WEBVTT - From Solar Pumps to Everything: Building a Market from Scratch 0:00:15.356 --> 0:00:15.796 Pushkin. 0:00:20.276 --> 0:00:22.636 There are at least two ways that you can frame 0:00:22.676 --> 0:00:28.796 today's show. One frame, climate change makes the weather more unpredictable, 0:00:29.076 --> 0:00:31.956 and the people who suffer most from this are the 0:00:32.076 --> 0:00:35.356 hundreds of millions of poor farmers in the developing world 0:00:35.596 --> 0:00:40.116 who rely on rain to irrigate their crops. The second 0:00:40.116 --> 0:00:43.836 frame is a little less familiar. Poor farmers in the 0:00:43.836 --> 0:00:48.196 developing world may be the world's biggest untapped consumer market, 0:00:48.516 --> 0:00:51.476 and a company that helps those farmers earn more money 0:00:51.716 --> 0:00:53.996 and move into the formal economy. 0:00:53.956 --> 0:00:54.796 Could be huge. 0:00:55.516 --> 0:00:57.916 Today's show is about a company that started out with 0:00:57.956 --> 0:01:01.596 that first problem, helping poor farmers deal with climate change, 0:01:02.076 --> 0:01:04.916 and now, after more than a decade, the company is 0:01:04.916 --> 0:01:08.916 addressing the second. They're helping poor farmers get richer and 0:01:09.236 --> 0:01:18.636 starting to sell them things they can now afford. I'm 0:01:18.676 --> 0:01:20.956 Jacob Goldstein, and this is What's Your Problem, the show 0:01:20.956 --> 0:01:22.956 where I talk to people who are trying to make 0:01:23.036 --> 0:01:26.036 technological progress. What's your name and your job? 0:01:27.796 --> 0:01:30.156 My name is. 0:01:29.956 --> 0:01:31.636 Starting easy, It's gonna get hard. 0:01:33.236 --> 0:01:36.436 My name is so funny. No one said no one's 0:01:36.476 --> 0:01:38.476 actually asking me what's your name and your job? Before? 0:01:38.676 --> 0:01:42.276 Just like that, bam, coming at you, coming at me hot. 0:01:43.036 --> 0:01:46.476 My name is Samir Ibrahim. I'm the CEO and a 0:01:46.516 --> 0:01:48.476 co founder at sun Culture. 0:01:49.156 --> 0:01:52.756 When Samir co founded sun Culture back in twenty twelve, 0:01:53.036 --> 0:01:55.356 he was trying to solve the problem of helping poor 0:01:55.476 --> 0:01:59.076 farmers irrigate their land. Wanted to sell them solar powered 0:01:59.116 --> 0:02:02.876 water pumps, but it soon became clear that selling pumps 0:02:03.236 --> 0:02:05.876 wasn't going to work on its own. To make solar 0:02:05.916 --> 0:02:09.276 irrigation work, sun Culture had to become a tech company, 0:02:09.516 --> 0:02:13.756 and a carbon credit company and a finance company. Ultimately, 0:02:13.916 --> 0:02:17.276 Samir realized that sun Culture really needed to solve a 0:02:17.316 --> 0:02:21.236 deeper problem. How do you help poor farmers get richer? 0:02:21.796 --> 0:02:23.836 A human sized solar panel on the roof of a 0:02:23.876 --> 0:02:29.556 household completely changes someone's and someone's family's life in a 0:02:29.596 --> 0:02:34.316 way that people who are living with disposable income may 0:02:34.356 --> 0:02:38.596 never experience that change. It's a huge change. It's like 0:02:38.636 --> 0:02:41.436 from someone going and saying like, I literally have nothing 0:02:41.476 --> 0:02:45.116 to like I can now pay school fees. I mean, 0:02:45.156 --> 0:02:46.156 it's just it's wild. 0:02:46.636 --> 0:02:49.036 Sun Culture is based in Kenya, which happens to be 0:02:49.116 --> 0:02:52.276 where Samir's parents grew up. Before he was born. They 0:02:52.316 --> 0:02:55.756 immigrated first to Canada and then to Florida, and Samir 0:02:55.876 --> 0:02:58.996 was working as a consultant at PwC in Manhattan in 0:02:59.036 --> 0:03:01.716 his early twenties when he and a friend decided to 0:03:01.796 --> 0:03:02.916 start sun Culture. 