Articles by Marc Manara

Toilet talk may be taboo in most professional situations, but at World Water Week, toilets were a hot topic.

For those unfamiliar with World Water Week, it is an annual meeting of water experts, practitioners and leaders from around the globe to discuss the world’s most urgent water issues. This year’s meeting was held August 16-21 in Stockholm, and ideas were exchanged on many water-related topics, ranging from water management practices to sustainable business models to research on health impacts to policy.  (For those interested, presentations from the event can be downloaded for free here).

This year saw a number of sessions focused on sanitation (a.k.a. toilets). The raw statistics around sanitation are shocking: 2.4 billion people (more than 1/3 of the world’s population) lack access to adequate toilet facilities. One in five children dies of diarrheal diseases, and 88% of diarrhea cases are caused by either unsafe drinking water, inadequate sanitation or poor hygiene.

Sanitation challenges are intimately linked with the lack of infrastructure investments in rural areas and informal settlements and slums, but solutions are emerging that can be applied by individuals and communities without a need to rely on large-scale centralized investments. It was encouraging to see entrepreneurs developing models for improving access to safe, hygienic toilets that can be distributed widely at affordable prices.

Dr. Brindeshwar Pathak, a sanitation innovator who founded the Sulabh Sanitation Movement, was the most prominent example: he was awarded the 2009 Stockholm Water Prize for his pioneering work in developing cost-effective toilet solutions and his work to change social attitudes toward unsanitary latrine practices. The scale of Sulabh is truly impressive, and the preservation of human dignity lies at the core of their work.

Another, earlier stage, example that stood out to me was Bapak Sumadi, an entrepreneur in Indonesia, a country where 66 million people practice open defecation. Mr. Sumadi has developed an innovative business strategy around direct sales of latrines: he’s segmented his market and has priced four different levels of products (ranging from $18 - $85); he’s branded each model with a catchy name and designed them to be upgradeable; he offers flexible payment terms and after-sales services (e.g., pit-emptying).  While it remains to be seen whether the model will be able to scale, it is encouraging to see promise in these enterprising, consumer-focused approaches to challenging one of the world’s biggest problems.

The conference was a valuable opportunity to identify business models and make contacts that can help us as we continue to invest in this sector.

Each year, the Tech Museum of Innovation honors 25 innovators who are applying technology to benefit humanity through the Tech Awards program. The program honors 5 Laureates in each of the award categories — Health, Education, Environment, Economic Development, and Equality — and selects one Laureate in each category to receive a $50,000 prize. Candidates may be individuals, non-profit organizations, or for-profit organizations, and past Laureates have included innovative organizations such as DonorsChoose.org and KickStart, as well as some Acumen Fund investees such as International Development Enterprises-International (IDE).

The nomination period for 2009 is now open, and submitting a nomination only takes a few minutes. So, if you know someone who might be deserving of the award, consider making a nomination.

Acumen Fund has learned over the years that its most successful entrepreneurs listen constantly to the needs and the nuanced preferences of their customers. A killer new product will certainly fail if it is not designed around the customers’ behaviors and desires. We’ve seen it happen.

As part of Acumen Fund’s monthly breakfast series, we were joined last Friday by Richard Allan, Director of the MENTOR (Malaria Emergency Technical and Operational Response) Initiative, who spoke about a thoughtful new technology for preventing malaria: insecticide-treated wall lining (shown at left, with a customer in the foreground). Imagine a flexible wall-lining that you can unroll in long sheets and attach to the inside walls of a home. Only it is impregnated with an insecticide that kills mosquitoes (and many other pests) on contact. A new company called DART (Durable Activated Residual Textiles), a joint venture between Richard, Acumen Fund, and Vestergaard Frandsen, will produce the product for distribution throughout malaria endemic regions Asia and Africa.

We’ve seen a lot of sexy, new product designs, and we’ve decided not to invest in most of them. So why are we so excited about this new wall lining (think wallpaper)?

For starters, it combines the best features of the two most popular malaria prevention products: the long-lasting insecticide-treated bednet and indoor residual spraying (IRS - this is where the interior walls of a home are sprayed periodically with insecticide). The best nets last about 5 years without needing re-treatment, but they require you to sleep underneath a net every night, which is a significant behavior change and a challenge for any distribution scheme. Indoor spraying requires no behavior change once the walls are sprayed. Unlike with nets, a family does not have to decide to sleep under protection; the spray ensures that they are naturally protected anytime they’re inside the home. Misuse is not really possible. However, the spray’s effectiveness only lasts about 6 months and there are complicated logistics and persuasion required to do the spraying in the first place.

Introducing wall lining. Wall lining will remain effective at least as long as bednets and likely longer, since it will likely see less wear and tear. And, like spraying, it does not require any behavior change once the walls are lined – if you’re in the home, you are protected. In this sense it is the best of both worlds – years of protection without the struggle to change people’s behavior.

