KenyaSocial entrepreneurship

Charcoal was yesterday time for the new age

GreenChar is a Kenyan startup that offers an alternative for charcoal.

GreenChar

On the food court of Tika Road Mall (TRM) in Nairobi, Kenya

The minibus spit me out in front of Tika Road Mall not far from the city centre of Nairobi right next to one of the prime highways in Kenya. It is a good area. Around me are people from all walks of life. I see youngsters window shopping, kids running around, business men rushing past me and I even hear some American English from a couple that is about to buy an espresso machine. Walking through the mall I also pass a by a telecom shop by Safaricom the most profitable private business in Africa.

Kenya is more than what westerners first think of. Especially Nairobi is a hub for businesses but also young entrepreneurs that want to change the world unwilling to accept the status quo. One of those entrepreneurial stories was revealed to me just a few minutes later when I met Ian the founder of GreenChar.

“Don’t wait for help. Don’t wait for help from your parents and don’t wait for anyone else to tell you when to start. You just start as soon as you can.” Ian Oluoch, Founder of GreenChar

GreenChar is a company that creates a charcoal alternative out of waste materials. The briquettes not only burn longer than regular charcoal but also have no fumes and produce more heat. They are a product with the opportunity to empower people in particular in rural areas in Kenya.

Members of the team of GreenChar with Sales executive Christian and founder Ian
Christian Ketinji and Ian Oluoch from GreenChar

One of the founders of GreenChar actually has this incredible story that made him start the business when his mum got sick of the heavy and poisonous fumes at home while cooking with charcoal. GreenChar is all about transforming people’s mindset because not every great product is as greatly perceived as you might expect at the beginning. A lot of obstacles are on the way but the vibes of the team are outstanding. I know it is not about the idea but about the team that drives the business and that team is strong and willing to go the extra mile that is necessary to make GreenChar a success not only in Africa but in the world.

Read more about Ian’s story and Boulder the new Silicon Valley of the USA in the full interview.

Interview

Apart from business

Basically my experience with social entrepreneurs is that they don’t have any free time at all. So what do you do if you don’t do business and don’t tell me you do business?

I have a hobby (laughs). I have a passion about entrepreneurship so during my free time I sort of try to look at my own experiences as an entrepreneur and try to package that in a way I can go and distribute my story.

Like mentoring?

Yeah, it is like mentoring but not direct sort of mentorship. I just put it out there and people can learn from it. After all I take the journey and break it down when I had the idea to when I started growing it to the challenges I faced and then I break it down into a case study. With that you’re able to see what I did and learn from the mistakes I made. I share that now with people. That is something I try to do in my free time. Also I am learning to play the piano. I just started a month ago.

You do an online course?

Yes, on YouTube.

What else do you learn online?

I learn a lot of things.

It’s very powerful most people totally underestimate online resources.

Yeah, you can almost find everything from accounting and all kinds of core subjects to things as silly as how to cloth your dog. It is powerful all that information.

Team GreenChar

Who did you bring today?

Ian Oluoch: Today, I brought Christian Ketinji. He is the head of sales and marketing. He is a really inspiring person. He is very convincing and can sell you anything (laughs).

So make Ian proud and introduce the company.

Christian Ketinji:  GreenChar is a renewable energy company. We have a very good product that is a green alternative for charcoal. Recently we did market research on the ground with Ian. I wanted him to be there so that he can see the potential in small scale buyers because we are mostly focusing on industries.

“The people that are closest to the problem are closest to the solution.”

You have the ambiguity between the small people and the industry. How do you cope with that? Because these are completely different groups, right?

CK: You’re right. First of all, I would say that small customers we look at them in terms of their numbers. If you can get as many of them we can actually get to a place where we are close to the revenue we would get with one large scale client. So a lot of time is spent on these small scale customers. We cannot miss out on the opportunity for cheap and affordable energy at their homes and their schools. We actually have a better net effect on the market than just getting someone at one part of the country where there is not much of a net effect to other parts of the country.

