“Now I had recently converted our family over to rechargeable batteries, and we were saving a ton with them. I did a little research online and discovered that rechargeables deliver ten to thirty times more energy than throwaways, per dollar spent. And I thought, wow, here’s something: a better battery.
“But then you gotta ask yourself, if they’re so great, how come no one in Africa is adopting them? Why don’t you see them? Well it makes sense when you realize that the primary thing people are after here is minimizing current out-of-pocket expenditure. There’s so little cash flow that people are watching every penny. And even though rechargeables save you money in the long haul, they are tremendously more expensive initially. The batteries themselves cost more, and you have to invest in a charger. And then, most significantly for rural Africans off the grid, you’ve gotta have a way to power the charger.
“So that’s when I started to ask myself, well how do you get over these hurdles? What are other businesses where you’ve got a very high initial capital cost that you want to spread out over the lifetime of the goods, so it’s affordable? There are all kinds of models for this in the first world, from tool rentals to video stores. So it became clear that renting was a way to spread out the capital costs and allow a consumer with less upfront money to still take advantage of the long-term savings of rechargeables. But it was also clear that to make a rental model work over here, you had to have a first-person direct-selling system, like the Avon lady or the Tupperware party. The salesperson has to actually know the renter, and be able to get the batteries back if the person decides to stop renting. And I knew we’d need that direct, personal relationship to be able to adequately explain new offerings like Burro’s batteries to prospective clients.
“That’s when everything started to fit together: the rental model opened up the economy of rechargeable batteries to a much wider audience, and improved the productivity of poor people because of these greater economies. It required a model where our business would be setting up these little businesses—these independent agents—who would be carrying Burro wares into their own villages. So it was right on brand for us. A great place to start.”
Traffic slowed in front of a roadblock. On the left, a trooper from the Ghana National Police, in stiff blue camo and matching visored cap, glanced at the insurance and registration stickers in the windows of slowly passing cars, occasionally motioning one over to the side of the road, where two other police holding Kalashnikovs performed their shakedown on the unlucky driver. As we approached the head of the line, I thought I saw the cop signal Whit to pull over. “Aren’t you gonna stop?”
“It’s not me, he’s going after the taxi behind me,” said Whit, eyeing the rearview mirror. “Don’t ever stop unless it’s completely clear they mean you. Don’t look them in the eye, don’t say hello. Just give them a little nod and keep moving.”
“How much do you have to pay if they pull you over?”
“Whatever is in your heart. That’s what they say.”
“And what’s typically in your heart?”
“A couple of cedis, but never offer it. Wait for them to demand it.”
“Okay, so then what?”
“Then you don’t get ‘arrested’ on some trumped-up charge.”
“No, then what happened with your battery idea?”
“Oh. Well, this was probably back in December of ’07. I was still in Seattle, just noodling on it more, thinking about names, starting to protect IP, researching batteries and chargers. But bear in mind this was all taking place against the backdrop of the Cranium sale to Hasbro, and then Dad died, so I didn’t have a lot of brain cycles to spend on Burro until maybe the end of January ’08. So then, once I had locked in to Ghana as the best place to launch, I started to realize I better get over there. That’s when I heard about the World Bank conference in Accra. I spent about three quarters of a week at the conference, met Charlie, then a good week and a half on the road conducting on-the-ground market studies.”
“How did you find people?”
“It was not as rigorous as you might want. We would just storm into a town or a village and find people who looked like they had time and might be potential clients. I had a driver, Asare, and we had Martin Aponsah, a translator; he’s the brother of Rachel and Cameron’s high school guidance counselor in Seattle who is actually a traditional Ghanaian chief. We went as far west as Takoradi and up to Koforidua, and then all along the coast road here. We interviewed people up and down the Akwapim Ridge. We stopped at places on the grid, off the grid, villages, cities, towns. We brought a bunch of batteries so we could show people what we were talking about. And then we interviewed people as potential agents as well as clients. We talked to probably seventy or ninety people around the country, and these were detailed, sit-down focus groups, albeit very informal.”
