Doing It Right

Let’s say hypothetically that you live in the North America, Europe, or Australia. You believe in the importance of spreading appropriate technology, but you don’t have the ability/opportunity/courage to get on a plane and move to another continent. When you ask yourself how you can best get involved or help, you look like this guy:

That’s ok. That’s a natural reaction. And so you search online for some of the mainstream charities out there, randomly pick one, and give a donation. Maybe you listened to Bono for advice.

But before you do that, I ask you to stop for a moment and consider this approach. Is this really the best way for you to get involved and support sustainable technology and development in Africa? Is your donation really having a positive impact?

Depending on the charity you chose, probably not. Maybe your donation will help provide a secondary school with a computer, which looks great in the charity’s reports but is completely impractical because the school lacks electricity or technical expertise or maybe even the desire to have computers. You can’t really track your donation, so you’ll never know.

Don’t get discouraged – there are definitely other options out there for you.

First of all, it is significantly more useful for you to contribute either your time and skills or your money rather than your used goods. Nobody wants your old high heels – especially not disaster victims in Peru.

The easiest and perhaps most useful way for you to contribute is to make a donation or invest in an organization that is “doing it right.” As most of you know by now, I have major issues with aid and organizations that give things away for free. But there are many fantastic organizations (mostly businesses) out there that can use your support.

I profiled a few of them this weekRent-to-Own, Global Cycle Solutions, Kilimo Salama, Hestian Innovation, and Zambikes. (This is by all means not an all-encompassing list but rather just a few of my favorites, many of which I have a personal connection to. I will continue to add to this list as time goes on.) Organizations like these rely on outside investment to help them kick them off in the early years. If they are really “doing it right,” then they won’t need your money anymore after the first couple years because they’ll be making a profit. If the organization is still completely dependent on donations 5 to 10 years later, then they’re probably doing something wrong…

So my advice is to find someone with a start-up idea that you support (check out my Doing It Right checklist for thoughts on distinguishing between projects that are doing it right and doing it wrong), and invest in them. I prefer to give money to people rather than large, faceless organizations, and these are the people that definitely will appreciate your support the most.

This past week I profiled 5 different organizations that I believe are “doing it right.” They all have a different niche to fill and a different model, but they’re all having a positive impact.

It then came to my attention that this list probably looks quite arbitrary to an outsider. How did I pick these organizations from all of the ones that I’ve seen over the past year and a half?

To help demystify this selection process, I’ve decided to write a short checklist of things that I look for in every organization. If the organization meets all of these criteria, then they’re probably pretty close to “doing it right.”

1. A desirable product. Whatever the product is that the organization is making, people need to want it. That sounds obvious, but there are too many organizations over here that are pushing undesirable technologies on people rather than designing based on user wants.

2. A high quality product. There’s enough crap that’s dumped on this continent from all over the world. Whatever the product is, it should be robust and of good quality so that it won’t be added to this junk pile immediately after people start to use it.

3. A price for the product. Whether you’re a for-profit or a non-profit, you need to be charging people for your product. I could list all of the reasons why this is essential, but my friend Brendan already has here. I’ll just add that this price has to be reasonable for the organization’s customers, and if it’s not, the organization needs either a plan to reduce the cost or to help customers pay the full price over time.

4. A dissemination model. Once you’ve got the perfect product for your market, the real challenge begins. The organization needs a solid understanding of distribution networks in the city/region/country in which it’s working so that the product can actually reach the end users.

5. Local staff. If the organization is staffed by over 15% foreigners, then something is wrong. The more locals running the organization, the better. (Note that this will be most challenging in an organization’s first year or so, but should improve over time. Also note that I picked this percentage arbitrarily. It doesn’t really matter exactly what the percentage is – a Malawian company that’s run entirely by foreigners probably has very little understanding of the Malawian market.)

6. Passion. Never underestimate the importance of passion. If the people in the organization believe wholeheartedly in what they’re doing, they’ll go far.