Customer discovery

So most of your resources are invested in the small scale customers?

CK: Exactly, that is the case. You find that we’re not really investing much in marketing. Because we just want people start using our product and recommend it. It is a very good product. When you go there and you do a demonstration people are really excited about it. For example you go to a school and do a demonstration actually the teachers and the cooking staff want that product in their homes. You can see the net effect on that product.

But word of mouth is also something that develops over time. Do you have any pressure from investors already? Or is it the founders that pressure you?

IO: (laughs) So right now I’m mostly focused on investor’s side of things and he is focused on the sales’ side of things. So we decided. Initially we were all over the place. Now you know what you’re supposed to do and you do it.

How do you put yourself in the customer? I mean you studied in the US, you are really well educated and your customer is maybe a woman who has no education and no smart phone. I mean let’s be honest she has definitely no smart phone! So how do you put yourself in that perspective? I think it’s quite difficult.

IO: The people that are closest to the problem are closest to the solution. I come from a woman that doesn’t have a cell phone and who can’t even speak. That was where I was at one point in my life. I grew up on my journey and I got exposed to the outside world where I saw these are the kind of ideas. So I brought the product back to the woman I can relate to. It gives the woman an idea of what is possible and that this is a product that is better for her health and two she can save money and can pass that money on to her child and maybe one day it will grow.

CK: To add on to that we haven’t lost common touch.

Social business challenges

Yeah, losing customers is losing business. So you also developed this idea of providing an area where they can make food. This whole idea what is the idea right now and how did you get there?

IO: I guess it was a point in Green Char’s future where we were debating what business strategy should we take. We are a social business but we still have to be sustainable. We were on the crossroads what to do. Is it pursuing profits first and then come back and build a social side? Or is it pursuing the social side and run out of money upon a month? So we developed a solution that would kind of match those two situations and we realised what if we build a distribution in an area with mostly poor population and build a network of kiosks. We call them eco kiosks. What we do is we identify a woman from that place, train her and then give her a kiosk initially for free. Then she starts paying it off month after month after she starts selling the briquettes. She can still cook with the same briquettes and sell whatever she cooks. That will add to her income. That is something we sort of developed.

I spoke to some social entrepreneurs and I really feel some of them have the problem that they focus so much on their social impact that they lack the business. But I actually think even a social entrepreneur has to be even a better entrepreneur then a regular entrepreneur because you have more things you have to focus on. You always have to keep the social impact in your mind. How do you go about it? How do you make sure that the social impact is not vanishing?

IO: I think that is a very critical point and I think every social entrepreneur at one point in time goes through that phase where you are thinking there is the social and there is the business side. The best way to mitigate things is to get people on board that can really focus on a specific aspect of your business such as sales. If sales is your area is your area of focus then you do the sales and let someone else push the social side and you push the business so that you don’t end up overlapping. We had a time where we ended up almost crashing because of the same situation trying to find the balance between the social side and the business side.

Challenges ahead

If you get funding of 400 million Schillings where would you invest the money in?

IO: I would invest in a proper distribution channel. I realized especially with GreenChar that since it’s healthier it’s good for the people and they will come rushing to buy it and since it’s smokeless as well we thought people want it in their house. But when we went to the market we realized people don’t really care about their health when it comes to cooking with charcoal and they also don’t really care about smoke.

It is because they don’t have the education.

IO: They don’t have the education. There is the behaviour they are used to from the time their parents and their parents used to use charcoal and there is a lot of smoke in the house. We bring a product that doesn’t have smoke in the house. Either it’s not real or fake.

It is some sort of black magic.

IO: Exactly (laughs)! It was very interesting for us. So with 400 million I would like to build a distribution to these people that can push any kind of innovative product that is good for them but you need to have the distribution and that takes a lot of money.

How do you guys go about education? I mean you work in sales so you are also kind of responsible to also educate the customers and tell them what this is.

