We’ve recently been setting up a new accounting software – Xero. As we’ve gone through this process, we’ve received a fair amount of push back in India. People are used to using a software called Tally, and we’ve had to justify why we want to use a different technology. As we’ve had these discussions, it has struck me that adopting Xero as our accounting software is just a part of our everyday mission: to help people adopt new, innovative, smarter technological solutions.

Most of the time, these solutions are external facing: solar lighting products, water filters, agricultural tools. But the same mantra applies to our internal practices as well. Xero happens to be one of these technologies.

The accounting industry in India seems to be dominated by Tally. People feel comfortable with this software. It doesn’t require any additional training, and it seems pretty ubiquitous. But the software has an outdated interface and is difficult to update, and so our team wasn’t terribly excited about it.

We researched a number of different softwares, and settled on Xero. The software is starting to get a fair amount of press in the US and we’re quite happy with the interface, but in India, no one has heard of it. People are constantly pushing us to use Tally instead. So, as in the case of a new solar lighting solution, our job is to facilitate user adoption. Except in this case, the adoption is internal.

This battle for innovation adoption is one that is core to Essmart’s mission, and we feel it is worth fighting this battle for Xero as well. Our company promotes the smartest, highest quality technologies, not only externally but internally as well.

While reading a Jalopnik article reflecting on the Indian car market, it struck me that the Indian car market is really not that different from the market for essential technologies. The author, Jason Torchinsky, a car blogger and first-time visitor to India, hit on a number of points about customer preferences, branding, and distribution in the car industry that really resonate with Essmart’s approach to technology dissemination. Interestingly, though, many of these points have historically been ignored by development-focused organizations.

Below are some of points Jason noticed about the Indian car industry from his visit with Mahindra, and how I feel they parallel Essmart’s work:

So, while India is an exclellent [sic] argument for the use of SUVs, it also manages to simultaneously make the opposing argument that no one really needs an SUV. This happens because for many of the situations you’d think you’d need an SUV (hauling huge things, rough terrain driving, etc.) people all over the place are doing with tiny hatchbacks and miniature 25 HP vans and trucks.

It’s amazing what people can manage to do with mini vans (not a minivan, but a miniature van). SUVs are overkill. We feel the same about our product catalogue. People don’t need a really expensive, large solar home lighting system; they can manage to get nearly all the same functionality from a much smaller product. And many essential technologies are just that – products that can get someone all the functionality they need but at a more reasonable price point or in a more reasonable sized box.

Indians are, collectively, some of the biggest savers of money in the world, so before they buy something like a car they research the hell out of it.

This is something we notice at Essmart quite a bit. Even though most of our shop owners and end users don’t have technical backgrounds, they often ask very technical questions about all the products in our catalogue. Wattage? Battery life? Flow rate? They want to know exactly what they’re getting. As a result, our sales executives need to be very knowledgeable, and they have to help instill this confidence in our shop owners.

… they can also be quite status-conscious, all the way across the economic spectrum. That’s why, I was told, the Tata Nano hasn’t met with the sales success it should have: they made too big a deal out of how cheap it was. … while there are possibly millions of Indians who could really use such an inexpensive car, none of them really wants anyone to know that they could really use such an inexpensive car. No matter how poor you may be, it seems that you’ll always want to seem like you’re not quite that poor.

In reflecting on the car industry, I actually think Jason has hit on one of the most critical reasons why technology-for-development initiatives across the globe have failed: branding. Non-profits and NGOs in international development are so focused on helping people that they nearly always brand their products as products that help the poor. Unfortunately, this is exactly what people don’t want. If you had the choice to buy a product that is a step up the social ladder or a product that cements your status as being poor, which would you choose? At Essmart, we’re focusing quite a bit on the branding of our product catalogue. For example, a low-cost solar lantern is cutting edge technology that just happens to be low-cost because how efficient LEDs are.

