James and Fred's Water Delivery Business
Last week our project team spent time with Jibu, a local Safe Water Enterprise (SWE), in Uganda and Rwanda. We working with them on localizing SEMA (System for Emerging Market Analytics), our open-source mobile IT system designed for Safe Water Enterprises in developing markets.
While visiting their sites the communities to better understand their business, I was once again struck by how similarities of the context in which we work as SWEs. While driving around in Kampala over the weekend, we encountered these two entrepreneurs, James and Fred.
Their story is typical: poor but enterprising, they set out to make money however they can. So they started a water business. Between a loan/investment from their uncle and some of their own savings, they invested 3m Ugandan Shillings (about US$800). This allowed them to make the down payment to lease a motorcycle delivery vehicle, purchase an inventory of 80 jugs, and enough fuel to start delivering water to their neighbors’ homes.
They buy each jug refill wholesale from a local water company, Maaji, for UGX 3,000 (80¢) and resell each for UGX 5,000 (US$1.35), about 40% margin for the service of water delivered to one’s doorstep. Empty jugs cost UGX 15,000 (about $4). They make enough for the two of them to be happy continuing what they are doing, but of course, they “would like to make more.”
The motivation, story, and numbers are extremely similar to those we’ve seen in Haiti, various parts of West Africa. They are even incredibly similar to South and Southeast Asia if you view the prices in terms of USD adjusted for PPP (Purchase Price Parity adjusts the USD value based on how much people earn/pay for daily items so is a better measure of the relative prices of products than a straight USD foreign exchange conversion).
One of the goals of this IT project, and that of dloHaiti/UNTAPPED, the lead organization on this project, is to take advantage of the similarities in the context and challenges in the SWE sector and develop tools and solutions, such as mobile IT tools, that can serve the entire sector. That means less re-inventing the wheel, but also learning from each other to tackle the global challenge of safe water for all.
We hope that the open-source mobile IT systems we develop and help deploy will help entrepreneurs like James and Fred improve their logistics efficiency and help them grow their business so that they can indeed, “make more.”