CK: So basically what we do is we have pamphlets and before we hand out the pamphlets we try to explain it to them and try to show it to them pragmatically by doing demonstrations. For example, if I tell you that the briquette doesn’t have smoke I have to show you it doesn’t have smoke. So we have to test it. Or if I tell you 12 kg of briquette can cook up to 1000 plates of ugali I have to show you that. You would never believe it otherwise. That is basically the kind of education. I prefer to call it information. It is a bit easier.

New markets

Now we’re in Kenya… What about Africa? When do I see you in Uganda, when do I see you in South Africa?

IO: I think 80% of Africa relies on biomass. So in terms of market value there is definitely a huge opportunity but what is a problem is the source of raw material, one. The raw material we can use can only be found in certain areas. Secondly, the infrastructure is important. Our second biggest cost is transportation so getting a product to let’s say a factory is a bit difficult for us. So right now we’re focusing on Kenya and our next move will be Tanzania because of the huge tobacco manufacturers who use a lot trees and it is affecting the country in a really negative way. There are no more trees and can we find an alternative source of fuel.

I actually talked to one of the entrepreneurs and I really liked that she said let’s talk money. Do I really make money? So what about it? Do you make any money?

IO: Initially we didn’t. GreenChar is now two and a half years old and initially our focus was 100% social. We stumbled upon an idea that was good and we thought let’s push this. We went out there and got people to support us. We immediately got on the ground without knowing. You need a distribution, you need a supplier, you need a value chain that ultimately connects and in the end of the day you need to make money for you to continue doing what you are doing. So we learned the hard way in a sense that we didn’t see all this and we focused absolutely on social. That is why we changed our strategy from focusing on the small, small individual household towards clients who can actually pay you as one client and pay you in bulk. Now you can use that money to build the distribution. So we switched our strategy and focused on where the money is because in the future we believe that it is the distribution that eventually has the money. But it takes a lot of money to build it up.

Who are the most important partners in the business?

IO: Right now I would say it’s us because we kind of do things direct. We worked with distributors in the past but it didn’t work because we’re a small player and you need to be a little bit of a big player.

You need market power to negotiate.

IO: Market power, exactly. Actually, the direct distribution is cheaper. You don’t have people brokering the price.

Marketing strategies

Do you also sometimes feel you are like a mascot to people? People love social entrepreneurship and they want to talk to you like me is it also somehow annoying because they don’t take you seriously?

IO: I think it is very useful. One of the reasons why GreenChar been able to be where it is is the attention we received and the support from people like you that get to share our story. Also people out there who can relate: “Hey I was once in a house that was full of smoke and these guys are doing something that I would want to do”. So that puts us in a really advantageous position and definitely helps the company to build our brand and build our networks.

How do you pitch to industry companies? You said you’re having like a change in focus which in my perspective makes a lot of sense. You have to pitch differently. So how do you do it?

CK: For small scale buyers we use the energy, the smokeless part of it, the burns longer part of it. But for industries we use the cost part of it. So you have to show them how much savings you may make in one month and how can that money be used elsewhere. So for example if it is a tea factory and they are making this amount of savings you can say that this amount of money after a couple of months can be used to buy a lorry for picking tea from the farm and deliver it to the factory. It can also save on their fuel expenses, their transport expenses. It is the cost part of the product when it comes to large scale customers.

Do you guys also have fun like a GreenChar party? Ian, I mean your team is growing so how do you make sure that they stay? I see you hire great people as I can see here. But how do you make sure that they stay? How do you build this kind of culture?

IO: I like this question. Every week on Tuesdays we have like a coffee meeting in the morning where we share silly stuff that you’ve done in the past week. That also helps to reflect on what we have achieved in the last week and also to plan what we want to achieve next week.

You want to add something?

CK: Yeah, we also like sharing information. I like spending time with Ian because I learn 20 things in a day and he can learn let’s say 10 things in a day.

I would also say that in an interview (laughs).

IO: (Laughs).

CK: For real. I learned a lot through him in the past three months. Especially in terms of finance, he has told me a lot and I hope I also told him a lot.

IO: Yeah.

