The Ideal Biz in a Box

We took Shashin on to work for Sanergy this summer both because he had great experience launching microfranchising programs with the microfinance operations SEWA Bank in India and BRAC in East Africa. Just as importantly, in his interview, he articulated the frustrating lessons he had learned and how he might have done things differently.  Shashin’s ability to step out of the experience and reflect objectively with candor and confidence convinced us that he was the right fit.

Sanergy plans to roll out its sanitation facilities through three different channels: independent entrepreneurs, who run them as an income-generating activity; through landlords, who purchase and provide them to tenants; and through organizations that attract high concentrations of people – such as schools, restaurants and churches – who offer them as a value-add service.

Shashin has crafted a working hypothesis of what an ideal microfranchise model might look like. Indeed, we want to create the perfect business-in-a-box.  But what goes into that? We know it’s a combination of a great product, initial and on-going training, aspirational branding, aggressive, visible marketing and unrivaled customer service. We’ve grilled social enterprises that have done this before – VisionSpring, Living Goods, Community Cleaning Services, and Sarvajal, to name just a few. We’ve also grilled strictly for-profit franchises and brands that have had considerable success in the slums–recognizable names such as M-PESA and Coca Cola.

A few initial thoughts that have come out of this process so far:

  • There exists a tension between an operator serving as an entrepreneur or as a manager. How much freedom do we give to the franchisee? Are they the best equipped to devise hyper- local marketing strategies or should we be hyper involved?
  • What makes M-PESA or Coca Cola an attractive franchising opportunity? If franchisees make money, others want to follow suit.  But why don’t other large corporations have as much success?
  • It might not even matter what we put into the box, so long as we find the right kind of operator. The more we learn, the more we become convinced that it all comes down to finding the right entrepreneur and setting the right expectations.

Like any good investigator, Shashin has found that each question he answers leads to several more questions being asked. And in the end, these questions can only really be answered by getting down and dirty in the slums turning our ideas into action. First stop: Collecting and sorting through the trash from 400 households in Lunga Lunga.

  • Hey guys – we were looking at similar issues with our SEID project last fall. Did you also look into SPOT City Taxi in India? Also an interesting report by Dalberg called “Franchising in Frontier Markets” had some useful insights and case studies.

  • This is a question a lot of people would love the answer to- it’s really great that Sanergy is documenting the process so the community can learn from it.

    When we were looking into microfranchising to roll out an arsenic removal technology(ECAR project at Berkeley), we came across these really helpful articles (which you have probably already seen, but if not here you go)

    “Good Business for Poor People” from the Stanford Social Innovation Review (Lisa Jones Christensen, David Lehr, & Jason Fairbourne)

    Good luck! And it would be amazing to read about what you end up discovering!

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