Disclaimer: This is an ever-evolving list. I am not implying that I know everything about what makes an organization do it right vs. wrong. This is just what I’ve learned works well so far, and I’m sure I will continue to learn more about what is effective and what is not as I continue to travel, study, work, and grow.

In 2007, two Americans and two Zambians, motivated by the lack of rural transportation in Zambia, came together to found a bicycle company. They started off small, filling a container of bicycles purchased in the US and selling them in Zambia.

Three years later and they have a well-known name, Zambikes, a busy workshop, and an ever-increasing line of products.

Zambikes sources their bicycle parts from manufacturers in Asia and assembles them at their production center in Lusaka West. They focus on quality, building a robust mountain bike that may be more expensive than its imported Chinese rivals on the market but can out-last them any day, especially on Zambia’s rough terrain.

They also build a longer, load-bearing bicycle that can carry over 200kg of cargo for those in the transport business. Recently, they started producing bamboo frame bicycles locally.

In addition to bicycles, the company makes two trailers: the Zamcart, also used for transporting goods, and the Zambulance, for transporting patients to rural health clinics. All materials for their trailers are found locally.

Zambikes has quickly made a name for itself as the highest-quality bicycle producer in Zambia, attracting business from many of the major NGOs and non-profits working in the country. They also sell directly to individuals, who can pay in installments if they need to in order to purchase the bicycle. They still rely mostly on business from large development organizations, but that is changing over time.

The best part of the company, though, is the people. The staff started off as a local football (soccer) team, and they still retain that camaraderie (and play games every week). The two American founders are preparing for the company to be run entirely by Zambians in the next year and a half, and they have many good hands to leave it in. Then hopefully they will move somewhere else to repeat the whole process.

Nearly three billion of the world’s inhabitants use solid fuel for cooking and heating. Of these, about 80% burn biomass, which includes wood, charcoal and dung.

In Malawi specifically, 93% of energy use is from burning wood. This results in widespread deforestation and in smoke that kills the world’s largest number of children under 5.

Environmental projects are challenging in terms of motivation and incentives. Health projects are equally as challenging because of perception and dependence on governments. Combining both is doubly challenging. Hestian Innovation tackles both problems in Malawi using a business model.

Hestian Innovation produces three different types of stoves for different types of users. Each stove improves the efficiency of burning wood significantly (up to 80% for stoves), thus reducing the amount of smoke produces and the amount of firewood consumed.

But many organizations have produced improved stoves for rural Africa. This is not the innovative part of Hestian’s model.

To market and sell their technologies, Hestian uses decentralized production. All of their stoves can be made from locally available materials in rural villages. Hesitan identifies potential rural production sites for their products, and provides seed capital and training to get things started. Employees – often women with ceramics experience – will produce the entire stove at the site and then sell directly to the end user in their surrounding villages. They take a commision on every product they sell, thus motivating them to make more and sell more stoves.

Hestian then has no marketing costs – because their employees take care of that – and no transport costs – because their products are manufactured at site. They can instead focus on monitoring the quality of their products at each production center, and can use their resources to continue to set up new centers. It’s expansion and dissemination made easy – something that centralized companies can only dream of.

(Note that I already wrote a post on Hestian Innovation here, but I think this organization is so cool that I’m writing on it again for Doing It Right week.)

(Photo: Ofuman, Ghana, 2008)

Many rural villagers throughout Africa rely on small-scale agriculture to support themselves. Unfortunately, it’s not an easy thing to rely on.

Improved seeds and fertilizer can help increase yields, but rarely do farmers choose to invest in them. And for good reasons, too. Would you invest in more expensive seeds if you knew that the probability of your crop failing due to poor weather conditions was extremely high? It’s not a safe bet.

Kilimo Salama, which means “safe agriculture” in Kiswahili, aims to change that in western Kenya. The project is a partnership between Syngenta Foundation for Sustainable Agriculture, UAP Insurance and Safaricom (a Kenyan mobile phone company).

