Electrifying the Developing World: A Chat with BBOXX CEO Mansoor Hamayun
One of our sessions during the Cleantech Forum Europe that will be held in Stockholm (May 19-21) is titled the 10 Year Track – How we (can have) Impact. The theme is about how European companies are tackling environmental and resource challenges in some of the most populous and impoverished regions of the world. One of the speakers in this session is Mansoor Hamayun of BBOXX, a company leading the solar revolution across the developing world by designing, manufacturing, distributing and financing innovative plug & play solar systems to meet the energy needs of the mass market.
Can you tell us the genesis story for BBOXX?
Sure thing. BBOXX started off during my university times. It was my second year studying electrical engineering in London at Imperial College and I was sitting over dinner joking around with a few friends and I said “half the world doesn’t have electricity.” And that lingered in my head for a while. I didn’t think too seriously at first, but it made me interested personally in why one third of mankind (which is the correct number) doesn’t have access to electricity when it’s so fundamental to ensuring an acceptable quality of life – is it a policy issue, is it an engineering challenge or what is it? So we signed up as a charity, to try to bridge the gap of learning with what we considered to be one of the greatest challenges of the century. We started on a few projects in Rwanda and in the course of two years connected 500 or 600 households before graduating, raising $300,000 in the process. But suddenly, at the end of it we started being approached by so many people across the world who were asking “hey can you do this for us?” And then we realized that actually there’s a huge market out there and with a successful business plan and organization across the developing world, there is real potential for success. There were only three things that other organizations don’t really have: they don’t have the product, they don’t have the knowledge, and ultimately they don’t have the confidence. So what we did was put everything in place and we started BBOXX to bridge those three things and we realized that to really have an impact beyond charity, we had to become a for-profit organization and we had to grow. That was 4 years ago now. Since, we’ve launched in 14 markets, we have over 250 employees under the BBOXX banner, and we’ve sold well over 35,000 systems to customers. So things have gone pretty rapidly. It’s actually quite exciting.
What are some of the experiences that have shaped your approach to serving as CEO?
There are several things. I think one of the key things is that because we work in the developing world, we can’t become a niche player, the fundamental infrastructure doesn’t exist. So a lot of the challenge is to start from scratch with a lot of basic infrastructure. In Kenya and Uganda, for example, we’ve become the logistics company, we’ve become the distribution company, we’ve become a finance company. We have a design office in London where I’m sitting right now, with manufacturing in China. So it’s been a lot about learning about what the bottlenecks are, learning how to enter that space, building teams and credibility around that and, most importantly, making all those dots connect together. So those are the key challenges and learning points that come with it.
Backing up a bit, can you describe the needs your customers have and how your company addresses them?
Our typical customer is getting electricity for the first time ever in their lives. That’s an interesting challenge in and of itself. So the basic customers that we service need light, radio, phone charging – that’s the profile of the basic customer. But we have a very wide range of products – we start from small 10 W systems up to 5 kW systems. We power tons of barbershops, tailors, rural clinics, bank branches, rural offices of all sorts. The needs are pretty similar to the ones of the developed world and actually one of our design philosophies is that we want to provide the on-grid experience in an off-grid setting. That means that we also have to provide a lot of appliances. So to the end market we also have electronic supply, and about 10 to 20 percent of our revenue comes from sale of shavers, radios, fans, TVs, etc. There is a very wide range of needs that we service, and there’s a level of similarity to our customer base. No difference.
The theme for Cleantech Forum Europe is centered on appreciating how far technologies have come in the last 10 years, as well as a focus on the next 10. Where is BBOXX heading?
I think where we’re headed is a very exciting place where energy acts as a service, and where renewable energy is actually cheaper than carbon-based solution, especially in the developing world. BBOXX is very much investing in distribution and customer financing, all in all to give people the ability to have energy as a service. And that means that they are actually saving money every month, compared to whatever the existing solutions are, and at the same time a much higher quality of provision for the same amount of money. And that’s mainly enabled by price changes in energy, solar power, batteries, efficiency of LED light, and improvement of existing networks in the entire supply chain. We also have an KPI-enabled control functionality of products to be able to understand our customers’ user behavior as well as charging algorithms and we know that there’s been a lot of rush in battery technology, for example. There are lots of things that have happened in the last 10 years that really have unlocked a huge market base for the next 10 years or so.
