Svati Bhogle, social entrepreneur and founder, Sustaintech
Location: Bangalore, India
“Grow, but don’t spread yourselves too thin.”
How long do you blend tea leaves with milk? Should you brew the tea for a shorter few minutes after that, or turn the gas off? When Svati Bhogle, a chemical engineer by training, went from one of the ubiquitous tea stalls on one side of the street to the other in Bangalore, she saw how a simple beverage such as tea was being made with completely differently recipes. Customers may care a little less about the nuances in the roadside refreshments, but she has catered to it with her company Sustaintech (http://sustaintech.in/). Founded in 2009, it has produced a variety of clean cookstoves in a country where two-thirds of the population uses traditional cookstoves (file:///C:/Users/lahnabee/ Downloads/india-cookstove-and- fuels-market-assessment.pdf), and where 400 million are at risk of indoor pollution.
The cookstove market is large, and Bhogle testifies to the diversity of an industry which, compared to the dense market for household cookstoves, very literally has more to offer, on many more plates. From making dosa, to omelettes, to chapattis, the thinking behind Sustaintech’s six main product designs ensures that different food can be cooked sustainably and with versatility, according to different fuel types. “The two flagship products which sell well – a multipurpose stove which cooks on a saucepan or a pan with a diameter of 50cms, and a tava stove (cooking on a flat plate with plate dimensions 2ft by 3ft) – represent around 70% of the Indian market,” adds Bhogle.
After all, says Bhogle, “innovation is not an issue”. The chemical engineer started her career at a multinational and at research institutions, joining TIDE (http://tide-india.org/) in 2003. As the name suggests – Technology Informatics Design Endeavour – the company works in technology development and system building. Soon, she realised that there was a gap between the research and what the consumer needed – Sustaintech was created to bridge that gap.
Today, she divides her time between the two. “At TIDE, we talk to people and understand their needs,” explains Bhogle. “Sustaintech scales that work up, looking more at business development and marketing, distribution and sales. We are very much field-focused.” Sustaintech operates on a regional basis and almost exclusively in the densely populated state of Tamil Nadu in the south, which Bhogle says is “quite heavily industrialised, and there is a lot of male migration in search of employment”. The company has also moved into the southern parts of Karnataka (“which is less populated, and where we thus work around hubs”), and some parts of Kerala (“which is more touristy, and thus densely populated”).
The business model
Investments came in after two years. With a staff of 25, comprising a CEO, accounts and sales departments and a servicing team, Bhogle feels that Sustaintech could still grow faster. She admits business could have grown faster with government subsidies, but she made a conscious decision to “avoid risk; I didn’t think it would be sustainable in the long run”. She calls out the state of the cookstove industry in India, too (http://economictimes. indiatimes.com/industry/ energy/oil-gas/lpg-prices- raised-by-rs-86-steepest-hike- in-indias-history/articleshow/ 57416002.cms). “It’s in a bit of a bad shape, largely because government policy suddenly changed with a commitment to provide cooking gas (LPG) for everybody, when crude oil prices were low. It created confusion in the policy.”
The company has mostly stuck to the script, she says. “Any would-be competitor at the time wanted to sell fuel, whilst we wanted to sell stoves,” she says. “Our business model was around the fixed sale of capital goods. We started off by employing our own salespeople, since we were not attracting any distributor interest as a new company with a new product.” Sustaintech is slowly moving into a distributor model.
Customers are also compensated for spreading the word about sustainable cookstoves, and supply references for the company. On a whole, customer appreciation is very high, says Bhogle. “People can see the use of a sustainable cookstove, and the more people know about the stoves, the more demand there is for customisation,” she says. With this shift away from using less firewood and crop residue, having fewer ill-heating stoves or smoke-filled dangerous cooking environments, the issue now lies in the traditionally lower income levels of the rural population. “Entrepreneurs have to make big financial decisions to invest in the cookstoves – dipping into their savings, if they have any, or getting a loan.”
The company measures social impact according to three different factors. Sustaintech is environmentally friendly, since it saves business people from using firewood and other fossil fuels. It’s economic, since less is spent on more economical fuel. Finally, the company investigates whether there has been an improvement of drudgery, in people’s health, and also their ability to cook faster and thus spend more time with their families. Sustaintech also tracks some of the cookstoves it has sold, and provides regular service calls. “We will go to some villages, talk to some users on the phone, and extrapolate that number to the entire segment.”
Bhogle admits she is still “grappling” with her role as a social entrepreneur. “For me impact is far more important than profits, which is not a good business mindset,” she says. Whilst Sustaintech has always made sales, Bhogle had to cut down on an initial ambitious overestimation of targets. “Our planning could have been more adequate,” she says. “We thought that the cost of customer acquisition would be lower than it actually was; we were spreading ourselves too thinly.”
Getting into rural areas incurred more costs, she says; the solution was to stay in smaller towns and get to know the customers. “The type of foods they were serving, and how many meals a day. My advice is to grow, but not to spread yourselves thin. By creating hubs in rural areas, word of mouth works better than us approaching people.” While Bogle feels her customers have become more prosperous, she hopes that the company will become profitable. “That should have taken three years, but we required so much money to deal with the cost of customer acquisition.” For now, the plan is to add more distributors and associates, especially with a population that, according to a 2013 Global Alliance for Cookstoves report, will be staying predominantly rural for the next decade (file:///C:/Users/lahnabee/ Downloads/india-cookstove-and- fuels-market-assessment.pdf). Meanwhile, a new raft of costlier cookstoves is being designed for urban areas, where an environment with more pollution and longer cooking times could be well served by cleaner stoves.