If you consider businesses that solve Tier A problems, safe drinking water is pretty much top of the list.
Across East Africa people are unable to drink from the tap, and so are left to either boil their own, or buy expensive water in a bottle.
Galen started Jibu to address the need, creating a franchise where local entrepreneurs could treat tap water at source and sell it in reusable bottles to people in their neighbourhood.
We discuss how the business started, the benefits and challenges that come from the franchise model, and Jibu’s vision to provide convenient safe drinking water for all.
Here are some of the key quotes
“Jibu equips entrepreneurs to start their own water treatment businesses”
We finance them to provide safe drinking water to their community and also generate income for themselves
“We have worked across East Africa from the start”
Jibu have operations in Uganda, Rwanda and Kenya, and started in DR Congo. We went for three at once which worked as a good strategy for us – it meant we weren’t overpampering any particular business and didn’t lead to false confidence that we would succeed.
“They’re all different”
In Rwanda, customers go directly to the shops. Uganda are much more geared towards delivery and convenience. DR Congo was difficult to find partners.
Trust and infrastructure
Owing to the strong law environment there is much more trust in new products, the assumption is that if it’s on the market, it’s safe. In Kenya and Uganda however, there are more rip off products and so people are more weary and Jibu needs flashier marketing.
The end consumer is “the middle 70%”
The bottom 20% can’t afford Jibu water and the top 10% choose bottled water. Jibu has the middle of the market.
“We’re 5x cheaper than bottled water”
It opens up a massive market for the Average Joe.
“Each franchisee serves a 1km radius”
They know their community well and engage in direct marketing to increase sales. Jibu Corporate doesn’t market directly.
“To get started, they become a micro-franchisee”
This is a franchisee business selling directly to another business that does the final sales. Once a micro-franchisee has got good numbers, they can apply to become a franchisee. This is a way to know the person and test a new territory.
“Main resistance has been regulatory authorities”
Not so much in Rwanda and Kenya, but in Uganda, there is an incentive for the government to keep the existing water companies in business. It has therefore been slower than hoped for to get authorised etc. Consumer acceptance however has been high.
“Nowhere had safe tap water”
All across the region, the water quality was so poor that the only option other than bottled water was to boil it, which is expensive, fumey and takes time. It also doesn’t remove impurities.
“I came out of NGO work to do business”
I felt that setting up a business with a sustainable backbone was the key to making a difference in the region after spending time working in the Peace Corps.
“Jibu works eye to eye with entrepreneurs”
It was important for me to not patronise the people I was working with.
“We launched the first pilot in 2013”
We’re now opening a new franchise every week. Entrepreneurs are making money and their businesses are growing, led by the entrepreneurs who know the end consumer better than Jibu Corporate.
“In terms of infrastructure, Jibu is the stepping stone”
We work in environments where the infrastructure isn’t mature enough to have a centrally treated system for clean tap water. The problem is pipe contamination rather than with it being centrally treated.
“Ownership is the secret sauce to scalability and innovation”
The fact that Jibu franchisees own their business mean they are much more likely to find creative solutions to meet customer needs. This is less so if you set financial targets and other employer-employee incentives.
“People aspire to own their business”
Ownership is what people strive for, especially if it’s behind a profitable business. We have an oversupply of qualified entrepreneurs.
“We have a thorough onboarding process”
Beginning with being a micro-franchisee, background checks, and an upfront cost of ~$1000 which is mainly to demonstrate commitment and provide working capital. Break even typically comes within 4 months.
“17 year old girls are running their own business”
Our entrepreneurs have a wide variety of backgrounds. Most have had previous jobs or tried ventures before starting with Jibu. Our youngest is a 17 year old girl.
“The water is just for drinking”
They don’t use it for washing or cooking. The franchise processes the reusable bottles when people take it back each time.
“There are probably hundreds of other bottling companies”
We’re seeing some copy cat businesses, and lots of other companies doing water treatment. Our advantage comes in having lower operational/ transport costs because all of the treatment is done at the source of the franchisee and sales are direct.
“Face to face relationships are key”
Because entrepreneurs serve a small community, they have a deep relationship with their customers. This is a competitive advantage against other companies looking to enter the space.
“Our vision is beyond water”
We look to leverage this platform for not just water, but for other products too.
“Water technology has developed beyond business models”
There have been lots of advances in the treatment of water, but just not a business model the utilises it. The filtration process is very energy efficient.
“Our bottle design is patented”
The mould was made in China and the bottles are manufactured in Nairobi. The innovation comes in its multiple uses and not being compatible with other bottle treatment plants.
“Flavours in water are getting popular”
We’re seeing some consumers in Nairobi especially looking to add flavourings to the water. They’re mostly sugary and we haven’t found a naturally sweet cordial that is sweet enough for the African market.
“We’re looking how to franchise the mothership”
We have worked a lot on replicating the franchise model, now we are looking at what it would take to replicate Jibu Corporate in another region. That’s the future vision for the company.
“Jibu means the answer/ the solution”
It’s not just about water, it can be pronounced everywhere we operate and makes sense to people we speak to.
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