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Silicon Savannah: Expanding Access to Clean Cooking Fuel

ABOUT THIS EPISODE

A significant amount of the world’s population — over 2 billion households — cooks with dirty fuels. For most, there simply isn’t access to clean cooking fuel.


In Kenya, Nick Quintong (CEO and Co-Founder) and his team at PayGo Energy have designed an IoT solution that expands access to clean cooking.


In this episode, Nick shares:

- Why startups are abundant in Nairobi

- How a piece of smart hardware brings clean cooking fuel to Kenya

- The journey of developing new IoT technology

- Advice for negotiating the right metrics for success


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Currently significant amount of the world's populations cooking with dirty fuels that they can buy some small amounts they can afford every day. Our device allows to buy gas in the same fashion, so that they can afford it, and gas is much cleaner than cooking with charcoal kerosene in the household. You are listening to over the Air Iot connected devices and the journey, brought to you by vary in each episode we have sharp, unfiltered conversations with executives about their IOT journeys, the mistakes they made, the lessons they learned and what they wish they'd known when they started. Hey, everybody, welcome back to over the air, Iot connected devices and the journey. Today we're going to be talking about energy, Iot and Africa with CO founder and CEO of Pago Energy, Nick Quintong. Nick, thanks for going on the show man. Thanks for having your in. So, Nick, for those who don't know, tell us a little bit about Pago Energy and the problem you guys are trying to solve. And for now, thirtyzero foot view is fine. Thanks, Ryan. Yeah, so, pig of energy. Our mission is to unlock clean energy for the next billion, and so by the next billion we meet of the billion households that are currently lack access the clean cooking fuel today, and so our technology is a smart meter that locks in any gas cylinder and it turns it into a pays your device so that customers can actually buy gas and small amounts. Currently, significant amount of the world's populations cooking with dirty fuels that they can buy and some small amounts they can afford every day. Our device allows them to buy gas in the same fashion so that they can afford it, and gas is much cleaner than cooking with charcoal kerosene in the household. I guess one thing that's kind of interesting to me is like your background personally. You're not from Africa originally, believe you're raised in the United States. Spent some time at GE kind of like a, I don't know, more traditional career path talk. Can you talk a little bit about like how how a guy came from that background and, you know, is now founding cofounding a Tech Company in Kenya? Like what does that path look like? Yeah, it was kind of a kind of a random pat so, yeah, that Gee Great Company. Great receive great training there. Originally, I'm a an oregon boy. I grew up in band if I'm a way into the corporate world and yeah, around your four five, I sort I getting this kind of creeping existential angst about what am I doing in the world. I think it's something that's been plaguing our generation and so I wanted to try to do something a little bit closer to the impact side. So, coming into like my fifth theory, G as, are looking for some opportunities and I found one to be a kiva fellow Kiva, if you're not familiar with that company, their one. They're nonprofit. They're one of the first companies to do crowdsourcing. Their focused kind of the microfinance, micro lend space and emerging markets like Kenya. So I was accepted into this Kiva fellows program and they placed me in Nairobi to work on this kind of Keybas it project. So could it placed me anywhere in the world? They placed me kind of randomly. Maybe not ran randomly for them, but randomly for me for Nairobi. And once I got there, I mean Ken you as an awesome place. Can you. People are awesome. There's tons. I'm an outdoor guy. There's tons of do outside. So I really loved the country and then when I got into the start up ecosystem, people are working some really big kind of media challenges. There's lots of smart people here and, yeah, I really liked the vibe of the scene here. But what I like the people are working on a type of people that are drawn to this market and yeah, but love the country. So that's how I ended up here. Is the silicon SAVANNA. Understand the term it is, like, is that related to Kenya specific, or are is that like Africa, you know, that region of Africa, or like this? Obviously this podcast is not about Iot in Africa specific, but for many people this might be one of the few times they're hearing about IOT development in Africa. Can you give us like twenty...