“And?”
“What we found was incredible receptivity to the idea. I was cautioned by someone at the conference, ‘Oh yeah, people will tell you they’re interested until you ask for money.’ But I know a little bit about market studies, and I could tell we were getting pretty straight answers from people. I mean, I think I came away feeling like there would be stronger demand than we’ve seen in urban areas, but I really underestimated the demand in off-grid rural areas. We’ve had trouble cultivating the urban demand, at least in Koforidua, but we’ve also had trouble getting good agents there. So I think the verdict is still out on the potential in urban areas. Obviously what we’ve learned is our sweet spot is the rural areas in general, and particularly off-grid areas.
“But the May trip confirmed that people were in fact spending between two and five bucks a month on throwaway batteries. Moreover, it suggested that many people were going through their batteries three or four times a month in any given device. That’s what we were most after, because that’s where they start to see the economies. Unless somebody is burning through batteries three or four times a month in a particular gizmo, they’re not gonna be a good customer for us. There’s no point in putting rechargeable batteries in a wall clock—at least not when you’re asking for a fixed fee per battery every month.
“And the other thing that became clear was people were having to carefully ration their device usage. For me, that was the tip-off that people are gonna respond to the all-you-can-eat promise we were making. Assuming we could make the economics work on our end, we would be able to keep people at about the same battery budget they were at now, but with comparatively unlimited energy potential.
“So on that first trip it all became pretty clear to me. Originally my objective was to find a Ghanaian partner and do a more detailed market study, maybe spend ten thousand dollars or something. But I came away from that trip feeling like a study was gonna be a waste of time and money, because I was just blown away by the response. It was so strong. I was like, okay, we’re just gonna roll the dice and roll this out. Can you drive for a while?”
We pulled over and switched seats, and I pushed the pedal down hard. The road was pretty good, only a few potholes, and we wanted to get back to Kof-town by dark. Tomorrow morning was the battery route, and we needed to drive it ourselves. Kevin was still learning how to drive (Whit was paying for his driver’s ed classes) and had not yet received his learner’s permit. I was amazed that Ghana even had such a formal process for driver training, but apparently attempts are being made to rein in the highway slaughter, and education (along with “overspeeding” signs) is one of them.
It was a big step up for Kevin, who was thirty-seven. He lived alone, in a studio apartment on the south side of Koforidua with a sink, shower, and cold running water twice a week—comfortable by local standards. When he saw I was interested in Ghanaian cuisine and willing to eat anything, he adopted me as a lunch partner. We would head into the market and his favorite lunch stands (Kevin had no stove in his apartment), where he introduced me to various offal-based delicacies like stewed pig intestines and goat kidneys. When he cooked at Whit’s pl
ace, he used lots of garlic and hot pepper. Originally from Kumasi, he was college educated and read the newspaper every day. He was worldly by Ghanaian standards, having once been to Nigeria, and he wanted to visit London, where his brother lived. He was engaged to an Ashanti woman who lived in Kumasi. Kevin was not a bachelor. He was a widower. In 2006, his wife and seven-year-old son were killed in a tro-tro accident. It happened on his thirty-fifth birthday. They had been visiting her family, and they were coming home to celebrate.
1. A Dangerous Place
In a 2007 op-ed piece in the Los Angeles Times titled “What Bono Doesn’t Say About Africa,” William Easterly chided rock stars and their corporate sponsors for perpetuating an image of Africans as downtrodden victims. “Africans are and will be escaping poverty the same way everybody else did,” he wrote, “through the efforts of resourceful entrepreneurs, democratic reformers and ordinary citizens at home, not through PR extravaganzas of ill-informed outsiders.”*
When it comes to Africa, charity bashing appears to be catching on. In 2009 the young, Harvard-educated Zambian economist Dambisa Moyo wrote a best-selling book with the eye-poking title Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa. Asked by the New York Times Magazine what she believes has held back Africans, she replied: “I believe it’s largely aid. You get the corruption—historically, leaders have stolen the money without penalty—and you get the dependency, which kills entrepreneurship.”