Lastly, Jason commented on car maintenance. He noticed that the majority of car repairs happen in small repair shops:

So anything, say, Mahindra sells needs to be at least somewhat repairable by these little shops. That means if they’re releasing some new engine technology they have to educate these smaller mechanics to know how to work on it effecively. This is also important because many people in smaller villages and towns rely on the mechanic for car purchasing advice.

Maintenance is an important part of Essmart’s model, but I actually think this quote has some more important commentary on marketing. Local retail shops are the lynchpin of Essmart’s operations because the majority of people depend on them to access information on new products. Our sales executives do their part in convincing households to purchase our products, but the word of the local shop owner is much more persuasive than our own.

So there you have it: essential technology dissemination is actually not that different than the Indian car industry. Rather, there’s quite a few lessons that the tech-for-development space can learn if we want to disseminate technologies sustainably or at scale.

You can’t completely understand the problem until you learn about it from the people who know it best.

This has been a personal philosophy that has grown stronger over the past couple of years. It’s been reinforced even more this winter.

I’m Jen, and I’ve been working on Essmart for over a year now as part of the US-based team. In Boston, I created surveys to assess the needs of village storeowners in India. I helped fundraise through social venture competitions. But this winter, I was finally able to come to India to do on-the-ground work. And as a result, Essmart and what we do has become even more alive to me.

I see the huts and off-the-grid settlements that never get electricity, which are problems that Essmart’s social goods help to resolve. I witness when village storeowners see this water filter or a solar lantern for the very first time.

People sometimes have this perception of international development work as swooping to save these people, heroically lifting them out of poverty or ignorance. This line of thinking perpetuates an unequal power dynamic that should not be the case. When I visit village stores with our sales executives, I meet tough, savvy shopkeepers who are not easily sold on our products. They take the products out of their boxes. Then they touch the products, they explore the finishes, and they carefully examine every detail. They turn off their shop lights so they can better test the strength of our lights. They listen closely when Essmart’s sales agents explain the product more to end users that crowd around in curiosity. It is only after this demonstration that shopkeepers agree to take our business card and have an Essmart catalogue put in their store.

These shopkeepers are not easy sales, but when they believe in us, they continue promoting our products. On one of our daily routes, we introduced a new product to a shopkeeper. When we left, he continued demonstrating the solar flashlight to three or four intrigued end users. Village shopkeepers are smart, and when we say that Essmart is establishing partnerships with local village stores, we mean it—these local retail stores are our partners and equals.

And we know that we’re promising them quality products.

With clock-like precision, at the exact same hours every day, the power goes out. On my first night here, I was shocked. Now, I just follow Diana and Poonacha’s lead and grab our closest solar lantern product to work by. Our appliances’ solar panels charge outside of the apartment everyday. One of ur water filter products sits in the kitchen. Even as I write this, I leap up every few minutes with our bug zapper to swat at the newest member of our resident mosquito army that’s trying to feast on this new foreign delicacy (me). I have never known sweeter revenge.

So, I assure you, these products really come in handy in Pollachi. Our own daily use of Essmart products is a testament to their quality and our belief in them!

It has been amazing seeing the ideas of Essmart translate into action and results on the sandy, sun-beaten roads of Southern India. Yes, Essmart is a work in progress, but that’s the way all things in life should always be. We are a dynamic process. We are constantly evaluating and re-evaluating, thinking about what we could do better, and making the necessary adjustments so that we become better. My time in India has more than reinforced my belief in Essmart and everything the US-based team and I have been working toward. I return to the States, reinvigorated to work for the Essmart cause.

Jen Zhu is a joint degree candidate in Government and Sociology at Harvard University. She has prior experience with two other social enterprises, and worked with Dalberg Global Development Advisors to analyze 80+ social enterprises’ challenges and success factors. She also researches the dissemination of public health interventions through social networks in developing countries. Jen works on market analysis, social media, and U.S. marketing.