...seconds on Silicon Savanna what that means? Yeah, I mean's looking Savannah's really focused on on Nirobe and what's been created here. So there's been a lot of investment in ecosystem development and so there's one. There's some great universities here in East Africa, specifically here in thy robe, plays like university and I robe strath Moras and great schools that are that are putting out talent. There's a lot of focus from development finances institutions in this part of the world. The UN is based here, a lot of embassies are are located here. So there's a fair amount of funding and a lot of educated people and there was some initial kind of startups that started, you know, popping up here about ten years ago. Since then there's been a lot of investment and accelerators. There's been popups of kind of venture capital firms and there's been, you know, a few kind of win some kind of early success stories come out of Kenya. Hunions are also very innovative people. They're also quick adopts and new technology. There's over ninety percent of the population uses mobile money here. A lot of innovations come out of this part of the world. So it's become a real hub for startups in East Africa. And then so when missay s littlekins about Savannah, they're really talking about what's been built here in my robe. Cool. Well, let's get back on track. I'm I'm really interested to hear about the technology solution you guys have have developed. So you're looking at the energy market in Kenya. You know, you're seeing this like nondemocratized access to clean burning fuels or like for most people to get access to to natural gas like very expensive or maybe, you know not, like the unit economics don't work at the individual level. Can you talk about like the process of you landing on an isot solution as the solution to address that problem? Yeah, just kind of just set the stage. So, I mean, when you're looking at a place like Nairobi, most of the population is living in these really densely populated kind of informal type settlements and so cooking with like natural gas, you know in the states or in Europe, really isn't possible. And these areas that you can't put piped gas infrastructure into a place that's kind of informally set up. You know, there's there aren't tarmac roads in the houses are are not, you know, built to the traditional code that you're used to. This is a really a really challenging environment right especially, so would be very dangerous and expensive to put natural gas in these areas. are also growing really fast. urbanizations happening in Africa and most part in a lot of emerging markets really rapidly, and so these places are actually, you know, they're not static, they're growing every day. So it's a really challenging environment. If you look at the livelihood of the average household here, they're living on less than eight dollars a day. Some, a lot of houses, less than five dollars a day and a lot of their income streams are unpredictable. We're doing, you know, six seven things in a month to make ends meet, and so when you look at that person's Daytoday, it makes a lot of sense in the by charcoal, wood or kerosene that they can buy in small amounts, and that's what our founding team saw early on, as they're kind of the kind of pattern of behavior on cooking and for curing fuel. So we saw folks team up and in long lines to buy these fuels. We started doing the back of the NPT and map or like wow, they're actually spending a lot more money to cook with charcoal then I actually spend cooking with gas every month. And so first I was like, well, this is a real injustice, but then it also was the next question was like, well, you know, what are the real barriers to cooking with gas? So we understand why we can't put pipe gas in the home, but I can someone not afford a gas cylinder if we know they're spending more than that a daily basis. So we realize that really just that gas is only sold in large amounts. You have to buy the cylinder itself, which traditionally would be, you know, pipe gas infrastructure. You if to buy that yourself, which is the cylinder, and it can only be refilled in large amounts. So, although there are some maybe analog...

...solutions to this, we thought, hey, there's a real opportunity for us to come in, you know, with an Iot device, to not just change the format in which gas is sold, to try to find a way to sell on a fractional basis that matches up with the day to day life of the customers were targeting, but the IOT component could also help us be really efficient with a supply chain, because the areas, again, that we're working in are really challenging to do distribution. There's no addressing system, that there's not street names, and so having information flowing from the home, having better control of the assets, we thought, could also really improve the supply chain. So it felt like the right solution and it felt like a way to really displace a lot of these dirty fuels that we knew we're not the right product for customers. Just it's just all they had access to, got it and like okay, so you're now like narrowing scope. We, I think the we are the audience, and I are starting to understand like the problem, you know, and how you guys are looking at the solution makes a lot of sense to me. Talk about the device that you guys have built, you know, to actually begin to meet this out some of the like unique problems that you needed to solve? Can you talk about that submetering device, I don't know if that's the right term, but that you guys have built and like some challenges along the way that, you know, either technical or user interface or, you know whatever, that you guys have needed to solve in order to be successful? And like actually talk about the device itself. True, yeah, I mean to like any hardware company, I mean developing hardwares are a nightmare. It's again. So we had a place that we wanted, we had a very clear idea, i. really elegant solution, and then we kind of had to bump along until we landed on what we've got today. Look, when you when you look at the technology that we needed to solve this problem. A lot of the things under the hood are not novel. Right, you have a gas cylinder. Gases, you know, pressurized so that it's in liquid form, right, and so it's coming out at high pressure. So we have to regulate it to get it to low pressure. Once it's regulated, regulated to get low pressure, because that's what we can cook at right, really efficiently. Once regulate it, we have to measure it, and that's also not novel. There's lots of devices out there that can measure gas, you know, and flow. Once we've measured the gas, we need to communicate that measurement back some kind of a system. So we have some kind of a communication, a module and PCP that's kind of storing the information, right. And then, you know, in a prepay format, you need to be able to shut off access right to gas if folks haven't have been paid for it. So you need some kind of a valve, right, that's going to that's going to lock. So all these components are are not novel, that are under the hood into the first question is, do we need to develop an entirely new device at all? Right, and this is a gas meter essentially. Well, there weren't gas meters out there that were really that could do what we needed them to do, that are managing gas at high pressure. Most gas meters are dealing with we have so much lower pressure than out of a cylinder. There weren't meters out there that would lock on top of a cylinder and would be tamper proof the way that we needed. And then also from an accuracy perspective, there weren't meters out there like in a commercial setting that we're selling gas and he's really like a micro amounts. I mean we're talking about folks, but need to buy, you know, fifty grams or at the gas. That kind of accuracy we weren't finding in meters that were available in the market. So pretty quickly we're backing into a totally new device again, knowing that, hey, a lot of the components may not be novel, but the way we're going to put them together will be. So we started that journey. Obviously there's a lot of prototype being going on. We didn't actually land on pointing advice in the cylinder off the Bat. We actually tested putting a device inside of a stove. But we started find out really quickly the hey, this we got. We have to get to the household level and understand how people are in interact with this device and the environment that it's going to be in and pretty quickly realize, okay, there's a lot of safety concerns to having this built in, built into a stove, that it...

