pictures by Eric Persha – look them up, they’re terrific!

1. Launching EGG Franchises in Mvuti, Mbande, Bwama and Msanga

As explained in a previous post (“Can We Franchise EGG Services?”), we have decided to franchise the transportation and distribution of EGG’s batteries to store owners near certain customer populations.  Over the last few weeks, we interviewed and selected four franchisees, determined the fee that customers should pay to swap batteries at their stores and developed an operations manual to train the franchisees on various processes.  During EGG Retreat 2010, our team visited the stores to sign contracts with the franchisees and launch the sites.  The franchisees in Bwama and Msanga arranged large gatherings of current and potential EGG customers on the day that we visited their sites.  During these meetings, Yohana and Hussein made presentations about EGG’s service and announced to customers that they can now swap their batteries at a nearby storefront, instead of having to travel to our charging station in Chanika (or arrange for a neighbor or friend to make the trip on their behalf) as before.  The above picture captures the gathering in Msanga.

2. Improving Forms and Recordkeeping Processes

As EGG has expanded, we have begun to realize that some of our forms and ways of recording data can be improved.  We made several such improvements during the retreat.  For example, previously, we had separate sheets to record different types of battery movements to and from our charging station in Chanika.  We had a sheet to record customer swaps, a sheet to record the batteries that our electricians use for new installations and a sheet to record large transfers of batteries between our charging station and newly-launched franchises.  Last week, we designed a single form to track all of these types of movements.  This will help us more easily track the number of batteries at our charging station at any given point in time.

3. Implementing an IT System to Track Customer and Battery Information

Finally, during the retreat, Laurent began implementing an Access database to better track customer and battery information.  This system will be fed with the written records taken by our sales team and at the charging station and newly-launched franchises.  It will significantly improve our future operations.  For example, it will help us correct human errors, such as a franchisee recording a battery number incorrectly or accidentally giving a battery to a customer with an expired subscription.  In addition, it will  notify us if a particular battery has not been swapped in a certain period of time.  It will allow us to see who most recently had the battery, so we can inquire about its status and get compensated for any lost batteries.

There is a lot of work left to be done to finish implementing these changes, but the retreat definitely gave us a head start.  We hope to make such retreats a monthly or bi-monthly tradition, so look out for blog posts on EGG Retreat 2010 – Part 2!

Dr Jamie Yang, EGG-energy’s CEO, won one of the prestigious 2010 Echoing Green Fellowships and a feature on the MIT Global Challenge’s blog.

Goooooooooo EGGGGGGGGGGGGG!

(nice tie)

Over the last week, the EGG team has begun testing a TV package with five current customers.  The package consists of devices to power a TV (a battery and an inverter).  The customers selected for the trial already own TVs but are either not using them or are powering them with a generator or hazardous car battery and inverter set-up.  EGG is supplying the customers with newer, safer devices free of charge for two months, provided that they keep detailed logs of their usage patterns and how long their TVs last after each battery charge.  The goal of the trial is to determine which devices are best-suited to power the TVs currently on the Tanzanian market and in people’s homes, and ultimately, what to include in our more permanent TV offering.

EGG’s trial TV package includes one of several sizes of 12-volt batteries.  These batteries are larger and higher capacity than our current batteries, which are intended for small appliances such as lights and radios.  As before, the customers in the trial will charge these batteries at our charging station in Chanika.  The package also includes an inverter to convert the battery’s DC power to AC, since most of our customers have standard (20-inch, color) AC TVs.  The exact battery and inverter combination that a customer receives depends on the number of watts consumed by his / her TV set.

At the end of the trial, we will decide if supplying devices to power TVs currently on the market is a viable business.  Another option we are considering is importing TVs that consume less power, such as LCDs.  These TVs would require cheaper, lower capacity batteries and inverters than the TVs currently on the market.  Until these decisions are made, we hope that this trial will show current and prospective customers that we are serious about developing a TV package that suits their needs.

A movie house near EGG's charging station in Chanika

Kids watching TV inside the movie house

“You use your skills to help repair a broken world, however, you see nothing remarkable about it; you simply expect it of each other, and of yourselves. Over the past decade, the number of students who volunteer through MIT’s Public Service Center has grown somewhat, but the real difference lies in the depth and ambition of their engagement, which has blossomed from interest in volunteering in the neighborhood now and again, to a deep culture of service that has inspired members of the Class of 2010 to launch a free summer camp for the children of local cancer patients, to bring battery-enhanced electricity to remote villages in Tanzania, and to design wheelchairs for people in developing nations around the world.”