0:03:03.476 --> 0:03:06.356 It's no surprise that we weren't farmers. I didn't grow 0:03:06.396 --> 0:03:08.836 up in a farming household, so I didn't know anything 0:03:08.836 --> 0:03:12.076 about farming. So when we started thinking about how to 0:03:12.156 --> 0:03:15.476 solve this problem, we first started exploring where this problem 0:03:15.636 --> 0:03:21.316 was very big, and it just so happens that Africa 0:03:22.036 --> 0:03:25.796 is where this problem is really prevalent. It's really prevalent 0:03:25.796 --> 0:03:28.996 because two thirds of the workforce are farmers that live 0:03:29.036 --> 0:03:30.676 on one or two acres of land, and they live 0:03:30.716 --> 0:03:32.796 off grid, and they live in rural areas, so they're 0:03:32.836 --> 0:03:34.676 the most affected by this problem. 0:03:34.796 --> 0:03:38.156 And the problem narrowly is climate change makes it harder 0:03:38.156 --> 0:03:38.716 to grow food. 0:03:38.756 --> 0:03:45.316 That problem, yeah, exactly. Yeah, But then they're also potentially 0:03:45.356 --> 0:03:47.276 a big part of the solution to the second problem, 0:03:47.316 --> 0:03:49.156 which is we need to grow more food to feed 0:03:49.236 --> 0:03:52.556 it growing population. Yeah, Africa has sixty percent of the 0:03:52.636 --> 0:03:56.436 world's unused farmable land. It's the only continent with an 0:03:56.476 --> 0:03:59.236 economic water scarcity versus a physical water scarcity, So we 0:03:59.276 --> 0:04:02.596 have enough groundwater to use it for growing crops and 0:04:02.676 --> 0:04:05.716 keeping animals. Just people can afford to draw it, and 0:04:05.796 --> 0:04:11.196 you have a massive unemployed workforce that is also agrarian, 0:04:11.956 --> 0:04:14.156 so you have all the resources to sort of think 0:04:14.236 --> 0:04:18.196 this through. Because I'm not a farmer, I looked at 0:04:18.196 --> 0:04:20.476 farming as just an algorithm. You have a bunch of 0:04:20.476 --> 0:04:23.956 inputs and variables, then you have an output. So I 0:04:23.996 --> 0:04:27.356 looked at it and said, what are the variables that 0:04:27.516 --> 0:04:32.196 have the most outsized impact on the outcome? And when 0:04:32.196 --> 0:04:34.676 you look at all the farming inputs, it is very 0:04:34.716 --> 0:04:39.556 clear that water has the most outsized impact on the output. 0:04:40.076 --> 0:04:43.836 Having access to reliable water makes sense, makes sense. I 0:04:43.956 --> 0:04:47.076 might even have guessed that one not knowing anything, yeah, exactly, 0:04:47.916 --> 0:04:50.196 having reliable water can increase your yields, but up to 0:04:50.236 --> 0:04:54.516 five times, Like, it's pretty crazy. And it is coincidentally 0:04:55.436 --> 0:04:59.356 the variable that changes the most because water for agriculture 0:04:59.356 --> 0:05:00.876 in many parts of the world comes from the rain, 0:05:00.916 --> 0:05:04.796 which is increasingly more inconsistent and unreliable. So he said, 0:05:04.876 --> 0:05:10.316 great Africa water, that's where we have to start. Irrigation 0:05:10.396 --> 0:05:13.956 in Africa is a sixty five billion dollars opportunity because 0:05:14.116 --> 0:05:17.516 only four percent of African farmers irrigate versus close to 0:05:17.556 --> 0:05:18.876 forty percent in Asia. 0:05:19.156 --> 0:05:22.196 So the other ninety six percent are just relying on rain. 0:05:22.596 --> 0:05:25.276 Rain. That's why African farmers are some of the ports 0:05:25.276 --> 0:05:27.756 in the world because imagine you don't know when the 0:05:27.836 --> 0:05:29.836 rain's gonna come. So we were like, okay, why do you, 0:05:29.876 --> 0:05:32.356 Sophie farmers irrigate and we're like, oh, duh. You'll probably 0:05:32.396 --> 0:05:35.556 guess the answer as well. It's just too expensive. Not 0:05:35.636 --> 0:05:39.516 only is the water pump too expensive, but the recurring 0:05:39.636 --> 0:05:42.956 cost for fuel, which is forty to eighty bucks a month, 0:05:43.436 --> 0:05:46.436 is too expensive for a farmer that's making one thousand 0:05:46.516 --> 0:05:47.756 or fifteen hundred dollars a year. 0:05:48.196 --> 0:05:51.556 And so the fuel is this like a deep diesel generator, 0:05:51.596 --> 0:05:52.356 I mean, is that the. 0:05:52.276 --> 0:05:56.156 Way of petrol exactly a diesel generator of diesel powered 0:05:56.636 --> 0:06:00.356 or petrol powered water pump to move the water to 0:06:00.396 --> 0:06:03.716 give to their crops was a problem because irrigation is 0:06:03.756 --> 0:06:05.716 just moving water from one place to the other. 