It sounds ridiculous to say that entrepreneurship is risky. Of course it is, even when carefully conceived. Investing time and money in any venture that doesn’t generate a paycheck within a month is risky. But as time went by, what struck me was the prolonged nature of Whit’s risk; it was like betting on a horse the day it was born, then waiting three years for the Kentucky Derby. Even so, it became clear that Whit and Jan needed to figure out a faster way to deal with agent reconciliation, or get better agents, or both.
“Seasonal income is a big issue,” said Whit one January night, back from our coastal trip, as we sprawled across the rattan sofa on his second-floor veranda. “When we started in the fall, people were harvesting their maize and they had lots of money, disposable income,” he went on. “But because they can barely meet their needs, they spend it when they have it, without a whole lot of thought to what happens next. So now it’s the dry season—no crops, no money. I had assumed people would still buy batteries in hard times, but we’re finding that many people really do live without them in the lean months.”
Whit had only been in business for a few months, but already he was seeing kinks in the plan. He had assumed customers would recognize the obvious advantage of the Burro offering and keep renting every month, exchanging their old batteries for new—establishing the sort of recurring annuity stream that gets venture capitalists salivating. But a number of factors led to renewal rates lower than the high client satisfaction reports had predicted, not least of which was the issue of income volatility.
“What if you got people to pay an annual fee when they have the money?” I asked.
“That’s a lot of money for these people, even in the good season. Maybe with microfinancing. Maybe we get into a model where agents get microfinancing so they can stock up on batteries from us.”
Whit poured a sweaty bottle of local Star lager into a pint glass and took a long swallow. “Initially we were focusing on signing up new customers,” he continued, “and I think that also hurt our renewals. We hadn’t prepared the first class of agents for the challenges of renewals. Some agents feared that collecting batteries from people slow to pay would terminate the relationship for all time, and even jeopardize their standing with friends and neighbors. Some even went so far as to continue providing fresh batteries to clients who kept promising to pay ‘tomorrow.’ We had to put a stop to that, but saving face is very important here. So Jan and I came up with revised terminology. Instead of canceled, nonrenewing clients were said to be on break, and we trained agents to remove any stigma from the collection of batteries. You know—‘It’s fine to go on break, many clients go on break, and Burro will welcome you back when you are able to pay.’
“The third problem is that a lot of customers seemed to be testing our resolve. So many charities and NGOs have provided so many services at little or no cost to these villages that expecting something for free from white people has become perfectly rational behavior. Once we made it clear that Burro was not only refusing to offer credit but was also being hard core about collecting batteries on unpaid accounts, renewals began to improve.”
Down on the street, a minivan for Fred’s Medicated Soap crawled past, its roof-mounted speakers blaring ad slogans in Twi. On the side of the truck, next to a crude painting of a topless woman with one breast cartoonishly larger than the other, was inscribed in English:
Indication: Treatment of Breast Cancer, Boils, Conjunctivitis of Eyes, Treatment for Broken Bones, Waist Pains, Rheumatism, Menstrual Pains, Severe Headaches, Stomach Aches, Rickets Fibroid, Whitlow Piles, Stroke & Babies Facing Hard in Walking.
“Jesus,” I said. “We’re doing business in a country where people buy soap to cure breast cancer.”
“Ghanaians are obsessed with cleanliness,” said Whit. “Which is amazing considering they have no running water and live on packed dirt. They take bucket showers twice a day, and you’ve no doubt noticed the beauty salons on every block. Frankly, they find white people rather slovenly.”
