Overview
If you’ve been following The East Africa Business Podcast for a while, you might notice that most episodes are around the 30-40 minute mark.
Whilst that was the intention here, in this episode Samir and I end up chatting for well over an hour.
The reason being is that (to me at least) there’s just so much interesting stuff to talk about the business he’s running.
Sunculture exists to improve productivity amongst smallholder farmers, and does so through a variety of services including solar irrigation pumps and financing all run on a state-of-the-art software platform.
We talk about how and why the company was formed, why Samir believes that, unlike the US, there will always be smallholder farmers in this part of the world, and how Sunculture’s dream team operates, in part motivated by Samir’s monthly emoji email.
A big part of the Sunculture thesis on development is aligned with the discussion I had with Conrad Whitaker. To learn more, search for the episode on the Distributed Economy.
We do the interview in the garden of the lovely Sunculture offices and so there may some background noises (including a nearby scuffle between a dog and monkey) which I hope doesn’t detract from what is a really fun and information-packed episode.
We sometimes go a bit off-piste, including how Samir is hoping to one day reach out to the Ohio band that share Sun Culture’s name. We sample one of their tracks at the end of the episode, if you’re interested.
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Social Media Links
Website: http://sunculture.com/
Facebook: https://www.facebook.com/SunCultureKenya
Twitter: @SunCultureKenya
LinkedIn: https://ke.linkedin.com/company/sunculture-kenya-limited
Transcript
Sam: 00:00:00 Intro
Sam: 00:02:15 Cool. So we’re here today with Samir from Sunculture. Samir, welcome to the show.
Samir: 00:02:19 Thank you very much.
Sam: 00:02:20 Cool. So we’re here in the Sunculture garden. Would you call it a garden?
Samir: 00:02:25 I call it a garden. Yeah.
Sam: 00:02:26 So we’re in your new office, which basically, you know, to say it’s an office is unfair, when you’ve got a vegetable patch over there.
Samir: 00:02:34 You know when we harvest, we actually cook those vegetables for lunch. You’re more than welcome to come by. You’re missing it by a couple of weeks.
Sam: 00:02:42 No way,
Samir: 00:02:43 Sadly.
Sam: 00:02:43 Okay. Anyway, what does Sunculture do?
Samir: 00:02:46 So we exist to help improve and protect the productivity of smallholder farmers. So our official mission is that we develop and commercialize life changing technology that solves the biggest daily challenges for the world’s 570 million smallholder farmers.
Sam: 00:03:05 Okay.
Samir: 00:03:06 Solve problems, help them increase their incomes, allow them to participate in consumer markets, and then a whole lot of macro issues can be solved. So lifting a lot of people out of poverty helping Africa not spend the $110 billion, it’s projected to spend importing food by 2025, help people be able to make money in rural areas. So you don’t have mass urbanization and the challenges that come with that. But at the very core of it, it’s helping farmers increase their productivity.
Sam: 00:03:35 Pretty cool. Okay. What are some ways which you do that?
Samir: 00:03:38 So when we, I’ll give you like our little trick for how we think about this. Okay. And then you can also come up with all your own ways of solving this. So we have this framework that we called the productivity ladder. So a lot of folks in energy who you’ve probably spoken to think about their services in terms of the energy ladder. How do you get people to use more energy services over time? We think about it in terms of how do we get our customers to become more productive over time. So how do we get them to climb up the productivity ladder at the base of that, when you look at the sort of core problem you need to solve, you have to look at how a farmer lives. Farmers, or at least most of our customers, the smallholder farmers in east and west Africa live on plots that are about this size as our subculture garden. They live in a, in a small structure that’s like the small structure on our, on our property as well. And they make money by either selling crops, selling animals, or selling milk from their livestock. All three of these things need water. And because most people get water by physically filling up these buckets with 20 liters of water, which weighs 20 kg. So if you went to the gym and this morning, it’s those big weight plates at the gym, because it’s so heavy, they’re only able to move enough water to barely meet their domestic needs. So they practice what’s called rain fed agriculture. Which, rain is inconsistent, unreliable. They don’t get enough of it.
Sam: 00:04:59 Rain fed agriculture is, basically…
Samir: 00:05:01 You wait for the rain to fall. That’s it. Yeah. And they don’t get enough water to become productive. So if you’re looking at figuring out how to give their crops enough water to grow, or their cows enough water to produce a sufficient amount of milk or their chickens enough water to hatch eggs and have more chickens to sell, You need to figure out how to move water from where it is to where it needs to go. So most people know us as a solar irrigation company because we were the first company to commercialize solar irrigation in Africa. But, solar irrigation isn’t a silver bullet. It’s just the first step on the product, to be honest.
Sam: 00:05:32 The first round.
Samir: 00:05:33 Yeah, first round. Makes Sense.
Sam: 00:05:35 Yeah. Cool. So solar irrigation, that is using solar panels to create energy to pump water from a river?
Samir: 00:05:43 River, well, lake, bore hole water harvest area, dam, any water source.
Sam: 00:05:49 When did you start that?
Samir: 00:05:51 We started our first pilot in late 2012. We spent the first seven months in the field, started selling stuff in 2013. Didn’t raise any additional capital or didn’t start raising external capital till mid 2015. Only kind of had figured out what product market fit could look like.
Sam: 00:06:09 Okay, and what did it look like?
Samir: 00:06:10 It looked like solar panels pumping water or powering a submersible water pump, pumping water to an elevated tank and then using gravity to release water through drip irrigation. And we’ve since then sort of moved away and iterated on the product, made it more affordable, made it more modular. That was what V1 looked like. It was called the Aggro solar irrigation kit. If you Google, you’ll still find some like pictures and articles on the Aggro solar irrigation kit.
Sam: 00:06:38 Yeah, that’s all right. So yeah, just say, cause we’re in the garden, people are beginning to go home.
Samir: 00:06:43 Yes.
Sam: 00:06:43 Yes. Hence, there might be a sound of a car.
Samir: 00:06:46 There might be sound of cars. There might be a sound of birds. Really loud birds if you get lucky.
Sam: 00:06:49 Excellent. Okay, so you started off, you said it was like 2015, was when you…
Samir: 00:06:56 Started getting our first sort of bit of grants.
Sam: 00:06:58 Yeah.
Samir: 00:06:58 So we came with some friends and family loans, which we paid back. Yeah. And then we said, look, we were, no one’s doing this anywhere. We need to figure out what, what this looks like. And I’m sort of air quoting this, this and this looked like technology bundled with value added services and financing.
Sam: 00:07:19 Okay.
Samir: 00:07:19 And then we started in 2015 raising some grant capital to try it a bit more at scale. And then over the years we continued to iterate on our product. So we went from a product that costs about $5,000 down to $500, which took three days to install, and now it takes a few hours to install, that combines hardware and software now and now we’re sort of this one stop shop for smallholder farmers where we have a technology platform that includes hardware and software and we bundle it with value-added related services and financing.
Sam: 00:07:55 Okay.
Samir: 00:07:57 Yeah, yeah. A lot of things.
Sam: 00:07:59 Ok, on that, how many people work at Sunculture?
Samir: 00:08:03 We have official count as of last week was 88 non sales employees and we just trained our 99th sales agent.
Sam: 00:08:18 88 plus 99.
Samir: 00:08:19 You want to do the math.
Sam: 00:08:21 I just wanted to make sure that you don’t have 11 people. All right, cool. Why do you separate them like that? Why did you, why did you speak to them separately like that?
Samir: 00:08:30 Dude, we just went through a huge hiring and on-boarding of sales agents. So in my head, one of the metrics for tracking is how many people we’ve trained for sales agents and we just finished 99 so it was just separated in my head. Just in terms of counting numbers.
Sam: 00:08:45 It’s not like you have one office where all the non sales employees go and another where sales people.
Samir: 00:08:50 Yeah. That’s just how I viewed it in my head right now.
Sam: 00:08:54 Okay. Very cool. And when, how many people did you need to get to V1 ?
Samir: 00:09:00 Two.
Sam: 00:09:01 Really?.
Samir: 00:09:02 Need to get the V1, yeah, it was myself and my co-founder. And that was V1, like original V1 like the OG V1.