...needs if we're going to really make this thing tampered proof, it's going to have to lock on the on the top of the cylinder so people can access more gas and we need to be able to control as much as we can the safety side in our own office. So having multiple components in the household would be more dangerous. So how much can we put under the same kind of housing and Qa within a controlled environment before we get it into the household? So we start doing all these learnings once we got it got out in the market and obviously it's been an inderative process like any other harbor company, but we've landed on a product that's still kind of has those same core componentry but we've had to make some tradeoffs and we've had to spend some time really understanding what the customer needs. But gas companies need to be able to do this really efficiently and provide ultimately experience for a customer that is going to keep them from, you know, excited to cook with gas and keep them from cooking with other fuels. So our audiences a lot of business leaders that are thinking about or in the process of developing a connected vice, a CIOT solution whatever for their for their business. You know, we hear a lot at very that, hey, this thing that we're developing, there's a lot off the shelf components. It's you know, this thing is is most is mostly you know, a, plus, B plus. See Different off the shelf components configured in a unique in different way, or the application of the thing is unique and different. But yet, as you've discovered, you know, A and B and C may all be standard off the shelf components, but the application or their integration is not at all standard. If you were taught like speak directly to those people out there, like what learnings do you wish nick had known at the beginning of this process that he knows now about what look may look relatively straightforward because, as you said, the things are not novel. The the technology is relatively off the shelf at the individual component level, but the application or their integration is not. What would you say to business we are out there that that is in a similar position about the journey that they're about to embark on. There's a lot thought that I would do differently. I can go back and take this thing from the top. But lookuy, I don't have a technical background, so I you know, I leaned a lot on the te level guys on our team when we scope this thing out the beginning. But from my perspective, there's a couple areas where, you know, we might have been able to we actually some things that we did well then some errors where we might have been able to potentially speak things up. The first is, once you understand, I'd say, the experience you're you're trying to provide your customer and what you believe are the risky assumptions like in your business model, there are a lot of ways to test those without having, you know, fully big device. And so for us working with gas, not just from a safety perspective but also just for there you know the standards regulations around selling gas and measuring gas. Right, there's a lot of hurdles that you have to overcome just to get your first devices out into the market, and so you've got to find clever ways to get out there and test as soon as possible. We had some prototypes or we're testing, you know what, how a customer interact with it, and they were incredibly low fidelity cardboard. Ye, using low fidelity prototypes, you can learn a lot about your customer without going through the Rigamarole of developing even like initial prototypes and trying to put those out in front of, you know, front of customers, and I think that the some of that. I think companies could do right as is say hey, I I see that a lot of these components are off the shelf. I could put something together rather quickly...

