Village Capital Case Study: Eco Fuels Kenya

This post originally occurred on the Village Capital blog at: http://www.vilcap.com/village-capital-case-study-eco-fuels-kenya

The following post was written by Myles Lutheran, a Director at Eco Fuels Kenya. With a background of developing early-stage, venture-backed companies in the United States, Myles first came to Eco Fuels Kenya through the Frontier Market Scouts Program, co-founded by Village Capital.

Village Capital: Developing Impact Investments Globally

Over the past six months I have been working with Eco Fuels Kenya, a startup which has become Kenya’s largest producer of organic fertilizer in only one year since its founding in March of 2012.  I first engaged with Eco Fuels Kenya through Village Capital, an investor in the company, who sent me to help develop the business through a talent-placement program. Village Capital views Eco Fuels Kenya as an ‘impact investment,’ an enterprise with the potential for both financial returns and a positive environmental/social impact. Despite the fact that JP Morgan estimates that $17 billion will be dedicated to ‘impact investing’ in 2012 and 2013, my experience with Eco Fuels Kenya has exposed that a negligible amount of those resources get to early-stage enterprises creating impact.

This is a problem. As the impact investing industry has started to take shape over the past few years, most funds have shifted away from supporting early-stage enterprises due to the high cost and difficulty of performing due diligence on companies serving base-of-the-pyramid (BoP) populations.  These changes in criteria have only worsened the biggest problem that most investors are facing: not enough investment-ready companies to put the growing amount of impact investing dollars into.

Recognizing this problem as an opportunity, Village Capital has developed a unique peer-selection model that makes sourcing, supporting and investing in early-stage enterprises effective. I have seen the impact of the Village Capital model first-hand at Eco-Fuels Kenya, who just six months after being selected as the top social enterprise in the Village Capital/GrowthAfrica: Nairobi program this past December has gone from a small-scale pilot project to an investment-ready company.

Eco Fuels Kenya’s Participation in a Village Capital Program

024Founder Alan Paul explaining Eco Fuel’s  process. Croton husks (an ingredient in the fertilizer) in the background

Just months before the Village Capital Nairobi program started last fall, Eco Fuels Kenya founder Alan Paul had begun market validation for the biofuel and organic fertilizers that he produced from local, indigenous materials sourced by BoP community members desperately in need for additional income.  All signs were going well, but already having sunk all his personal funds into the venture, Alan was in need of more capital to increase production to a point where it could reach its revenue potential.  Spending his entire life living and working in Eastern and Southern Africa and operating in a small, rural town in central Kenya, Alan had never heard of the term ‘social entrepreneurship’ and had no way to be connected to the ecosystem available to support for-profit ventures seeking social change.

A friend recommended Alan apply to the Village Capital program where he would get training over four months and the chance at a $50K investment.  Alan applied and was selected from over 100 applicants as one of a cohort of fifteen. At the end of the four-month program Eco Fuels Kenya was picked by their peers for a $50K investment, accelerating the company’s progress in ways that otherwise may have taken Alan years to accomplish on his own­­:

  • Business Model Validation

Like many social entrepreneurs Alan was building an enterprise that did things nobody had ever done before, specifically building a raw materials supply chain based on sourcing unused, indigenous materials through BoP community members and creating a commercial market for organic fertilizers sourced and produced in Kenya.  Working with the other social entrepreneurs in the Village Capital program helped identify bottlenecks and focused Alan’s model to make it stronger than it was when he had developed it on his own.  Since the participants in a Village Capital program were peers rather than competitors, it was a great opportunity to get honest, unbiased feedback from other impact-driven entrepreneurs who wanted to see Eco Fuels Kenya succeed.

  • Committed Capital

Alan had put all the funds he had available into Eco Fuels Kenya and had proven that he could source his raw materials and sell his finished products, but he needed more capital to grow the business. Despite this need for funds, Eco Fuels Kenya didn’t meet the strict requirements of most funds investing in social enterprises and wasn’t in need of the amounts that many impact funds have adopted as their minimums in recent years.  Since the money in the Village Capital program was pre-committed at the start of the accelerator and the investment was decided upon by the entrepreneurs in the program rather than analysts in a far-removed office buildings, Alan had the opportunity to get money vital to the development of his business without the lengthy, distracting and overwhelmingly unsuccessful process of courting impact investors.