Sam: 00:09:09 Yeah.
Samir: 00:09:09 Was us two existing products off the shelf. We put it together on a farmer, on a farmer’s farm.
Sam: 00:09:17 Yeah. How did, how did you get in situation where…
Samir: 00:09:19 Yeah. So I am not a farmer.
Sam: 00:09:23 Okay.
Samir: 00:09:24 My family’s from here.
Sam: 00:09:25 Yeah.
Samir: 00:09:25 So my family got here from India in 1850. Okay. They got on a boat and decided to check where the wind would take them and very fortunately landed in Zanzibar, not a bad place to land and live there. And then in the 70s, they left and I grew up with this emotional attachment to the region and sort of a feeling of responsibility to…
Sam: 00:09:45 When you say left. And they left.
Samir: 00:09:46 They left in the 70s, went to North America. Yeah. So did what a lot of immigrants do. Find someone that they know somewhere else and just go there. So they ended up in Canada where I was born and then I grew up in Florida and went to school in New York and yeah, grew up feeling responsible to use the opportunities that my immigrant parents never let me forget they gave me to solve big problems. And my co-founder, Charlie had this idea to combine renewable energy and agriculture and he looped me into it. He actually, this, I only got involved by pure luck. The Universe is, was working in, in our favor. I guess he wanted to put this idea through a business plan competition at the university I went to and in order to enter the competition, you needed someone on your team who went to the undergraduate business school at NYU where I went to school and I was the only person he knew that went to that program, so he just asked me to sign a piece of paper, letting him enter the program and pretending I’m on his team.
Sam: 00:10:58 And you’re a, hold up this looks pretty good.
Samir: 00:10:59 Not, not even then. It was a few months later, he calls me on a Wednesday night at like 10:30 PM and if anyone calls you on a Wednesday night at 10:30 PM it’s trouble usually. So I was worried. I say, “hey man, what’s going on?” He goes, “we’re in the semifinals.” I’m like, “of what?” He’s like, “remember that competition that we entered? We’re in the semifinals and I’m calling you because you need to pitch with me so it looks like you’re on my team.” That was when I was like, wow, this is actually interesting. He had no idea of my family background. He had no idea that I was really passionate about the private sector’s role in economic development. No idea. It just happened that we had complimentary skill sets, we had similar values. We wanted to solve big problems. Like it just worked out super, super well and so one of the things that I think we we’re the luckiest about just figuring out a working relationship and that works well.
Sam: 00:11:50 What was it about the initial pitch which grabbed you?
Samir: 00:11:53 The macro numbers for sure.
Sam: 00:11:55 Okay.
Samir: 00:11:57 We saw, and you know Charlie, Charlie saw this early on, there’s this huge untapped asset class in smallholder farmers, right? 570 million of them globally that because they practice this rain fed agriculture, they don’t make so much money. So between 600 and a thousand dollars per year, they don’t have any disposable income. Their incomes are not predictable or dependable because they’re relying on the rainfall, which is unpredictable and unreliable, which means that banks don’t want to finance them and insurance companies don’t want to insure them. So these smallholder farmers don’t have access to capital to invest in assets to help them make more money later on, which means they can’t participate in consumer markets. And then all those macro problems happen like I talked about.
Sam: 00:12:41 Yeah.
Samir: 00:12:41 So we said if we can figure out a way to create a dependable and reliable income for these farmers, we, one, can build a really meaningful business that no one is doing. We can lift an entire group of people out of poverty. We can create a new consumer market, we can then sell into that consumer market. We can then also solve all these big knock on effects. So that’s how it started.
Sam: 00:13:06 Yeah.
Samir: 00:13:07 It just, no one was doing it. It made sense. We said, why not try it.
Sam: 00:13:11 Yeah. And then from there you were like, you’ve felt some connection to East Africa and you’re like, let’s just go over and try it out. Or like when did you, when did you first…
Samir: 00:13:20 We got second place in the competition, that fueled the fire a little bit.
Sam: 00:13:23 Yeah.
Samir: 00:13:24 And then I was working at PWC at the time. Yeah. My sort of that, that was my post, post college job. I was in their financial services, structured products and real estate group and Charlie had taken a year off of school to start a consumer electronics business in New York. That’s a whole separate story. Very funny story, which I maybe we’ll get to later. And I had saved, I had saved I think 17 days of vacation in PWC. So that’s Monday through Friday, five times plus a little bit more and add on weekends. That was 23 days.
Sam: 00:14:01 Yeah.
Samir: 00:14:02 So we decided to use those 23 days and come here and try pilot, post getting second place. Charlie had come in January of that year just to check it out. But it was really, you know, we got second place. We were, we thought that we deserved first place because it was such a big opportunity.
Sam: 00:14:21 What did get first place?
Samir: 00:14:23 A company that was making iron fortified cookies for pregnant women who were anemic.
Sam: 00:14:32 Okay. In the US?
Samir: 00:14:34 In India. Yeah. So we said this has to work there, there has to be a way to make this work. So we went in, we launched the pilot and we had a sort of set of questions that we said, if we answered yes for all of them, we’ll do it. We answered yes to all of them and we…
Sam: 00:14:50 What were some of these questions?
Samir: 00:14:51 Does the technology work? Does the business model make sense for a for profit business? Does the business model make sense for smallholder farmers? So can we make money? Can they make money and does this whole thing work? And it was, yes. I called my partner in PWC and quit from here. Charlie called his dean and said, hey, I’m not coming back. Went back, packed our bags, begged everyone we could ask for, for loans and then got on a one way flight.
Sam: 00:15:20 Was the company called Sunculture?
Samir: 00:15:21 It was.
Sam: 00:15:21 Yeah
Samir: 00:15:22 But we only had the website, Suncultured, with the ‘d’ at the end because Sunculture was taken, so we had to negotiate for that.
Sam: 00:15:30 Really?
Samir: 00:15:30 Yeah.
Sam: 00:15:30 What was the initial, the original sunculture.Com doing?
Samir: 00:15:34 I don’t know. There is a sunculture band who if you’re listening to this, we’d love to meet you.
Sam: 00:15:39 A Sunculture band.
Samir: 00:15:40 There’s a band called Sunculture in the US that has, I think the Twitter account and maybe the Facebook account, but we would love to meet them. They’re like a small band that I think, I mean, I listen to music. It’s pretty great. Yeah. I should reach out to them.
Sam: 00:15:52 What type of music is It?
Samir: 00:15:54 Like indie rock.
Sam: 00:15:56 Yeah.
Samir: 00:15:56 I should reach out. Maybe I’ll do that.
Sam: 00:15:58 Yeah. Cool. Okay. So that’s Sunculture.com. Cool, then you land here and you’re like we’ve got to like make this thing work
Samir: 00:16:05 First we have to figure out what we don’t know. I think there were like two characteristics that really helped us at the beginning days. One was we were super naive, like just uberly naive, which I think was really good quality at that time.
Sam: 00:16:18 How old were you at that time?
Samir: 00:16:18 23 turning 24 in a few months. Yeah. so I think the naivety inflated our confidence, which was really helpful for us to make the jump, but also this, we really knew, we didn’t know anything. We knew we could figure it out. We knew we had the resources, we knew we had this sort of base understanding to make this work, but we knew we didn’t know a lot about the problems we were solving. So we said, let’s spend the first seven months in field, First big mistake, putting our first pilot four hours away from where we live. So we would take the matatu up four hours and back everyday. Ended up getting a car driving up and down.
Sam: 00:16:56 What was the logic? There must be some logic to doing that.
Samir: 00:16:58 It was the first farmer that we had met because we met one of his relatives in the US at some point and said, we need to find a farm to pud a demo on. It was a great way to get to know each other, Charlie and myself. Great way to get tour the country.
Sam: 00:17:14 Yeah.
Samir: 00:17:14 But I do think if I would go back and do it again, I would put the first demo much closer, which we did for the second demo.
Sam: 00:17:19 Yeah,.
Samir: 00:17:20 Only 45 minutes.
Sam: 00:17:21 And the reason you made that choice was just like, here’s an opportunity. Like we should just take it.