Yes, that’us, right there!

Gooooo Eeeeeeeeeg and congratulations to Jukka on his graduation!

The most notable (and unexpected) part of the conference was its focus on solar devices.  Though I expected the conference to cover a variety of off-grid lighting solutions (such as off-grid power plants, battery services and human-powered solutions), solar devices was the topic of a majority of the presentations that were made.  Indeed, during the opening speech of the conference, a representative from Tanzania’s Rural Energy Agency said that the purpose of the conference was “to figure out how to make solar devices more affordable to the poor.”  In addition, a majority of the companies with exhibition booths showed variations of solar-powered LED lanterns.

Despite this, there were several ideas presented during the conference that were interesting and relevant to EGG:

• Schneider’s Battery Distribution Model
• Using Micro-Finance to Help Entrepreneurs
• Providing Services beyond Lighting

Schneider Battery Distribution Model

Schneider Electric, a global electrical equipment company based in France, recently started distributing LED lights in rural India.  The lights are powered by batteries that can be charged by the grid or a solar panel.  Schneider sells a package consisting of batteries, a charger and a solar panel to rural entrepreneurs.  Customers who have purchased LED lights but cannot afford their own batteries and chargers subscribe to an entrepreneur’s battery rental service.  The entrepreneur rents batteries to customers and swaps them every day at customers’ homes.

There are several interesting aspects of this model.  First, all parts of the business (battery ownership, charging, transportation and distribution) are sold to entrepreneurs.  While EGG is currently considering franchising the transportation and distribution of our batteries (See entry below entitled “Can We Franchise EGG Services?”), we might also want to consider selling our batteries and the charging portion of our business to franchisees in the future.

Another interesting aspect of Schneider’s model is that its entrepreneurs swap customers’ batteries every day, regardless of how much they have been used.  The advantage of this is that it prevents customers from overusing batteries and reducing battery life.  This model might not work in areas less dense than India (such as Tanzania), as transportation costs would be too high.  We might want to consider other ways to prevent our batteries from being overused though, such as requiring customers to swap their batteries every three days or using battery indicators.

Using Micro-Finance to Help Entrepreneurs

During a session entitled “End-User Finance for Off-Grid Lighting”, a few speakers made the point that the goal of companies at the conference should not be to reduce the quality of our products and services to make them affordable to the poor, but to partner with micro-finance institutions (MFIs) to make quality products and services more affordable.  There are two main issues with this idea.  First, most lighting products and services (including those presented at the conference and even EGG’s battery subscription service) fall below the lending range of typical MFIs.  Second, for better or worse, MFIs usually need to see that a loan they make to a customer has real potential to increase his / her income.  This might be harder to establish if the customer is using the loan to purchase a lighting product or service.  The speakers did mention using MFIs to help entrepreneurs (such as those used by Schneider) afford a large package or quantity of a product.   This idea would not meet with the two issues mentioned above.  If we decide to sell EGG’s batteries and chargers to franchisees in the future, we might consider using MFIs to make it more affordable.

Providing Services beyond Lighting

Finally, on the last day of the conference, a speaker from the Solar Energy Foundation argued that it is unreasonable to expect customers to be satisfied once their need for lighting is fulfilled.  He said that in many cases, it is other services (such as cell phone charging and radios) that attract customers and that lighting is simply an added bonus.  He encouraged conference participants to think beyond lighting and begin offering TVs, fans and other electricity-powered devices that customers demand.  From my experience in the field, I agree with this assessment, especially regarding the demand for TVs!  In fact, the EGG-team has started developing a battery-powered TV prototype, and this will be the topic of my next blog post.  The only question is: will we be on time for the June 11^th start of the first African World Cup?

Micah, Field Operations Manager
Born in Kansas, USA (14,400 km NW of Dar)
Past Experience: Studied international development at Calvin College (USA) and conducted microfinance research in Tanzania
Best EGG-memory: “My favorite EGG-energy moment is when we finish an installation and invite the customer to turn on the lights for the first time.”