  • Exposure to the Ecosystem of Impact Investing

With a supply chain that never stretches more than 50km from the Eco Fuels Kenya factory in central Kenya, there was little hope that impact investors would ever find Alan’s company.  This all changed when he participated in the Village Capital accelerator program, as Eco Fuels Kenya was suddenly exposed to a global network of impact investors who, mostly based in western countries or major cities, rely on Village Capital to generate strong leads in geographical areas they don’t have the capacity to reach on their own.  The development of the model in the incubator, including being selected as a winner, was a strong ‘pre-due-diligence’ mechanism that showed the impact investing community that Eco Fuels Kenya was worth taking a closer look at.

Winning the Village Capital investment gave Alan Paul and the rest of the Eco Fuels Kenya team a huge confidence boost. The funds received were used to help purchase higher-capacity equipment and move from a pilot site into a full-size factory.  With an improved model that was developed alongside supportive, entrepreneurial peers Eco Fuels Kenya is adopting new processes and technologies to expand its social and environmental impact while simultaneously increasing revenues and moving towards its first year of profitability.

Eco Fuels Kenya takes on a Frontier Market Scout

059Getting into the action!

Shortly after their winning of the Village Capital investment I was placed with Eco Fuels Kenya through the Frontier Market Scouts program, a talent development program that Village Capital co-founded with the Monterey Institute for International Studies to provide career opportunities for professionals interested in the impact investment sector and hands-on assistance for enterprises like Eco Fuels Kenya.  The combination of my experience developing processes, eliminating bottlenecks, and launching brands at venture-backed startups in the United States along with my passion for global social enterprise and environmental sustainability gave me unique credentials to help Eco Fuels Kenya further accelerate their development at a pivotal stage.  After learning everything I could about the organization, environment and market I identified three primary areas where I would focus my initial efforts:

  • Re-Branding to Reflect New Potential

Due to the discovery of market potential during the first year of operation, Eco Fuels Kenya had shifted its focus from biofuel to organic fertilizer. The problem was that we needed to raise additional funds for working capital and none of the internal or external documentation had been updated to reflect this new opportunity.  I knew that in order to get the right attention from the right people, including both large agro-consumers of fertilizer and future impact investors, we would need a brand that reflected our new focus and potential.  Within two months of my arrival the company had a new business plan, new website and updated product packaging to move from pilot phase to production stage.

  • Scaling-up of the Seed Collectors Network

VilCapBlog_CollectorGroupFactory GM Cosmas with a new collectors group for our Seed Collectors Network

As fellow entrepreneurs in the Village Capital cohort identified with Alan, with new machinery and a bigger factory, the barrier to scale would be the rate at which we could collect our raw materials.  Eco Fuels Kenya’s Seed Collectors Network, consisting of BoP community groups living in forested areas where our inputs grow, was lacking the structure and predictability of a healthy supply chain needed to grow the business.  We knew we would need to formalize this network not only to reach our targets at our initial factory, but also to replicate the network at each additional factory in the future.  I have written-up a proposal and raised grant capital for a mass SMS-based project which we believe will help us accomplish our supply chain goals, and early signs of its implementation look promising.

  • Raising Additional Working Capital

Raising investment money is an incredibly time-consuming and distracting process to running an early-stage venture.  Alan had successfully raised money through the Village Capital program to expand the factory and purchase new equipment, but more was needed to cover the gap between purchasing our raw materials from our Seed Collectors Network and collecting revenue from our large agricultural clients at a production scale.  With an increased knowledge and exposure of the impact investing ecosystem attained from the Frontier Market Scouts training, I am able to confidently take the lead role in engaging and following-up with investors that have learned of us through Village Capital so Alan can spend his time on what will ultimately make the business succeed: running an efficient factory and selling fertilizer.

Recently appointed a Director of the company to help focus on areas of business development, I am excited to be a member of the growing Eco Fuels Kenya team and help address challenges as we scale our initial factory site and prospect second sites for replication.  This unique opportunity to develop a high-impact, developing-country social enterprise would have otherwise been impossible without the Frontier Ma­­­rket Scouts program and Village Capital.

