Just a few months ago, I was theorizing on delivery models that work for people living in poverty (more about it in this report http://pubs.iied.org/16551IIED.html a joint production of IIED and CAFOD and in this book http://developmentbookshop.com/delivering-energy-for-development by Practical Action Publishing) and the next thing I know I’m in Haiti making and selling charcoal improved cookstoves and crucially trying to follow my own guidelines.
Selling stoves is not an easy task under many respects, but then and again that is precisely why it is so interesting. The stove we produce (I work for International Lifeline Fund (ILF), an American NGO) is called PlopPlop (meaning “fast” in Haitian Creole), and it is the result of ILF’s experience in stove making and extensive market research. In our case, back in 2011, this consisted in a set of complementary activities such as finding out what people traditionally cook, how they cook it, why they do cook it that way. This knowledge tells a lot about the shape and size of the to-be-designed device. There is always a good reason for why people do things the way they do, a set of habits and behaviours that goes under the name of “cultural context”; grasping those reasons can help to propose suited solutions that deliver the required service and even suggest improvements that increase convenience. Taking the local cultural context into account means to actually propose alternatives to current practices that make sense in the local conditions. The step ILF took next was giving out prototypes for people to test, observe how they are used and humbling listen to the feedback. Within a few iterations, The Stove was ready to be introduced on the market; which is ultimately the best test of them all. If you can convince people to buy what you propose, you know for a fact that it is appreciated.
This type of exercise can be very useful to rapidly indicate what is the need to address, if any, and successively understand whether you have a product or not. For example, such scrutiny applied to solar cookers would most probably suggest their limited suitability for households where breakfast requires coffee and happens before noon; saving much investment and effort for their diffusion in those circumstances. And yet, it is dismaying to see how many projects have aimed at promoting solar technology for cooking in the unverified and unquestioned assumption that it is good and practical in all cases. Surprisingly (for the initiators) these projects fail. Failure is often attributed to a presumed cultural background and resistance to innovation from the target group. What it really means is that people won’t give up drinking their coffee at 7:00 in the morning.
The culture context is made of many aspects and each one needs taking into consideration; some are more palatable than others; charcoal for example. The large majority of the Haitian population uses charcoal to cook. Charcoal making is the principal cause of deforestation in the country; cooking with charcoal and firewood kills 4 million people around the world per year (yes, not a typo, 4 million, more than malaria and AIDS); charcoal is very expensive and cooking takes up a good proportion of families’ income. However, people rarely have a choice. The reality is that in Haiti just a small part of the population can afford LPG, electricity is unreliable, there isn’t currently an ethanol nor plant oil value chain in place, and for any of these alternatives to become common practice it will take time; charcoal on the other hand, is being used every day by most. Biomass briquettes are emerging as a viable possibility too; they can be used in the same appliances as charcoal. While other solutions come to maturity, a device that optimizes charcoal (or briquettes) use and reduces harmful emissions is better than nothing and has the potential to have a greater impact on lives than an ideal solution… that stays on paper.
The PlopPlop is a sturdy stove model that can accommodate a large enough pot to prepare rice and beans for an average family of 5. We also make a smaller stove which is ideal to cook sauce. The two combined, cover most of the cooking needs of the local population. I can proudly say that people do like it.
And this is where the fun starts. The technical solution is actually not the focal and ultimate point of a project/business. Having a product to sell, leaves you with a business case to be proven and a value chain to be put in place. The product needs producing, distributing, commercializing and, chiefly, it needs to be bought by the end user. Good luck with that.
A business case should prove that it is possible to deliver the energy solution at a price which is acceptable to the consumer. If the project’s target group is made of people who have very limited budgets, this is challenging but in many cases still doable. As in any other domain, there are tricks and tips. People in Port au Prince usually buy traditional stoves for a price which is approximately a third of what an improved cookstove would cost. However, these traditional stoves are made with scrap metal and have shorter lifetimes than improved ones. Moreover, the difference in price between traditional and PlopPlop is paid back by charcoal savings in less than one month. The business case is clearly there. Unfortunately, people are not acquainted with the advantages of improved cookstoves and just appreciate the difference in price. Even when told of the incredible benefits, they still need to believe the teller. Moreover, spending more today to save tomorrow comes as a difficult practice to humans in general and more so for the ones with little means, who face every day difficult expenditure prioritization choices.
