Behind the scenes of a cleantech startup in India
Behind the scenes of a cleantech startup in India
This is the first in Rupesh Shah's ongoing series about working at a social enterprise in rural India.
When listening to feedback on the Simpa Solar Home System in Mathura, India, one man told me: "If this product had been around six years ago, my son would still have a mother."
When his little boy was crying one night, the mother got up with only a candle because there was no electricity for light. When she reached for milk, she was bitten by a poisonous snake and died. Clearly, flicking on a light switch would have saved her life.
Such is daily life for 2.5 billion people around the world who are locked into situations with bad or no electricity. The centralized electricity infrastructure may not have not reached them or if it has, there are daily cuts or even worse — outages that last days or weeks.
This energy poverty is extremely limiting and stifles development. There is no power for lights so shops can stay open longer or neighbors can connect on their porches, no reliable power to consider investing in machinery to make daily tasks easier.
Small solar home systems (SHS) can solve this problem. In Bangladesh, Grameen Shakti sells 100,000 systems a year to rural households. SHS can power multiple lights for morning and evening, a fan for cooling and comfort, and easily charge several mobile phones. These systems range between $150 to $300, depending on the type of lights and how long they will run. Not surprisingly, these price points keep most rural households away because they only make $5 or less a day.
Simpa Networks, founded in 2010 by Paul Needham, Jacob Winiecki and Michael MacHarg, is attempting to make these systems not only affordable by rural households, but also investible by commercial capital.
Simpa added a meter with a keypad and display to every SHS. Customers can purchase a Simpa SHS packaged with finance. After a small down payment, customers pay for energy days. When they pay, they enter a code on the keypad, which, if valid, gives the customers energy for as many days as they have paid for. If an invalid code or no code is entered, the meter turns off and the system stops generating electricity. Simpa's software generates unique codes for every system, so Simpa can track when and if each product is paid.
I learned about Simpa in 2011 at the SOCAP Conference while I was director of corporate sustainability at Intuit. While I absolutely loved my mission at Intuit, I felt I was missing a chance to have direct, tangible positive impact on peoples' daily lives. The idea of using technology to make renewable energy accessible and affordable to rural households in India seemed like a perfect opportunity for me.
It's been six months and the learning curve is just as steep as my first week. I was hired to run Simpa's product team to ensure that we had a compelling product with clear requirements targeted at specific customer segments.
Despite my focus on Simpa's product, I could see plenty of other opportunities for improvement. My first learning was that organizational clarity and alignment were job one. Fortunately, I received world-class leadership development during my time at Intuit and learned how to think strategically, build teams, manage people, create alignment and prioritize.
Intuit CEO Brad Smith shared advice on how to approach my new role as a Simpa leader. He recommended that first I ensure all Simpa executives agree and align on four areas:
1. What is our mission and why do we exist?
2. What are our values?
3. What are our core capabilities?
4. What will success look like?
Simpa's executive team took Smith's advice and we started on a journey to clarify these key questions. We developed a clear strategy and the mission and vision were reinforced, company values were clarified and enhanced, our core capabilities were defined and key metrics were discussed and agreed. Soon after, we had a re-organization that led to a tighter executive team with clear accountability and responsibility. My role expanded to also run the hardware, software and supply chain teams.
At this point, Simpa had pivoted to a new geography, a new sales and support model and a new product. With everything happening at once, we were clearly building the plane as we were flying it. Many startups go through this phase where the clock ticks and everything seems urgent and important. Using a few key principles to make decisions seem to help a little. For example, we decided that our product had to be of highest quality to ensure we started to build trust with the new sales channel and with customers. We sacrificed other aspects, including cost, having a large bulky product vs. a compact one, making installation times longer due to such things as more onsite wiring, all in the name of high quality.
However, despite those principle-based decisions and frequent conversations about priorities, everything still seemed critical and important. I tried very hard to balance short-term objectives (build the products quickly) with some longer-term objectives, such as developing new products based on our recent customer insights. I tried to use everything I had learned about leadership and management in this situation. I promoted our best people to bigger roles, gave constant feedback, supported a bias for action, but yet everything still seems to be a fire drill.
I know that these challenges will just make the reward even better for Simpa and, more important, for our customers. Simpa's mission of making clean energy accessible, affordable and investible is bold and challenging. Obviously we still have a lot of work to do.
Our goal for 2014 is thousands of "happy customers" and growing from a few hundred to a few thousand a month. By happy, we mean they are using the system and are on track to pay for the system. This signifies that we are making a healthy margin on every sale and turning Simpa into a sustainable business.
While I wrestle with the daily challenges of helping to lead a startup in rural India, there are moments where I can feel that direct impact I was longing for. In December, I was sitting at our office in Mathura when two gentlemen arrived from a village 100 kilometers away — a long and expensive journey for most villagers.
They came because they placed an order and made their down payment 10 days ago, but they hadn't received their solar home system. They weren't angry but they pleaded with us to install the system so their children could study for upcoming exams. They wouldn't leave until they had confirmation on when their system would be installed.
What we do matters — and it mattered greatly to these two gentleman and their next generation.
Villager image by FiledIMAGE via Shutterstock.