Samir: 00:17:25 We just need to put something somewhere and see what happens. But we didn’t know how the, we didn’t understand the day to day lives of smallholder farmers. So we needed to put the system in the field and see what the farmers touched, what would be potential break-points, what questions they had, where they needed help, where the tech may not serve them very well. We always say that the farm is our lab. So even when we roll out new products, it always starts with our customers. What are your problems? What do you need? What don’t you have? How can we help you? And I think that’s one of the founding principles that have allowed us to grow into what we’ve grown into right now.
Sam: 00:17:59 Yeah. Okay. What was the name of your first farmer?
Samir: 00:18:02 Our first farmer. Sirma.
Sam: 00:18:04 Sirma.
Samir: 00:18:04 And then the second one was Peter.
Sam: 00:18:07 Sirma and Peter. Did they know each other?
Samir: 00:18:08 They did not. They were very far.
Sam: 00:18:11 Okay. Alright. So what was, what was the deal with like when you went to Sirma, what did you say?
Samir: 00:18:16 We met, we met one of his relatives in the US.
Sam: 00:18:18 Yeah
Samir: 00:18:19 Well this one was easy. We’re going to give you something for free just to see if it works. That was the first one. We don’t like giving things away for free. We often don’t, the reason we gave these first two products for free was because it was really a product we need, needed to test the product. So the first two farmers was very much product r and. D. Then we started selling stuff to people. So the sales pitch for these guys was really easy. We’ll give you free stuff. Let us come to your farm whenever we want, let us try stuff and then you don’t have to pay us. There’s your birds, dinner time.
Sam: 00:18:53 Do you remember the first time you went to a farm when you asked them to pay you?
Samir: 00:18:57 Yes.
Sam: 00:18:57 What was that like?
Samir: 00:18:59 Amazing. Oh, we got so excited.
Sam: 00:19:04 Paint a picture. So like, were you like planning up to this day or was it like, it just kind of happened? What was it?
Samir: 00:19:09 It just kinda happened. We realized one day we were running out of the money we borrowed like, man, we really need to start selling some stuff. We didn’t know how to raise money. We didn’t know what grants were. We didn’t, we didn’t know how to raise capital at the time. We didn’t know that there were organizations that were built and created to just support us. In the early days, we didn’t understand.
Sam: 00:19:31 Okay
Samir: 00:19:31 We understand it now. But were like man, we really need to start selling some stuff, otherwise we’re going to run out of money. So we started marketing and started calling people and used Facebook.
Sam: 00:19:40 When you say calling people, is it like calling up farmers?
Samir: 00:19:43 We used Facebook to get warm leads and then we’d call them and try to sell to them.
Sam: 00:19:48 So the phone was on Facebook?
Samir: 00:19:49 Yes.
Sam: 00:19:50 Like Facebook groups?
Samir: 00:19:51 Yes. We have one of the top hundred Facebook pages in Kenya. Yeah. We have something like 160,000 people on our Facebook page. Our posts get a million views.
Sam: 00:20:02 Really.
Samir: 00:20:02 It’s amazing. It’s, it’s, and it was, it was born out of just our need and the cheapest way for us, our need to market, the cheapest way for us to Ab test. And it was at a time when people were starting to figure out that giving Facebook for free was a really great way to get people online in a really cheap way to get people access to information.
Sam: 00:20:22 So you, you were kind of like, there at the right moment and stake your claim.
Samir: 00:20:27 Yeah.
Sam: 00:20:27 Wow.
Samir: 00:20:28 And Charlie has now developed a skill set in digital marketing. So we started just marketing on Facebook. Our first sale was to an organization called the Likipia wildlife fund foundation. It was an NGO and they bought three of our systems, one for this place called Rumuruti, one for Tigoni, one for Timau out on Likipia.
Sam: 00:20:50 Yeah.
Samir: 00:20:50 I remember sitting at the, at their office, which was in Nanyuki at the airstrip, like quote unquote closing the deal. And I remember the first check that we got, it was like something happened. It was a whole mess. We really wanted the first check. We wanted to have our first sale. Car broke down on the way down to drop it off to us. We sent someone to go pick it up and I remember having the check in my hand and like Charlie and I were just like yes.
Sam: 00:21:17 Physical piece.
Samir: 00:21:17 It was a physical check for three systems. We went and cashed it, not cashed it, deposited it. That was a big day for us.
Sam: 00:21:25 So much more symbolic.
Samir: 00:21:25 So much more symbolic. It was amazing. It wasn’t a transfer. Yeah it was a check. It was a physical check that we picked up and like we had in our hands. It was super symbolic. I think symbolism is important. Yeah, it’s important. Definitely. That was a big one.
Sam: 00:21:38 How much does it for?
Samir: 00:21:39 A little over 10 grand.
Sam: 00:21:41 USD?.
Samir: 00:21:41 Yeah, it was a big one. It was a great for sale.
Sam: 00:21:46 Cause one thing I’m thinking is like if you’re making money off smallholder farmers who don’t have much money, like how do you get, how do you, how do you make money? Like in terms of just the transactions, like departments, transaction values and stuff like that.
Samir: 00:22:02 Build something people want, create value in their lives and they’ll pay for it. I think that’s one of, that’s one of the being a business that being a for profit business, our farmers really hold us accountable because if we don’t make stuff they want, they won’t buy it. If they don’t buy it, we ride a business. So we always sit with the farmer in the middle, solve problems for the farmer, they’ll pay for it. Yeah, the profile of our farmers certainly has changed from the $5,000 product to the $500 product. But we still have margins when we sell products. And if we figured if we can create value for a farmer, a farmer is willing to pay for it. We also finance for our farmers, so they have a, we have a program called pay as you grow. Yeah. You like the name? Cute?
Sam: 00:22:51 How long before you, how long did it take?
Samir: 00:22:52 It was really quick for that one really quick for that one. But our farmers pay us over 30 months.
Sam: 00:22:58 Did they get the joke?
Samir: 00:23:02 It’s not a joke.
Sam: 00:23:04 What I mean…
Samir: 00:23:04 Yeah. They love it and they love it. Pay as you grow. They love it. It’s like, oh, we’re growing. We’re going to pay over time while we grow. Sweet. Our, our main product is our flagship products called Rainmaker. Also, they get it. It’s like it’s raining.
Sam: 00:23:19 Yeah. Yeah. Have you got like, like a naming department? Where does this stuff come? Is this come from, it’s like, being there and just being like, what should we call our next thing?
Samir: 00:23:30 Pretty much. Yeah. We just had one of these naming conversations last week at our leadership meeting. We had to name a new pump that we’re coming out with and it was kind of going round the table and saying, what are we, what do we need? What’s the, what’s purpose of a name? It’s one for brand. For customer also for what we call it internally.
Sam: 00:23:48 Yeah. What’s it called?
Samir: 00:23:51 Can’t tell yet.
Sam: 00:23:52 Really?
Samir: 00:23:52 Yeah.
Sam: 00:23:53 Okay.
Samir: 00:23:53 Yeah. It’s just a larger version of a water pump for our internal uses. It’s not, this one isn’t a customer-facing one so far. It’s been just sitting around and then try and go with customers. So saying, you know, what do you think about this name? Because again, it really matters what a customer thinks. It doesn’t matter what I think. So we’ll come up with a name and then we’ll share it with customers and say, what do you think about that?
Sam: 00:24:12 They must all gravitate towards the rainmaker and all that.
Samir: 00:24:14 Same with colors and with everything.
Sam: 00:24:16 Yeah. Okay. What about your map? Make money. Okay. Make money. So, you’re now at $500-ish price point
Samir: 00:24:23 Yeah, we have, we have two products. We have about $1000 price point, $500 price point financed over multiple years.
Sam: 00:24:29 Okay. So how, what’s the initial cash cash outlay?
Samir: 00:24:32 $89.
Sam: 00:24:34 Are any farmers excluded from that?
Samir: 00:24:36 Of course. Absolutely. Yeah, there are, there will always be people that are excluded from what we can do alone. You know, their governments need to exist to provide welfare for people that, for profit businesses can’t necessarily do that too. Yeah. Now that may actually let me take that back. That might not always be the case. I completely take that back. So right now there are people that are excluded. The only way for this in all these businesses to work at massive scale and I’m not, I’m not talking about it’s scale for Sunculture to do well or other companies to do what I’m talking about its scale where you’re looking at like hundreds of millions of people, governments needs to get involved and the dorm likely of subsidies or smart subsidies. Then these types of products can be affordable and available for everyone. But until that’s in place and then it’s there, there will be people who are excluded from this.
