EGG-energy

Jukka’s trip to our Tanzanian outpost is coming to an end. During the few weeks he spent assisting Jamie in Mvuti and Dar, Jukka designed an incentive plan to bolster EGG-energy’s sales capability, assembled field data to update our financial models, roamed the capital city to find four white polos to be printed with our logo and worn by our highly motivated salesmen, picked up a few more kishwahili words and helped install our systems at customers’ houses. There’s little doubt that the sight of his butterfly sunglasses will be missed by the Tanzanian sun!

In addition to the many stories and energetic enthusiasm that he’ll bring back to Cambridge, MA, Jukka was tempted to toss an old tincan in his backpack before deciding to leave it on Jamie’s bedtable. Yesterday, one of our customers brought it to the station, as a gift to us: a tin can that had gotten a new life as a kerosene lantern. Polluting, leaking, a fire hazard, low quality light. “Now that I’m your customer, I don’t need this anymore. I’m giving it to you as a gift.” He must be happy with our service, confident that he can pay our fees all year round, and sure of our continued presence, him who’s giving away what was lighting up his family’s evenings! We’re betting that seeing this unexpected token of appreciation every morning will help put a smile on each of Jamie’s days!

This side of the ocean is not short of good news. We’re very proud to share that
- we’ve been selected to compete in the next round of the William James Foundation’s socially responsible business plan competitions,
- we’ve progressed to the second round in the Global Social Venture Competiton,
- we’ve been invited to present at the UNC Kenan Flagler’s annual Sustainable Venture Capital Investment Competition and
- and we will represent MIT at the Net Impact 2010 Walmart Better Living Business Plan Challenge.

Goooooooooooo EGG-energyyyyyyyyy (TM Ben)!

- Blandine

EGG-energy’s opening day in Mvuti was a great success. We signed up eleven customers, completed five installations, and took in Tsh. 637,000 in revenue (480 USD). Interest is strong, and many additional orders were promised.

The day got off to a rocky start, with the wheel falling off of the car.

After catching rides in a dala-dala and a very dilapidated taxi, we made it to Mvuti to sign up our first customer.

We’ve done a range of installations, from a single light to six lights (two batteries). The lights are typically used in the common room, bedrooms, the shop, or outside for security. Almost all of the customers purchased a mobile phone charger. Here are a few pictures of our happy customers after their electricity was installed:

And finally, a very tired EGG-energy at the end of the day, outside of our first distribution center in Mvuti.

We are learning a lot about how to make this business efficient and scalable and are looking forward to sharing these insights with you. More to come soon!

–Jamie

Over the last few weeks we’ve been gearing up for the opening of our pilot site in Mvuti. This last Monday we conducted an informational meeting detailing our service offering and pricing. After I introduced the EGG-energy team in my broken Kiswahili, Hussein presented the business to the community.

We quickly disseminated 200 pamphlets that day. Here is one sheet of our three-fold pamphlet, including the cover (right), the frequently asked questions (middle), and the inside flap with the summary of our service (left).

After the meeting, we conducted a survey of our feasibility study customers to determine how much their energy expenditures have changed since starting with EGG-energy 2 months ago. The results were very encouraging:

• Kerosene usage for lighting in most homes went to zero
• EGG-energy saved its customers an average of Tsh. 1800 per week on energy expenditures for lighting, radio, and mobile phone charging. This is an annual savings of Tsh 90000 ($70), more than enough to cover the cost of the installation and battery subscription.

Our supply room is stocked, batteries charged, user manuals ready, receipts printed. EGG-energy is open for business Monday November 2nd!

–Jamie

Emmanuel and Jamie installing the new batteries and lights in two households

Today Jamie and Emmanuel installed two more batteries and lights in two households. People are very keen the see and get the new electrical systems.

The demand is high and the chairman has already gathered a list of 40 next customers in the village.

We have also found a location for the first charging station as well as a potential hire to be the first egg-energy battery charger.

Today Jamie and I went to see the results of the two household installations in Mvuti, get feedback and swap the first batteries!

One of the two installations at a sewer

They look great and results are very encouraging!

- The household owners loved the syste, when asked to give feedback about positives and negatives, only positives were mentioned
- The son of the chairman confirmed that there is strong demand and proposed to make a list of the potential future customers
- They are happy to pay the price asked for the service and do realize a saving with regards to kerosene and AA batteries. The light provided is much better than the one they had before.
- We were even asked by people from other villages to come install the system.
A teacher from another village: “But what is your timeline? Can we expect to have this light soon? We are fed up with using kerosene…”

- Emmanuel

Here are Jamie and Deus (IB Energy, our local partner) installing one of our lighting systems:

Jamie and I signed the first households to start piloting our service next week. These customers will help us refine our offering, and make sure we are providing a proper battery size.  We offered a range of products through retailers in Dar and a free subscription to our battery.