0:06:05.956 --> 0:06:08.156 Yeah, so like there's a river over there, not that 0:06:08.236 --> 0:06:12.396 far away, but the farmer doesn't have can't afford to 0:06:12.476 --> 0:06:14.916 buy the gas to run the generator to move the 0:06:14.956 --> 0:06:17.396 water from the river, and by the way, if they 0:06:17.436 --> 0:06:20.236 could buy the gas to run the generator, then you're 0:06:20.276 --> 0:06:21.396 making climate change worse again. 0:06:21.436 --> 0:06:22.836 But we don't exactly worry about that. We don't have 0:06:22.876 --> 0:06:24.476 to worry about that. That's not even, that's not even. 0:06:24.596 --> 0:06:26.476 That's just like they're just like, we need to be 0:06:26.516 --> 0:06:29.716 able to afford something, right, yeah, right, sure? Or then 0:06:29.796 --> 0:06:32.156 what happens is they just take buckets and they fill 0:06:32.196 --> 0:06:34.316 up those buckets with twenty liters of water, which is 0:06:34.356 --> 0:06:36.276 forty five pounds, which is those big weight plates in 0:06:36.276 --> 0:06:38.716 the gym, and then they walk to their farm or 0:06:38.716 --> 0:06:40.836 they pull it up from the well and just is 0:06:40.876 --> 0:06:45.436 super inefficient. So we said, okay, we need to figure 0:06:45.436 --> 0:06:49.236 out a way to first make irrigation affordable, then we 0:06:49.276 --> 0:06:50.956 need to figure out a way to get it to people. 0:06:50.996 --> 0:06:53.356 So from an affordability standpoint. 0:06:54.036 --> 0:06:56.956 Do you ever stop and think like this is too 0:06:57.036 --> 0:07:00.956 much Like as you're like at the talking about these things, 0:07:01.156 --> 0:07:02.916 you're just like a college kid. 0:07:02.836 --> 0:07:05.796 Right we were twenty three, And I think that was 0:07:06.316 --> 0:07:07.396 the advantage. 0:07:07.316 --> 0:07:09.636 You had basically never had a job. It wasn't like 0:07:09.636 --> 0:07:12.076 you had like run some company or done some big thing, right. 0:07:12.116 --> 0:07:14.796 I think that was the advantage. I think that's why 0:07:14.836 --> 0:07:16.836 we probably didn't stop and say this is going to 0:07:16.876 --> 0:07:19.356 be really hard. I think, I think really that. 0:07:19.396 --> 0:07:21.676 Was it the dumb kid advantage. 0:07:21.956 --> 0:07:24.276 Yeah, yeah, I call it, what did I call it? 0:07:24.316 --> 0:07:27.076 Sort of naive confidence or just yeah, one of those, 0:07:27.076 --> 0:07:30.956 but I like the dumb kid confidence is probably more accurate. Yeah. 0:07:30.996 --> 0:07:32.676 So we're just sitting there, We're like, oh, yeah, obviously 0:07:32.756 --> 0:07:36.596 we're just gonna make irrigation cheaper, no problem. So okay 0:07:36.836 --> 0:07:39.756 to do that. That is like twenty eleven ish, right, 0:07:39.756 --> 0:07:43.356 this is what twenty eleven, twenty twelve, Yeah, exactly. Yeah. 0:07:43.916 --> 0:07:48.236 What's really interesting about that time is we reached grid 0:07:48.316 --> 0:07:50.676 parody in a number of African countries. So the cost 0:07:50.756 --> 0:07:55.156 to connect your power to power your your household with 0:07:55.276 --> 0:07:58.356 solar became cheaper than the grid. So you have you 0:07:58.356 --> 0:08:01.956 have these like tailwinds in terms of cost reductions kind 0:08:01.996 --> 0:08:04.436 of happening. So let's figure out to make the fixed 0:08:04.436 --> 0:08:08.796 cost reasonable and a fixed cost, and then let's finance it. 0:08:08.876 --> 0:08:11.676 So we spread that fixed cost over time, because no 0:08:11.716 --> 0:08:14.436 matter what, the upfront cost is still too expensive, which 0:08:14.436 --> 0:08:17.156 