...and get that out to market and it's actually at least for gas right. There's a lot more that you've got to do to probably get that fully approved, to get that out there and safe in front of someone's get that hands your customers, and you might have skipped some really risky assumptions that you could have rooted out was something that was, you know, much more kind of low fidelity, like even a cardboard prototypes like what we used Atago. So I think that's that's something that we did. That was probably a good thing. It helped us land on a device that I think was much closer to where we where we need to be, and I think we save a lot of time and money by doing that testing up front. On the other side of it, some mean that I think is it's mean that you should be parallel processing is that, although you may have something that again has let off the shelf components to hit the unit cost that you need to hit for this to be a commercially viable product, usually you can't have all off the shelf components under the hood. At some point you, in our start need to do custom componentary when you go to the value engineering process you're going to need to start making some some tradeoffs and the thing will get a lot more custom over time just to get your cost down. And so I think the earlier you can start that process will will allow you to avoid a stop start and I think for us, if we did things a bit sequentially, I think that was tied to the timing around our funding, to be honest, in our our bandwidth. But if we could have parallel process that path the scale and that path to a place where our uneconomics were we're looking positive a lot sooner, I think it could have probably shaved a lot of time off our path. So although you're you're taking your time and using lower fidelity stuff up front, I think should be taking that information and feeding it into what you believe is the more skilled product you're and have in the future, and that's your entire thought process around not just was under the hood but your global supply chain. How insaid that manufacturing everything you need to do to hit both the unit costs and scale that you need to really have this thing take off. So I think for us, you know, we did the front end right, or we were doing a lot of the really important testing and iterating really quickly and not doubling down on a design too early. But in the other side I think that we probably could have done some of the value engineering work and thinking around what a scaled production should look like, what our global supply chain should look like, which had done it a lot earlier and led to kind of a stop start. So, you know, takeaways. They're around parallel planning, you know, like getting your existing prototype as time as possible while also thinking about Vto, not prototype all the way through. Then begin, you know, thinking about you too. We see that a lot. Can you talk about this idea of like accidentally shaming your customers during that manual weighing process because they were embarrassed at the lack of gas being used. It made them it. Can you expand on that? Yeah, I mean to keep yourself honest, right. So you're trying to be scrappy and and do a kind of a clever test. And for us we were trying to test, you know, people's willingness to pay, you know, you know, for to sell gas and small amounts. And the way that we did it, we thought was really clever, going around and weighing people cylinders every day. It didn't require any you know, technology development. If we can get to the kind of the root of the challenge early. The problem is when you knock on someone's door but day and you weigh their cylinder and then you right down the weight and then you know, you know, either take payment ay they to top up or if they didn't cook anything the night before, they're having to look you in the face as your weigh the cylinder and say sorry, I know, I cooked with something else or or I or maybe it's really low income household. They weren't able to have a meal the night before. And so we really felt that we were skewing the data, but by this really invasive approach. And so when we didn't think about at the...

...beginning, and I think we had to look back at the data afterwards and say, Hey, I wonder how much you were driving consumption just, you know, because of the you know, the social pressure that we write that we were giving them by knocking on their door every day. It's something that we hear a lot where early Beta customers start to root for the the product company. You know, they're part of it, they want to see the things succeed, and so they end up, as you said, skewing the outcome and it in it has all of these unintended downstream effects where people are saying, Hey, look like usage is higher than expected. You extrapolate that forward and say, you know, we could maybe see, you know, this much impact. And but of course that's, you know, related to like the personal effect that that you pointed at. Can you talk a little bit about like another thing you mentioned that that I wanted to kind of pull on a little bit is we hear a lot where the device developer, you know, either the person at the company that's in charge of it or the company itself, has these metrics of success and they say, look, we're going to get fifty units out in the wild and that's what we're going to consider success. But maybe that person's CEO or that person's venture capitalist says, well, hang on, I you know, five hundred is actually the benchmark of success. Hat Did you guys had? Like was this something that that resonates with you? Is this an experience that you guys have had and, if so, like what lessons learned can you share about, like setting the goal post in the correct place and getting everyone bought in around the correct goal post location? Yeah, this is one of the most deeply frustrating things about launching at a hardware, hardware company is that for a hardware company, to hit it between the UPRIGHTS is more challenging, you know, and there's a huge difference between fifty units and even a hundred units or thousand units and depending on where you're at in your in your development process, and so getting to a place where you think that you've read the top of the mountain and then people telling you you're not actually there, you've got this whole other thing to go up is is really demotivating for the team and really frustrating. So we've definitely had that happen. I mean the first thing is that if you can have investors that have a background and investing in hardware companies, that will help a lot because they can start to at least empathize with your position and understand how challenging is to even just get to that next it's that next point. So for us, one of the challenges that we've had is that, you know, we've got a lot of different folks that are that are setting some of these parameters and we have to really get deep around what is this assumption that they want to test, and I think that's been the real question. Is this a question of around the technical feasibility of what we're doing? You want to you want to see how this thing actually works out in the wild and you need a certain amount of you know, there's a sample size and your mind that shows that and we really dig into it, like what is it? What is the actual data points that you need to understand that this technology works and that it's feasible at small scale and at some significantly larger scales as that the question. Is it more about user engagement and you have a real concerns around product market fit and you want to see enough cycles of data, and that can come in different forms. That's actually like the number of customers, or it's a smaller group of customers over a longer period of time, or it's more data points right from individual customers. So we spent a lot of time, as we get became more mature. Thing is a leadership team digging into what is it we're solving for. And when you got different folks in the room that are trying to kind of scope what they're mean, what they believe, the risky assumption is you start to put those out of separate assumptions that we're testing. So technical is something doing? There's a technical concern that we need a test, let's make sure those books are covered. If it's more of a market based concern, let's separate those out and we...

