This article was taken from Kickstart’s website and was only moderately edited by the blogger.
"KickStart’s mission is to help millions of people out of poverty. We promote sustainable economic growth and employment creation in Kenya and other countries. We develop and promote technologies that can be used by dynamic entrepreneurs to establish and run profitable small scale enterprises.
KickStart believes that self-motivated private entrepreneurs managing small-scale enterprises can play a dynamic role in the economies of developing countries.
These entrepreneurs can raise small amounts of capital ($100-$1,000 US) to start a new enterprise. KickStart then helps them to identify viable business opportunities and access the technologies required to launch the new enterprises.
In addition to promoting small enterprise development, KickStart’s technologies, expertise, and methods are widely applied throughout Africa to support programs in agriculture, shelter, water, sanitation, health, and relief.
In 1991, Martin Fisher and Nick Moon founded ApproTEC, which in 2005 became KickStart. Their model was based on a five-step process to develop, launch and promote simple money-making tools that poor entrepreneurs could use to create their own profitable businesses.
KickStart’s early efforts focused on building and food processing technologies. But in Africa, 80% of the poor are small-scale farmers. They depend on unreliable rain to grow their crops and have, at most, two harvests per year. With two valuable assets, a small plot of land and basic farming skills, KickStart realized that irrigation would allow people to move from subsistence farming to commercial agriculture.
In 1998, KickStart developed a line of manually operated MoneyMaker Irrigation Pumps that allow farmers to easily pull water from a river, pond or shallow well (as deep as 25 feet deep), pressurize it through a hose pipe (even up a hill) and irrigate up to two acres of land. Our pumps are easy to transport and install and retail between $35 and $95. They are easy to operate and, because they are pressurized, they allow farmers to direct water where it is needed. It is a very efficient use of water, and unlike flood irrigation, does not lead to the build up of salts in the soil.
With irrigation , farmers can grow crops year-round. They can grow higher value crops like fruits and vegetables, get higher yields (The Food and Agriculture Organization reports that irrigation increases crop yield by 100-400%) and most importantly, they can produce crops in the dry seasons when food supplies dwindle and the market prices are high. Because of the long dry seasons and growing population, there is potential for many thousands of farmers to start irrigating without flooding the market. There are local, urban and even export markets for the new crops.
Since 1991, 73,821 successful new businesses have been started in Africa using our tools. Today more than 800 new businesses are being created each month. Since each of these enterprises supports a family, we conservatively estimate that these businesses have already lifted 369,107 people out of poverty. Each year these businesses generate over $81 million in new profits and wages and have created 65,917 new waged jobs. In Kenya alone, the users of our tools are generating new revenues equivalent to 0.6% of the GDP.
KickStart continued to expand across Kenya, proving that our model was scalable. In 2000, KickStart expanded into Tanzania, and in 2004, we expanded into Mali. Both countries were significantly different from Kenya, yet our programs in both countries have flourished and grown, proving that our model is replicable. Other organizations have distributed our pumps across Africa and today, thousands are in use in Uganda, Malawi, Zambia, Sudan and Rwanda.
1. Identify Opportunities
We look for business opportunities that many thousands of people can start with initial investments of no more than a few hundred dollars, and that are so profitable that entrepreneurs will recover their investment in the first three to six months.
This is “farm time.” Farmers are used to putting their money in the ground for short periods while they wait for the harvest. A payback period of one to two years will be unacceptable to them and so it is unacceptable to KickStart.
These new businesses must initially serve the needs of other poor people. As the businesses grow and the entrepreneurs become more experienced they can expand their market to include the local town and then can start selling to middlemen who sell in the local city and even to export markets.
But these business opportunities usually require some kind of equipment or tool.
2. Design Products
We start with a challenge--design a tool that will generate income. Then, to make the task even harder, we have developed a list of design criteria. Every tool has to meet every criterion if it is to go into production.
Why do we make things so hard on ourselves? Because our mission is to get people out of poverty. Our tools (and everything else we do) are a means to that end. It is not enough to come up with a clever invention. It must be useful, productive, safe and durable.
Most technology trickles down to the poor. Things like cell phones have been revolutionary for poor people. But this technology was developed for the wealthiest consumers on earth and only became accessible to the poor thanks to economies of scale.
KickStart, on the other hand, is designing specifically for the poor. We know that our tools represent a significant investment for a family. We honor the commitment our entrepreneurs make by producing tools of “first world” quality.
Sometimes “Appropriate” Technology Isn’t
In designing technologies for the world’s poor, there is too often a focus on developing things that "we" think "they" need. Or worse, we develop a technology to address a problem that we have defined, without fully understanding local culture.
For instance, we (in the West) purchase technology that promises to save us time and effort. But in the developing world, time and effort are two assets that people have in abundance. So rather than trying to ease a burden, we look for tools that will help a person maximize the cash income they receive in return for their investment of time and labor.
Local Design for Local Solutions
The vast majority of KickStart’s design work is done in Nairobi, Kenya, at our Technology Development Centre. Our team of engineers, designers, and technicians develop and test prototypes to ensure performance, cultural acceptability and durability. It takes many months to invent, design and produce each new technology.
As challenging as the design phase is, this is the easiest part of the process.
Establish a Supply Chain
The greatest invention cannot change the world if it does not get of the inventor's workbench and into the market. KickStart builds a supply chain from the existing private sector to create a permanent and sustainable way to make and distribute our products.