Eco Fuels Kenya’s Future

The new factory and equipment allows Eco Fuels Kenya to produce enough to meet the growing demand for its products and makes a strong business case for additional working capital needed from other impact investors.  Winning the Village Capital program has helped to generate strong interest from investors, and has also connected Eco Fuels Kenya to the ecosystem of social enterprise, creating the opportunity for innovative, industry-changing partnerships to help establish a market presence and expand upon Alan’s original plan for scale.

With the addition of funds from a number of investors over the next few months, Eco Fuels Kenya will be on track to grow beyond its current factory by the end of this year and begin its vision of replication across East Africa.  What was started as a biofuel company has turned into Kenya’s largest producer of organic fertilizer, with the potential to engage thousands of BoP community members on both ends of its supply chain, thanks to the teamwork of the social enterprise community facilitated through Village Capital and the investment received at a critical stage in the young company’s development.

As Village Capital increases the number of programs it runs and expands into new countries, stories like this begin to pop up all over the world and the impact investing community has a new way to find investment-ready social enterprises.

***

If you’re interested in following in Myles’ footsteps, learn more about the Frontier Market Scouts program by visiting the program’s website. An innovative program to place career-transitioning professionals with social enterprises and impact investment funds all over the world, Frontier Market Scouts is helping to address the need of talent in the social enterprise space while furthering the impact and increasing the chances of success for companies within the global network of Village Capital and its partners.

 

A Frontier Markets Scout as an Unreasonable Mentor and a visit to UpEnergy in Uganda

The past couple weeks have been quite exhausting as I spent over 75 hours on busses and matatus for both my roles with Eco Fuels Kenya and Village Capital, along with some time spent in Uganda to visit a fellow Frontier Market Scout Andrew Price who is working with UpEnergy. Despite the exhaustion of time spent on public transport and unpaved roads, the trip contained a number of highlights that made it all worthwhile.

Eco Fuels Kenya - Organic Farming

Eco Fuels Kenya General Manager Cosmas with one of our retail farming customers

I got started with a trip to Nairobi for a number of investor and partner meetings on behalf of Eco Fuels Kenya. We had a wonderful site visit from a potential impact investment partner just before I headed south, so over the following week myself and the other members of the management team followed-up in Nairobi as the firm performed additional due diligence and learned each of our perspectives on the opportunity and challenges of the organization’s future. Taking advantage of the trip to Nairobi, I was also able to meet and engage with a number of potential partner organizations, most of whom also participating in the development of Kenya’s organic fertilizer market, to make formal introductions and brainstorm collaboration ideas. As we dig deeper into the world of organic fertilizers it is becoming more and more apparent that collaboration, rather than competition, will help us reach our goals of replenishing Kenya’s chemically depleted soils. It is an exciting time and opportunity for Eco Fuels Kenya to be in a position to help lead the development of this commercially-viable market.

Mentoring UnreasonableAfrica - Myles Lutheran Frontier Market Scout

Group photo with the team from GrowthAfrica and Unreasonable Africa who helped pull off the incubator event

Before departing Nairobi for Kampala, Uganda I participated as a mentor for the Unreasonable Insitute’s first Nairobi initiative: a 48 hour incubator for social entrepreneurs. Representing both Eco Fuels Kenya and Village Captial at the event was a great opportunity to help some early and mid-idea stage social entrepreneurs develop further to a point where they could take the next step in building their business. Since Village Capital and GrowthAfrica recently announced a second incubator program this upcoming September, it was a great opportunity to meet some potential participants and teach them about the Village Capital model. On top of meeting and brainstorming with entrepreneurs, it was great to network with the other mentors of the program to dive deeper into the Nairobi social enterprise scene while exchanging ideas and resources. To top off the great weekend spent at the incubator I was proud that one of the teams I helped mentor was named the winning enterprise of the weekend, riding the success that they had during the session I spent developing their idea with them to the winners circle.

