How Catalyst Fund Helped PayGo Energy Build a Foundation for Growth
As startups move past a proof of concept and start to scale, they require whole new sets of systems, operational processes and skills. Startups often have to develop initial, high-level systems that will allow them to grow and expand in the future. A well-thought-out backend system determines the quality of product and service a startup provides to its consumers. To build such a system, a startup requires a team with the technical expertise to implement the right changes.
Early-stage startups usually have small teams, and struggle to find and retain the right talent at the right time, because of the high demand, limited resources and sometimes not knowing what kind of talent is needed as they grow. In the case of PayGo Energy, a distribution service that harnesses the power of pay-as-you-go technology to bring modern fuel to homes everywhere, it was the latter. Working in a highly challenging environment – early stage, East African context, with limited bandwidth – PayGo Energy needed some help identifying, designing and developing one of the most important components of their business. The firm needed help to fully understand and translate their requirements into objectives, improve and enrich the software value proposition and start building a base to grow a customer network from dozens to tens of thousands.
Over the course of two months, Catalyst Fund helped inject the skills and knowledge of an interim chief technology officer to quickly build the base of PayGo Energy’s payment architecture. Working lean and using off-the-shelf software, Catalyst Fund brought essential skills, specific systems knowledge and a CRM to the PayGo Energy team.
Together, they sought to understand the current solution, analyze the main drawbacks to scale, identify other related stakeholders’ needs, and build the foundation for their processes and system. Together, they answered the following question: How can PayGo improve the customer experience with the software backend and boost engagement with the pay-as-you-go model?
PayGo Energy has developed its own smart metering technology that records gas consumption, monitors user credit and shuts off the valve when the user runs out of credit, even from the most inaccessible household locations. The prototyped smart metering solution is now being used by early adopters. However, in order to scale and cater to hundreds of users, PayGo Energy’s system had several challenges that needed to be addressed. These were:
- Integration with a scalable gas payments solution;
- Lack of a platform to aggregate key customer health indicators, including consumption patterns, gas remaining in tank and battery remaining on unit; and
- Lack of tools to measure, monitor and run effectively an in-the-field sales force and customer service.
Creating a base software architecture allowed PayGo Energy to learn how to use tools and build on them to achieve short- and medium-term goals such as optimization of gas distribution, monitoring of workflows and future additions of new features such as mobile apps, loans and credit-scoring algorithms.
To design, build and fully test a base software architecture, the PayGo Energy system was connected using the following off-the-shelf components:
- APIs using Zapier and Google App Script to receive data from cylinders in real time and trigger actions to refill and maintenance;
- M-Pesa’s bill payments solution to accept and record users’ payments;
- Google Sheets as a database;
- AppSheet to develop mobile apps without the need for coding for CRM, inventory management, sales and customer service applications; and
- A communication channel via Slack to keep everyone on the team posted.
Currently, PayGo Energy is preparing to shift from Google Sheets to SQL databases, and from Google App Script to a platform as a service (PaaS) such as Heroku, Google App Engine or OpenShift, among others. In addition, the communication tools (Zapier and Slack) are now embedded within the company and used every day to update the teams on progress. AppSheet has been a useful platform for those on the team with an understanding of how databases function. It provides useful tools for coding without needing the technical knowledge, allowing the team to jump “straight to mobile.” As a result, they have been able to speed up the task of process definition and business process improvement.
Right Place, Right Time
“Without the support it’s likely that we would have spent much more money on a system that might not even have fit our requirements. With Catalyst Fund’s support we were able to define our requirements, tackle the most urgent issues immediately, get the early adopters onto the system, support operations with the data and plan a development timeline to support the growth. In addition, the tools provided are easy to use for the whole team, even without coding knowledge.”
– Mark O’Keefe, cofounder, PayGo Energy
Helping PayGo Energy define their short-, medium- and longer-term development priorities enabled them to identify key areas for investment (e.g. payment aggregation platform) and develop a clear scope of work for the requirements of conducting a 200-household pilot. PayGo Energy also learned some things that might be helpful for other startups out there in the same boat. They are:
- Talk early and often to software developers who have relevant experiences;
- Get feedback and define software requirements early to identify when you need technical support (e.g. script development); and
- Do as much as you can with the free/”freemium” tools available (e.g. Google Sheets, AppSheets, Zapier, Slack). By struggling through the use of the tools you find out what works/does not work very quickly.
This temporary yet scalable foundation gives PayGo Energy time and a clear path to improving the architecture. This is valuable time to focus on gas distribution while the company learns quickly and absorbs as much as possible about how their system works at scale. We are especially pleased to know that PayGo Energy was able to enhance its organizational capacity on building software and we look forward to seeing them succeed in their endeavors.
Javier Linares is an associate at BFA based in the Medellín office.
Photos courtesy of Delia Harrington, Accion