is why only four percent of African farmers irrigate with 0:08:17.196 --> 0:08:19.316 diesel petrol pumps. So we said, let's take an old 0:08:19.316 --> 0:08:24.516 technology water pumps irrigation, decarbonize it, figure out how to 0:08:24.516 --> 0:08:26.996 make it solar powered, and then deployed in a resource 0:08:27.036 --> 0:08:30.356 rich environment like Africa. That's like the summary framework. So 0:08:30.396 --> 0:08:33.996 we went and developed and made Africa's first solar irrigation company, 0:08:34.956 --> 0:08:40.036 and we the original price of the system. If you 0:08:40.076 --> 0:08:41.556 were to go and try to buy one of these 0:08:41.596 --> 0:08:45.076 before from like an NGO, it would cost twenty five grand. 0:08:45.596 --> 0:08:49.276 We managed to get it down to five grand, okay, twenty. 0:08:48.956 --> 0:08:51.596 Five thousand dollars, So that's like that, so twenty five 0:08:51.596 --> 0:08:53.916 thousand dollars is completely out of the question, presumably for 0:08:53.996 --> 0:08:56.196 really out of the small farmer who can't afford to 0:08:56.316 --> 0:08:58.396 diesel the generator. 0:08:58.476 --> 0:09:02.916 Yeah, when we started, we managed to without really any 0:09:03.316 --> 0:09:06.196 technical innovation, just buying the right things from the right 0:09:06.196 --> 0:09:09.636 places and putting it together for our pilot project. We 0:09:09.756 --> 0:09:12.236 got it down to five thousand dollars. And at that 0:09:12.316 --> 0:09:15.396 point we're like, you know what, I'm sure over time 0:09:15.756 --> 0:09:18.036 we can get this to be cheaper. Like, let's just 0:09:18.476 --> 0:09:20.556 accept we can do that, and let's figure out the 0:09:20.556 --> 0:09:23.916 other things I need to go around this, okay. And 0:09:23.476 --> 0:09:26.516 that's that's when we learned that affordability was one part, 0:09:26.516 --> 0:09:31.156 but availability was the other part, because huh, and that's 0:09:31.396 --> 0:09:36.516 the harder part. And it's because because small, older farmers 0:09:36.516 --> 0:09:39.996 don't have disposable income, no one's really selling them a 0:09:39.996 --> 0:09:42.316 bunch of stuff, which means the infrastructure to be able 0:09:42.356 --> 0:09:43.636 to get them things doesn't. 0:09:43.396 --> 0:09:46.436 Exist, like to some significant degree. They're not in the 0:09:46.556 --> 0:09:51.636 kind of monetized, financialized economy, right exactly, they're growing food 0:09:51.636 --> 0:09:54.956 for themselves, they're treading some amount of food whatever at 0:09:54.996 --> 0:09:57.516 the market, but they're just not in the cash economy 0:09:57.556 --> 0:09:58.316 the way we think of it. 0:09:58.396 --> 0:10:02.836 Right exactly, They're in the informal economy and it's very 0:10:04.916 --> 0:10:09.676 isolated and acute, so very village level, et cetera. So 0:10:09.716 --> 0:10:12.396 we went from thinking we could drop ship these products 0:10:12.436 --> 0:10:15.716 from China and just like Johnny Appleseed, get a bunch 0:10:15.756 --> 0:10:18.756 of these things out really quickly. So then realizing we 0:10:18.876 --> 0:10:22.236 had to figure out how to manage our own supply chain, 0:10:22.796 --> 0:10:24.316 we had to first wait to do a bunch of 0:10:24.836 --> 0:10:26.356 innovation on the power electronics. 0:10:26.396 --> 0:10:28.276 Well wait, why didn't your first idea work? So your 0:10:28.316 --> 0:10:30.796 idea is like, we can make these things at you 0:10:30.836 --> 0:10:34.676 know whatever, eighty percent cheaper than they exist now they'll 0:10:34.716 --> 0:10:37.036 be a good deal for farmers, like you know, we'll 0:10:37.156 --> 0:10:42.036 order parts from China like everybody does. Why didn't that work. 0:10:41.836 --> 0:10:44.556 Because financing wasn't part of the original idea. It was 0:10:44.636 --> 0:10:47.396 we thought we'd be able to do with banks, and 0:10:47.436 --> 0:10:49.436 we thought we'd be able to work with banks to finance, 0:10:50.236 --> 0:10:54.796 and banks in Africa will ask farmers for two things. 