“Well they’re used to Brits,” I noted. “Which reminds me, what’s up with all the ironing? These people are constantly ironing clothes, and with no electricity. Have you seen those irons that hold a chunk of red-hot charcoal? Amazing. I’ve never seen such a crisply creased bunch of people. I feel like such a slob by comparison.”
“Well, you are a slob, but the ironing is a health issue,” said Whit, draining his beer. “Mango flies, also known as putsi. They lay their eggs in drying laundry, hanging on the line. When you put the clothes on they hatch and the maggots burrow under your skin, leaving nasty boils. The only cure is to squeeze them out by hand. You put Vaseline on the boil, and the little fucker sticks his nose out to breathe. Then you pop him out like a zit—but the trick is, they have barbed spines and they hold on, and if you break them off they get infected. Before you know it you’re a walking pus-bomb. Sepsis is a big issue here. It’s so hot and humid that even minor insect bites get infected; you can imagine what a rotting half maggot under your skin looks like after a week. Anyway, ironing kills the mango fly eggs.”
“Holy shit. As if these people didn’t have enough to worry about. No wonder they buy medicated soap.”
“It’s a dangerous place. Americans have no idea. By the way, did you know your son bought a bottle of Scotch yesterday?”
“What?”
“Scotch.”
“Where’d he do that?”
“At the liquor store, duh.”
“Were you with him?”
“Yeah.”
“And you let him?”
“I’m not his dad. But I figured you’d want to know.”
“I figure his mother will not want to know. Hey, Harper!” No answer from inside the apartment.
“He went down to the market,” said Whit.
“Great. What’s the drinking age here?”
“Eighteen.”
“He’s seventeen.”
Whit laughed. “This is Africa. Like they check IDs.”
I took away the Scotch.
2. It’s My Brother’s Fault
Seasonal income was one challenge facing Whit. Another, more vexing problem for Burro was the complexity of agent reconciliation. Twice a week, Whit, Jan, Kevin, Harper, and I spent the day driving to villages around Koforidua, meeting with Burro’s dozen or so field agents to exchange dead batteries for fresh ones and collect the rent money. It was an absurdly complicated process with reams of paperwork to keep track of who had paid, who hadn’t, who was going on break and who was renewing, to sa
y nothing of how many batteries each customer was using and the frequency of their replacement. We all knew there had to be a better way, and Jan and Whit were developing more efficient accounting systems, but Burro hadn’t gotten there yet. One idea was to give more autonomy to agents; Burro would rent batteries to them and not worry about the end users—sort of like Avon ladies. But for the pilot program, Whit felt it was important to understand how villagers were using the batteries, and how often they needed to “refresh.” So the tedious reconciliation days continued. We’d sit for hours in our camp chairs, eating peanuts and grilled plantains under the midday sun as Kevin and the agents pored over numbers, flicking biting red ants off their paperwork.
One day we sat under a tree in the village of Adawso, a pleasant junction town with a busy market, near a group of teenage boys playing a menacingly physical game of Ping-Pong at an outdoor table. It reminded me of the cutthroat Ping-Pong Whit and I used to play in the basement rec room of our split-level suburban house. One of the boys was wearing a T-shirt that said IT’S MY BROTHER’S FAULT. Whit and I went over and posed with him for a goofy picture. Agnes, an agent for the nearby village of Gbolokofi , arrived and spread out her paperwork. Her wide, soft face was framed by a knitted headband around her smartly coiffed and straightened hair. She ran down the list of her clients: Kwaku Afo, Kwei Norley John, Ogbey Samuel, Kwame Oparre, Regina Awuku … twenty-eight in all. This week she added a new client, but some of her existing clients who owed money appeared to be missing in action. “What about Neil Armstrong?” Kevin asked her.
“He went away,” replied Agnes. I think we all said “To the moon?” in unison, and Agnes laughed. (When signing on for his Burro batteries, Neil told Agnes his first name was spelled “like the moon astronaut,” which is what she wrote down.)
Max Alexander Page 8