Making an impact with clean tech in Tanzania

Tuesday January 31st, 2017 - Smart Villages

Interview with Jodie Wu

CEO & Founder at Global Cycle Solutions

“New products need to be used and experienced and taught”

When Jodie Wu was still an engineering student at the Massachusetts Institute of Technology, she invented a simple device that let farmers use a bicycle to shell corn. The mechanism allowed rural farmers to process corn 10 times faster than with traditional methods, and Wu wanted to commercialise the idea. She moved to Tanzania in 2009 and founded the company Global Cycle Solutions to do that.

Over the next few years, Wu says she learned a lot. The corn shellers didn’t take off as quickly as she’d expected. Her customers in rural Africa were more interested in products that already existed than in brand-new ones that her company would have to design.

“New products need to be used and experienced and taught,” she says. “Even though we moved 800 products into shops, people didn’t know what it was”.

Her company tried to keep one foot in sales and the other in design, a strategy her board viewed with scepticism. In 2011, the board asked her to choose between the two. Wu chose sales and decided to focus on solar. She says she had no idea that the market would evolve in the way it has.

“When we first got into solar,” she says, “we were educating communities about what solar is”. That changed quickly, as customers became more sophisticated and knowledgeable about solar technology and its costs. Soon the sales conversations changed from pushing solar to distinguishing GSC’s products from low-quality ones. These days, it’s about explaining the long-term costs of a system and how those costs compare to those of a few major competitors.

GCS Sales Agent Judith Laizer cooks at home

GCS Sales Agent Judith Laizer cooks at home

“I have to train my staff very differently,” Wu observes. “Before I just had to show up in a village and things would sell. Now they need to know the watts … and when we look at the final cost, how are we better than competitors”.

GCS also had remarkable success in selling what Wu calls “luxury charcoal stoves”. These stoves, which are manufactured in Nairobi, cost about US$50—more than 10 times the cost of the cheapest ones on the market. But GCS’s stoves reduce smoke by more than half and fuel costs by about 60 percent—a crucial savings in a market where the cost of charcoal is rapidly rising. The average consumer, who might spend about US$30 on fuel a month with an inefficient stove, stands to save US$240 a year.

Wu says GCS sells at least 1,000 stoves a month, and she expects that figure to double soon. The company has sold 20,000 stoves since sales began in 2014. Wu sees those numbers in terms of social impact as well as revenue.

“Ninety-nine percent of those stoves are being used by women who are now no longer dealing with black smoke and are in a safer environment,” she says.

Meanwhile, GCS has sold about 40,000 solar lanterns, which improve students’ ability to study at night.

In terms of impact, Wu also points to the livelihoods that GCS creates for its many sales representatives, who are all residents of the rural Tanzanian areas where they work. Up until recently, the company employed over 200 of these sales representatives; all together, they have earned a total of more than US$100,000. Recently the company shrunk its sales force to about 50 agents to increase support and enable them to move much larger volumes. Since that change, earned income for GCS sales representatives has more than doubled.

Wu acknowledges that the sales wing of GCS is changing quickly. Previously, sales representatives simply purchased all of the inventory they wanted to sell, and kept their profits. However, in mid-2016 the Tanzanian economy entered a stagnant period, and that model no longer worked.

“We couldn’t move anything on cash anymore,” Wu says. “No one had the money”.

GCS handled this development by taking on the credit risk itself. Today, in most cases, rural sales agents receive the product without purchasing it, and receive their commission once the customer pays in full.

Wu says the biggest challenge at the moment is finding and retaining employees. She points to a recent case where 120 people people in Tanzania’s lake region applied for positions. The company invited 10 of them back and hired five. A few weeks later, only three were still working. Most of the time, Wu says, the problem is that an applicant lacks the work ethic or the communication skills needed for the job.

GCS Sales Agents Meckitilda Petro and Stephano Nyanda

GCS Sales Agents Meckitilda Petro and Stephano Nyanda

To address this challenge, GCS is moving toward a model where potential workers have to meet a challenge before getting an interview. “We say ‘Here’s a brochure, bring us a customer’”, Wu says. “Some people do it within the hour”.

Five to 10 years from now, Wu says she’d like to see GCS be a recognised brand name across all of Tanzania. She’d also like to expand the company’s products to include a broader range of things rural people need, such as water and sanitation equipment. “We are looking at ways to satisfy all the different needs for a rural individual,” she says.

James Trimarco, Writer and researcher