Andrew Price - UpEnergy | Frontier Market ScoutsAndrew Price - UpEnergy | Frontier Market Scouts

Andrew interviews an UpEnergy client after she spent two weeks trialing a new cookstove product

An overnight bus ride put me in Kampala to catch up with fellow Frontier Market Scout Andrew Price who is working with UpEnergy. UpEnergy (as described on their website) fights poverty, improves health and protects forests by making clean energy technologies available to more people in the developing world through carbon-financed distribution channels. Carbon financing through international carbon credit markets allows UpEnergy to sell their products at a price that Base of the Pyramid (BoP) customers can afford to pay, thus increasing access to these life-changing technologies. Having no prior experience with clean cookstoves, the primary product UpEnergy distributes, I was extremely interested in seeing their implementation and the challenges of their distribution which are well documented. I shadowed Andrew as he went on customer visits to get feedback from trials of new cookstoves that UpEnergy is considering adding to their portfolio.

With a short pit stop in western Kenya to visit a new best friend, I exhaustively made my way home to Nanyuki on buses and matatus to get back to work at Eco Fuels Kenya. Officially half way through my six month Frontier Market Scouts assignment, I’m excited as ever to continue the progress we’ve been making since my arrival.

Some Photos from the GrowthAfrica Site Visit – April 2013

Working hard with one of the team members for the photo op.

Working hard with one of the team members for the photo op

Alan explains the process to some guests and Johnni of GrowthAfrica, our newest Director

Alan explains the process to some guests and Johnni of GrowthAfrica, our newest Director

Cosmas explains the benefits of our Organic Fertilizers on depleted soils to Johnni of GrowthAfrica.

Cosmas explains the benefits of our Organic Fertilizers on depleted soils to Johnni of GrowthAfrica

Cosmas and Johnni - Eco Fuels Kenya

Cosmas holds some Croton Nuts as he explains part of our production to Johnni and other visitors

Alan and Johnni - Eco Fuels Kenya

Alan and Johnni with one of the input in our Organic Fertilizers

Alan with Croton Seeds - Eco Fuels Kenya

Alan takes a moment to seperate some Croton Seeds during the visit

Cosmas, Anothy and Seed Collectors - Eco Fuels Kenya

Cosmas of EFK and Anthony of GrowthHub with some of our Croton Collectors

Cosmas, Soloman, Organic Farm - Eco Fuels Kenya

Cosmas and Soloman stand with a farmer using our Organic Fertilizer on his Cabbage.

Helping to Pave the Way for Kenya’s Organic Farming Future

As progress continues in the upgraded Eco Fuels Kenya factory and daily operation starts to move towards an autonomous flow, the management team now looks forward to further implementing its strategic plan for the future. Specifically what this means is diving deeper into the market for organic farming and organic fertilizers in Kenya and looking to collaborate with other players in the field who have equally vested interest in the people, environment and economics of the country’s agricultural future. It is an unfortunate, yet common occurrence to hear from prospective clients whose soils have been damaged by heavy use of DAP and NPK fertilizers over the years. Everyone from large-scale commercial farmers to a growing number of agro-finance social enterprises that help subsistence farmers increase income are actively looking for ways to repair their soil conditions for increased production (i.e. yield and plant size) now and to ensure longevity for future seasons, two of the main benefits of planting with organic fertilizers.

The Eco Fertilizers Kenya logo

The Eco Fertilizers Kenya logo

Back in mid-2012 Eco Fuels Kenya was told by KEBS that our organic fertilizer brand, Eco Fertilizers Kenya, was the first organic fertilizer being produced in the country. Since that time we have become aware of a number of other locally produced organic fertilizer and farming initiatives, but there is still a lot of work to be done to educate and build awareness in the development of a growing organic farming ecosystem that focuses on short and long term benefit to the country and its people.

Some players and initiatives in the organic farming movement across Kenya worth noting include Ashoka Fellow Nelson Kariuki, who has made significant progress facilitating policy changes to enable increased use of organic fertilizer in the country and helped start an organic fertilizer brand called Rutuba. Next is the work of the Kenya Organic Agriculture Network (KOAN), which is using a network of organic farming stakeholders to fulfill its mission of improving the livelihoods of small scale producers in Kenya through organic agriculture. Their monthly publication, The Organic Farmer, helps to bring education, unity, and facilitate collaboration in a young, but growing section of Kenya’s agricultural economy. Last but not least are up and coming social enterprises including ourselves and companies such as Sanergy, which increase sanitation in Kenya’s slums through micro-franchised toilets and produces energy and organic manure out of the collected waste.