Sam: 00:25:32 Okay. But there’s enough, I mean is it like I’m not, I’m not quite sure how to answer this question or ask this question, but I’m trying to think at $5,000. What percentage of your smallholder farmers market could your access? Like what does that…
Samir: 00:25:46 Much smaller market.
Sam: 00:25:47 But is it like a linear thing? Is there a particular drop offs wave?
Samir: 00:25:51 No, we, good question. In terms of like is it linear or not? I don’t, I don’t think it’s linear. Right now at a, between a 500, so at sort of a $38 or $39 a month, so between a dollar and a dollar 30 a month, there is a market of between one and 2 million farmers for us in Kenya alone.
Sam: 00:26:15 1$ and $2 a month?
Samir: 00:26:17 One and, 1$ And $1.30. So repayments of a dollar and a dollar 30 a day.
Sam: 00:26:26 Okay. Which adds up to about $30, $40 a month. About 40. Again,
Samir: 00:26:31 There’s, there is between and farmers that meet the criteria of having a water source, etc, about one to 2 million of those in Kenya. So there are enough farmers, it’s not linear. I think there’s much more farmers. There’s more than 10 times the amount of farmers available at this price point than they were at the $5,000 price point. Yeah. but there is a point at which you can’t make something cost less without sacrificing the quality of the product for the farmer. So we always say relevance and quality before affordability.
Sam: 00:27:03 Relevance and quality before affordability. Okay.
Samir: 00:27:06 So relevance in this case, let’s say you’re a farmer relevance is getting the right amount of water that you need from where it is.
Sam: 00:27:15 Yeah.
Samir: 00:27:15 So most farmers in Kenya have water between 20 and 50 meters. So it’s pulling that water enough water on a daily basis to satisfy your agricultural and domestic needs. So our water pumps for water from 70 meters.
Sam: 00:27:28 Got It. So you could do one for half the price, but it only does 20 meters and it’s not gonna be relevant to them.
Samir: 00:27:33 Yeah.
Sam: 00:27:34 So its got to work.
Samir: 00:27:35 It’s got to work. Yeah, its got to be high quality.
Sam: 00:27:37 And even it costs a bit more. We don’t care. Not really care.
Samir: 00:27:39 We don’t care. But we want to make sure. It’s, it works and it’s relevant and we don’t, you know, there’s a Strive Masiyiwa, so this is Zimbabwean entrepreneur. He was at the office a little bit ago and he said something along the lines of don’t build, don’t make condescending products. And that really stuck with me. You know, make products that people actually need and that they’ll use and it’s not, I’m going to give you this product that’s like, okay, just because you can’t afford anything better, make something better, figure out a way to finance it over time where the daily cost of ownership is affordable, but you extend the lifetime of the amount or you extend the terminal which they need to pay. There are ways to make really high, high quality products affordable for consumers that don’t have too much disposable income. I fully believe that.
Sam: 00:28:35 Yeah. Okay. So you sort of touched on a bit in terms of the financing in that, like there’s, it’s, you know, there was this, this time gap before you can, so you, you have the initial outlay of like you have to produce and manufacture the system and then you’re getting the money back in piecemeal. So there’s going to be this time period that you sort of mentioned a few times, you’ve taken on some external capital. Is that predominantly to fill that gap or is it, yeah. What are some of the main things that you’ve used? Your external capital for?
Samir: 00:29:09 Everything. I believe that different types of capital are needed for different parts of the business at different times. Okay. I’ll explain that. When we started the business, we raised grant capital to just operate the business. Now we raise grants for very specific pilots where we’re the first mover. Okay. So same type of capital grants, but not used to run the business used for very specific parts of the business. Yeah. We raise equity to grow and operate the business and now we raise debt to cover this period of time in which we need to order inventory before we get paid back.
Sam: 00:29:48 Okay, cool. Right, so you got four, these are the four. You got friends and family?
Samir: 00:29:53 Yeah, friends and family paid back. Okay. grant, capital equity, debt and equity from different types of investors. So our earliest investors were these angel investors, so folks that really believed in what we were doing and they have operating experience. They came in to be a bit more hands on and for the network. Then they raised some money for some vcs. They have a bit more institutional experience. Help us think a bit more about how do we professionalize what we’re doing. In the last year we raised money from the French utility EDF who have now come and helped us think about how do we, you know, how do we think about operations at scale?
Sam: 00:30:29 Okay. Do the these investors want different things from Sunculture.
Samir: 00:30:34 In terms of.
Sam: 00:30:35 In term of are certain investors feeling, I got into this because I want to see, let’s say financial risks. I know you can say ultimately, you know they’re all going to converge, but some might say, I’m coming to this because I really care about the impact that comes from this. So I might be saying, I did this because I care about the scale that you get. I don’t really care about profitability right now. Others might be saying, no, we need to start making this a profitable business. And if it was, if we sort of build it down, I’d want to make sure that we sacrifice making money so that we can impact more farmers. Whereas other people might be saying, right, this is a profit making business. We need to follow that way. Yeah, here’s any, this is all conjecture in my head. I’m joining you have any of those?
Samir: 00:31:23 Oh that, that’s a very valid question. We’ve been very careful about putting the group of investors that we have together and we have a group of investors, so the angel investors, the vcs and sort of the strategic institutional investor that all want to make money and make impact and don’t think you need to necessarily separate those because to make impact at scale, you need to have a sustainable business. But we won’t. And our investors won’t sacrifice making money or building a business that’s profitable to necessarily reach more people because we don’t always think reaching more people or selling more widgets is the only way to look at impact. And when Charlie and I first met, it was because his best friend growing up was dating a good friend of mine from university. And I was hosting an event at NYU where I was at school to bring together entrepreneurs all over from, from New York City. He came to the event late of course, and he ended up at that event meeting some guy who really influenced the way that we can describe impact. And it’s, we look at it as sort of the, it’s called a cube of value. So how many people can you impact? How deeply over how much time number of people is just one dimension of that. And we look at how do we maximize the of value. So we don’t necessarily look at impact in terms of reaching as many people as possible. We look at impact in terms of how do we increase that decreased volume, right? One way could be fewer people, deeper impact, quicker time. One could be more people, longer time, shallower impact. There’s just a lot of ways to put that together. We just want to increase that area. And that changes with the available technology, with the regulations, with types of partners. And that, that changes just with, with the environment in which we operate. So we look at how do we increase that, that cube of value, but doing it by building a profitable business.
Sam: 00:33:37 Okay. Have there ever been arguments, argument might be a bit strong disagreements between the direction the company should go in based on some of these things?
Samir: 00:33:47 Not based off of impact. But certainly there, there certainly have been disagreements. And I, I think that that’s healthy in terms of direction types of farmers we may need to serve markets we want to enter. But that’s, that’s good. It’s healthy having a lot of different perspectives on the table. It’s healthy. Where we draw the line is when people would ask us to serve a specific market without any reason other than we want you to serve a specific part of the market. So if someone says, we want you to sell a product at this price point to which these people, we draw the line, there. Some investors have specific mandates around that
Sam: 00:34:28 Really. Like what they’d have a mandate that we need to, they’d need to, they’d be an investor. That’s mandate is we need to sell cups at five shillings in this area.
Samir: 00:34:39 You know when, when funds are created, they’re created with specific mandates and those mandates are then used to raise money from their investors and when they invest in companies, they need to invest in companies that reached certain mandates. That was just an example, a very specific example of what it meant. It could be. Now people’s mandate could be we need to reach this portion of the population or x percent of our invested investments need to go towards this type of people, which is, which is very okay for us because we have a different view of impact, sort of this Cuba value. We don’t work with folks who say we have to serve these, these types of people at this price point because impact is a little bit more robust than that.
Sam: 00:35:24 Yeah. Okay. That makes sense, you said that some of the grant money you’re taking at the moment is too wet to do things that you’re the first people doing.