0:10:55.076 --> 0:10:57.076 One is a pay slip and they're like, well, I'm 0:10:57.116 --> 0:11:00.156 a farmer. I don't have a pay slip, job or collateral. 0:11:00.636 --> 0:11:03.436 And banks aren't willing to take irrigation or a cow 0:11:03.596 --> 0:11:05.476 as collateral because they don't know how to repossess and 0:11:05.516 --> 0:11:08.956 resell them, so farmers can't get access to loans. We 0:11:09.196 --> 0:11:11.396 realize we have to figure our financing. We're like, okay, 0:11:11.516 --> 0:11:14.356 that's interesting, and then we figured out. We realized we 0:11:14.396 --> 0:11:16.476 had to figure out the installation because there's no third 0:11:16.516 --> 0:11:20.716 party installers, the maintenance, the ongoing after sales support. We 0:11:20.836 --> 0:11:22.916 had to figure out the digital engagement. We had to 0:11:22.916 --> 0:11:25.236 figure out supply chain, We had to figure out R 0:11:25.236 --> 0:11:27.636 and D from the power electronics side, we had to 0:11:27.636 --> 0:11:29.756 figure out how to monetize carbon credits to give them 0:11:29.756 --> 0:11:32.956 further discounts boomom boom bom bom bom bom bom. So 0:11:33.036 --> 0:11:34.756 what we thought was going to be just a drop 0:11:34.796 --> 0:11:38.596 shipping company ended up being a company that has to 0:11:38.596 --> 0:11:44.596 build this entire physical and digital infrastructure to get these 0:11:44.716 --> 0:11:48.516 irrigation systems to farmers. And that's where the journey started. 0:11:49.636 --> 0:11:51.476 Why didn't you give up when you realized that? 0:11:54.516 --> 0:11:57.356 Because we only realized it over time. It wasn't all 0:11:57.356 --> 0:11:59.716 in one wa bam, thank you, ma'am kind of thing. 0:11:59.796 --> 0:12:01.316 Do you kept being like, oh, we just got to 0:12:01.356 --> 0:12:02.636 solve this one thing. 0:12:03.116 --> 0:12:08.196 Yeah, truly, And that's and we kept uncovering the next 0:12:08.236 --> 0:12:13.516 step over and over and over again until finally, a 0:12:13.556 --> 0:12:17.316 few in twenty twenty one, this is almost ten years later, 0:12:18.276 --> 0:12:22.156 we've figured out one of the last remaining pieces in 0:12:22.236 --> 0:12:24.796 terms of making this truly affordable and locked in for 0:12:24.876 --> 0:12:28.276 a large group of people, which is monetizing carbon credits 0:12:28.316 --> 0:12:31.596 and giving our customers discounts with those revenues. And at 0:12:31.596 --> 0:12:37.116 that point, we have a business that has shown that 0:12:37.196 --> 0:12:39.676 you can collect repayments from farmers. We have a ninety 0:12:39.676 --> 0:12:43.476 percent collection rate from the quote unquote worst unbankable people 0:12:43.476 --> 0:12:47.716 in the world. We have ninety percent digital engagement from 0:12:47.796 --> 0:12:51.036 people who most of the world writes off as not 0:12:51.076 --> 0:12:52.956 being technologically literate. 0:12:53.196 --> 0:12:55.436 But via text message or something, what does it mean? 0:12:55.716 --> 0:12:58.756 They're checking their balance through our app? How much do 0:12:58.836 --> 0:13:02.036 I have left? They're asking, they're asking questions, raising tickets, 0:13:02.036 --> 0:13:04.556 they're referring friends. If you're a mobile app, They're like, 0:13:04.636 --> 0:13:09.876 really like engaging. And we get to this point where 0:13:09.916 --> 0:13:12.316 finally we said, okay, in order to make this affordable 0:13:12.396 --> 0:13:15.356 to the mass market, not just at that point, I 0:13:15.396 --> 0:13:17.916 don't know, some tens of thousands of farmers we worked with. 0:13:18.076 --> 0:13:21.196 So it was this sort of like better off farmers. 0:13:21.316 --> 0:13:24.636 Presumably five thousand dollars where you started, it's still very 0:13:24.676 --> 0:13:27.076 expensive for a farmer who's farming a few acres and 0:13:27.076 --> 0:13:28.076 can't afford irrigation. 