Svadha: ‘The First Step for Households Is to Get a Dignified Toilet and Use It’
Svadha, a subsidiary of eKutir, is a sanitation business founded in India in 2013. The company was one of two recent winners – along with Samagra – of OpenIDEO’s Water and Sanitation Challenge, designed to support on-the-ground WASH (water, sanitation and hygiene) enterprises. Svadha trains entrepreneurs and provides them with capital to buy sanitation and hygiene products, which these entrepreneurs sell, help install and support after the sale. The idea is that local residents are best suited to determine the needs and desires of their customers. Here, as part of NextBillion’s ongoing series of Q&A posts about different business models and technologies addressing sanitation, we learn more about Svadha’s business model and billion-dollar potential. The answers were prepared by Garima Sahai, co-founder and CEO, and Jessica Brooks, sanitation impact strategist.
Kyle Poplin: Why was Svadha founded specifically as a for-profit venture, and not a nonprofit?
Svadha: Simply, we wanted to help solve the sanitation problem in a different way. There are certainly good roles for nonprofits in improving sanitation – especially in emergency situations, motivating behavior change, and facilitating access to services and government schemes like the Clean India (Swachh Bharat) campaign. But we saw that the rural sanitation market was disorganized and fragmented, making it difficult for people to access quality and affordable sanitation solutions of their preference.
Our mission is to meet the sanitation needs and aspirations of households with a sustainable and scalable market-driven approach. We train local entrepreneurs who offer sanitation materials in one-stop shops. The business creates a livelihood for the entrepreneurs, sustaining them to continue offering sanitation solutions to households. This is critical because households need continued access to sanitation materials in case something breaks or they want to upgrade. Unfortunately, the “traditional” nonprofit approach often doesn’t account for these facts.
Households also have different preferences and needs beyond just a standard toilet. The ability to customize their toilet provides a sense of ownership. As a social business, we are also able to focus on innovative sanitation products, services and distribution models to reach more people and meet more needs. For example, we offer Tiger Toilet’s waste processing technology in our Svadha Green biotoilet, which processes waste more quickly and efficiently, reducing the burden (and cost) of pit maintenance on households.
KP: What services does Svadha provide and what innovations does Svadha bring to WASH?
Svadha: Entrepreneurs can access all of the toilet elements from us – with more variety, affordability and quality. Unlike traditional sanitation suppliers in the market, we offer free delivery to reduce the “last-mile penalty” (higher delivery charges for more rural locations) and to reduce the burden on entrepreneurs’ working capital rotation. (Delivery charges require entrepreneurs to make large, burdensome orders just to fill the truck.) Beyond this, we provide entrepreneurs with business development and consulting support and professional marketing materials to increase local demand.
For households, we create solutions tailored to their needs and facilitate the delivery of those solutions through our entrepreneurs. For example, we co-created a toilet insurance product with a national insurance provider to protect household toilets from natural hazards like cyclones, fire and falling trees.
We’ll continue to introduce existing sanitation innovations into our network. We have several of our own under development!
KP: Part of your mission is to empower customers with dignity and reduce poverty. But sanitation is also about good health. Which of these considerations takes precedence in your decision-making?
Svadha: Impact can be a step-wise and gradual process. First, we want to make sure we build strong entrepreneurs who can earn enough from our business partnership that they can sustain themselves, their services to households, and our business. Of course, if the entrepreneurs are doing well, they are effectively selling to households.
The first step for households is to get a dignified toilet and use it. While we care about improving the health of end consumers, it is a difficult aspect to focus on. End consumers often know the health benefits of sanitation, but knowledge is rarely adequate for behavior change. It is also methodologically difficult to measure the impact, as many factors interfere, illness is under reported, and maintaining a control group interferes with our business’s rapid expansion. The health impact from improved sanitation access is also well-established in the scientific literature. Instead, we focus on usage and customer satisfaction, knowing that usage leads to health impact. Optimizing both usage and satisfaction ensures we have social impact, a solid value proposition, and can optimize word-of-mouth marketing for better reach.
KP: At what specific point in your startup did you realize that Svadha was filling a need and that your concept for the organization was valid?
Svadha: From the outset, we knew there was a need to fill. It was how to fill that need sustainably that we have been – and are – continually iterating upon. Our growth is really indicative that we’re filling a need. In the last six months, we’ve doubled the number of entrepreneurs in our network (over 200) and our revenue.
KP: How big is Svadha today and how big could it eventually become?
Svadha: We have 200-plus entrepreneurs in 50 percent of the districts in Odisha, our base state of operations. In the near term, we are focusing on scale-through in Odisha to cover as many blocks (the administrative level below district) as possible and scale-up in another state. So far, we’ve reached approximately 78,000 end consumers with sanitation solutions.
With effective implementation partners, we aim to establish organized sanitation markets globally via innovations in product development, entrepreneur distribution systems and ICT integration. Our near-term mission is to enhance the livelihood of 8,400 rural entrepreneurs and provide dignified WASH solutions to at least 1.6 million customer households in India. In India alone, the rural sanitation market is worth U.S. $10 billion to $14 billion. To achieve this growth and to work effectively with implementation partners across many geographies, we will need investment in our WASH Software as a Service (SaaS) platform to provide a customized and integrated ERP (enterprise resource planning) system with ecommerce and CRMs (customer relationship platforms) for our entrepreneurs.
KP: What have been the most pleasant and, conversely, most disheartening things you’ve learned starting Svadha? What advice would you give others who are starting a social business in an emerging economy?
Svadha: Since starting Svadha, I have been inspired by the people I have worked with – the feedback from our end consumers and entrepreneurs, the dedication and energy of our team, and the support and advice from many professionals and organizations. The sanitation sector is finally getting more attention, especially thanks to efforts of organizations like the Toilet Board Coalition, World Toilet Organization and water.org (our strategic partners). However, there’s still a lot of work to be done for developing better sanitation solutions (e.g., for waste processing) and consumer insights. This can be the most disheartening, at times.
For others starting a social business, I would recommend asking a lot of questions and often – most especially to your target customers. There are a number of good online resources for social entrepreneurs, but fewer for emerging economies and especially for the BoP market. This makes it even more challenging yet necessary to build your network for advice and insights and to listen closely to your customers.
Kyle Poplin is editor of NextBillion Health Care.
Photos courtesy of Svadha. At top, Water.org visited Svadha’s field operations and talked with entrepreneurs about how they benefit from working with the company.