Samir: 00:35:33 Yeah.
Sam: 00:35:34 That sounds quite cool. That’s quite cool. How do you, how does that, at who, who leaves it, he leads the discussion there do you, are you kind of like, cool, we’ve got some fun stuff that we can do. You know, let’s go out and find some grants or do the grants out the grant. People like going, we need someone to go out and do this and you’re all working, which, which normally leads to the other.
Samir: 00:35:54 Normally the first one.
Sam: 00:35:55 Okay. So normally, you’re like.
Samir: 00:35:57 We have something called the find the right partner for it.
Sam: 00:35:59 Okay.
Samir: 00:36:00 Often times donors will have these open calls for specific programs. Yeah. We won’t raise grants to do stuff that we wouldn’t already do ourselves. Yeah. And that’s where you can get in trouble because people, when money’s in sort of available or in your face some people can get into trouble by saying, I’ll bring on this capital to do x, even if x wasn’t part of my plan. So we first say, what is it that we want to do? And then what’s the right type of capital for us to achieve that? And then we go and find partners to satisfy those capital requirements.
Sam: 00:36:41 Have there been any interesting grants that you’ve won?
Samir: 00:36:43 Oh yeah. Many.
Sam: 00:36:45 What are some of the ones you like.
Samir: 00:36:47 I mean, we’ve run grants from a number of different organizations and you know, we wouldn’t be here today without grants. And it’s really interesting when you look at agriculture and energy and other markets around the world. Sectors are very heavily subsidized by governments. And you know, the donors that come in to work with private sector companies like us are sort of filling, filling the gap of, you know, how do you work with organizations that have a first mover disadvantage where you’re testing new ways to achieve what would be national priorities as well. But that hasn’t, the solutions haven’t existed yet.
Sam: 00:37:28 Yeah.
Samir: 00:37:28 So we’ve, we’ve raised money from a number of governments. Right now we’re actively working with Microsoft to develop a very cool software platform. We worked very actively with the Shell Foundation for all the donors we haven’t listed. We really love you, but it’s a number of donors, right? It’s and for different parts of the business. You know, like USAID came in really early when we were looking at thinking of how to expand our business. The GSMA came and said that, we were thinking about building a new product and looking at financing, they were the first ones to take a bet on that. And throughout our history, there have been a number of organizations that have taken bets with us on things that have never been solved before.
Sam: 00:38:11 Like what?
Samir: 00:38:13 Like, how do you become the first company to commercialize Solar Irrigation Africa? How are you the only company to bundle these value added services and financing with this technology? How do you pilot the first solar irrigation financing scheme in sub Saharan Africa? How do you build a solar irrigation platform that’s 10 times cheaper than what you started with? How do you build a software platform where you are, you know, detecting agricultural risks earlier than anyone else on the continent. All of these bits and pieces that add to our business require capital to try. And there have been a number of donors who’ve come and said, look, we know you’re the first one to try this. We believe in this. Let’s try it. When it works, then you go and raise commercial capital. And we wouldn’t be here today without all of the donors that have supported us on this journey.
Sam: 00:39:01 Yeah, very cool, so kind of like, oh that’s not so I hadn’t really grasped that before. So it’s basically like giving you the safe space to fail. Yeah. Is what the, I mean a lot of the time that’s, yeah,
Samir: 00:39:13 Yeah, exactly. Try this out. We think that you’re right and we know that if you are right, you’ll go and raise commercial capital to then build that into your business. But it’s really, we’re going to be really expensive for you to try it out with equity or debt because if you fail, then you’re in a little bit of trouble. So let’s give you the capital to satisfy our development needs, which is trying to see your business work cause it’s impacting a lot of people. And then once that works, then you can go and raise commercial capital for it.
Sam: 00:39:41 Yeah. Very cool. All right. Yeah. Before we came over and sat in the garden you showed me, the, what you call the, the root and that, the sort of the living space that is representative of where…
Samir: 00:39:54 Oh yeah,
Sam: 00:39:55 Yeah.
Samir: 00:39:56 Demo home.
Sam: 00:39:57 That’s the one, one of them was the pressure cooker?
Samir: 00:40:00 Yeah.
Sam: 00:40:00 Can you talk to me a bit about that?
Samir: 00:40:02 To make it clear on what we make, what we don’t make, we only build sort of platform level technology. Okay. So in terms of the hardware, we built the control electronics for the energy management system, the battery that can power different appliances. We don’t make our own appliances because appliances exist and there are a lot of good appliances around the world. In terms of the software, we’re building a software platform where we can plug in other people’s data sources, but it’s platform level stuff. Our energy management system can handle appliances that were acquired 500 watts. So it’s a quite a large amount of power for folks living off grid. So we can power pressure cooker, electric pressure cooker. It’s quite interesting. A lot of our customers spend hours per day gathering firewood and/or charcoal to cook the number one cause of noncommunicable diseases in…
Sam: 00:40:52 Non-communicable.
Samir: 00:40:52 Like, so noncommunicable diseases are diseases that are not able to be transmitted from one person to another.
Sam: 00:41:07 So the, the number one non-communicable
Samir: 00:41:11 The number one cause of noncommunicable diseases in Kenya. And I don’t have to start a sub Saharan Africa, I definitely not it’s for Kenya, is cooking for like a non clean cooking. Okay. So if I were charcoal in the house, yeah. So pressure cookers or something that’s quite interesting for our customers because they saved time and they, it’s much, much healthier for them.
Sam: 00:41:32 Yeah.
Samir: 00:41:34 So we started piloting pressure cookers. We haven’t commercialized it yet. Yeah. But it’s one of those appliances that we would be happy to have as an add on after someone increases their income with the solar irrigation. And then how do we continue to make them more productive either by saving their time, making them more healthy, etc.
Sam: 00:41:51 So what’s, what’s the, what’s the big sell with a pressure cooker? So,
Samir: 00:41:54 So let’s say you live in rural Kenya, you spend a few hours a day cooking. Yeah. So if I could cut that time by 70%, then you have more time to do other stuff. Plus I’m making sure you don’t bring in all, you don’t breathe in all these nasty fumes, your grand-kids don’t breathe in all these nasty fumes keeps you healthier.
Sam: 00:42:11 Yeah. Gotcha. Okay. What some of the other so what the, have some of the devices that we have in there?. So there’s a TV…
Samir: 00:42:19 There’s a TV. So even to answer this question more broadly too, I’m going to ask myself the question, how do we choose appliances?
Sam: 00:42:27 Sumit, you want to come and take my…
Samir: 00:42:31 Kicking you out of business over here. We run focus groups with farmers. We’ve done focus groups with hundreds of farmers this year, to help ourselves figure out what appliances farmers would want after they increased their incomes. TV’s interesting. Bundled with agriculture content to help people learn about farming. There’s a lot of other potential appliances that are used for agricultural productivity and increasing productivity at a domestic level. So saving a lot of time, making people healthy. Can’t share all of them just yet. In the House we’re showing egg incubators, which is very interesting for us as well.
Sam: 00:43:13 Egg…
Samir: 00:43:13 Egg incubators.
Sam: 00:43:15 Egg as in chicken egg?
Samir: 00:43:15 Chicken egg.
Sam: 00:43:16 Not ag?
Samir: 00:43:17 Not ag, egg, egg. I’ll have some more water so you can more clearly, egg incubator. So people will hatch eggs in egg incubators and then sell day old chicks. So there’s a large market for people to buy chicks that are a day old, then grow them and then sell them or grow them for more eggs. But there’s a big market for people to grow hatched chicks and then sell them. It’s wild.
Sam: 00:43:46 I was thinking more in terms of like this device, this machine that is the egg incubator. Is like quote quite a well known thing. What I’m trying to get is there a sense of you don’t know what you don’t know when you go, when you do focus groups?
Samir: 00:43:56 Partly we show a lot of, when we do focus groups, we have a number of products, we go in and we use and we show pictures of and then see how people ranked them based off of a number of factors.
Sam: 00:44:08 Okay.