Yohana, Sales Manager
Born in Musoma, Tanzania (1,200 km NW of Dar)
Past Experience: Managed a hotel in Dar
Best EGG-memory: “A few months ago, I did a demonstration of EGG’s product with Micah at Kigogo Fresh.  So many people gathered to listen!  I sold 10 installations that day.”

Greyson, Electrician
Born in Shinyanga, Tanzania (1,000 km NW of Dar)
Past Experience: Worked for a construction company
Best EGG-memory: “I remember doing an installation with Micah, Jamie and Hussein in Msongola.  After it was complete, many people came to see it.”

Hussein, Regional Manager
Born in Tabora, Tanzania (800 km W of Dar)
Past Experience: Assisted refugees as a distribution clerk for UNHCR
Best EGG-memory: “The first day we demonstrated EGG’s product in Mvuti.  It was like a public meeting.”

Laurent, Intern for 7 months – implementing information management systems and procedures, documenting feedback from the field, developing expansion plans and helping look for partners
Born in Tours, France (6,800 km NW of Dar)
Past Experience: Studied physics, economics and energy policy at Ecole Polytechnique (France) and MIT (USA). Professional and volunteer experiences in French Polynesia, the Philippines and Japan.
Best EGG-memory: “Driving home after completing an installation in Msongola.  Everything was dark except for the EGG lights.”

Jonathan, Chanika Charging Station Manager
Born in Shinyanga, Tanzania (1,000 km NW of Dar)
Past Experience: Served as a radio operator in the Tanzania People’s Defense Forces
Best EGG-memory: “One month ago, two people from France came to see EGG’s station in Chanika.  They wanted to know what EGG was up to.  My job here has given me the chance to work with many foreigners, like those two and like Micah and Jamie.”

Saidy, Electrician
Born near Mbeya, Tanzania (800 km SW of Dar)
Past Experience: Worked as an electrician for various companies
Best EGG-memory: “Interviewing for the job many months ago.  I like working here.”

Juliet, Electrician
Born in Iringa, Tanzania (500 km SW of Dar)
Past Experience: Volunteered at a technical school
Best EGG-memory: “Hearing that I got the job with EGG and would be getting paid to work here.  My last job was volunteer work!”

Jamie (Not Pictured Above), CEO, Board Director and Co-Founder
Born in California, USA (16,200 km NW of Dar)
Past Experience: Earned a PhD in engineering from MIT (USA) and developed prototypes for microbial fuel cell start-up
Best EGG-memory: “When a customer came to the charging station in Chanika with his kerosene lamp.  He said that with EGG’s service, he no longer needs to use it.”

Pareen (Not Pictured Above), Summer Intern – Developing battery distribution model and formalizing ground operations
Born in Texas, USA (14,700 km NW of Dar)
Past Experience: Studied economics at Rice University (USA) and worked in the energy practice of a management consulting firm
Best EGG-memory: “Going to Msanga for an installation.  We spent half a day in the village and began to understand how things work there – where people gather, how people and goods travel and the village’s current methods of getting electricity.”

While this account might not seem like anything special, it made me think about what it means to treat the poor as consumers and the advantages of such an approach.  Thirty years ago, well-meaning development organizations used a very different strategy – they decided what was best for the population they served and offered it to them for an artificially low price (and sometimes for free).  That day in the field, Yohana treated the group as other producers in their lives treat them – as consumers who are capable of making their own purchasing decisions.

I see two major advantages to operating this way.  First, it increases the likelihood that the service we sell will be used and valued by our customers.  Like any for-profit business, we allow potential customers to decide for themselves how they value our service, instead of deciding for them that it suits their needs best.  Those who elect to purchase our service believe it will benefit them and are thus more likely to use, take care of and potentially improve our service.

Second, operating this way allows us to provide a higher-quality, more sustainable service to our customers.  We price our service above our cost.  If we instead sold it at an artificially low price, our ability to serve current and future customers would depend on the (sometimes unpredictable) availability of outside funding to fill the gap.  In addition, because we pay attention to our profits, we invest in increasing the quality, convenience and cost-efficiency of our service in order to remain competitive.

All in all, it makes sense to experiment with using for-profit models to provide socially valuable goods, keeping in mind that the limited wealth of our customers poses an impressive challenge to our operations, one that other for-profit companies might not face.  The key, however, is to use this challenge to become radically more cost-effective than we would be if we operated as a non-profit.