M-Kopa Solar - borrowing from the sun
Jesse Moore, co-founder of M-Kopa Solar in Nairobi, Kenya
I lived and reported across Africa for ten years and in that time although my views, thoughts and ideas about the continent changed constantly - (as with anyone who lives as a foreigner in a country you see things differently, and as a journalist even more critically at times) - it’s the entrepreneurs and business start-ups, both the experienced and the novice, setting out to solve some pretty basic problems with amazing energy and creativity that leave me feeling excited and optimistic.
And it’s impossible not to get excited about the Kenya-based solar energy company M-Kopa.
They sell paper-sized solar panels you put on your roof to give light and power. The cost of the panel is then paid off in monthly instalments through your cell phone.
The sun, a solar panel + your mobile phone = light and power.
Bill Gates was so excited about the company he and his wife’s foundation invested four and a half million dollars. He featured M-Kopa on Facebook page as well.
Jesse Moore (pictured above) is one of the co-founders of the company. You can listen to him interviewed on Monocle’s Entrepreneur programme here and below he gives his down-to-earth insights into starting up a solar energy company in a country where the need is endless and the demand is constant…..
Starting up your own company, was this always your long term vision?
My own background professionally started in the development sector, working for more standard charities, trying to do good in the developing world. And quite early on in my career I felt that I wanted to do something more scalable than what I was seeing charity aid was able to accomplish. I got fascinated by different business models, which would be quite profitable but have a big impact on low- income people. So after many years of trying some different things I eventually went to business school.
How did going to business school and getting your MBA open the door to coming up with a game plan for a business?
Selling M-Kopa panels at the rural village store
By the time I was doing the MBA it was very clear that technology was part of the answer of how you could create a good business that did well. The success stories involved some kind of leap-frogging technology. So whilst I was at business school trying to work out what I was going to do with the rest of my life and hopefully learning some things in business that would help me with the rest of my career, I thought of two different sectors I would pick to work in.
One would be the mobile technology sector – obviously mobile phones have become a huge, transformative business opportunity in emerging markets that does a lot of good.
The second one that I was thinking about was renewable energy. So I was thinking solar, going off grid – this is going to be a big part of the next game in the next couple of decades so its ironic now that we’re really a mobile technology company that sells solar and we’ve combined mobile technology to apply renewable energy to make it affordable.
And how did the co-founders come together?
It [the business] really germinated between a few of us who were trying to start a business together - we had worked with bigger companies and we wanted to set up on our own and start something from scratch. The idea for M-Kopa was hatched in the brain of the other co-founder for M-Kopa, Nick Hughes, and he shared it with me over dinner one night here in Nairobi about 5 years ago. It took me about a year to convince my now wife to marry me and move to Kenya. But she jumped on board pretty fast and we moved to Kenya and started the company from scratch.
Jewellery maker, Anne, is able to work on her beading business at night
With a background in development you’ve seen a lot of the problems people in the developing world face - so do you see business rather than charity as more of the solution?
Everybody is aware no matter where you are in the world that there is dire poverty and people live without enough basic means to live whether that’s housing or food or energy. There’s then just two ways to look at that need. Is it a need that is filled by charity or is it a need that can be filled by a business solution? And some things need to be filled by charity there’s no question - for humanitarian disasters, business is not the answer, but in most places, especially regions like this in East Africa which are growing, people want to afford the solutions to their own problems. They don’t necessarily want hand outs. They really want to make themselves better by buying the products and services that make them better and they want to contribute to the economy by being part of the economy.
As an entrepreneur you’re tackling a pretty massive problem - lack of power on a monumental scale. Was it quite daunting to start tackling that problem in a country like Kenya where you’re not from and in a place you may not be used to doing business in?
Maasai farmer Daniel Tempes Olinapa switching on his bedroom light
First thing - is it daunting to tackle the problem of lack of a power or the use of kerosene for lighting [in Kenya and elsewhere in Africa, kerosene is used for light but its dirty and expensive]? If you’re doing it as a business like we are its not a problem, it’s a huge opportunity. There’s a billion dollars spent every year on kerosene and there may be 5 million homes that lack affordable power - so that becomes a great opportunity and a great part of your business plan. When we were going out to pitch this to investors – the bigger the scale of the problem, the bigger the scale of the market and I don’t think we’ve ever felt daunted. If anything we’ve felt motivated by the fact there is so much demand out there that we can fulfil and it’s a big ocean of opportunity for us to grow.
I’m Canadian and I started working in Kenya for a charity back in 2002 so I’ve been working in the country now for over a decade. I find Kenya a pretty great place to set up a business actually, which isn’t to say its not daunting, I think setting up a business in any country is daunting. There are comforts that setting up a business in Canada woiuld have provided but there are also great advantages that Kenya can provide, particularly in the form of lots of talented labour, wages that are much less than you would see in the west so you can afford more staff more quickly.
And you don’t find these big market gaps so often in more developed markets its more likely that somebody’s already thought of it and is charging ahead so the opportunities in developing markets are very very big and attractive to an entrepreneur.
The logistical and technological challenges must be vast?
The challenges change over time. I think the early phase in the pilot and proof of concepting were technological challenges because to the best of our knowledge there had never been another solar system with a cellphone integrated into it. So we had to build everything ourselves from scratch. But once that technology was more or less ready the challenges have shifted to distribution and support.
As we now sell over 1000 units every week the coordination of the sales force and the distribution through shops and the stocking of those shops and the odd return when a customer for whatever reason needs to bring back their device or if a panel has been stolen how can we replace that – all those distribution channels are monumental and you can’t hire somebody that in four weeks will make that better. This is years and years of improvement in the making.
So the hard sweat is in rolling up your sleeves and building distribution, building a team and building a company culture and building finance that supports all the petty cash and pay roll – they’re not very sexy things.
The technology is very sexy, it’s a great idea but the unsexy things are the difference makers. You’ve got to bring that technology and just roll up your sleeves, find a great team, be dogged about the details and do the same thing better and better and better and better every day for many many days before you can sit back and say, wow we’ve done something amazing.