A few months back, Selvan met a Dasra representative at a conference held at the Tata Institute of Social Sciences in Mumbai. She told him about the Dasra Social Impact Program, an executive education program that trains decision makers of leading nonprofits and social enterprises across India. Then she said that Essmart should consider participating in it.

As Essmart’s co-founders, Jackie and I deliberated about whether or not to join. There were pros and cons. The main pro was that Dasra is well connected in the social sector (industry?), and we’re new to India and could use the connections. This is particularly the case because, as Jackie wrote in the previous blog entry, our operations are based here and neither of us is Indian. The second pro was what I would be able to learn from other participants. The third pro was personal/professional development, since I now have the role of pitching Essmart in India.

Despite these pros, the cons were also plenty. The biggest con was that participating in the program came at a financial cost, and we’re bootstrapping. The second con was that the program required three weeks of my time.

After a analyzing the potential costs and benefits, we decided to go for it. Were the costs worth it? It’s too early to tell if Dasra’s connections will pan out into something financially tangible for Essmart. I’ll have to wait until after the second and third workshops, when we comb through and edit our business plans, polish our pitches, and present to potential investors. I did learn a few new concepts from the sessions and peer-learning sessions, but sometimes the discussions were a bit unfocused, nonprofit-centric, and not yet applicable to us at our early stage. I think I did grow personally and professionally. At least, I’m figuring out the most effective ways for me to represent Essmart and the most effective ways for Essmart to be represented to potential customers, partners, and funders. We’re still firm believers in limiting hype and selling results.

It has taken me a few weeks to see it, but the most beneficial takeaway from DSI’s first workshop was the time and space to revisit, rethink about, and re-articulate Essmart’s vision. When we’re busy with operations, we tend to lose sight of the big picture. Since Essmart is just starting off, we need to make sure that our first steps are taken carefully and deliberately. But for us to be aware of how our decisions support our vision, we need to be able to clearly articulate our vision.

The importance of defining who we are, what we do, and what we stand for came up the following week, when I made it down to Pollachi. Sales are picking up considerably, especially for a particular product. We also realized that if we go through additional, non-retail-store distribution channel, we could increase our sales in the short-run.

However, Essmart’s vision is to use the retail shop network as a means for people in rural areas to learn about great new products, get great new products, and trust the people behind great new products. It would be easy to follow the money and chase volumes of easy sales, but that wouldn’t build up the vision. We don’t want to become seen as distributors of a single product who go through ad hoc measures to sell. Anyone can sell products, but we’re creating a new distribution channel. Creating a new distribution channel takes time and conscious decision-making, especially in the early stages.

So, thank you, DSI, for making us hammer out our business model canvases, think through our theories of change, write and deliver 30-second pitches, and turn-in a two-pager and business plan slide deck. All of these activities help us recenter on who we are, what we do, and how we do it. We’re looking forward to working with you over the few months ahead.

“An outsider’s understanding of local conditions in India.” This is something which both Diana and I, as co-founders of Essmart, have been told we have.

I cannot argue with this statement. I am not Indian, I did not grow up in India, I am not aware of all the subtleties of life there. I don’t even live in India at the moment. Diana has me beat on a couple of these points, but we still are considered “outsiders” and we probably always will be.

And with the idea that we are “outsiders” comes the concern that we don’t understand India at all, followed by many doubts about our ability to succeed in an Indian market.

I understand this concern, and I’ve certainly heard this more than once. There are things I don’t know about how society functions and things I miss out on due to the language barrier.

But I also partly disagree with this concern, because it emphasizes how different we are as people. Our differences are the focal point, and it is because of how large these differences are that we will always have an “outsiders” perspective. This concern implies that it is difficult – maybe impossible – to ever overcome these differences.

Yet, despite how different we are and how large of a rift they cause, we are genetically 99.9% the same. This was a point that Bill Clinton raised in his Class Day speech at Harvard in 2007 (speech continues to Part 3). We are all 99.9% the same, and yet we choose to focus on our differences like they are the only parts of us that matter.