Samir: 00:44:08 So we’ve a very specific way of running focus groups to make sure we’re making it feel as real as possible with the amount of money you have. How do you make money? If you use this, you make more money here, how would you invest it to really get a sense of what people would actually invest in? Yeah, so sometimes you know for incubator, for example, if someone hadn’t seen it, they understand what it’s used for, they go, wow, that’s really useful. I didn’t know I could ask for that. Yeah. So we go with pictures and we describe it because you know sometimes it’s hard to even ask for something you don’t know is available.
Sam: 00:44:36 Yeah. What, honestly, what sort of, what have you found have been some of the important bits of information you do you share when doing this focus group that you might not have done the first time?
Samir: 00:44:49 So one of the really important pieces is helping people understand how much money they can make from it and how much money they would be spending without it. Which sounds really obvious, but it’s just taking time to really put that in writing. Hey, you can make this much money or having them figure it out themselves. So if you had this product, what would you do with it? How much money would you make from it? How much money would you be willing to invest in it? So just taking time and having them walk through their own process as opposed to telling them what they could use it for. Right. It makes it more real. It makes it more personable. And also it’s just the right way to do things is to allow people to understand how they would use it for themselves as opposed to you telling them how they should use it. You know, when we started the business, I told you the V1 was a big solar powered water pumping system and drip irrigation altogether. The gold standard. We realized that trying to sell and force people to go for the gold standard right away, it’s not, it’s not the best way to do things because it requires so much behavior change and so much investment. Instead we change our approach to say, look, instead of going for the gold standard, why don’t we start you off with a solar powered water pump and a sprinkler and/or a hose pipe, which requires very little behavior change and then upgrade you to drip irrigation and then upgrade you to bigger drip irrigation, etc, over time. So getting you to the gold standard, but over multiple years as opposed to saying, you have to do this now. When we first started, we said, you can only buy this package and that was wrong. And we broke up the package and allowed people to mix and match based off of sizes, based off of what their needs are, what their comfort level is. And instead of trying to determine what is best for our customer, we show them our customers, the option, allow them to decide what’s best and then kind of graduate them. So we took, we expanded the Lens in which we look at our customers instead of a sort of a one year lens, we now have sort of a longer 20 year Lens. So we go through the exercise of, you know, what our customers need over the next 20 years and how do we serve them over the next 20 years.
Sam: 00:47:00 I see. Okay. So one thing I’ve, I’ve always sort of wondered about smallholder farmers and sort of productivity, etc, is by funding. You can obviously enlighten me a bit more on this, but if Amazon.
Samir: 00:47:15 I’ll be your guru on this.
Sam: 00:47:16 If Amazon are getting more productive from their plot of land, is there a limit to productivity they could get. Whereas if they kind of combined together and kind of did more, more of a commercial farming thing, you might get the economies of scale and that would make things even more productive.
Samir: 00:47:36 How much time you have? So it’s, it’s a, if you look at countries like the US, where you had over half the population operated on farms or farmers and now single digits, just a few percent of people are farmers. One of the bigger reasons for that was farm aggregation. One of the reasons why people aggregated farms in the US a hundred years ago plus was because in order to mechanize your farm, so to use machinery to do work that humans would take too long to do or would do it ineffectively, you had these really expensive machines. So it was not, you were not able to be, to have a profitable small farm that was mechanized because the machines cost too much. Right now we can mechanize 1/16th acre farms profitably. So there doesn’t need to be aggregation as there were in other markets around the world because we now have technology that can be that, that we can sell to really small farmers where we don’t need to have big masses of lines. So that’s one thing we don’t need to aggregate. Of course you can achieve economies of scale when you aggregate, but you also have to look at the farmers that we talk to, don’t want to give up their land because traditionally land is passed down to your children and then to your children and then to your children. And that is an asset that you own. And culturally it’s a, it’s an honor to have that piece of land. Our customers tell us that they wouldn’t want to aggregate because that’s, that’s theirs, so there’s, there’s also a cultural bit and cultures differ across different regions in Kenya as well. But across the regions that we work in, which are most regions in Kenya, our customers say they wouldn’t want to aggregate. This is their land. It’s for their family. They want to use it that way. So my philosophy, my theory is that there won’t be aggregation at a farm level and we need to figure out how to make farmers profitable on an individual level.
Sam: 00:49:46 Solid answer. Done. Yeah. Good. That’s good. Alright. Sleep easy right now. All right. Supply side. Yes. You’ve spoke a lot about demand side. So you’ve got this platform and then you basically….
Samir: 00:50:03 What a good Buzzword Huh?
Sam: 00:50:04 Isn’t it?
Samir: 00:50:04 Yeah. It’s how, how, how do you use the word.
Sam: 00:50:07 How quickly was that on your pitch decks?
Samir: 00:50:09 Not so quickly, not so quickly.
Sam: 00:50:11 Right.
Samir: 00:50:11 We don’t like using buzzwords for buzzwords sake. We’re like very anti that.
Sam: 00:50:16 How else do you, if you don’t, if you weren’t allowed to call it a platform, what would you call it?
Samir: 00:50:20 Which part of the business?
Sam: 00:50:22 The bit where different manufacturers can, you get different products, which can all go through the Sunculture system.
Samir: 00:50:31 I don’t know.
Sam: 00:50:32 Maybe it’s a platform, maybe that’s the word.
Samir: 00:50:33 It is definitely a platform, it’s definitely a platform.
Sam: 00:50:36 Yeah.
Samir: 00:50:36 You hear people talk about X platform Y platform.
Sam: 00:50:40 Yeah.
Samir: 00:50:40 And really all it is is their way of doing things.
Sam: 00:50:45 Have you ever just found yourself not necessarily as the Uber for x, have you ever described yourself as, the something for something?
Samir: 00:50:52 We, we haven’t but, and you know those, those kind of analogies are useful in some ways but also really detrimental in other ways because it’s really hard to put us in a box because we touch so many sectors, water, energy, food, Fin-tech, IOT. Again, more buzzwords, but in all parts of what we do and people like to put us in certain boxes. So it’s hard for us to say where the, you know, the A for B. One thing that we have thought about a lot, and it’s how we use our, we did a re-branding, how we define our core values as a business. Part of, part of how we define our core values has looked at how apple has designed products for its customers and how apple has the purchasing trust of its customers like me and how apple is reliable in terms of its servicing. You always find someone smart at the genius bar or on the phone who can help you solve your problems. But really putting the customer at the center of it’s product design strategy. We’ve often, we’ve, we’ve talked about that internally, so we want to have the best products that can satisfy our customer needs. Then that we have the purchasing trust of our customers because of the quality of the products and services that we offer.
Sam: 00:52:25 Apple for smallholder farmers, no I’m joking. Yeah, I’m one day people will be saying.
Samir: 00:52:31 I have my black turtleneck inside if you want me to go, pull that out.
Sam: 00:52:36 And one day people will be the Sunculture for X.
Samir: 00:52:39 I hope so. Yeah, I hope so, I hope, you know, I hope we are breaking a lot of the rules that people think that you have to follow and I hope that we’re showing that, you know, you don’t have to do things the way other people do it. One of the hardest things to do when you start a business is to not emulate people, especially in markets where things haven’t been figured out and where there are a lot of people to look up to. It’s really important to understand that, you know, your business is different, you’re different, your customers are different and don’t emulate. So hoping that we can break the…
Sam: 00:53:10 Is that?
Samir: 00:53:12 I don’t know.
Sam: 00:53:14 Maybe it’s a cat. We’ve got, we’ve got.
Samir: 00:53:16 Theirs, there’s a cat. And then there’s dog, dog, two dogs. There’s monkeys around here as well. So I dunno what…
Sam: 00:53:26 We’re in a residential area?
Samir: 00:53:27 We’re in a residential area. Yeah. It’s nice. It’s, this used to be a daycare.
Sam: 00:53:35 Really. It did look a bit colorful.
Samir: 00:53:37 Yeah. If you see the playground in the front, yeah. You can use it as well. As one of my mandatory requirements was to keep the playground here. So, yeah.
Sam: 00:53:48 So we talked about supply.
Samir: 00:53:50 Yep.
Sam: 00:53:50 And I said, I thought I thought supply was your platform, but maybe it wasn’t like what, what, what would you say is the supply? What is your, when you think of the supply side of your business, do you not think about it?
