News & Insights
To reach the last mile, learn from the locals
Morgan Babbs was Global Partnerships’ (GP’s) Green Technology field associate intern throughout the summer of 2013 (read about her experience here). Since then, she won a D-Prize and a Davis 100 Projects for Peace grant to start her own solar power social enterprise in Nicaragua, SolarRoute, which delivers solar lights to rural communities by tapping into existing last-mile distribution channels. Morgan shares some of the lessons she’s learned since founding her start up. Morgan is a rising senior at Tufts University, where she’s majoring in economics and international relations. She can be reached at firstname.lastname@example.org.
by Morgan Babbs, founder and CEO of SolarRoute
In the field of development economics, the “last mile distribution challenge,” how to service the most geographically isolated corners of the world, is often portrayed as an amorphous concept that stumps social entrepreneurs around the world. In the search for a solution, many come up with innovative strategies and new delivery models.
This kind of innovation is important in order to advance global development, but it’s even more important to focus on what you can learn from existing day-to-day supply chain movements and business practices in order to best reach the last mile. Before we jump to the question of, “How do we solve the last mile distribution challenge?”, it is important to ask, “Who is already going the last mile?”
If you transport solar lights atop a chicken bus, will they arrive at their destination?
Doing business in low-income countries is certainly challenging and frustrating at times. However, it would be imprudent to think that things just don’t function in these markets — in fact, it’s quite the opposite. There are intricate, albeit informal, last mile networks that move cash and goods all around the country.
How is it that cash and tons of passion fruit, mattresses, pots and pans, and other items are routinely moved around the country on top of a bus or in the back of a pick-up truck with no record, receipt, or insurance? The answer: trust.
Try to imagine all the players in this supply chain that have to uphold their end of the bargain in order for this to run smoothly. You’re counting on the fact that your goods won’t be stolen, that your contact on the other end is there on time, that the vehicle doesn’t crash or get robbed. The possibilities for disaster are endless. Yet, I’d be lying if I said that SolarRoute hasn’t sent a box or two of Greenlight Planet SunKing solar lights on top of a chicken bus for a staff member to pick up in his hometown two hours away from our base. Trust plays an important role in ensuring that informal last mile distribution networks function in Nicaragua, where the petty crime rate is high. It is an impressive system that functions against all odds.
Thus, selling solar lights in Nicaragua forces you to see things through this new lens. You naturally start to think more about supply chain and distribution of universally popular products: where do things move, where do people go, what is best advertised? Simply standing in a bustling market or at a busy bus stop for several hours in the municipal capital of a rural zone can teach you more than you could possibly imagine about local last mile distribution tactics. And that’s what inspires SolarRoute’s strategy.
What is the last mile and how can we reach them?
SolarRoute provides dual solar lamp-cell phone charging technologies to the last mile in Nicaragua. The “last mile” is a development term used to describe geographically and economically isolated populations with little access to relevant information, services, and resources to lift themselves out of poverty. It’s a definition largely applicable to the 30 million people in Latin America and the 1.3 billion people in the world who do not have affordable access to energy. This group makes significant use of kerosene lamps for energy, which are harmful for their health, the environment, and provide limited visibility during evening hours. Lack of lighting and proper technologies inhibits productivity — resulting in fewer hours spent studying or working, which translates to a smaller chance of progressing out of poverty.
There is an entrenched system of last mile interactions that SolarRoute has tried to replicate in order to maximize customer reception. For example, the most far-reaching and recognizable companies in Nicaragua are the two competing cell phone carriers, Movistar and Claro, Coca-Cola, and the largest chicken distributor, Tip Top. What they do best? They ensure that their brand is everywhere. In every corner of Nicaragua, you can add Movistar and Claro minutes to your phone, and you can buy a Coke to wash down your Tip Top chicken. Lucky for them, these companies gross huge profits so they can easily afford to take big off-road vehicles around the country every week to distribute their product. So if your goal is last mile distribution, the most logical, scalable, and cost-effective thing to do would be to tack onto the guys already going the last mile.
SolarRoute does last mile distribution like the local experts
SolarRoute works with agro stores, microfinance banks and school teachers to reach each institution’s last mile network. Our most recent development in last-mile strategy lies with a network of dirt-bike mounted distributors contracted by Movistar to deliver Movistar cell phone credit throughout the country. They span most of Central and South America and we recently scaled nationwide with them—allowing us to reach their 30,000 resellers (and more along the way). So, in addition to selling cell credit and cell phones, they also sell solar products. At every kiosk in every corner of a developing country you can find a “Movistar: recharge here” sign indicating where you can add more minutes to your cell phone. SolarRoute hopes to make small solar solutions as accessible and commonplace as cell phone minutes.
It’s doing the little things to imitate already successful brands that will hopefully add to SolarRoute’s success. For example, every SolarRoute retailer gets a sign indicating that SolarRoute products are sold there, a move inspired by the Movistar, Claro and Tip Top retail signs seen outside shops. Movistar and Claro paint their logo on concrete walls in every town: so do we. Movistar and Claro host small marketing events in the local markets and bus stops once per week: so do we. The idea is to engage in marketing, sales and business strategies that are already employed by the local experts in Nicaragua.
Of course there’s a need for improvement in these markets. Increased reliability and accountability, and a reduction in bureaucracy can help make huge strides towards increased availability of life-changing resources, services and technologies. But a huge discussion exists around creative last mile solutions. It’s a challenge, but it’s important to remember that there are already companies doing this. The question to ask is, “What can we learn from them in order to better distribute life-changing things such as tablets, cell phones or vaccinations?” In fact, it would be taking undue credit by saying SolarRoute employs “innovative” last mile distribution tactics. SolarRoute has really just latched on to what the country already does best. Maybe it’s innovative to us outsiders, but in Nicaragua, it’s the norm.