From Africa to Seattle, Building Businesses to Solve Big Problems
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applying existing approaches that might be taken for granted elsewhere to specific problems in specific places that have been overlooked by businesses and left to inadequately funded aid groups and ill-equipped governments.
“While we look to the for-profit sector to make money and grow, we look to the nonprofit sector to solve the problems of the world,” Libes said. But the magnitude of the problems—malnutrition, energy poverty, inadequate healthcare—is far beyond what even the world’s largest philanthropies, including the one headquartered here, can solve.
Indeed, the Bill and Melinda Gates Foundation has made investments in for-profit biotech startups and other groups working on technologies and business models that could benefit people in the developing world. It brought two former biotech venture capitalists on board to expand these efforts.
Libes said he believes it will be new, for-profit companies that effectively address the basic needs of billions of people subsisting on a few dollars a day. “If you save them $1, that’s a lot of money,” he said.
The Fledge portfolio now includes several companies taking very similar approaches to the same endemic developing world problems, particularly in the area of clean, safe alternatives to burning charcoal and kerosene for cooking and indoor lighting. But that duplication doesn’t present a problem, Libes said, noting the size and diversity of developing world markets.
“There’s borders and there’s rules and there’s whatnot, so just because one company is doing something in East Africa doesn’t mean you can’t invest in another company doing the same thing” somewhere else, he said.
Moreover, Fledge is pursuing partnership and collaboration opportunities among its portfolio companies.
Green Energy Biofuels in Nigeria, for example, has sold some 350,000 cookstoves that use a clean-burning gel fuel, Libes said. But the stoves are built in China and imported. “Two of the largest manufacturers of cook stoves in Africa are Fledglings, so we are looking to see which of them can build stoves in Nigeria or ship to Nigeria,” Libes said.
Tom Osborn is another Fledge 6 entrepreneur. This young Kenyan developed GreenChar, a cleaner-burning cooking charcoal made of waste from sugar cane plantations rather than trees, after his mother developed lung disease from a lifetime of inhaling charcoal smoke. “There are 10 million women in Kenya like my mother,” he said.
His direct experience with the problem—it was his job to light the cooking fire each day—helped point him to the solution, and the business opportunity in scaling it up. In Kenya alone, Osborn said, charcoal is a $427 million annual industry. Its use is “ingrained in the culture,” so rather than trying to substitute a different cooking technology, GreenChar is “making a Kenyan product to solve a Kenyan problem,” he said.
The company’s distribution model relies on micro-businesses—local kiosks run by women and children. “Those closest to the problem are closest to the solution,” Osborn said toward the end of his well-polished presentation.