Our service MVP

Webuye, November 2015

Our service MVP

Finally, the blog post everyone was waiting for: our MVP in detail.

As a taster, you can see and hear below our very sophisticated communication piece where we tried to condense our MVP journey in less than 3 minutes for the Lean Start-Up Conference.

It was shot in one of our neighbours’ homes in Webuye town. Yes, it’s a town but a large number of homes are not connected to the grid even when the power cables are a few meters away. Too long to explain why.

At least you can see (although not smell) the current solution most people use for lighting, kerosene. And you can also see the transformative impact of a clean and bright light. The lamp shown would retail for about US$40, which is quite pricey for most and you wouldn’t find it in your usual rural corner shop.

I hope this example illustrates the three main barriers we are trying to overcome: lack of availability, lack of accessibility and lack of affordability of many technology goods in rural areas.

https://vimeo.com/133052867

The features

In a previous post we described our Customer Discovery journey whose main outcome was narrowing down the features of our MVP.

Our MVP is based around a service – or rather a range of services. Here a list of them.

1. We offer a range of goods that have potentially great positive impact on people’s quality of life. To start with, we currently offer a solar lamp, a solar home system and an efficient cook stove, all of which are expensive to be bought up-front in cash and are not easily found in rural shops and markets. We also offer some complementary products: a mobile phone and a radio, both of which can be charged from the lamp or the solar system.

We are brand neutral, meaning we only sell the best quality brands from the best suppliers. Obviously, key is to understand and learn from the customers to make that call. Offering payment plans removes some pressure for the eternal quest for the cheapest possible products, and since we also believe price is not the only factor our clients use when making purchase decision, we decided to go for quality instead of just price as a key indicator. Besides, if you offer credit, you can’t go for a product you don’t trust.

Do customers prove to be interested in more than the cheapest product to satisfy a need, even if short-lived due to poor quality? Are they interested in multiple products?

2. We offer credit to all! And we do this in-house, without a traditional partner such as a bank or MFI. Why? Our past experience in East Africa taught us that rural financial services are not at all well developed in the region. In addition, partnerships take a long time to agree on, interests may not always be aligned, and we were eager to get ourselves in front of our clients with an MVP with the core features. And offering payment plans is cleary one of them. These technologies are expensive for their target users. Most people in the western world would buy their car, domestic appliances, furniture and many other goods with some type of finance. Why would this be different in rural Kenya?

Yes, agreed, our clients do not have bank accounts, a credit history or stable and predictable incomes, but in the MFI world they had figured out a solution many decades ago: the social capital of villages and their inhabitants. We are betting that this social capital exists also in rural Kenya and therefore we are offering payment plans to groups of clients, not to individuals. We also stripped it off the cumbersome, inaccurate and uninformative credit checks. The groups act as self-help groups, with a leader to help members get organised and where each member acts as a guarantor for each of the other members. This is a tried and tested model and most importantly our clients are comfortable with.

Will these cross-guarantees be enough and what happens in the ‘hunger season’ or when school fees are due? 

3. Price and quality ticked. What else then? Accessibility and availability, but first: what about awareness? In Customer Discovery we were pleasantly surprised when we discovered that awareness for solar technologies was in general very high, and to a certain extent high for efficient cook stoves. That was not the case for water purification and we therefore decided to postpone the water problem for now. The high awareness of solar products is mainly due to the great work of some NGOs in the region, mainly SolarAid/SunnyMoney and the One Acre Fund. Thank you! We like you, even if we are now ‘competing’ in the same space.

To make our goods accessible and available we decided to include home deliveries, education of the users and installations in all of our sales at no extra cost. We believe that in this market, the more “touch points” with clients the better, it helps building brand and confidence in a very sceptical market. Delivering to groups spreads the costs over many units, and educating the users and installing the system are both fundamental to guarantee a happy client experience, particularly in a market where customers are unfamiliar with the proper use of the products. Our bet is that people default in their payments not because they can’t pay but because they don’t want to pay and this is mainly because they are unhappy with their purchase. A client that understands the new ‘high tech’ purchase, as well as a proper installation are ways to minimise this risk.

How are these additional services perceived? Do they help prevent defaults or, better, market the brand?

4. This brings us to after-sales services. All our products are sold with a warranty of one or two years. We will never offer a product without a decent manufacturer’s warranty. In Customer Discovery we learned that the concept of warranty isn’t understood at all by most and after-sales is almost non-existent in rural areas. All Kenyans I meet complain about generally appalling customer service. Why isn’t this widespread customer pain better addressed in this country? Since we are here for the long run and we aim to keep selling to the same clients again and again, we are making great efforts in educating our clients on their rights as consumers. For example, a quick replacement with a new product made a client so happy that she decided to pay off part of her debt in advance!

Can this be a key differentiator that sets us apart from the ‘competition’?

Lessons learned

  • Features for service MVPs are less tangible than for product MVPs and harder to visualise and test. Feedback on the features of a particular product is fine, but we just buy and resell them. How do you define features of a boring business that just literally ‘sells stuff’?
  • What is the right number of features and the complexity of them? Not too little, not too much, a fine balance that is difficult to find.
  • A concierge style service appears most desirable when testing a service MVP, it may look laborious and antiquated but the learning is priceless.

Favourite Steve Blank’s Manifesto line: “Validate your hypotheses with experiments”