...might be able to address these differently. So early on I think we just trusted you know, the folks were talking to is. Now that they're not, they meant to change the goal posts. It's that's unders a disconnect also between the folks that are on your board that are telling you, Hey, this is what we believe the market is looking for from our experience. Then you go out to market and slap in the face and they're looking for something different. So again, I think you have to figure out what is it that we're testing for and you have to triangulate it from the fost close to the business and ultimately, what that that that audience is going to make the found decision which, if it's a next funding round, right, it might be your this next round of investors. They might have a different looking field in the folks you're dealing with today. Three things, things that I think we're we've talked about today, that are like interesting that you at home, you know, might want to consider as you're, you know, thinking about your project. One is this idea of parallel development, so like get a product out in the market that utilizes as much off the shelf as possible to get that initial feedback, but at some point you need to begin to build your V two in parallel with that, not wait until that process has completed to you know, I think there's a an idea of like really looking carefully at your Beta adopters. You know, you want to be mindful of like is is there any opportunity for this data to become skewed by the you know, the people that that we've included in our Beta and and their behavior maybe not being representative of the broader market. And and then the third one is, which is one you just talked about, this idea of goal posts and getting key stakeholders really bought in about what success looks like across you know, all these key parameters. So like units deployed, you know, probably like something around like utilization, you know, market adoption, consumer behavior, things like that, like really defining that so that everyone agrees what success looks like in the team can go drive towards that nick. We're just about out of time, but I did want to ask you one last question. You mentioned at the top of the show and user listeners from the United States would be familiar. Bend Oregon one of these towns that's totally blown up. I did not know anybody was actually ever from then. It seems like the kind of place that no one is actually you. I live in Boseman Wantanas the same thing. I think the last board and raised Boseman person left ten years ago. What's something? When is the last time you've been back to bend Oregan and for listeners out there that are familiar with the town, what's the thing that you think has changed you've seen change the most about bend organ? Give us twenty seconds, anyone, even though Ben's change a lot good at bend organ. It's a it's a magical place, great place to grow up. You've got the Caska mountain range that the shoes for ever running through town. I think a lot of the things that I love about bendard are are still there. When we move there there is about Fifteenzero people. So I didn't. Wasn't born there, but I moved there I was four or five years old. It was mostly a lumber town and now there's about a hundred thousand people there. I don't know what they're doing for work. The economy there that they have a bit of a startup seeing there's a big kind of scene around growth right, but people there aren't too worried about that. They're more outdoors people, so they're ski and they're playing golf throughout in the woods. They're having a good time. So they in the main. Difference is yet the scale. I mean it's it's huge. Is Gone up by like a factor eight and in size the economies totally change from being a lumber town and yeah, but I'd still think that the people are the same there. They're outdoors people, they're having a good time and it's a beautiful place to live. I Love It, Ladies and gentlemen. Co Founder and CEO and a Fatgo Energy and long time Bend Oregon resident, Nick Quinn Tong next, thanks for being on the show today. Ryan, thanks so much for outing me. You shouldn't have to worry about IOT projects dragging on or unreliable vendors.

You've got enough on your plate. The right team of Engineers and project managers can change a pivotal moment for your business into your competitive edge varies. Close Knit crew of ambitious problem solvers, continuous improvers and curious builders know how to turn your ideas into a reality on time and up to your standards, with a focus on mitigating risk and maximizing opportunity, will help you build an Iot solution that you can hang your hat on. Let's bring your Iot idea to life. Learn more at very possiblecom you've been listening to over the Air Iot connected devices and the journey. If you enjoyed today's episode, make sure to hit subscribe in your favorite podcast player and give us a rating. Have a question or an idea for a future episode? Send it to podcast at very possiblecom see you next time.

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