Zucchini Plant - Eco Fertilizers Kenay

Zucchini plant grown with Eco Fertilizers Kenya organic fertilizers

Despite momentum for Kenya’s organic movement being underway, there is still much work to be done. Proper scientific control testing for all organic fertilizers on the market and outreach/education are among the major challenges which Eco Fuels Kenya seeks to undertake in partnership with local and global organizations that have interests in encouraging sustainable agriculture practices. With their help, we hope to move these conversations from a community level to an international level and engage not only direct buyers and sellers of goods, but also the government which has the ability to influence the flow of imported chemical agricultural inputs, help encourage investments into local organic agriculture companies and build infrastructure that every modern economy needs in order to thrive that is currently lacking in places where large agricultural operations are taking place across Kenya.

As Eco Fuels Kenya continues to grow production levels at our new factory site we have higher ambitions than simply developing a market for organic fertilizers. We want to set an example for the country and the rest of East Africa how value can be created from indigenous, organic resources that have been historically ignored or discarded. Through partnerships we will demonstrate that the biggest impact can be achieved if we work together towards common goals instead of independently in silos where efforts are often inefficient or wasted. Our success will prove that, with the use of today’s technology we don’t have to ignore BoP (Base of the Pyramid) community members from either side our supply chain just because they live in rural communities or have little to no formal education or job training. And through replication of our model, fulfilling our vision of six additional factory sites across the country in the next six years, we’ll help pave the way for Kenya’s organic farming future.

Biochord Humicoil - Eco Fertilizers Kenya

A close-up look at EFK’s soil-conditioning organic fertilizer

Finished Product - Eco Fertilizers Kenya

Finished product ready to be shipped to Laikipia’s agricultural producers

Building the Croton Supply Chain Partnerships for Lasting Impact

(Sorry in advance, but no pictures this time)

Since the arrival of our new machinery a few weeks ago the team has been busy unpacking, setting up and adjusting the various components to get each one operating at optimum efficiency. This time spent fine-tuning the machines is essential to ensure a smooth operation in the months ahead when they will be running 40-50 hours per week to meet product demand and help grow our business. In the past couple weeks I have already seen a glimpse into future growth as we have made our first sales of Croton Nut Oil (CNO) since my arrival and hired two new additions to the Eco Fuels Kenya team to help with our increased processing. After a bit of a slow period with national elections putting the country on hold and logistical trouble releasing the machinery from the port in Mombasa, things finally are picking up as planned here in Naro Maro.

With the new machinery up and running, as we look ahead to prepare for the next 2-4 months, a large focus of our efforts will be concentrated on building our Seed Collectors Network and the amount of Croton Nut we collect to feed the new machines. After a successful first year of creating and validating a market demand for organic fertiliser, something no other company is doing in Kenya today, we now have the capacity to build up our supply chain efforts to ensure adequate supply for future production.

Due to the environmental and economic value-add that harvesting a previously ignored and indigenously growing plant, i.e. the Croton Nut, has to the forests around Mt. Kenya and its community members we have received a lot of interest in partnerships from local governmental and non-governmental organizations whose goals align with our operations. For example, the local NGOs who work on forest protection like the idea of selling Croton Nut to Eco Fuels Kenya because it encourages the protection of the Croton Megalocarpus tree from being cut down and used as fire wood, which was the only use for it previously. Other organizations who want to help stimulate economic opportunity for Base of the Pyramid (BoP) populations support the supplemental income generated through the simple harvesting activity of collecting Croton Nuts that have matured and fallen to the ground. Both types of organizations want to help encourage the planting of Croton Megalocarpus seedlings to help re-forest areas and to create an income-generating crop out of unused land and secure environmentally-friendly sources of income for future years, which will make collections in future years simpler and more efficient.

As the case with other social enterprises who take on the challenge of building systems that previously did not exist through the assistance of community-based organizations, the key to building our Seed Collectors Network successfully will be in making sure we make the right partnerships that are beneficial to not only the agendas of each organization, but also to the environment and the communities in which we operate. With the wheels of this effort already in motion, we have had discussion and/or visits from the Laikipia Wildlife Forum, the Community Development Trust Fund and Kenya’s Climate Innovation Center, a new organization funded by the World Bank to assist the development of social enterprises based on environmental innovation. All of these relationships present exciting opportunities to increase our impact and grow our social enterprise, and I look forward to assisting their formations over the coming months.

