They might be anywhere in the world right now, but they’ve probably stood out their whole lives because they’re committed to social change, to empowerment and because they walk through the world with grace and humility.
They’re the kind of people who get things done in all sorts of crazy situations, the kind of people who keep their wits about them no matter what and no matter where, the kind of people who just seem to connect with others no matter where they go.
These are the kinds of people who might make up the next class of Acumen Fund Fellows. Applications opened today. Hear from Fellows in their own words – click on this video.
My last night in Hyderabad, 100 people gathered at the Acumen Fund offices for an informal community event at which I and my colleague, Karthik Chadrasekar, spoke. It’s always exciting to see such a large turnout and interest in our work, and I was struck particularly with the number of people I met who are working on entrepreneurial ideas to deliver power and light.
It’s not surprising, given the staggering numbers: 500 million people in India alone without reliable power (and 3 billion globally); 1.5 million deaths annually from indoor air pollution; and the poor typically spending 15% of their income on dirty, low-quality fuels – more than is spent on healthcare or education.
But of course all big solutions start at the beginning, not the end…with one system or pilot or idea that works so well that it is built to grow. And to make it all happen, you need the right person, or people, with a vision of how to make the impossible possible.
The idea behind Husk Power Systems came from Gyanesh Pandey who, together with his partner Ratnesh Yadav, began tinkering with renewable fuel solutions for the poor in 2002. By 2007, Gayanesh and Ratnesh had settled on biomass as their preferred fuel source and had set up shop in the Indian state of Bihar, where Gyanesh is from. Bihar is part of India’s “rice belt” so rice husk is abundant, as is poverty.
But no one had ever built an end-to-end system here that generates power and delivers it to villagers’ homes at an affordable price.
Husk Power Systems began as an NGO, the Samta Samriddhi Foundation, that built one mini-system and wired the surrounding village. The system uses rice husks to power turbines to create electricity, and the business model is powerful in its simplicity: create small-scale infrastructure (wires to thatch homes strung on bamboo poles); a predictable and reliable power supply from 6pm to midnight; and sell customers two CFL (compact fluorescent) bulbs at a price that they can afford.
Or, as it is sold to the villagers: the cost of electric light to your home (which has never been delivered in the thousands of years this village has been here) is 300 rupees for the connection (about US$6) and less than 100 rupees (US $2.50) per month.
Uptake has been swift.
In every village we visited, house after house after house was bathed in the cool blue glow of CFL lights. Homes in villages that had been dark or powered by kerosene for thousands of years were lit up. And not just some of them. Nearly ALL of them. 80% or more of them in every village we entered.
Demand – for this product, with this reliability, at this price – is not an issue, which sets Husk apart from nearly all of the businesses that serve the poor in the developing world.
This helps explain the pace of Husk’s growth: they had two systems installed by the NGO by early 2008, and a little more than 2 years later they have nearly 50 systems serving more than 100,000 people and growing at an accelerated pace. The plans to scale are aggressive, with the goal of reaching hundreds and then thousands of systems in the next few years. And that will bring its own challenges – of acquiring more turbines and building and maintaining more systems and building the salesforce and collecting payments from customers and training thousands of mechanics.
But what I find so exciting is to see a business serving the poor with a core model that works so well, one in which promise of meeting a need is matching up with the reality on the ground – high demand , hugh penetration, and high satisfaction from low-income customers, with underlying economics that work. Having seen hundreds of businesses around the globe that aim to do just this, I know how rare it is.
And if business solutions to poverty are going to work on any sort of scale – not just delivering products to some but addressing social issues at their root – we need to start asking ourselves this question of market penetration. All too often we look at the company level and ask if it is selling enough at a low enough cost to make the business work. This itself is hard enough. But for so many social problems, large-scale change will only come when market penetration (even if the market is just one village) – for safe drinking water, primary education, sanitation, vaccines, maternal care, etc – reaches 70%, 80%, 90%, even 100%.
It is this depth of adoption that will fundamentally alter the infrastructure of people’s lives.
As the sun rose over the deep green rice fields around us, hundreds of people were walking along the highway and amongst the rice paddies, starting their day – squatting, walking, sitting, and waking. That’s one aspect of India that feels different from nearly everywhere: no matter where you go, it feels like there are always a lot of people going about their business.
1 in 6 people in the world lives in India, so any social issue in India is, by definition, a big one. The Indian state of Bihar, India’s poorest, has a population of 85 million, 80% of whom have no reliable access to electricity, 58% of whom are under the age of 25, and 85% of whom live in rural areas. And this is just one state – with a population larger than the UK, France, Italy, Spain, or Germany – in a country of 1.1 billion people.
When people talk about what will ultimately break the back of poverty – philanthropy or market-based solutions, or some combination of the two – I’m inexorably drawn back to these sorts of numbers. They makes me ask how anything could possibly grow to touch hundreds of millions of lives without some sort of economic engine that works. It feels impossible. The imperative, then, is to find a way to make markets work in service of social change in places like Bihar.