What do you like most about the work that BBOXX is doing?
We say this quite frequently – every week, every month – that “electricity has a real transformative impact in the society that we work in.” Whether it’s in a new village where a person gets electricity for the first time or somewhere else – it’s a real life changer. A lot of cleantech companies working in the developed world are setting up using sustainability as a key metric. For us, since a lot of our customers are getting electricity for the first time ever, the socioeconomic benefit is immense. And I really, really enjoy that part of the work that we are able to achieve.
Are there challenges to growth and adoption of your products and services?
Of course. One of our main competitors is customer behavior, customer habit, and the customers’ old way of life. It doesn’t matter which products are cheaper or better, there is tradition and behavior attached to energy use as it is. So our success is lot about user education, it’s a lot about benefits, it’s a lot about showing what’s possible to my customer base, who sometimes are not completely informed about what energy can do for them, especially what more energy can do for them in their homes.
I think one of the things that needs to be highlighted here is that there’s a real difference between the solar market in the developed world with grid connection, feed-in tariffs, and the tax around that in comparison with our market which has direct current, smaller, 200 Watt systems, and is decentralized. So the fundamental infrastructure is very different from the typical utility model even though the use is very similar. That’s why a lot of technologies that exist for on-grid don’t exist for off-grid.
How do you go about informing them? Is it educational, is it case studies, do you put a test unit into the village or the city or the town?
It’s a combination of a lot of that, actually. We are our own wholly-owned distribution network in several countries, and we want to be inside the village, so a lot of it is really finding educational points to show people what’s possible , teaching them by doing, and trying to understand them on a very localized basis – this guy wants to run a barber shop, this guy wants to run a tailor shop, this guy wants light to put up a light, this guy wants to put up a light and go fishing, this guy wants to store poultry products in the fridge, etc. It’s about learning what the customer wants and what he can afford and try to build around that. Actually a lot of our systems to date have been sold to enterprises – shops, barber shops, etc., and slowly we’re reaching out on a household basis. Our typical customer is still a business owner and we are moving to more of a household business over the next months and years.
Moving focus to the next 12 months – what does success look like?
Success for me looks like becoming an energy-as-a-service provider and enabler globally. We are challenging a global problem and for me it’s about building the tools around that. Whether it’s the product, the small products to the big products, whether it’s the software that operators on the ground need to have to know which customers have paid or haven’t paid, whether it’s the service in the background to enable proactive maintenance forecasting of the product and customer behavior, and how we can improve the experience even further – if we can really lead through all of these ways to offer energy as a service in a global context – that’s success. One of the key challenges for us as well is that energy is a regulated affair. And we are challenging the very nature of a utility style business model that has existed for around 100 years now with nationally-owned companies and nationally-owned distribution providers. Also the laws and regulations have not really followed technological advances, especially in the developing world. So that’s one of the key challenges that we are trying to overcome and we are trying to do so in various ways.
Is there a specific target you would be comfortable sharing in this context? Anything in the next 6-12 months?
6 to 12 months we’re aiming to have another 50,000 customers in various forms and by 2020 we want 20 million customers. And that isn’t really electrifying a significant amount, considering the 1.4 billion people who are not electrified. So it will still just be a drop in the ocean in many ways but that bigger than it was before.
Can you share something about your interest in Cleantech Forum Europe 2014 and why you chose to participate?
When I came into contact with you, I was excited by the futuristic approach that you guys have. I looked at some of the previous attendees at your events and the work you guys have been doing and I think my interest lies in looking at where the energy market is going, and the learning points about what’s happened in the developed world and how it can be cross applied in the developing world. I think a lot of the regulatory challenges that people had 10 or 15 years ago in the US or UK, for example, are the same things that we are having now in our markets. I think some of the strategies and people behind these challenges are very interesting to learn about and obviously the technology process as well.