I believe that we have more in common with our target consumer than people recognize. We may have a different hometown, ethnicity, language; but we are all still people, and in that sense we share many understandings. We all understand what it’s like to be brought to laughter, or to tears. I can understand someone struggling to make a decision due to family pressure, because I’ve fought that battle before. I can empathize with someone wanting to purchase a top quality product for a low price, because I’ve weighed the cost vs. quality of products in my head before. Sure, the context will be different. But when you look past the differences, it’s really quite amazing how many similarities there are in the underlying thoughts and actions.

Bill Clinton finished his speech with, “Enjoy your differences, but realize that our common humanity matters much, much more.” We may have an outsider’s understanding of local conditions, but we have a common understanding of human conditions. It is with this common humanity that we are building Essmart.

Most of the products that you see above are priced from 5 rupees ($0.09) to 100 rupees ($1.80), including wrist watches and LED torch lights (flashlights). A chat with one of the market’s regular electronics vendors revealed that he gets a good margin for cheap products and that customers are more inclined to buy a cheaper product that will last few months compared to an expensive, long-lasting product. While I was chatting with him, a few of his old customers showed up carrying broken torch lights and wall clocks which they bought only a couple of weeks ago.

Interestingly enough, the same people who bought all of these cheap products were very particular about quality when they moved to the vegetable vendors. After a lot of examination, they only bought the fresh vegetables at the market. The village market demonstrates that there is no simple correlation between a consumer’s sense of quality and price. On a larger level, it represents the complexities of village life/markets and breaks through the idealization and generalizations of village life.

Essmart is committed to bringing high-quality essential technologies to rural households, but we also accept this comes at an extra upfront cost for our customers. This leaves many questions unanswered about where Essmart fits into the ecosystem of rural markets and household consumption. But these unknowns are also why we are committed to being in the field, where we can more thoroughly ask the right questions and explore these complexities.

This isn’t an update from the field, but it’s still part of the entire experience of building Essmart out here in India. Last week, I had the opportunity to participate in an “International Faculty Seminar on Social Entrepreneurship” at the Tata Institute of Social Sciences in Mumbai. The Dell Social Innovation Challenge out of UT Austin invited me to represent Essmart, which won this year’s grand prize.

As the title of the seminar indicates, most of the participants were faculty and administrators from Indian universities, nonprofit organizations, and social entrepreneurship networks. From what I gathered, the goal of the seminar was to spur social entrepreneurship on Indian campuses, ultimately encouraging students to involve themselves in the just-about-burgeoning-yet-still-somewhat-undefined field.

Essmart began when I was a graduate student at MIT, and our team consisted and still consists of students. Naturally, I compared Essmart’s experience to one that a team of Indian students dabbling in social entrepreneurship would have. I hadn’t realized how much I had taken Boston’s (and particularly, MIT’s) entrepreneurial environment for granted. My final year in graduate school was really a transformative process; I flirted with social entrepreneurship in September, but as I got more involved in the classes, networking events, opportunities, and process of developing Essmart with co-founder Jackie Stenson, I was naturally drawn into taking real, actionable steps by June.

The process doesn’t happen as naturally for Indian undergraduate and graduate students, as the academic environment isn’t as supportive of student-initiated social enterprises in terms of funding and mentorship. Additionally, the way that social entrepreneurship is taught is not particularly inspiring. During the seminar’s curriculum development sessions, I could see the huge disconnect between teachers who treat social entrepreneurship as a thought exercise and students who may want to take it up on the margins or as a career. For example, one newly-minted professor insisted that students sit through lectures covering every single theory of social, economic, and political change under the sun. I counter-insisted that such lectures are not necessary and rather make students less interested in actually doing something.