Lighting and cooking solutions are a great place to start, because villagers already spend 10-15% of their income on fuel (for dirty, unsafe kerosene lamps and for open stoves that spew noxious smoke in people’s homes), and because 1.5 million people a year die globally from respiratory conditions resulting from indoor air pollution – 50% more than from malaria.
The opportunity and the need here is huge.
Acumen Fund has two investees that are working to crack this problem: D.Light, which sells solar lights to replace kerosene lamps, and Husk power, which is bringing power directly into people’s homes. So when six-foot-two Gyanesh Pandey, CEO of Husk Power Systems, casually rolled into the (VERY bare-bones) Skylark Hotel in Padrauna wearing shorts, a white t-shirt, and a big smile on his goateed face, I wanted to know how and why he is solving a problem that no one else has managed to tackle.
What comes across quickly in conversations with Gyanesh is that markets are working in a limited way even in Bihar: villagers are buying kerosene, fertilizer, seed, alcohol and clothing, so even people making just a few dollars a day have some small amount of cash that they’re spending. This means that the goal isn’t to wave a magic wand and introduce markets where they don’t exist; the goal is to understand the village-level economy – and the mindset of people living there – well enough to offer solutions that will work to improve lives.
It turns out Gyanesh, who has a BS in Electrical Engineering from IIT Varanasi and an MS in Electronics Engineering at Rensselaer Polytechnic Institute, grew up in a village in Bihar, and he’s quick say, with a twinkle in his eye, “Hey, if I don’t work on these problems, who will?”
Gyanesh started tinkering with renewable fuel solutions for the poor in 2002, and in 2007 he and his partner Ratnesh Yadav set up and funded an NGO, the Samta Samriddhi Foundation, to build one mini-system that would provide power to 2-3 surrounding villages at a price villagers could afford. Gyanesh and Rathnesh figured that if the price were low enough and the reliability high enough, they could sell power and 1-2 lightbulbs to villagers who would be all too happy to give up their kerosene lamps.
In 2008, based on promising early results, Gyanesh and Ratnesh set up Husk Power as a for-profit company, and less than three years later Husk has installed and is operating more than 40 ultra-small systems that are providing power to more than 100,000 people, and Husk plans to grow to 5-10x their current size in the next few years.
More on-ground stories are being added every day at: ontheground.pk. Please add your stories.
Here’s the letter:
The world has been slow to react to the enormity of the floods in Pakistan. Acumen Fund wants to help change that, and in the process take a small step toward changing the way the world sees Pakistan.
I know that all of us have been putting our thoughts and actions towards flood relief and rehabilitation. To create greater awareness globally on what is happening on the ground in Pakistan, Acumen Fund has launched a website www.ontheground.pk to capture both news and first hand experiences about the impact of the flood as well as the flood relief efforts.
The website allows you to post your stories or photographs in Pakistan as well as news updates regarding the flood. This information will build a compelling tapestry of what is happening on the ground in Pakistan, and will reach out to the global Acumen Fund community.
Please share what you are hearing or doing on www.ontheground.pk. Doing so will help demonstrate to the world that people (Pakistanis and non-Pakistanis) are taking action to help. We are rolling this out to our global community and leveraging Acumen Fund’s networks outside of Pakistan to get the word out and advocate for action!
At the same time, do help spread the word about this. Anyone is free to post what they are seeing/doing on the site. I believe that our message to the world will be stronger if we all come together to share what we are doing.
After all, Pakistan needs the world to act now.
Country Director, Pakistan | Acumen Fund
Tonight at 7pm, PBS NewsHour will air Part 2 of its interview with Acumen Fund founder and CEO Jacqueline Novogratz. This segment will focus on Jamii Bora, the Kenyan microfinance organization which has built the Kaputei housing development outside of Nairobi. They are an incredible organization and I’m sure the segment will provide a glimpse into the fabulous work they do.
I participated an interesting conversation tonight of about 30 people all interested in the “impact investing” space which, broadly defined, is focused on taking an investment-based, market-based approach to solving major social problems. Acumen Fund, where I work, is one of the pioneers of this space, and we’re excited to see the growth of the sector, especially in the last few years.
Tonight’s conversation started with a question – “what are the limits of philanthropy?” And while I thought this was an interesting question to kick off discussion, I thought it was a misleading starting point for a conversation about how to use patient investment capital for social change.
It’s not about what’s wrong with philanthropy. Rather, we opened our tool box one day a few years ago and discovered a strange new tool – using the markets and an investing mindset to make social change. What we’re all in the process of trying to figure out is, “What’s this tool for? Where can it best be used?” I don’t know if philanthropy is a hammer or a screwdriver or an awl, but I do know that we can waste a lot of energy trying to figure out all the things that other tool cannot do, energy that would be much better spent holding this new tool in our hands, playing with it, trying it out in different situations, and honestly looking at the fruits of our labor.
Where does this tool work? Where does it do a fabulous job? And where does it prove to be awkward or misshaped or just plain inappropriate?
This new tool alone isn’t going to solve all our problems just like philanthropy doesn’t and the markets don’t either (nor does microfinance; nor does infrastructure; nor do projects for women and girls). But those who spend their time mastering this new tool, apprenticing and toiling and honestly assessing what they have worked to build – these people will show us the way forward.