Bukoba, on our way to Uganda.

11-5-08

I wake up and open the curtains of my hotel room in the Serengeti and see a Giraffe wander past. The elegant gait and gentle disposition is mesmerizing to watch. She stops and munches on some leaves before carefully walking along. Her long legs taking delicate steps, her head swinging side to side. It's a proper way to greet this day as I later learn that Obama has become the 44th president of the US. Everyone we meet today and for the next few days congratulates us as if we personally had made it happen. It's a great feeling to have been in Africa on this historic day, and something I won't soon forget.

11-8-08

This trip wraps up. We'll head back to the States and organize all the events, paper and receipts in order to prepare for the next stage of the project. I'm torn between feeling as though we didn't accomplish nearly any of the things we had hoped to and realizing that the pace of things is drastically different in Africa. However, based on all the feedback and contacts we've made I'm certain of the future success.