Judging the Tangaza College Business Plan Competition & Striking Oil in Naro Moru

As part of my Frontier Market Scouts assignment with Eco Fuels Kenya, I am spending 20% of my time scouting new companies and partners for future Village Capital programs. The first scouting opportunity of my placement came on March 15th when I was forwarded an invite to the 2nd Annual MBA Global Business and Sustainability Business Plan Competition at Tangaza College in Nairobi, an event put on in partnership with ALTIS Postgraduate School of Business & Society of Milan, Italy.

Upon arrival to the competition the audience and participants received a welcome reception from the dean of Tangaza College prior to splitting into four different rooms for the different categories of presentations. Unable to decide which of the four I wanted to sit in first, I curiously stayed back to hear the de-brief given to the judges of the competition, most of whom represented impact investing

Judging the Tangaza Competition alongside ALTIS, Jacana Partners, and Acumen Fund

Judging the Tangaza Competition alongside ALTIS, Jacana Partners, and Acumen Fund

I was assigned a section and listened to pitches from 6 enthusiastic social entrepreneurs from Kenya, Zimbabwe, Uganda and other African countries over the morning session, critiquing each one on the competitions three criteria: Business Potential, Implementation Capacity, and Social Potential. After a winner was selected there was a short break before the afternoon session where the top businesses of each section (Agribusiness and Accommodations, Business Services and ICT, Green Economy and Manufacture, and Health and Community Services) would pitch to the entire audience and a new mix of judges for a chance to be crowned the winner of the competition. As more opportunity presented itself,

Tangaza Competition Winner Innovation Eye Center

Tangaza Competition Winner Innovation Eye Center

I secured a spot on the final judges’ panel alongside representation from Acumen Fund, Jacana Partners, and ALTIS Postgraduate School of Italy. After hearing the best pitches from each of the sections, we unanimously chose Innovation Eye Centre, an Aravind Eye Hospital replication, the winner of the competition.

I was grateful for the opportunity to participate as a judge in the competition and to network with the young social enterprises and established industry funds who made the event a success.

The moving team preparing to move 10 tons of equpitment

The moving team preparing to move 10 tons of equpitment

Back in Naro Maru, on that same Friday, we had got our new machinery delivered from the port where it was being held in Mombasa along with a pleasantly unexpected drop-off of Croton Nuts from a new collector with their first, hopefully of many, deliveries. The dedicated team, with the help of about 10 casuals, worked through the weekend to offload the 10 tons of Croton Nuts into the storage room and 10 tons of equipment from the trucks that they came on to their appropriate locations. Without sophisticated machine moving equipment that we would have likely used in the ‘west,’ it was the help of levers, pulleys, steel rollers, and manpower that got the machinery in place and mounted by the middle of the week. After all the machinery was in place it was up to local electricians and welders to put the remaining pieces in place to get us up and running properly. The team worked closely with the welders and electricians for the remainder of the week to make sure each motor, pan, connection, and filter was properly placed and mounted for the start of our oil production the following Monday.

Oil being produced for the first time since my arrival nearly two months ago was a great way to get the week started and had a noticeably energizing effect on the Eco Fuels Kenya team. The perseverance and patience of the team and it’s management as many unexpected and uncontrollable hold-ups came about over the past two months, ranging from delays in funding to the country’s presidential election, demonstrated a strong mentality to overcome obstacles and stay focused on goals; perhaps the most critical factor for success when working at startup social enterprises in a developing country.

Croton seeds entering the press

Croton seeds entering the press

Cake as a by-product of oil production, an ingredient in our fertiliser

Cake as a by-product of oil production, an ingredient in our fertiliser

A river of Croton Nut Oil

A river of Croton Nut Oil

As the staff continues to work diligently at getting the machines producing at capacity I will be completing modifications to the company brochure, which will be supplied to our resellers to help retail distribution of our products, and updates to the business plan, which will be distributed to a number of enthusiastic impact investment funds we have been in contact with over the past four months. With modifications to the website, brochure, and business plan paired with a factory full of new equipment that is running at capacity we look forward to re-engaging with interested investors that want to help us meet our growth and impact goals of the future.