Samir: 00:54:00 No, we think about it a lot Something we’re very good at. It’s one of our core competencies. My co-founder and his, his R and D team can look at sort of China as like a Walmart. He knows where to find everything, knows how to test everything. We’re very good at the supply side. Very good at sourcing. Very good at quality assurance. Very good at quality control. Have I told you that we got on a way flight here, when we left New York, we first stopped in China.
Sam: 00:54:25 Okay.
Samir: 00:54:26 So we have very good relationships with our contract manufacturers, our suppliers with our manufacturers as well.
Sam: 00:54:31 Yeah. So they’re making stuff few.
Samir: 00:54:35 So sometimes we buy off the shelf stuff. Sometimes people are making stuff for us. We make some of our own stuff so we make our own the controller electronics, the green board, the PCB, we make our own. Yeah. And which allows us to power all these really high powered appliances from different parts of Asia. And then we do our own sort of assembly and we send it over here. And then we do the own, we do our installation, we do the installation for our farmers on their farm.
Sam: 00:55:04 And this is done, is that from the sales agents?
Samir: 00:55:06 Done by engineers. So we have sales agents and we have engineers across the country that do the installation. And then the repairs and maintenance.
Sam: 00:55:14 Do you have like little hubs?
Samir: 00:55:15 We do, we do, we call them sales and service centers. Sscs centers. Sscs yeah. You can say it seven times.
Sam: 00:55:22 Sales agents. They’re kind of a locus around those.
Samir: 00:55:30 So our sales and service centers actually trail our sales agents. So they go in areas that we start to saturate and then they stock spare parts. They’re used for good branding point of sale. But if we don’t have a sale service center in the area that need spare parts, we send them directly and we have engineers and go and do all the repairs and installations. Yeah.
Sam: 00:55:52 Who’s your star salesperson?
Samir: 00:55:53 We have two right now, Olivia and Margaret. Okay.
Sam: 00:55:56 What, what makes them so good?
Samir: 00:55:58 They, well we, we had a town hall last week. We do a town hall every quarter and we’re sort of going over where, where we’ve come from. These two women together sold more units, like more than, together they sold more than half of what we sold in our whole first year and they sold that in like Q2 this year. I haven’t been able to dig into why they’ve been so good.
Sam: 00:56:25 Do they work together?
Samir: 00:56:25 Separate, independent yeah.
Sam: 00:56:28 Are they different personalities?
Samir: 00:56:29 So this is my first time meeting them in person.
Sam: 00:56:31 Okay.
Samir: 00:56:33 Different personalities for sure. Yeah. Both very confident, very competent. We find that sales agents that, that are sort of, that understand that this is just generic for everyone, but it’s so true. It’s that if a sales agent understands the challenges that their customers go through, that they become really good sales agents because it’s not even a matter of selling someone. It’s a matter of serving someone. So I always tell people we’re in the service industry, we exist to serve our customers. As you grow and as you have a bigger sales organization, it gets, it gets hard to often have that message go through to every new person that comes on because they want to hit numbers and make commission. But the best sales agents that we have are ones that understand that they’re here to serve our customers. And both Margaret and Olivia, when I met them last week, they both came off and had sort of, they had the empathy to be able to understand where our customers went through and were very humble about their work. And sort of didn’t say this directly, but you kind of picked up that they were sort of, yeah, well we’re here to help our farmers. That’s all we’re doing is helping them out, which is really cool. Which is, you know, what you want to hear, which is I had my dream to hear that from everyone. Yeah.
Sam: 00:57:52 What’s your sales cycle?
Samir: 00:57:54 So, so different, so different. I mean, most, most people are quite quick.
Sam: 00:58:04 Quite quick like…
Samir: 00:58:04 Within the month.
Sam: 00:58:05 Okay.
Samir: 00:58:06 Some people, we have people calling after hearing about us for a year.
Sam: 00:58:09 Yeah. How many visits will someone make?
Samir: 00:58:13 So we need, we need somewhere between four and six touch points. So it doesn’t necessarily mean visits. Could see us on Facebook, could see one of our agents get a few SMSs. We, we know that for us there’s, there’s, you need just a number of touch points as of now and that could change as we release new products. So we also found that our sales cycle and the way we need to communicate needs to differ based off of region, based off of product we’re selling. And there’s again, no silver bullet. You have to adapt to the needs of your customers. Some people in some regions want to see things in person, some people are okay buying it from their neighbors. Referrals work better in some regions. Different marketing channels work better in other regions.
Sam: 00:58:55 Quite a complex operation. Yeah. With all these different terms to factor and all these different…
Samir: 00:58:59 Yeah. But it’s so interesting. Yeah. It’s so interesting and being able to filter all this into a system that works. It’s super defensible too because if you systematize this and you, you know, we’ve, we’ve really strongly moved from an intuition led business to a data driven analytics led business and doing that has allowed us to systematize lot of the work that we do. So how do we systematize and put algorithms around digital marketing or about where we open up a new market or about our supply chain? How do we create a system that links our accounts with our after sales, with our, with our dispatches. Now that there’s a system in place, it’s fascinating because it’s so defensible. So working in markets that industries don’t exist for you to piggyback off of all these different pieces, it’s challenging, but if you can figure it out, it’s quite, it’s quite a defense. It’s quite a moat.
Sam: 00:59:52 Yeah, I can see that. What are the main hires you’re looking to hire for next?
Samir: 00:59:59 Only people that are front lines right now. So we have, I think the best team come the Dream Team. So we had the dream team.
Sam: 01:00:08 I saw there was a little sign that said teamwork makes the dream work.
Samir: 01:00:09 Teamwork makes the dream work.
Sam: 01:00:10 So they’re clearly listening.
Samir: 01:00:11 Clearly listening. Yeah. Our, our head of HR, Joanne, who’s a superstar, she has this she has this sweater that says Dream Team on it. We, we, we pay attention to who we hire. And we have an amazing team. That’s just an amazing team. Now the only people we’re hiring are customer facing people. So sales agents, engineers, credit officers, relationship managers, people that have a direct interaction with a customer.
Sam: 01:00:38 To what degree do you attribute the fact that you’ve been able to assemble a dream team? Because one thing is my hypothesis, it’s like obviously partly be yourself, but the fact that you’re doing quite a cool business that people can feel inclined to.
Samir: 01:00:54 Unless you’re gonna post something about my phone. I’ll answer that question. I’m going to ask myself another question as well because I think it’s quite interesting.
Sam: 01:01:01 It’s a better question than I’ve asked.
Samir: 01:01:02 No, it’s not a better question. It’s just something that I, I thought about what we san pull this up. So I send out a, one of my monthly emails. There’s been,
Sam: 01:01:14 Is this an internal email sent?
Samir: 01:01:16 Internal email.
Sam: 01:01:17 Are they, do they have fun name like Sumir’s monthly email?
Samir: 01:01:20 I always put a nice, there’s a subject for all of them. With an Emoji.
Sam: 01:01:26 What was the emoji this time?
Samir: 01:01:26 For June. June was a target. The target Emoji, cause we were talking about targets. May was a trident.
Sam: 01:01:36 A trident?
Samir: 01:01:36 That thing.
Sam: 01:01:39 Oh yeah. Like oh the thing that Zeus has.
Samir: 01:01:43 Yes.
Sam: 01:01:45 What’s the, what does the trident symbolize?