Kilimo Salama has set up over 30 weather stations in five regions in western Kenya. Farmers living in these region can choose to buy insurance when purchasing seeds, fertilizers or chemicals for a minimal added cost (ranging from 9 KSH to 100 KSH, or about US$0.10 to US$1.30, per kg of the product). They recieve an insurance subscription directly on their mobile phones. If nearby weather stations register during the growing season that weather conditions were unfavorable due to drought or excessive rain, farmers receive a payout proportional to the extent of the bad weather directly to their mobile phones via Safaricom’s M-PESA.

The project was piloted with two weather stations in 2009. A drought occured, and farmers who invested in improved seeds or fertilizers either received a 30% or 80% payout depending on their location. The following season, more farmers subscribed to the insurance.

Not only has Kilimo Salama taken an entirely new and innovative approach to microfinance, but they are helping farmers build trust in new technologies and improved methods. I am expecting mass expansion in the near future.

(Photo from Kilimo Salama’s website)

Global Cycle Solutions (GCS) started as a D-Lab project at MIT. The goal was to take a hand-powered maize (corn) sheller developed in Guatemala and put it on a bicycle, turning the bicycle into more than just a mode of transport.

An unfortunate number of D-Lab projects fizzle away into nothing once the class ends or the students graduate. But this particular D-Lab team won MIT’s 100K Competition in 2009. So Jodie, the current President and CEO, moved to Arusha, Tanzania, to turn their project into a reality.

GCS’s goal is to promote technologies that turn the bicycle into a machine of innovation. Even in the most rural areas there are always a few people with access to bicycles, and this number is increasing. These people often use their bicycles only for their own personal transport. GCS wants to turn them into small-scale businessmen on wheels.

Currently GCS sells a bicycle-powered maize sheller, which drastically reduces the time and effort required to shell maize in villages (traditionally done by beating bags of maize with a stick), and they’ve recently started producing a bicycle-powered mobile phone charger (design by Bernard, who also makes things like this for fun).

Over time, their products will expand, but they will all share a common theme: using the power of a bicycle to increase output. The goal is to create a line of products that are all interchangeable with a universal adaptor, thus allowing clients to expand their businesses.

Currently GCS is setting up dealers both in Arusha and in other places in Tanzania to sell their products. They can tap into both bicycle dealer and agro-dealer networks, and they can target the entrepreneurial youth. Customers need to invest in a bicycle and a GCS machine (GCS is partnering with the National Microfinance Bank of Tanzania to help provide loans), but the returns from such a business can cover their costs in months. And despite being such a new company, interest from both local customers and dealers and foreign investors has been overwhelming.

Mark spent a year and a half living in a small village in North-Western Zambia as an Engineers Without Borders (Canada) volunteer. Now he has started a company called Rent-to-Own.

Mark saw a need to make various technologies and equipment accessible for people living in rural areas, specifically in the North-Western Province where he had personal connections. Not only is there no place for people to purchase equipment to help their businesses grow (and so most people don’t know about what’s available), but, even if there was such a shop, the equipment is often too expensive.

Rent-to-Own aims to fill this gap. Local agents identify potential clients and work with them to fill out a questionnaire that assesses how entrepreneurial they are and a business plan. Clients then put a 10% down-payment on a specific piece of equipment (Rent-to-Own’s newly developed catalogue, pictured above, features all of the equipment they retail). Rent-to-Own then purchases and transports the equipment, and every month the client pays a percentage of the total cost (which is the equipment price plus a small commission for the company) until he or she owns the product. The business plan prepares the client for this process, mapping out how purchasing such equipment will help the business grow and enable the client to eventually cover the whole cost in less than 12 months. There’s also a cash sales option if the client can afford it.

The company started in October 2009 and so far has six agents and 28 clients, four of whom have already paid for their equipment in full.

While many companies over here spend a lot of resources on research and development for their products, Rent-to-Own can focus on providing rural clients with solutions. They rely on their agents’ personal connections and trust, which certainly involves risk, but they can then access markets that no other company can. For a continent that is full of various technological solutions (many of which have been around for years) that rarely make it out of the cities, Rent-to-Own is exactly what the rural businessman needs.

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