Stage 3: Prepare – Putting the ‘Eco Fuels’ Pieces in Place

The past couple of weeks at Eco Fuels Kenya consisted of learning the processes of day-to-day operations, getting to know the personalities and roles of each team member, and starting to find ways to contribute as a Frontier Market Scout. I did my best to do anything and everything to get involved; from helping to mill organic fertilizer to finding pushpins to track collection centers on office maps to helping to prepare a plot of land for another Eco Fuels Kenya demonstration garden. On the side I completed the development of a new website to give the company the professional image it deserves for its accomplishments and opportunity. It’s nice to already feel like a contributing member of the team after being here for less than one month.

Eco Fuels Kenya - 1 Year Anniversary

Myself with the Eco Fuels Kenya team at the one year anniversary celebration

My third weekend in Kenya marked the one year anniversary of when Eco Fuels Kenya became a company, and to celebrate the team went out for a Saturday afternoon lunch at a nice resort at the base of Mt. Kenya. In addition to the meal, the team and I were able to enjoy activities like horseback riding and boating while they reflected on what they’ve learned during the transition from an NGO project to a sustainable social enterprise. The afternoon ended with each team member receiving a letter of appreciation from the executives congratulating them on the work they have accomplished thus far and rewarding them with a 10% increase in salary, which they were all very pleasantly surprised to take home with them.

Founder Alan Paul Searching for Croton

Eco Fuels Kenya Founder Alan Paul travels into the bush in search of croton

With Kenya’s national elections shutting down the country for a couple days, Alan and I decided to spend Monday taking a hike into the forests of Mt. Kenya in hopes of locating a new, dense population of Croton Megalocarpus trees for future collections. Despite our search coming up fruitless, both literally and figuratively, it was great to spend 5 hours hiking 16km through the bush and forests of the mountain building up the anticipation of game sighting with every pile of elephant dung and footprint that we stumbled upon. Learning how social entrepreneurs spend their ‘days off,’ while simultaneously putting some real context to the title of my blog, proved to be a tiring but enjoyable experience.

Moving 40 Tons of Croton Seeds

Half-way through the transport of over 40 tons of croton seeds

Having recently acquired the second half of the factory space from a vacated tenant, the short 3-day work week at Eco Fuels Kenya consisted of business as usual for collections, sales, and management and a single goal for the operations team: transporting 40 tons of Croton Nuts from the old store room to the new. The additional space and optimized layout of the factory will result in increased productivity for the processing of Croton nuts into oil and fertilizer, but it requires the movement of some heavy items such as the feedstock materials and machinery. I made up part of the four person croton moving team, although I didn’t contribute nearly as much as the other three, and we were able to complete our goal by the end of the work day on Friday.

Reflecting on what I’ve learned about the team, history, and opportunity of Eco Fuels Kenya and returning to my Frontier Market Scout classroom notes on the Monitor report From Blueprint to Scale – The Case for Philanthropy in Impact Investing has helped me to understand the organization in an industry-relevant context. The report, which outlines four stages of a pioneering firm’s development as Blueprint, Validate, Prepare, and Scale has gained increased popularity for how social enterprises should successfully evolve to reach their full potential. I realized that Eco Fuels Kenya has successfully completed the Blueprint and Validation stages, starting with founder Alan Paul’s comprehensive analysis of the opportunity and finishing with the receipt of an investment from Village Capital and GrowthAfrica after one year of concept validation.

With recent factory expansion nearly doubling operating space and quadrupling production capacity with the anticipated delivery of new equipment in the coming weeks, Eco Fuels Kenya is spending its energy preparing to scale; stage 3 of the 4 stage blueprint. It’s an exhilarating time to be a part of the team and identifying projects for the weeks ahead including: building brand and awareness, setting up equipment and operations, and identify and eliminate bottlenecks.