Samir: 01:01:48 So the subject of this email was ‘gyshido’ which stands for get shit done. We work with an organization called Unreasonable and they have this ‘gyshido’ policy about how to get shit done. And I was reflecting in this email on sort of three key factors that have got us to where we are and that I see in all the most successful people on our team. One of them is the hustle. Yeah. So we have a lot of folks who are just super hungry getting an MBA on the side of working you know, managing team from home, asking for mentorship, just the hustle people who are really hungry for, for development resilience. So people who really believe that, you know, the craziness is going to work, that being resilient to the words and they say are seeing the light where other people don’t. That’s been a huge factor. And then putting the company over self. So, you know, putting the purpose of our work ahead of their personal beliefs or ahead of their personal benefits. That’s something that’s really, really key. The thing that, that would, the reason I had the trident was because the one, the one factor that our lowest performers lack is this ‘gyshido’ so get shit done. So the trident was kind of like, Eh! Get shit done. Yeah, that was the closest thing. I didn’t want to put a poop Emoji. This felt more, more get it, getting done. So those are, those are the factors that have contributed to the highly successful people in our organization. I think the reason we’ve been able to assemble the dream team is that we, I mean, we’ve just from day one, Charlie and I have always put our customers first. We’ve always said that increasing the productivity and incomes of our customers has been the most important thing and that we just embody it. We’ve always had that philosophy, always put our customer first. We’ve always been very clear that we will not sacrifice quality and relevance for affordability. We will figure out ways to make things affordable with operational or manufacturing efficiencies or financial innovation. We’ve just really kept true to our core beliefs. And I think that the, you know, trust is consistency over time, right? So I think we’ve just built trust that we are consistently living our core values. And I think people like that, and people trust that no matter what, when shit hits the fan one day or when things get really tough, that we’re going to live our core values and we’re not going to sacrifice what our purpose is as an organization for anything. And I think that that’s what, how we’ve been able to attract the dream team and those people who believe that and embody that have been our most successful folks in the dream team.
Sam: 01:04:32 Yeah. So a few more questions. I realize Samir, we’re already on the longest interview I’ve ever done.
Samir: 01:04:37 I don’t know if that’s a thing to celebrate or not, but I’ll celebrate it right now.
Sam: 01:04:43 So six months to the, in the next six months to three years. Yeah. What does Sunculture…
Samir: 01:04:49 Six months to three years, come on, man. I’ll do both.
Sam: 01:04:56 Okay.
Samir: 01:04:56 But I won’t do, I’ll do both separately cause they’ll look different. So six months we’re raising around a funding right now.
Sam: 01:05:04 What type of funding?
Samir: 01:05:05 Equity.
Sam: 01:05:06 So this is people saying we’re going to take a percentage of Sunculture.
Samir: 01:05:10 Yeah. For capital with a belief that we’ll get paid back a lot more in time.
Sam: 01:05:18 How much are you promising them?
Samir: 01:05:20 We’re not, We’re not. We’re good. We don’t share. We won’t, so I won’t share how much we’re raising or what we promised them right now so just in case you have any more questions on that.
Sam: 01:05:32 It’s like this is a, people who are, they obviously will care about the impact.
Samir: 01:05:36 Yes.
Sam: 01:05:37 But they are also…
Samir: 01:05:37 Commercially minded impact investors who have a vision to, who have a vision that matches our vision. Yeah. So to scale this business across multiple markets to affect as many people as possible, to grow what we think could be the most meaningful sort of agriculture business on the continent. And then at some stage go to different continents. So raising that, so in the next six months, get that closed. The next six months looks very much like it does right now. Just more like the machines running in more areas in Kenya. So just more sales agents, more and more people that are customer facing. So just where we’ll grow in terms of people are feet in the street, foot soldiers serving our customers. So you know, that that’ll grow up quite a bit. We’re distributing in a few markets or we’ll distribute in a few more markets and just, it’s just growing our current operations. So nothing totally new, just kind of growing current operations. In three years time we might be operating in one or two new markets. So not only growing what we’re currently doing, but replicating what we’re doing in more markets. We’re working on some really good software stuff, some really cool software stuff. Where, we’ll be able to highlight risks that farmers face that are not in their control much more visibly in real time, which means that, you know, we can help course correct for farmers. So give hyper local recommendations on pest mitigation, how much fertilizer to use, irrigation recommendations. So we, we always talk about bringing the best in best in class precision agriculture, smallholder farmers, which we’re doing. This is just a huge extension on that on the software side. So in three years really, really commercializing that software piece to then crowd in more capital, more insurance companies. More input companies, more product companies to serve farmers. So building the most robust fin-tech platform and marketplace for smallholder farmers because we have all of this information.
Sam: 01:07:42 Yeah, and you built the trust with the farmer.
Samir: 01:07:43 We build trust with and we built trust with the market as well.
Sam: 01:07:46 Yeah.
Samir: 01:07:46 You know, I think the reason why people don’t invest in smallholder farmers is because they don’t understand the risks that are, that smallholder farmers have. If the risks are visible, then insurance companies can price the risk with the premium and then banks will insure and put an interest rate on it, which is pricing a risk as well. So if we can help make the risks visible and then help help give farmers advice that helps them make better decisions on how to mitigate against those risks, then they have access to more capital, which allow them to then go buy more products and services. But again, solar irrigation isn’t a silver bullet. They want stuff. They need stuff like pressure cookers TVs, more machinery, more inputs. But we can help serve as a platform to again, increase and protect the productivity of smallholder farmers and help them mitigate risks not in their control. And then highlight how we’re doing that so people are comfortable selling to those customers.
Sam: 01:08:41 Sounds very cool.
Samir: 01:08:42 Yeah. Thanks. I think so. Yeah.
Sam: 01:08:46 10 years?
Samir: 01:08:48 I don’t know if I’m going to be the right person run this in 10 years. Okay. I don’t know. I don’t know. I might be. I very well might be, but different size businesses need different personalities. I always tell the team what gets us from zero to one won’t get us from one to a hundred, which is the same. Won’t get us from 100 to a thousand. That means people, that means systems, that means processes. And maybe I can develop or maybe I had the skill set to manage the company where it’ll be in 10 years, which will be on multiple continents. But maybe I won’t be. Yeah, maybe I’ll be doing the next cool thing. Who knows? But Sunculture will survive that.
Sam: 01:09:29 Yeah.
Samir: 01:09:30 I’m building Sunculture to survive well beyond me and that’s, I keep telling everyone as well. Keep figuring out how to fire yourself out of a job.
Sam: 01:09:40 Yeah.
Samir: 01:09:41 So if you can fire yourself out of your job, it means we’re growing. So I continually, continually try to fire myself out of a job.
Sam: 01:09:45 What did you fire yourself off of?
Samir: 01:09:47 Operations. Kenya operations. Our COO now runs Kenny operations and we’re hiring a Kenya GM to take over his role. So he’s fired himself out of a job. And now, that gives us space to think about how can we best, how can we best be used to help Sunculture grow? So it’s a good thing to fire yourself out of a job because it gives you space to think about what’s next. In 10 years, maybe the job I fire myself off, myself out of and where I need to go. Maybe that doesn’t fit. Maybe we need to bring in someone external, but Sunculture will survive well beyond me.
Sam: 01:10:23 Very cool.
Samir: 01:10:24 And again, I’m, I might be the right person and I’ll be here and we’ll be doing this podcast interview again. But yeah, check back in 10 years.
Sam: 01:10:33 Very good. And, and people who are listening, how can they learn more about Sunculture in various different ways?
Samir: 01:10:40 So you can listen to this podcast, which you already have so well in. If you want to see how we interact with farmers and how farmers think and how farmers feel check out our Facebook.
Sam: 01:10:54 Is that just Sunculture?
Samir: 01:10:55 It’s Sunculture Kenya. Our website is my least favorite thing right now. Maybe when you publish this it’ll be better. We’ll see. So if you go to our website and it’s like, Eh, then just wait a little bit. You can find more information there. Type in Sunculture in whatever search platform you use. Lots of articles, lots of videos. If you want to join us in our mission, you can reach out to me directly, Samir, [email protected], we’re I was looking for really talented people to either work with or collaborate with now or in the future. So if anyone wants to join our mission and join our work, please, please reach out directly. If anyone has any questions on how to do this, how to start a business in East Africa West Africa as well, reach out as well. We’re always trying to crowd in more really smart driven people because it’s going to take more than Sunculture to solve all the problems we’re trying to solve. We think we’re an important piece, but again, we’re not a silver bullet either. There’s going to, there needs to be way more companies that are started that work together to solve all of these problems. And we, we look at some of the challenges that we’re solving for smallholder farmers and we’re just one, one of many solutions that are needed to improve the livelihoods of these folks. So yes, so join us, we welcome you. And yeah, I’m happy to help in any way that I can.
Sam: 01:12:26 Awesome. Well Samir. Thanks so much.
Samir: 01:12:28 Thanks man. This was fun.