At the end of the seminar, I had an opportunity to pitch Essmart to these Indian faculty members. The long question and answer session reflected the doubts that many of them had about Essmart’s model and our “outsider’s” understanding of local conditions here in India. While I understand that academicians establish their careers on their abilities to think critically, the thought that ran through my mind was, “Well, you can’t know until you try. And at least we’re trying.”

And that thought was confirmed immediately after I returned to my seat. One of the computer technicians approached me with the help of a translator. He said that his peri-urban village faced similar problems that our Pollachi end users face. Then he asked where he could get his hands on the technologies in our catalogue.

After I put this computer technician in touch with someone who could help, I couldn’t help but reflect on the sequence of events that took place. Talk really is cheap, and the beauty about innovation is that its untested newness holds so much potential. While we were students, we at Essmart were given the space, encouragement, and support to gradually try out our ideas, which in turn, gradually transformed us. We began with an idea, which was supported by a pilot, which was used to demonstrate feasibility and generate a more formal business plan, which launched us into the position to acquire more funding. Now that we’ve begun operations, we hope that other student-initiated social enterprises can be fortunate to receive the support that we’ve benefited from.

After finally getting a chance to see and interact with some of the rural retail outlets we are working with in Southern India and getting a better feel for both the logistical challenges and the market potential, I couldn’t help but think of an article I read last February. In Innovations in Light, Tina Rosenberg writes about what occurs after product innovation.

As she points out, with so many people around the world working on the technological side of the problem, “technology is the easy part of solving the problem.” Hundreds of affordable “essential“ technologies have been created to address problems faced by people living at the base of the pyramid – largely devices focused on energy, water, and health issues.

The hard part comes when trying to inform and distribute innovative products to a new group of individuals who have little first hand experience with many of these devices, and who may be skeptical of the reliability of something they view as a large investment.  When our team visited our partner retailers, there was palpable interest in the glowing lamp charged by the sun, and people poked and prodded the lantern with interest.  While they were curious, they hesitated in immediately purchasing one until they knew more about its features and how durable it was, or better yet, until they talked to someone who already had one.  Since many large-scale distributors don’t focus on villages because of logistical challenges, these rural communities have only periphery experience with the essential technologies we are promoting (like solar lanterns and water filters). And though many rural community members see the potential benefits of having an alternative light source when the electrical grid can go out three or four times in a day, they want to make an informed purchasing decision.

As Rosenberg reports, large-scale manufacturers like d.light and Barefoot Power (two companies who produce solar lighting devices) are trying to reach rural areas but are struggling to overcome logistical problems and warranty services – major problems if the company lacks a significant on-the-ground presence and struggles to build trust with local communities.  While trust is a major component of doing business all over the world, it is especially important in rural India, where business runs on connections and relationships.  By embedding ourselves in Pollachi and hiring local sales agents to grow these connections, we at Essmart are trying to circumvent some of the problems that large-scale manufactures have experienced in the past.  Since warranties are a major selling point but are also a complicated logistical hurdle, we are refining the warranty service to better establish trust with customers as we work with the local retail shops and receive direct feedback from end users. We plan to use that trust to promote the sale of life-changing technology.

While Essmart faces a number of obstacles in adequately informing our market, building trust, and overcoming logistical complications, the need for the products we have aggregated is enormous. It is exciting to be on the forefront of bringing new and affordable technology to the people who could benefit from it the most.  It will be difficult to overcome the complications that have inhibited others from reaching impactful scale in the past. However, if we can solve those problems, we can help achieve what these products were designed to accomplish – transforming the landscape for people living at the base of the pyramid.

Happy Independence Day! Since today was a national holiday, we spent most of it working from our Pollachi office/warehouse. Our sixth Essmart team member has arrived, and watching our complementary skills come together to move Essmart forward has been a rewarding experience. Everyone has been occupied, since there is a lot to do.