Eco Fuels Kenya - Factory Sign

The updated Eco Fuels Kenya factory sign with the new tagline I came up with

Author’s note for the Social Enterprise nerds:

Monitor’s report primarily makes the case for philanthropic capital’s role in impact investing, stating that many social enterprises require grant capital to go through blueprint, validation, and preparation stages successfully before taking on equity or debt in a way that won’t limit their ability to reach their impact potential. Although Eco Fuels Kenya has not taken on any philanthropic capital to date, founder Alan Paul does admit that the time spent with the project when it was part of an NGO was crucial to the company’s development thus far because it allowed him to analyze processes, tweak production capabilities on machinery, and validate customer willingness to purchase the products before the initial personal investment he made to start the organization.

In my opinion this further validates the case for philanthropy in impact investing whether it is direct, with social enterprises receiving grant capital, or indirect, in transitioning a social enterprise from nonprofit to for-profit when the blueprint and validation stages have already started which appears to be the case for Eco Fuels Kenya.

A Frontier Market Scout’s Transition to Eco Fuels Kenya

FMS Scouts Myles and Emily re-discover Post-It Notes on the streets of San Francisco

FMS Scouts Myles and Emily re-discover Post-It Notes on the streets of San Francisco

The weeks between the completion of my Frontier Market Scout (FMS) training at Monterey International Institute and my arrival at the Eco Fuels Kenya factory in Naro Moru, Kenya were filled with anxiousness, anticipation, and excitement. Being reinvigorated about social enterprise and impact investing having met a number of like-minded individuals and learning from industry leaders through the FMS courses was just what I needed to reaffirm my decision to take a leave from Mobile Heartbeat, the startup that has played a large role in my life over the past two years and the position I credit with nearly all of my professional development and successes to date. It was time to take a break from the iPhone-induced, western lifestyle I took for granted every day and embrace the challenge of assisting a developing country-based startup to scale its operations from pilot to production, putting my social enterprise education, passion, and ambition to the test. After all, the only way to get an experience like this is to go out and do it.

After a brief stay in Nairobi, where I was able to meet a number of interesting individuals working in Africa’s startup, tech, and social enterprise hub, I boarded a matatu to Nanyuki. As my head pressed against the ceiling of the back row attempting to get comfortable for my 3 hour journey, I took in the breathtaking views of central Kenya. Because of the nomadic schedule I had during the months leading up to this moment it was the first time I had a chance to truly reflect on the transition I was making and the opportunity that lay ahead, and I couldn’t help myself from smiling a few times as I looked out the window at Mt. Kenya standing tall in the bright Kenyan sun. After a smooth arrival, I spent the evening getting acquainted with my new home and admiring the stars that lit up the night sky like brighter than I had ever seen before.

Eco Fuels Kenya Factory Signage

Eco Fuels Kenya Factory Signage

It was straight to work the next morning where I was able to meet the Eco Fuels Kenya team for the first time at the weekly company meeting; all of whom have been working together for years on a similar project that failed to see its potential due to the unsuccessful leadership of a local NGO. As I observed the meeting I appreciated the trust demonstrated between the Eco Fuels Kenya team and founder Alan Paul, the social entrepreneur who took ownership of all operations and staff last year to turn it into the thriving social enterprise he saw it could be. The team fielded all of my questions, showed me the factory, and gave me an introduction to the manufacturing process for their biofuel and Organic Fertilizer products; all of which have sold at a rate faster than they can produce.

Potatoes grown with Eco Fuels Kenya's Organic Fertilizer

Potatoes grown with Eco Fuels Kenya’s Organic Fertilizer

Over the course of the week I went on a number of trips in an effort to dive as deep into the business as quickly as possible. From traveling into the mountains to help pick-up Croton, the primary ingredient in nearly all of Eco Fuels Kenya’s products, at local collection centers to visiting a local potato farm that recently demonstrated the benefits of our Organic Fertilizer as part of a larger fertilizer test, I radiated off the team’s energy and the business’ opportunity that has presented itself all within a 2 hour drive of the Naro Moru-based factory. Day-by-day I began to see why Eco Fuels Kenya had recently been awarded an investment of $50,000 USD from Village Capital and Growth Africa and the vision for scale that Alan has painted with his team.

Recognizing all the momentum that Eco Fuels Kenya has going for it and the milestones that need to be accomplished in the next six months during my placement, I am excited and ready to be a part of the team for the road ahead.