Interview with Henri Nyakarundi
Founder, The African Renewable Energy Distributor
Location: Kigali, Rwanda
“Looking back, the only way you can be in business is to be a little bit naive”
From bus stops and hospitals, to marketplaces and health centres, to Nyabiheke, one of the four major refugee camps in Rwanda, Henri Nyakarundi is ensuring that his mobile solar kiosks are changing Rwandan attitudes, as well as providing much-needed energy.
Launched in 2013, almost two-thirds of ARED connections are provided to Rwandans in rural areas. Its bicycle-powered smart solutions charge multiple phones and will soon be providing internet connections. The busiest kiosks are in the cities, with the next nearest majority in the east of the country, in cities and towns such as Rwamagana and Kayonza. And although the government is threatening to ban outdoor businesses, which Nyakarundi does not believe to be a sustainable move, it’s a change of scene for the native Rwandan who was raised in Burundi and the United States.
Nyakarundi was 19 when he moved with his sister to Atlanta, where he had family. “War had started in Burundi so it was a question of better opportunities, at least at that time”. He started his own trucking company by the time he was 27. With a small family in tow, he hesitated about coming home to Rwanda; Nyakarundi had his university degree, which his mother had emphasised was important; he had been a salesman; he was now a successful entrepreneur. Yet money, he says, was not everything. “I’ve made it before, and I wasn’t fulfilled. I wanted to make a social impact”.
Add to this the consideration that he was moving back to Africa, which is, in his words, a very fragmented market. “The mistake that people make is to develop every market yourself, which is a huge mistake when doing business in Africa. Here, every country has such different laws. Its different than the West, where connections are less important. I started seeing the growth of Africa, a lot of changes, when I would come home on vacations. When I left it was a lot of chaos”, he says, referring to the 1994 genocide.
“Suddenly, I saw opportunities, and really, that’s what entrepreneurship is about”. After almost twenty years in the U.S., Nyakarundi says he did not experience culture shock in coming back to the country he was born in. “Things are much slower here than it is in the States, especially dealing with people”, he says. “My biggest culture shock actually came when I moved to the U.S., I couldn’t cope for the first two years. It’s the hardest country I’ve ever been to, an unforgiving land”.
With his small family now grown, Nyakarundi took the next step, which took three months of planning. He knew he wanted to work in energy. However, the dream of working on a new technology called CPS, concentrated solar power energy, was short lived. It was more efficient than solar panels, he says, but it would take too much time and money, and would require a diversion to Israel, where the technology was being successfully developed at the time. Instead, the correct path was to keep it simple and cost effective: to work on mobile solar kiosks, which could charge phones, an issue Nyakarundi himself struggled with when he would come home to visit Rwanda or Burundi during the holidays. Just over 20% of Rwandans have access to energy, with 6% of energy being accessed in East Africa in total. In comparison the number of people owning cellphones ranges from 60% in Rwanda, or 50% in the region. By 2018, 70% will have access to electricity.
First steps: Diving into R&D
Nyakarundi had saved money, and knew what he wanted to do, and which business model he would be using. The next steps were in building a small team—which today is still only made up of a few people—and crucially, something which Nyakarundi recognises he didn’t have the patience to do properly: research and product development. “I always jump into business, like I did for five years with trucking, which can be a mistake”, he says, of the slightly longer journey it took to find the right people with the right expertise.
Unlike other entrepreneurs in his shoes, Nyakarundi did not have an engineering background, which proved problematic for the particular niche he now occupies in Rwanda’s promising tech industry; he says he has, to his knowledge, thus far been the only entrepreneur who has developed a physical product like the solar kiosk in this field. “Of course I was very naive about the amount of work and money it would require. Developing your own product is extremely expensive”, he laughs. “Now, looking back that’s the only way you can be in business—to be a little bit naive. If you’re being realistic, you probably will not do it”. It cost more than the US$30,000-40,000 that Nyakarundi expected, since charging cell phones was not a viable business. “In Rwanda, I’m the only one that developed a product as a Rwandan—everyone else is into apps and not really physical products. There is no local expertise, even regional expertise, so development needs to be done overseas. It’s extremely challenging. The kiosk required skills in energy, moulding, design, and manufacturing, which I didn’t think of at the time”.
The computer science graduate outsourced the work via a freelancer website called elance.com (now upwork.com) and hired a Californian designer before working with a local designer. He also worked with Polish and Chinese engineers, before finding a solution in funding from entities such as the German government, Microsoft, and the Autodesk Foundation. A smarter move was to work with product designers who actually visited and stayed in Rwanda for a few days. “I got very lucky in winning some competitions and grants,” he says.
Scaling up with a franchise model
It may have been an “accident” for Nyakarundi to come across the multiple-phone charging gap in the Rwandan market, but one thing he was certain of was the type of business model he would be implementing. “I’ve always been a fan of the franchise model, where you can scale much quicker. I wanted to scale fast but without having to raise money all of the time. I see a lot of solar companies have thousands of employees, but I didn’t want to take that route”. He created a micro business behind ARED, where licenses are given out locally with partners. “I wanted to prove you could make money whilst having a social impact, which is kind of new now”. He is aware that mostly, investors can see this in a different light. However, Nyakarundi believes the system is working. “Of course we make less money, but the value chain is what is important, the value of services”.
Nyakarundi found that he was introducing a new concept to fellow Rwandans—that of working together with a company, rather than as an individual. “At least in East and West Africa, people are not used to this micro franchise element. It’s a win-win situation”. To top it off, Nyakarundi ensured that only the most committed would work with him with firm policies—for example, anyone applying for a license has to be 25 or older, and provide documentation and prove they can read and write (according to the Vision 2020 report by the Rwandan government, almost one in two is illiterate; two-thirds live below the poverty line). Only then could they access ARED’s three-day training programme, mobile apps, and a small credit line with a short turnaround of 48 hours, which evolves as the business grows. “Show us you are business-inclined, and apply”, says Nyakarundi.
While it will always be a challenge to find serious business people, Nyakarundi introduced a focus on women entrepreneurs—“who are more consistent”—and encourages those with disabilities to lease kiosks for less; around a third of kiosks are now leased by women. “Sometimes, people have a different mindset and you have to mould that mindset”, he says, of the challenges in finding interested businessfolk. One of the more memorable cases for Nyakarundi was when one of his partners married and promptly leased a kiosk for his wife, or when another partner expanded his business to a second kiosk. “People don’t need money to get started, which is our biggest value proposition—they make money on different kind of services and can maximise revenue”.
ARED has a strong monitoring system in place for the around 300 kiosks across Rwanda, to ensure business needs are met. This will be reinforced by the launch, in mid-January, of an all-new “smart kiosk” that has been 18 months in the making. “The software at the smart kiosks will be able to capture data more effectively from a central place, rather than sending people up-country to check on a kiosk”. Thus begins the evolution, for Nyakarundi, from a solar company to a tech company, with expansion to Uganda by March 2017.
—Nabeelah Shabbir (@lahnabee)
Henri Nyakarundi posts video advice on entrepreneurship