How is Kenya as an business environment? I also heard about social impact investing here. Where are you in this like getting investors, getting in touch? Is it a good place or would you rather be in Boston or in San Francisco?

IO: Kenya. Ok, the data and statistics say that it is actually oversubscribed with investors but actually when you get to the bottom of things like working in the manufacturing industry that means big machinery and therefore big capital requirements raising money is a bit tricky. Especially as a 20 year old man who wants to raise some money.

Or you can say fucking hard.

IO: It’s fucking hard. I noticed the difference when I went to Colorado. People there they don’t look at your age and dismiss you immediately. They actually see the value that you are trying to provide. That I can say is different to the local environment here.

So there are a lot of people which doesn’t say much, right? And they are a little bit cautious in their approach.

IO: Cautious and also… let’s just say cautious (laughs).

Let’s just say it like that. Who knows who is going to read the interview (laughs). What is your vision?

IO:  GreenChar’s vision… We want to be the ultimate provider of clean energy solutions. Not just that but once we become an industry leader we want to move into other clean energy products. That is why distribution is key for us. If we can build the distribution than we can suddenly push clean energy products through the distribution.

Next Silicon Valley

Ian, the US. What is the US for you?

IO: I was lucky. I was in a town called Boulder. It is very chilled. It is a bit laidback. There are many smart people over there.

Is it in West Virginia or something nearby?

IO: It is in Colorado.

Colorado, ok. Almost (laughs).

IO: So I found it very, very good. Especially the school like the university is experimenting with this new approach to higher education where you just don’t go in but you actually build a business. You have real investors that give real feedback and you can meet all those amazing people you can network with. That experience I would say has been one of the most profound in my life and it really sort of built me up. I see the world now in a different light.

Can you emphasise on that?

IO: To give you an example, you made up your mind about a business idea and you found a capable team to execute after pitching in front of real investors you might get funding still being in the program of the university. Then you just start your company straight away. It is really connected and the network in Boulder is sheer amazing

Kenyan culture

I know Kenya also faces the issue that bright people go to study abroad and then stay. You obviously returned because you’re here and we are right now in Kenya. What do you think about that and why are you back?

IO: I think most Kenyans we are brought up in the culture where you are born, you go to a school, you study hard and you get a good job. Your end goal is to get a good job that pays you lots and lots of money. So we are having a situation where the youth are exploding. There are so many youths but only so little opportunities. That is the mindset here. So when you have the opportunity to go abroad, you see that as an opportunity and many people prefer to stay. But for me I started GreenChar when I was young before I went and I could see that there is an opportunity right here where I am. Going there just reinforced my belief to come back to Kenya and see where the opportunity is.

In which area would you venture outside of GreenChar?

IO: Outside of GreenChar I think I would venture in education. We could start a school from the bottom up. A different kind of school that is more focused on skills than just theoretical information to fill your head and then after high school you have forgotten everything. You can’t even apply what you learned. So a practical school where you also give them the information but they can also apply what they have learned immediately and focus on entrepreneurship.

What would you give as an advice for your future children to get them on the right track?

IO: Don’t wait for help. Don’t wait for help from your parents and don’t wait for anyone else to tell you when to start. You just start as soon as you can.

Founder in person

How would you describe Ian as a person?

CK: Ian… well, well, well, well.

This is a very serious question.

IO: (laughs)

CK: Ian is very smart. He has thirst for knowledge and he is a good person. You know those people with good hearts. He is a good person. He has a good heart. So that’s Ian and he is fun to be around. Good morals. Let’s just stick to good heart and very smart.

And he has energy I could tell from the way he speaks. Last question. Your co-founder has this very touching story about his mum getting an illness from the charcoal fumes. Is that true?

IO: That is so, so true. I remember the time in high school. He actually had to go home. It was crazy.

It is very inspiring straight to the heart. I really was like wow that can change lives and it really keeps you working even though you have no energy but it keeps you focused. Thank you guys for the interview I really enjoyed it.  I hope it was great for you as well.

Interviewed by Marlon
June 2017

 

 

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