A few takeaways

First, the upfront cost of the lights, radios and mobile phone chargers didn’t turn out to be an issue with our customer base, despite us offering them at the relatively high retail price of small stores.

Second, communicating a temporary pilot service with no promise of continuity, with charging fees and with the households having to buy the lights and wires was surprisingly easy. We should be prepared for a different reaction for when the trial is over and the families have become used to having lighting in the house.

Finally, the social status boost from being the one household with lights can’t be overstated. The purchase process is a group effort with every available villager offering a perspective for the negotiated service. And for the next two months life revolves around the piloting households.

All in all, very promising results when reflected against some of the biggest questions we have going forward. One thing was very clear already now: the demand is there.

- Jukka

Emmanuel and I took the prototype kit out, and continued focus group interviews in Mvuti, an hour’s drive outside of Dar. After blowing up two inverters and having to restock for tools, Jamie really hit the home running with the proto box. It now hosts our battery, two types of lights, a mobile charger and a radio. We have yet to find a person who didn’t offer to buy the kit instantaneously after seeing it!

Several villagers gave us an hour of their time. Discussing with them confirmed that doing forward-looking market studies with the bottom of the pyramid households is a challenge here: the low-income villagers don’t really know how much they earn on an annual basis, let alone spend on energy. This makes internalizing savings on an annual basis, and thus estimating the monetary value of our service, difficult. On the other end, every village official knows the spiel that appeals to Western funders. Doing interviews is very much like going through an aid agency annual report.

We tested the concept of doing distribution through dukas, the small kiosks that sell everything from grain to shampoo to the kerosene that pervades villages in Tanzania. After recognizing the upside of all-around access, the discussion went negative: the interviewees fear that duka owners will play with the prices and introduce inferior quality batteries to the cycle.

We keep running into this phenomenon. Tanzanians don’t seem to count on the long-term existence of businesses or projects. At the same time, the quality of products you find here varies dramatically. One of the outcomes is that our focus groups want to buy the product upfront, so as not have to worry about whether we’ll still be there the following day.

Nobody questions the value of our service. And the price is right too. Communicating our model and commitment to the end customer: here lies the rub.

- Jukka

On Friday July 17, Jukka, Jamie and I visited a small town at the periphery of Dar es Salaam, about one hour away from the city.  We were accompanied by Deus, one of our partners in Tanzania. The community has approximately 1,900 households, no electricity and is five kilometers from the closest power line.

Town center

Fruit sellers

We arrived at the town center, and were directed to the town officials: the chairman, the coordinator for the youth association, the secretary of the association and the representative for water resources.  They were very enthusiastic and keen on seeing us develop the charging stations as soon as possible.  The officials stressed their people’s will and financial ability to have such a service and welcomed us in their town, with the hope that we would choose this location for our pilot.

The town/village officials

We interviewed several different people to assess the market:

• Mratibu, the town coordinator: Mratibu is a farmer who earns his income from farming cassavas, passion fruits and spinach in this garden. He uses kerosene, AA batteries, firewood and charcoal for his energy needs.  His overall energy bill for lighting and radio could be reduced by 85% with EGG-energy batteries.  Mratibu uses a radio and torch, as well as a generator, and if he had access to electricity, he would buy a TV and another radio.  Mratibu is most concerned about sending his children to school; reducing his energy bill would allow him to feel more secure about doing so.

• Jacob, a carpenter: Jacob’s  income comes from two sites: one in the village and one in Dar es Salaam.  Jacob uses charcoal, kerosene, AA batteries and a car battery. He also uses a torch, a bulb, and kerosene lamps, and has installed wiring in his house. Jacob is very happy with his bulb, which provides him with light and improves his quality of life.  He uses the additional hours with lighting to extend his working day. His total spending on lighting and radio could be reduced by 81% with EGG-energy’s service

• Agnes, a household mother: Agnes is in charge of a household of six other people, including her husband and five children.  Her main sources of income are nuts collection and sales, which she does every three days.  She has no radio or bulb and uses kerosene lamps.  EGG-energy’s service would enable a 65% savings from her energy bill.

Inhabitants burning their waste

A typical household

• Msafiri, a battery charger: Msafiri earns his income by charging car and phone batteries.  He owns a motorcycle to charge the car batteries in Chanika, 5 km away, and solar panels to charge the phone batteries.

