Saturday
August 18
2012

Scott Anderson

Weekly Roundup: (With VIDEO) Burro’s ‘Billion Dollar’ Plans

One of my favorite board games is Cranium. Unlike games like Trivial Pursuit or Pictionary, where the respective left and right brain types can dominate, Cranium provides multiple categories for the “creative cats,” “word worms,” “data heads” and “star performers” (those who like to sing or hum) to excel.

There’s even a block of clay that players use to sculpt objects and fellow teammates must guess what the clay object is supposed to be. In short, the game is open to a variety of skill sets.

Last week Whit Alexander, Cranium’s co-creator turned founder of BoP-focused business Burro, stopped by the offices of the William Davidson Institute where I work to discuss the business. I couldn’t help but ask him who came up with the clay idea.

“That was me,” Alexander replied, adding, “one of my kid’s was given some bee’s wax for sculpting, and I saw how it was easier than drawing for most folks and wonderfully tactile” as he pulled out a business card with the stark green and black Burro logo and set it out on the table. “I learned the value of crafting a strong brand while at Cranium, and we believe that Burro is a billion dollar brand oppportunity”

Burro the startup reminds me a bit of Cranium the game. The business is reseller of multiple products; each designed to lift a barrier to productivity and catering to multiple customers, with multiple needs and multiple skills/backgrounds. Burro sells AA rechargeable batteries, plug-in chargers for those batteries, cell phone chargers that run on Burro or other brands’ AA batteries, and an adapter enabling AA batteries to power devices that take D batteries. It also sells home lights that run on three AAA alkaline or rechargeable batteries, a solar light/phone charger, pocket flashlights, a manual irrigation pump in partnership with Kickstart, and most recently, eyeglasses through a partnership with VisionSpring. “Burro is all about delivering affordable tools to build better lives,” says Alexander.

Prior to Burro and Cranium, Alexander ran product development teams at Microsoft, and before that spent most of his 20’s living and working throughout West Africa as a student and aid worker. After selling Cranium to Hasbro in 2008, he returned to Africa to build Burro, establishing its pilot operations in Koforidua, Ghana.

(Whit Alexander, left, listens as brother Max reads from his new book, Bright Lights, No City).

Most of the farm families that live in hundreds of surrounding villages have limited or no access to the grid and little income to spend on electricity. That’s why one of Burro’s most popular offerings is its rechargeable battery service. Customers pay a one-time deposit of GHC 1.00 (about $0.50) per battery which is refunded if they discontinue the service and return the battery. Customers then pay GHC 0.25 per “fresh” battery (less than $0.15) that they exchange for one of their “fallen” batteries, as Ghanaians call them. Low-income, off-grid families spend substantial amounts of cash on throw-away batteries to power lights and radios. The Burro battery service offers a better battery at substantial savings while benefiting the environment and providing incremental income to the hundreds of local, independent resellers who sell Burro’s offerings.

“We do not call them ‘the poor,’ we call them our ‘clients,’” Alexander said. That client base is now made up of about 6,000 people, he said, and growing fast.

There are currently more than 300 Burro product resellers. Roughly half are direct sales agents going door-to-door and village-to-village to sell products and replenish recharged batteries; and the other half are proprietors of small retail shops offering the Burro brand products. Burro makes product available to resellers on consignment and they earn sales commissions that vary by product but are typically about 10 percent of their sales. Alexander and other managers find these sales agents by working with village leaders and hosting “gong-gong” meetings, where townspeople are gathered and are shown the product line. They try to find the stand-outs and the go-getters – often farmers or shop-keepers looking for supplemental income. Typically, a handful are nominated by their neighbors at the meetings. (Still, some village leaders try to encourage Alexander to hire one of their less-qualified relatives). “We make the final call on a new reseller always,” said Alexander, “We know the traits we need. We know how to get at them. We question. We even test. We’re getting better and better at identifying, attracting, and retaining switched-on, literate, numerate, problem-solving opinion leaders to be the face of Burro across those final miles.”

The sales people are provided some basic training on customer relations and other sales techniques because, after all, selling an irrigation pump with financing and lay away is very different than selling a battery recharge.

“We’re trying to make the first McDonalds and Burro resellers are our secret sauce,” said Alexander.

Brother Max Alexander, an author and previously editor at Variety and People, documented the early days and numerous challenges for launching Burro in his book “Bright Lights, No City.” (Check out a Wall Street Journal review here). The book is part travelogue, part startup management guide.

(Right: Whit testing phone chargers at a gong-gong. Not all phones seemed to work with the Burro chargers; eventually Whit solved that problem with a variety of diodes and resistors. Image credit: Burro Flickr stream).

Whit Alexander says the company is looking for equity investors and feels strongly about its prospects for growth. It also is selling several of the battery products to U.S. customers to maintain cash flow. But the long-term plan is to grow the number of products in the catalogue and increasingly scale the number of sales people and shops carrying the product line.

Burro, of course, is not the first startup to bundle products and services for the BoP. But their approach seems equal parts idealistic and realistic.

“We’ve been driving to sustainable profitability from the beginning,” Alexander said. “We’re starting small, but we’re learning fast. It may take twenty years, but Burro will be a billion dollar business. Remember,” he adds, “Wal-Mart only had three stores after five years.”

Check out a video interview with the Alexander brothers at WDI.

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Categories
Entrepreneurship, NextBillion Originals
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Base of the Pyramid, books, social entrepreneur, Weekly Roundup