Yet, beyond these technological advantages, the product seems to appeal to the customer better (at least as evidenced in early trials). Printed in many different colors and patterns, the wall lining is designed to appeal to the desire for beauty and home improvement that exists in all of us. Who wouldn’t want beautiful blue walls instead of the drab brown of sticks or mud? In fact, this is how Richard got the idea in the first place. In Cambodia, he noticed homes lined with wallpaper for purely aesthetic reasons. Why not combine the customer’s desire for beauty and home improvement with addressing a critical health issue?

Of course, there are many challenges ahead, but in a market dominated by multilateral & NGO distribution schemes, it is rare to see a product so thoughtfully designed with the customer in mind. With ~2 million deaths per year due to malaria and 1/4 of the world population living in malaria endemic regions, we owe it to the customers to design products that work for them but at the same time are as effective as possible.

The BiD Network is creating a series of country-specific guides for investing in Small and Medium Enterprises, and they have just published their guide to Colombia. These guides are meant to facilitate foreign investment in the range of $50,000-$2,000,000, and they contain some great information about the investing and regulatory environments in each country. Acumen Fund’s performance management and impact assessment methodology is covered in some detail as well.

According to the guide:

In mature markets such as in the US and Europe, SMEs benefit from an inflow of capital from venture capitalists, private investors and banks. However, investments in SMEs in Colombia are limited by a lack of information and thus a high perception of risk. “Investing in Small and Medium Sized Enterprises in Colombia” aims to address this knowledge gap, by providing all the information necessary to plan, manage and exit from an investment in an SME in Colombia. It is a practical guide and contains interviews with US, European and Colombian based funds, banks and experts on SME finance on how to approach an investment between USD 50,000 to USD 2 million in a Colombian SME.

Check it out: BiD Country Guide Series - Investing in Small and Medium Sized Enterprises in Colombia 2009.

I like to cook, and I was recently browsing through the 101cookbooks.com site, looking for something do make with some extra zucchini, when I came across this unexpected post: an invitation to join the 101cookbooks.com Kiva lending team.

Suffice to say, I was not expecting to find microfinance shout-outs on a cooking blog. But when I saw this post, I was really struck (again) by the power and reach of Kiva’s model. Kiva just makes it so easy for people to participate in the micro-lending “movement” – anyone can become a lender and forge personal connections to individual loan recipients in the developing world. Not only is it easy to participate, but now it’s apparently getting easier to enlist others, too. The virality is really impressive.

Acumen Fund’s model is obviously different from that of Kiva (small & medium enterprise finance vs. micro-lending to individuals), but we have similar ambitions around engaging large numbers of individuals in our work. How do we give any interested, eager individual a way to participate? How do we create personal connections between the customers of our portfolio companies in India, Pakistan, East Africa and people who live thousands of miles away? How do we build a “movement” around the development-through-enterprise sector in the way that the microfinance movement has sprung up in recent years? How do we translate that “movement” into changes in the way people approach philanthropy and development?

We don’t yet have answers to these questions, but Kiva has at least shown us that there are plenty of people out there who want to try to help solve poverty if you can just give them a way to get involved. Our challenge in creating a “movement” will be to supply easy ways for people to participate so that maybe one day someone else’s search for a simple recipe will change the way she looks at the world.

P.S. If you ever find yourself with an “extra zucchini” problem, I recommend this recipe.

I’ve recently returned from working in Acumen Fund’s Nairobi office, where I had the opportunity to visit sanitation facilities in low-income communities in Kenya as part of my work. Having never lived or spent time in East Africa, I had never seen life in any of these areas first-hand.  Most Americans never do. 

Knowing this, I felt the need to capture everything I saw in photographs. If there were children playing in a pile of trash, I wanted to capture it. If a woman dumped waste water into the narrow mud street of a densely packed community, I wanted a picture of it. When I visited a clean, high-quality sanitation/ablution facility amidst otherwise dilapidated construction, I wanted to take photos that highlighted the contrast, that demonstrated the potential for lasting change.

My motivations were simple: I wanted to share vivid stories with my friends, relatives, and even colleagues back home in order to raise their awareness of what life is like for 2/3 of the world. This is a critical part of Acumen Fund’s work, because until someone has an understanding of the challenges facing low-income consumers, he or she will not fully appreciate or support Acumen’s efforts to finance social enterprises serving these consumers. Similarly, without evidence of successful business ventures in low-income markets, he or she will not be convinced of their viability.

Sometimes you see change in unexpected places, coming from unexpected people.

Meet Frances, a beaming driver for Advanced Bio-Extracts (ABE), a company that works with 7,000+ farmers in Kenya, Tanzania, and Uganda to produce a critical input into cutting-edge malaria treatment therapies, artemisinin. As a driver, Frances has job stability that many in Kenya lack, yet his income is still quite modest and his hours long. Frances lives with his wife and children in Nairobi, but a small, mountainous village two hours outside Nairobi is where he calls “home.” His parents and brother still live in the village and tend to small plots of maize, arrow root and French beans.

Having never farmed for a living, Frances is an unlikely candidate to grow artemisia. But he’s doing it. Frances recently planted 2,000 artemisia seedlings on his family’s land and he returns to his village whenever work permits, usually twice per month, to tend to them.