0:13:28.396 --> 0:13:32.596 Yeah, and even even getting down to seven hundred dollars, 0:13:32.636 --> 0:13:35.356 which is where we got to, and even if we 0:13:35.476 --> 0:13:38.956 spread that cost over over a finance period of two 0:13:38.996 --> 0:13:42.956 or three years, even paying something like sixty bucks a 0:13:42.956 --> 0:13:45.276 month or fifty bucks a month is too expensive for 0:13:45.316 --> 0:13:48.676 most people. Huh. And we have to keep figuring out 0:13:48.716 --> 0:13:49.996 how do you make this more affordable. 0:13:50.396 --> 0:13:53.156 So the price has gone from five thousand dollars to 0:13:53.196 --> 0:13:56.196 three hundred and fifty dollars, and those are nominal prices, right, 0:13:56.236 --> 0:14:00.716 and real prices it will have fallen even more. How 0:14:00.796 --> 0:14:03.196 much of that decline in price is the decline in 0:14:03.236 --> 0:14:05.196 the price of solar panels? 0:14:06.476 --> 0:14:10.836 Some of it some? Yeah, most of it half no, 0:14:11.076 --> 0:14:14.196 less way less, way interesting, interesting, way less. 0:14:14.516 --> 0:14:16.516 Tell me all the things you did to make it cheaper. 0:14:16.556 --> 0:14:17.796 Tell me some of the things you did to me. 0:14:18.116 --> 0:14:22.596 A lot of it was working on the power electronics, 0:14:22.876 --> 0:14:26.076 so figuring out how to take a small amount of 0:14:26.116 --> 0:14:28.436 power to power a high powered appliance, So we need 0:14:28.476 --> 0:14:30.996 less solar to power a water pump. 0:14:31.236 --> 0:14:33.156 I read and I think it was a Bloomberg News 0:14:33.276 --> 0:14:36.996 article that your pumps use something like three hundred or 0:14:36.996 --> 0:14:39.756 four hundred watts. Yeah, she's crazy, right, Like that's like 0:14:39.956 --> 0:14:41.756 four incandescent light bulbs. 0:14:41.836 --> 0:14:44.196 Yeah, it's like you can't see me, but it's like 0:14:44.276 --> 0:14:45.556 a human size. 0:14:45.596 --> 0:14:49.276 Like the idea that that can be transformational for a farmer, Yeah, 0:14:49.716 --> 0:14:53.716 is really something to think about. 0:14:53.836 --> 0:14:55.596 Yeah, it's like there was one of our one of 0:14:55.636 --> 0:14:58.396 the stories are so incredible. One of our customers give 0:14:58.436 --> 0:15:03.276 a ted talk, and in that talk she talks about 0:15:03.956 --> 0:15:07.076 like talking to her plants and promising them water is 0:15:07.116 --> 0:15:10.436 going to come because they're dying, and literally not like 0:15:10.596 --> 0:15:13.396 just going to everything she can think of and bring 0:15:13.596 --> 0:15:16.276 in her being to try to convince her plants to 0:15:16.276 --> 0:15:19.956 stay alive. You go from that to her saying my 0:15:20.076 --> 0:15:23.556 cow didn't die. I expanded my farm and making kombucha. 0:15:23.676 --> 0:15:27.796 Like I mean, it's really transformational stuff. And there's one 0:15:27.836 --> 0:15:31.516 story that will always stick with me that that summarizes 0:15:31.796 --> 0:15:34.596 and really humanizes this. We went to see a farmer 0:15:35.836 --> 0:15:40.756 who is getting an installation. I love visiting installations when 0:15:40.756 --> 0:15:44.196 they're happening, especially for those who are using the manual 0:15:44.196 --> 0:15:47.916 buckets before, because once they realize that they don't have 0:15:47.956 --> 0:15:50.836 to spend three or four hours a day physically pulling 0:15:50.836 --> 0:15:53.436 a bucket of water from underground to the surface, whether 0:15:53.476 --> 0:15:56.396 it's one hundred feet down or beyond, and they can 0:15:56.476 --> 0:15:59.516 do that with a flick of a button, the look 0:15:59.596 --> 0:16:03.236 on their face will change your life. It is unreal. 0:16:03.796 --> 0:16:06.436 And when we ask this customer in particular, so now 0:16:06.476 --> 0:16:09.036 what are you gonna do. You're not gonna use your 0:16:09.156 --> 0:16:12.436 muscles to pull this bucket up, and she looked at 0:16:12.436 --> 0:16:14.316 me in the face and she said, I'm going to 0:16:14.356 --> 0:16:16.996 get fat with a huge grin on her face. She 0:16:17.196 --> 0:16:20.116 was just like, that's what I'm gonna do. I was like, 0:16:20.196 --> 0:16:21.956 that's right, it's amazing. 