Grundfos LIFELINK - CSI CONSULTING

Do’s and Dont’s from
doing business in Africa
Africa Innovation Network
September 8, 2011
Louise Koch,
Programme Manager

THE PROBLEM
"Across rural Africa, some 50,000 water supply points have failed,
representing a waste of US$215-360 million.
It seems simple and obvious but it needs to be said:
There is little point in drilling wells if there is no system to maintain
them. Every day that a borehole does not provide safe water,
people are obliged to drink from unclean pools and rivers,
exposing them to water-borne diseases.”
Jamie Skinner,
International Institute for
Environment & Development

THE BUSINESS CASE
» 884 million - people lack access to safe drinking water (UN 2009)
» US$ 20,1 billion - annual BOP spending on water (WRI 2007)
» US$ 8,4 billion - 2009 total aid budget for water and sanitation projects (OECD)
» US$ 92.4 to US$ 148 billion - estimated annual investment need in water
supplies and waste-water services from 2006 to 2025 (UN 2009)

THE LIFELINK CONCEPT
» Sustainability on all parameters
» Technically, environmentally,
financially and socially
» Closed payment system
» Transparency via remote surveillance
of operation and payment
» Integrated after-sales service

TIMELINE
2012
2011
2010
2009
2008
2007
Scale up – Africa & Asia
Multi-level Strategy – funding, partnerships, consolidating operations
Positioning in Market – B2G, B2Dev, stakeholder relations,
Pilot Phase – Pilot projects, adjusting strategy, stakeholder mapping
On the Ground – Market scan, partner search, setting up operations
Fuzzy Front End – Concept idea, technology research & development

1. LEARNING BY DOING
> Pilots and proto-types is the way forward
DON’T:
» Plan and develop everything from office
» Think that you get it right the first time
DO:
» Get on the ground and start action
» Learn from others and get feedback
» Have a systematic process for learning

2. NATIVE CAPABILITY IS NECESSARY
> Understanding the local context, culture and market
DON’T:
» Focus only on technology or product
» Rely only on desk research
» Think that people think the same as you
DO:
» Focus on social and cultural aspects in
your business operations
» Conduct systematic field research with
users and stakeholders
» Map the broader eco-system and actors
» Knowing what you don’t know…

3. HARDWARE NEEDS SOFTWARE
> Community relations and market creation
DON’T:
» Only focus on technology and product
» Think that your product will sell itself
DO:
» Systematic follow up and support of
customers / communities
» Market Creation & Social Marketing
» Community Development Programmes

4. NO ONE SIZE FITS ALL
> Flexibility in product offering and business model
DON’T:
» Push the same product across segments
» Forget to do the numbers!
» Rely on only one business model
DO:
» Know the demands of your market
» Price mapping and bench marking
» Set up flexible financing models and
income streams
» Bundle your product with multiple
functionalities

5. CROSS-SECTOR IS CROSS-CULTURE
> Multi-level partnerships and collaboration
DON’T:
» Rush into partnerships
» Rely too heavily on outsourcing and
piggy backing
» Think that NGO’s and development
sector share your business mindset
» Work only on a local level
DO:
» Select your partners carefully
» Know that when relying on others you
loose influence
» Make an effort to understand the
mindset and logic across sectors
» Apply a multi-level strategy for PR and
stakeholder relations

6. APPLY PRAGMATIC IDEALISM & FLEXIBILITY
> Scaling up with a dual business strategy
DON’T:
» Hold on to the same approach if the
market teaches you otherwise
» Expect the market to share your
standards
» Make it too difficult to do business with
you
DO:
» Dual business strategy of total concept
offering or component business
» Scale up with partners across boarders
» Keep your vision – and be flexible in the
approach to make a sustainable business

THANK YOU FOR YOUR ATTENTION!
Louise Koch
Programme Manager
lkoch@grundfos.com
www.grundfoslifelink.com