The motorcycle with the car batteries

The solar panels on the roof

The visit proved quite promising.  The demand for EGG-energy’s service is undoubtedly there.  Families want better lighting than the dim glimmer of kerosene lamps, hope to preserve their health, and to work and study longer at night.  They also seem to have the financial means to purchase the batteries and are eager to realize the savings of 35% or more from their current spending on energy.

-Emmanuel

Site visit to Mvuti, 17 July, Emmanuel Cassimatis

On Friday July 17, Jukka, Jamie and I visited Mvuti, a small town/village at the periphery of Dar Es Salaam about 1 hour away from the town.  We were accompanied by Emmanuel, one of our partners in Tanzania. The community has approximately 1,900 households, no electricity and is 5 kilometers from the closest power line.

Mvuti’s town center

Mvuti’s town center

Fruit sellers at Mvuti

Fruit sellers at Mvuti

We arrived at the town center, and were directed to the town officials: the chairman, the coordinator for the youth association, the secretary of the association and the representative for water resources.  They were very enthusiastic and keen on seeing us develop the charging stations as soon as possible.  The officials stressed their people’s will and financial ability to have such a service and welcomed us in their village, with the hope that we would choose this location for our pilot.

The town/village officials

We interviewed several different people to assess the market:

• Mratibu, the town coordinator: Mratibu is a farmer who earns his income from farming cassavas, passion fruits and spinach in this garden. He uses kerosene, AA batteries, firewood and charcoal for his energy needs.  His overall energy bill for lighting and radio could be reduced by 85% with Egg-tech batteries.  Mratibu uses a radio and torch, as well as a generator, and if he had access to electricity, he would buy a TV and another radio.  Mratibu is, most concerned about sending his children to school, and reducing his energy bill would allow him to feel more secure about doing so.

• Jacob, a carpenter: Jacob is a carpenter. His income comes from two sites, one in the village and one in Dar es Salaam.  Jacob uses charcoal, kerosene, AA batteries and a car battery. His lighting and radio energy could be reduced by 81% with Egg-tech.

Jacob uses a torch, a bulb and kerosene lamps. He has also, and installed wiring in his house.  He is very happy with his bulb, which provides him with light and improves his quality of life.  He does use the additional hours with lighting to extend his working day.

• Agnes, a household mother: Agnes is in charge of a household of sixother people, including her husband and five children.  Her main sources of income are nuts collection and sales, which she does every three days.  She has no radio for AA batteries, or bulb and uses kerosene lamps.  Egg-tech’s service would enable a 65% savings from her energy bill.

A typical household

Inhabitants burning their waste

• Msafiri, a battery charger: Msafiri earns his income by charging car and phone batteries.  He owns a motorcycle to charge the car batteries in Dar Es Salaam, and solar panels to charge the phone batteries.

The motorcycle with the car batteries

The solar panels on the roof

The visit proved quitepromising.  The demand for EGG-tech’s service is undoubtedly there.  Families want better lighting than the dim glimmer of kerosene lamps, hope topreserve their health, and to work and study longer at night.  They also seem to have the financial means to purchase the batteries and are eager to realize the savings of 35% or more from their current spending on energy.,

The EGG-energy team just returned from a trip to a rural community several hours outside of Dar.   TANESCO’s transmission lines do not reach this area, but one of the residents runs a 10kW generator that powers a grain mill and lights for ten dukas (small convenience stores) and other small businesses in town.  The generator—manufactured in China—runs from 4 pm until midnight.

The owner of the generator and the mill also runs a duka.  He sells small batteries, basic staple foods, toiletries, and kerosene, which he brings in from Dar in a 200L container. His customers can also purchase kerosene lamps that are typically fashioned from old tin food cans. Each family owns about three such lamps and travels from as far as 30–60 minutes away to replenish their kerosene supplies.

Besides agricultural products, community members prepare charcoal, which is primarily sold in Dar.

After surveying the energy usage in the area, we went up the hill to visit a secondary school, which serves 300 students between the ages of 12-18.  The class size is typically 40, and some students travel 4-6 km every day to reach the school premises.  Thanks to the generosity of a local NGO, the school is building a dormitory that will house 48 students. School fees are 20,000 TSH.

While the surrounding community gathers its water from bore holes, the school site has three 70,000L water cisterns that collect rainwater from the roofs.  The water is then boiled and used for drinking, but, during dry season, when the cisterns are dried up, students fetch water from a borehole two kilometers away.

On top of a delightful day of information gathering, I had an absolute blast with the kids. They loved the camera and were eager to showcase sophisticated dance moves and spontaneously arranged themselves into the warrior pose.  More than usual, the kids ran around singing ‘mzungu mzungu,’ which means white person. Emmanuel and I are reminded of being a white person on a daily basis;  Jamie is often called ‘mchina’ (Chinaman).

Warrior pose

-Alla