0:16:23.236 --> 0:16:27.036 So okay, so let's go back to you know, you 0:16:27.156 --> 0:16:29.596 got more than ninety percent out of the price of 0:16:29.636 --> 0:16:32.956 this thing, right, which seems like the fundamental thing you did. 0:16:33.076 --> 0:16:33.236 Right. 0:16:33.676 --> 0:16:35.676 Well, so one of the things you did to get 0:16:35.676 --> 0:16:39.676 the price down was start using carbon credits? Yes, and 0:16:41.116 --> 0:16:43.716 I don't I kind I mean, I can sort of 0:16:43.716 --> 0:16:46.116 guess at that, but I also have some questions about that. 0:16:46.196 --> 0:16:49.676 So tell me about how carbon credits work in your business. 0:16:49.876 --> 0:16:58.996 Okay, So there is a there are official verification bodies 0:16:59.916 --> 0:17:04.276 that create methodologies that count how carbon credits are avoided 0:17:04.356 --> 0:17:08.516 or removed from the atmosphere. And it just so happens 0:17:08.516 --> 0:17:11.236 that there's an exis existing methodology under the UN framework 0:17:12.036 --> 0:17:18.756 that talks about a displacement of diesel or petrol pumps. Okay, So, 0:17:18.916 --> 0:17:24.116 because solar is an alternate to diesel and petrol, we 0:17:24.156 --> 0:17:28.116 generate carbon credits for the systems that we install. 0:17:28.276 --> 0:17:31.876 So how much do you get paid in carbon credit 0:17:31.916 --> 0:17:35.756 credits for you know, the sort of median pump that 0:17:35.836 --> 0:17:36.276 you sell. 0:17:36.596 --> 0:17:38.516 So the way to think about this is we generate 0:17:38.556 --> 0:17:41.996 carbon credits. The system generates carbon credits for seven years. 0:17:42.716 --> 0:17:45.516 We give customers a discount upfront, and we sell those 0:17:45.516 --> 0:17:47.996 carbon credits over the remaining years, so we raise debt 0:17:48.036 --> 0:17:50.836 to be able to do that. We're able to give 0:17:50.836 --> 0:17:55.716 our farmers about a twenty percent discount at minimum on 0:17:56.236 --> 0:17:59.476 the monthly cost because we're able to sell carbon. Now. 0:17:59.836 --> 0:18:01.916 It might sound like a little bit of just a 0:18:01.956 --> 0:18:05.396 small discount, but we ran a pilot when we were 0:18:05.436 --> 0:18:08.876 launching our carbon business and we reduce the price of 0:18:08.876 --> 0:18:11.876 our system by ten percent and our sales went up 0:18:11.916 --> 0:18:15.316 by something like I think it was like two times 0:18:15.636 --> 0:18:18.076 something like that. Where we do st our price by 0:18:18.116 --> 0:18:20.076 twenty eight percent, our sales went up by four and 0:18:20.116 --> 0:18:24.276 a half times. Wow. So small adjustments in the monthly 0:18:24.316 --> 0:18:29.076 price make a huge difference. So we use those carbon 0:18:29.116 --> 0:18:33.836 revenues to directly subsidize our farmers. We're not a carbon business, 0:18:33.876 --> 0:18:35.996 so it's a pass through to our customers, which has 0:18:36.076 --> 0:18:38.916 enabled us now to grow more. You know, half of 0:18:38.956 --> 0:18:40.876 our customer base was added in the last two years 0:18:40.876 --> 0:18:41.396 because of that. 0:18:42.716 --> 0:18:48.196 So you're you know, lending the farmer's money to buy 0:18:48.756 --> 0:18:54.516 the pump. Obviously you're borrowing against seven years of carbon 0:18:54.556 --> 0:19:00.076 credits and passing that through Like you're a finance company 0:19:01.396 --> 0:19:05.076 to some significant degree, Like you're in the finance business. 0:19:05.476 --> 0:19:08.916 Yeah, we're sort of an everything company. And that's just 0:19:09.676 --> 0:19:12.796 it's just it's funny. It's like, it's really hard to 0:19:12.916 --> 0:19:16.316 describe what type of company we are to many people 0:19:16.436 --> 0:19:19.076 because we have to do so many things in order 0:19:19.116 --> 0:19:20.676 to give people access to these products. 