High Volume, Centralized Manufacturing
Early attempts to bring "appropriate technology" to the world's poor failed. Mainly they failed because they thought their inventions could be made by local artisans spread across the countryside. The idea was that this would create jobs and provide valuable technology. The idea is appealing, but is fundamentally flawed.
KickStart's tools are made in large quantities in centralized factories—just like cell phones, computers, and cars. We contract with the most advanced factories we can find and even develop the jigs and fixtures needed for mass manufacturing.
From Factory to Retailer Shop
KickStart buys the finished tools back from the factory and recruits existing local wholesalers, distributors and retail shops. Most of our retailers are small agricultural-veterinary shops that sell seeds, fertilizer and other farm inputs. We have shops in every major city, town, and village. These are local business people, motivated by profit. They are already part of the community and know the local customers.
Private Sector vs. Giveaway
Why not just give them away? In a word--sustainability. More importantly, a profitable supply chain is self sustaining. As long as there is demand, the factory, the wholesalers and retailers will have an interest in ensuring our tools stay available.
It also means that we have a permanent network for replacement parts. Our tools are machines with moving parts and all moving parts wear out eventually. These parts can be changed easily by hand and without any tools. With our supply chain, a farmer can go back to her local retailer and for a few dollars buy a new set of piston cups to keep her pump working for another few years. Once the supply chain is in place, the real work begins--building awareness and demand.
Develop the Market
To lift as many people out of poverty as possible, KickStart technologies need to be as well known and easily available as commodities such as sewing machines and bicycles that help create businesses.
Our MoneyMaker pumps increase net farm income by 1000% on average. They are a significant investment for the typical small-scale farmer, as much as a quarter of a family's annual income. Our tools can help people make a lot of money, but they will have no impact if people do not know about them or don't understand their value.
KickStart has to spend a lot of time--and the majority of our resources--building awareness, developing sales teams and marketing the MoneyMaker pumps.
We are selling "big ticket" items to risk-averse buyers who have little cash. If a poor person buys a pump and it fails to make him money, his family could go hungry.
Rural customers can be hard to reach. They live miles from the closest village and often miles from the nearest road. They may come to town once a month. They might have a radio, listening when they can afford batteries. They might see a newspaper if someone brings one back from the city.
These are challenges that specific marketing and sales strategies are in place to overcome.
Promises Made. Promises Kept.
"MoneyMaker" is the brand name because that is a poor person's greatest need--a way to make money. We work to ensure that our products live up the name testing and offering a one-year guarantee. If anything goes wrong, the farmer can bring the pump back to the store for a replacement.
Our impact monitoring team visits farmers and sales people often follow up a sale with a visit to the farm to see how the pump is working.
Aspiration and Trust
For many poor Africans, farming has not been a successful way to make money. People dream of success in business and think it means a shop or a job in an office. Farming can be a tough, backbreaking job with not a lot of return. We are changing that perception as thousands of MoneyMaker farmers become prosperous businessmen and women.
More than 73,821 entrepreneurs have created successful businesses with MoneyMaker pumps.
KickStart's comprehensive global marketing campaign built on the message, "Farming is My Business," that links farming with business success. Sales are increasing and awareness of the pumps is creating buzz and more sales opportunities.
We have over 200 sales reps stationed in every major town, transit point and trading center in Kenya, Tanzania and Mali. They demonstrate the pump at retail outlets and organize on-farm demos. Customers won't invest in a pump until they are certain it will work. Community wide pumping competitions gather big crowds and generate excitement and interest.
It is labor intensive, but given the limited marketing channels and very cautious customers, these efforts are effective at creating demand for our pumps.
The good news is that this level of market building does not have to go on forever. Once our pumps are as commonly known as bicycles we can reduce our marketing efforts. Then KickStart will make a profit on each pump sold.
Measure and Move Along
KickStart’s model is based on the Diffusion of Innovation theory. When a new product is first introduced into any new market, sales are few and the costs per sale are high. In fact, as the market is building, items are sold at a loss until the market reaches a “tipping point.”
Right now it costs us $17 to get a family out of poverty, but once we reach this tipping point, our cost per family out of poverty drops to zero.
The more radically new the product is, the more expensive it is to make these early sales. In the private sector, these early losses are subsidized by investors. KickStart uses donor funds the same way a for-profit would use venture capital.
A Permanent Solution
By using donor funds as smart subsidies KickStart is building a permanent solution to poverty.
We have set three measures of success for ourselves:
1. Do the people whom we’ve helped out of poverty, stay out of poverty?
2. Can more people avail themselves of the solution, without additional investment from KickStart?
3. Is KickStart becoming more self-sufficient as an organization?
Because we are building a profitable, private-sector supply chain, replacement parts are available to keep existing pumps in operation (like all machines, our pumps have moving parts that wear out and need to be replaced). We know from our Impact Monitoring efforts that the entrepreneurs continue to expand and diversify their businesses.
Because we distribute through local retailers, new pumps will be available to anyone who wishes to purchase one.
Once we reach the tipping point, KickStart will make a profit on every sale. We will reinvest these to develop new technologies and enter new markets so that we get millions of people out of poverty.
Time to Tipping Point
The tipping point is reached when sales of a technology reach 15% to 20% of the total market potential. We predict that it will take between 12 and 14 years from market entry to tipping point.
Compare this to cellular phones, personal computers, or the internet, which were developed for and marketed to the wealthiest consumers in the world.
We expect that we will reach a tipping point in Kenya around 2014. Proving the KickStart model will change the way the world fights poverty.