Last night we had a first long team meeting. It came after a day of shop visits by motorbike with Selvan and the sales agent who had worked with us in January. We visited the stores that Jackie and Selvan had stopped by and left a catalogue with a few days prior. These five shops resulted in a variety of outcomes: we completed one sale’s transactions (our first rupees!), saw catalogues removed from windows (because households wanted to take them home — note taken), talked with end users who wanted different types of technologies, and learned from shop owners about why they wanted or did not want to work with Essmart.

From the visits that we went on, we saw three recurrent themes: value proposition for shop owners, local training, and warranties.

Value proposition: Why should shop owners work with Essmart? Why can’t they just work with the suppliers directly? Why would they want to sell more durable products instead of what they’re currently selling? When I heard shop owners asking these questions, I was reminded of the questions that we were asked by our business plan competition judges. Our answers then still hold, and I believe that they carry even more weight since we’ve confirmed again from Pollachi. We provide a diversity technologies that would be difficult for a single store to acquire. We know the technologies and vet them before attempting to sell them, ensuring that people actually continue benefiting from them. We support shops through marketing and through facilitating after sales service. We provide generous margins compared with fast moving consumer goods. After speaking with an array of different types of shops, we’re getting to the point where we can profile which stores would be interested in working with us based on this value proposition.

Local training: We need to make the user education process as easy as possible. This is more difficult than it sounds. Many of the training manuals do not come in Tamil, which is the local language. Understandably, this makes user education very difficult. It also prevents shop owners from wanting to sell our technologies, since they need to feel comfortable answering customer questions about them. We’re seeing that this knowledge gap is crucial to fill, and we have a few ideas in mind to address this in a way that is 1) cost-effective for Essmart and 2) time-effective for shop owners, who are busy typically busy attending to other customers.

Warranties: Facilitating manufacturers’ warranties is something we’re strategizing about. The current process involves shop owners filling out warranty cards with customers on purchase, which can be a bit time-consuming and easily forgotten for both parties. When a product breaks, the customer needs to find the warranty card. We’re still learning about peri-urban households’ attitudes toward warranty cards (whether or not they keep them safe and handy), and we’re trying to streamline the entire warranty process.

Of course, there are many more issues to consider as we work through the kinks in Essmart’s model. No one said that distribution of these technologies was easy — that is, of course, the reason why Essmart exists. Although we’ll experience trial and error from the field, I think that progress has happened and will continue to happen as we learn by doing.

Thursday was a busy day for the Essmart team. As a President’s Challenge finalist, Rob and I were fortunate to attend a lunch with Professor Muhammad Yunus. Each finalist team got to briefly describe our start-up idea, and then the floor was open for questions.

Two points that Professor Yunus made during his answers stood out to me the most. The first is that the Grameen Bank does A LOT, but they didn’t start out that way. He started by taking bite-size steps. He identified one problem, for one person, in one village, and solved that.  When that worked, others came to him with the same problem. So he solved that too. Since then, the Grameen Bank has grown, and now they have many, many different business lines.

Part of me has a hard time believing that you can be successful with so many different business activities. We’ve been trying to narrow Essmart’s focus recently because we’ve received feedback that we’re trying to do to much. That being said, the Grameen Bank expanded slowly over 30 years. They did start out very focused, and Professor Yunus definitely emphasized the importance of taking small steps, of changing one life, and then thinking about scale.

Second, Professor Yunus said that he doesn’t often talk about failures. Not because he doesn’t learn from them, but because he views every failure as simply an idea to be put on the back burner. He’ll then pull out these ideas later down the road, when he’s found a more appropriate place for them, or he’s figured out a way to fix them. I’m a firm believer that we should talk about failures and lessons learned more in this field, and I found this framing of failures rather interesting.

After lunch with Professor Yunus, Taylor, Jaya and I pitched Essmart at the Boston Beta demo night. It was a fun and relaxed event. I got to practice my pitch again (you can never practice enough!), and I enjoyed watching Taylor and Jaya pitch! We’ve definitely all started to adapt some of the same phrasings when pitching. Thanks to all those that came up and supported us!