0:19:22.276 --> 0:19:23.996 And it's I guess it goes back to what you 0:19:24.036 --> 0:19:28.876 were saying, which is your customers, these small farmers are 0:19:28.916 --> 0:19:32.556 just not in a market economy the way we are 0:19:32.596 --> 0:19:35.196 so used to thinking of being in a market economy. Right, 0:19:35.236 --> 0:19:38.276 there's not access to capital or to financing. Obviously, what 0:19:38.356 --> 0:19:40.836 else is there not that we might take for granted, 0:19:40.916 --> 0:19:42.796 Like what else do you have to provide that you 0:19:42.916 --> 0:19:43.756 might not have thought? 0:19:43.876 --> 0:19:45.956 I mean, you know, when you're if your cable breaks, 0:19:45.956 --> 0:19:48.756 you call a third party installer maintenance personally, you go 0:19:48.796 --> 0:19:50.436 on task grab it to find someone to do it 0:19:50.436 --> 0:19:53.196 that doesn't exist. So we do all of the installation ourselves, 0:19:53.716 --> 0:19:57.156 all the maintenance, all the ongoing after sales support. What's 0:19:57.156 --> 0:20:01.436 been really interesting now is and this will answer the 0:20:01.476 --> 0:20:04.476 question of what else might you know, think about our 0:20:04.516 --> 0:20:07.036 customers are making more money, like we talked about, and 0:20:07.636 --> 0:20:09.116 just like us, when they make money, they want to 0:20:09.236 --> 0:20:11.796 buy more stuff. They want to get fat, they want 0:20:11.836 --> 0:20:13.316 to get fat, but they also want to buy things 0:20:13.316 --> 0:20:15.716 like health insurance, and they want to buy things like 0:20:15.836 --> 0:20:18.396 weather insurance. They want to buy things like high quality 0:20:18.396 --> 0:20:22.356 seeds and fertilizer. So they're coming at us and they're saying, hey, 0:20:23.156 --> 0:20:25.596 you know i've been paying you. Well, I'm paying my 0:20:26.196 --> 0:20:28.196 twenty thirty bucks a month and do it I'm paying 0:20:29.356 --> 0:20:31.236 Can you just add a little bit more to my 0:20:31.316 --> 0:20:36.276 monthly and give me these other things? So we said okay. 0:20:37.036 --> 0:20:39.436 So about a year ago we started a pilot where 0:20:39.436 --> 0:20:42.756 we bundled in health insurance. So if someone gets sick 0:20:42.796 --> 0:20:46.436 and go to the hospital, if someone passes away, the 0:20:46.476 --> 0:20:48.796 family has insurance to be able to take care of 0:20:48.836 --> 0:20:49.356 that need. 0:20:49.916 --> 0:20:55.396 Now let me ask you are are there. You can't 0:20:55.436 --> 0:20:58.116 be a health insurance company too, right, presumably there's there 0:20:58.156 --> 0:21:00.676 are health insurance companies in these countries. You are just 0:21:01.196 --> 0:21:04.276 selling insurance and taking some weird bundle. 0:21:04.276 --> 0:21:06.596 We're starting to bundle it to the monthly because again, 0:21:06.796 --> 0:21:08.676 the reason they come to us is because they trust us, 0:21:09.196 --> 0:21:13.636 they get duped by not good products. They trust us. 0:21:14.796 --> 0:21:17.556 We can get them discounts because we're buying in bulk basically, right, 0:21:17.596 --> 0:21:20.116 because we just added to the monthly payments and then 0:21:20.116 --> 0:21:22.156 they don't have to go and try to figure out themselves, right. 0:21:23.076 --> 0:21:26.076 So we did that. We made an investment into a 0:21:26.116 --> 0:21:29.156 company that allows us to now finance agriculture inputs. So 0:21:29.516 --> 0:21:32.236 let's say you're Jacob as a farmer, you're paying well 0:21:32.276 --> 0:21:34.636 for ten months and you come to us and you're like, 0:21:34.676 --> 0:21:37.836 I want some seeds. We're like, cool, here's a voucher 0:21:38.356 --> 0:21:40.276 that we sent to your phone. You can go to 0:21:40.316 --> 0:21:42.436 any of these right now in Kenya one thousand to 0:21:42.516 --> 0:21:45.036