The trick and tips for stove sellers are about conceiving ways to communicate the product’s added value in a convincing manner and address the upfront cost barrier. A product is convincing if it is desirable. Sometimes development projects seem to be designed to serve an idealized category of people who does not actually exist: The Poor. According to projects of this kind, “The Poor” should get cheap stuff that serves a development purpose, ideally for free. Truth is, in my opinion, that people with low purchasing power are, as everybody else, interested in what is, or seems to be, good value for money (“for free” does not fall in this category) and, where possible, makes you look fancier than your neighbour. To test this rather disrupting hypothesis, we are about to introduce a line of immensely cute stove branded auxiliary products, from aprons to plates, to clearly state that our stove is something of a “must have”. We are preparing our Ikea-like start-up package not for “The Poor” but for those who cannot afford much right now. To increase affordability we try to grant credit in those situations in which we are confident that the loan will be repaid; in schools, churches, communities, wherever a leader figure can act as testimonial, manage the loans for us and has a direct relationship with the end user. We are also working with those organizations that enable the Haitian diaspora from US to purchase goods for their relatives in Haiti.
While selling remains the main challenge, building a value chain is surely a complex operation as well. Start-ups in “developed” countries have a fairly low rate of survival. We should not expect this to be different in places where the environment in which the business needs to operate presents extra challenges. And yet some times, project managers sent to implement development projects, are inexperienced and alien to the local settings. Not a good start.
The procurement of goods that elsewhere would take an email here requires knowledge, skills and a whole lot of patience. The most basilar objects are inconsistently available or, most commonly, not found at all. I have been waiting for a heat resistant can of paint for the last couple of months; it was shipped to Haiti in early August but it remained seasoning at the harbour until yesterday, 29th of September. Services are also hard to source and the quality level is set fairly low. This means that some parts of the value chain are missing and need to be built by the business itself even where they do not belong to the core value proposition.
Truly skilled and trusted local people are very expensive. If there is one role for the international community to stimulate development it is that of providing these supporting services, helping to build stronger surrounding conditions for the business.
Enterprising greatly benefit from a favourable enabling environment too. This is made of numerous factors including a transport infrastructure of roads and harbours that keeps logistics costs at bay. In Port-au-Prince, roads are few and crowed, often unpaved. Reaching delivery destination is costly (vehicles must be off-road, better if four-wheel-drive) and takes long time.
In addition, hugely important is to be able to count on a clear and simple set of rules and regulations and business friendly institutions that make it easier and cheaper to set up a company, import and export and operate. Uniquely, internet banking in Haiti is often provided for non-negligible fees (i.e. in the case of our bank). Consequently, any transaction, such as payments of staff, goods and invoices are all done through checks or cash (but that is dangerous, people have been assaulted and even killed for the cash they were carrying). Considering that any operation at the bank counter takes literarily hours in a queue, this results in precious resources being wasted in mere inefficiency.
Favourable tax regimes, a low rate of corruption and transparency are also desirable features. The PlopPlop is made of metal that we buy locally. This accounts for more than half of our production cost since raw material, as all other imported goods, is very expensive on the island and makes our product uncompetitive. While direct import has the potentiality to result in lower prices, this implies clearing custom with unpredictable outcomes in terms of waiting time and imposed taxes.
With so many factors to consider, designing the perfect project becomes an idealistic if legitimate aspiration. Nothing can guarantee that the project will be a success, however, I feel that the recent efforts by IIED, CAFOD and Practical Action to provide insights and guidelines can help to give it a good try (further reading: http://pubs.iied.org/16551IIED.html and http://developmentbookshop.com/delivering-energy-for-development).