Sanergy and the Power of Systems Thinking

HES Case Study

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Currently, some 2.5 billion people globally do not have access to basic sanitation, and some 1 billion defecate outdoors, exposing themselves, their families and their neighbours to faecal bacteria. As a result, half of the hospital beds in developing countries are occupied by people suffering from diseases caused by poor sanitation and hygiene. At least half a million children die every year as a consequence. Although the lack of proper sanitation costs the world an estimated $223 billion a year, relatively scant attention is paid to the problem. In 2013, the UN launched a Call to Action on Sanitation, and in 2015, it introduced SDG 6 – Clean Water and Sanitation. Progress has been slow, however in recent years the need for increased private sector involvement has been recognised. By 2030 it is believed that the global market for innovative low-cost sanitation will be some $6 billion, suggesting a potential role for entrepreneurship.

One such innovative entrepreneurial venture is Sanergy (www.sanergy.com), a franchise company that provides non-sewered affordable sanitation solutions for the urban poor. The venture, which opened in November 2011, is the brainchild of three MIT MBA students who were required to find a solution to a problem facing 1 billion or more poor people globally. The three agreed that in most developing countries sanitation needs addressing, and that it could be done profitably adopting a systems thinking approach.

In November 2011, they opened Sanergy in one of Kenya’s largest slum areas on the outskirts of Nairobi, Mukuru Kwa Njenga, which houses an estimated population of 500,000. Today it employs some 250 people, 60 per cent of whom live in the areas the venture serves, has installed 772 toilets, removed over 7000 metric tons of waste and created 779 jobs, 93 per cent for Kenyans. It has done this by creating a network of not-for-profit low-cost waterless “Fresh Life” toilets that are franchised to schools and local micro-entrepreneurs and landlords who operate them as a business. Sanergy then supports its franchisees, helping them with promotion and secure customers, and supplies them with a pack that includes a uniform, a sign and a bucket and soap. The franchisee then charges the user a small fee for using the facility. The franchisor carries out periodic checks to ensure hygiene standards and the image of the franchise is maintained.

While franchisees can earn something in the order of $1000 a year from a Fresh Life toilet, the benefits are much greater. As Lyndsay Stradley, one of the co-founders recognises, a city is a system of networks and when one network, in this case, the sanitation system, is missing the other networks cannot fully function. Apart from increasing the pressure on the health facilities the lack of an adequate sanitation network loses Kenya an estimated $1 million a day, pollutes the environment and impacts negatively on the safety and education of the young, particularly girls and women through the lack of safe, private hygienic toilet facilities. With the introduction of the “Fresh Life” sanitation network, such conditions have been ameliorated. Girls and women are safer than previously, and school attendance has increased by some 20 per cent, with one school reporting that as a result of Fresh Life toilets, it has increased its pupil numbers to over 200.

Synergy also collects the waste daily, for a fee, using trained waste collectors who are provided with personal protective clothing and equipment, inoculations against waste-borne diseases, and health insurance. The waste is taken to a for-profit Sanergy “Farm Star” centre where it is converted into organic fertiliser (Evergrow) and animal food and sold to farmers. In theory, they should then be able to increase their yields and revenues and help retard soil degradation, important in a country where 80 per cent of the population depend on agriculture, and there is a demand for 270 million tonnes of organic fertiliser a year. However, finding customers has not been easy, so Sanergy offered free trials to farmers who could see the benefits (a 30 per cent increase in productivity) for themselves. Additionally, in 2012, with the support of the Bill and Melinda Gates Foundation, Farm Star started to use its solid waste to breed colonies of Black Soldier Fly larvae, which were then converted into animal feed, replacing the traditional fish meal feeds that were becoming unreliable because of overfishing in Lake Victoria.

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Since November 2020 Sanergy has been operating, in partnership with Kisumu Water and Sewerage Company in Kisumu, the third largest city in Kenya. Here more than half of the population live in slums with limited sanitation. The intention is that by 2025, Fresh Life Toilets will be serving over 1 million people. At the same time, Sanergy is exploring the possibility of converting organic waste into electricity and also constructing a new large-scale recycling factory that will enable it to convert 72,000 tonnes of organic waste into fertiliser, animal feed and clean energy. Thus they will not just be introducing safe, hygienic sanitation but rebalancing the ecosystem and helping stem environmental pollution.

The venture demonstrates clearly the inter-connectivity of the sustainability ecosystem and the value of applying systems thinking to entrepreneurship. While its primary objective has been to resolve the social issue of sanitation, it has also addressed the environmental issues resulting from agricultural degradation and helped in the reduction of poverty by creating wealth and jobs. At the same time, it has increased the safety of girls and women and made education more accessible to them. Thus by adopting a harmonious approach to entrepreneurship, based on systems thinking, Sanergy can be seen to have contributed not just to SDG 6.2 (social entrepreneurship) but to SDG 15 (ecopreneurship), to SDGs 1 and 8 (economic entrepreneurship) and to SDGs 3 and 5 (humane entrepreneurship).

References

Atlas of the Future (2020) . ‘A Franchise network of ‘digital toilets in Nairobi is helping stem the spread of COVOD-19 among vulnerable urban slum community‘. (atlas of the future.org).

Stradley ,L. (2018). ‘Why we need to Talk Shit’. TEDx Talk ,5 April, 2018 [online]. Sanergy website (sanergy.com)

Waldman-Brown, A. & Campbell Flatter, G. (2018). ‘Scaling Sanergy: Growing a Promising Startup’. Legatum Center for Development & Entrepreneurship. MIT: Cambridge, MA.


© Professor David A. Kirby and Harmonious-Entrepreneurship.org (2021). Unauthorized use and/or duplication of this material without express and written permission from the author is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Professor David A. Kirby and Harmonious-Entrepreneurship.org with appropriate and specific direction to the original content.


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