Off Grid Electric: Oxford MBAs Illuminate East Africa

TAKING THE BUSINESS MODEL TO TANZANIA

They were keen to take their ideas out of the classroom and test them in the real world. “Probably the most frustrating part for me as an entrepreneur was that there was no good way to test the model because there’s wasn’t an African village down the street,” he says.

That changed after Helgesen and Mackey graduated in 2011. Mackey was adamant that the team move to Tanzania. “Erica was very blunt and said the only way we’re doing this is if we’re all picking up stakes and moving Tanzania,” Helgesen recalls. “Josh and I kind of looked at each other, considered it for a minute, and then said, ‘OK.'”

The experience proved pivotal and tough — the MBAs had a lot more to learn. “The hardest thing about it was we weren’t solving our own problems. We were solving the problems of people who had very, very different lives than we’ve grown up in,” Helgesen says. He describes it as a constant learning process of figuring out exactly what their customers needed and hurdling cultural, linguistic, and financial barriers.

Though the team made missteps in the beginning, they got a few key things right: Rather than building their current pay-as-you-go solar kit from scratch, they started with an off-the-shelf solar system. By proving product-market fit, they sold skeptical venture capitalists on the idea of investing in an alternative energy company in Africa. They’d even fly funders on the fence out to Tanzania to see the company’s value and impact firsthand. “[Investors] would visit a customer and see the dramatic improvement in the customer’s life for what was often less than what they were paying before, and that’s just basic business sense … that there ought to be a big opportunity here,” Helgesen says.

‘FOR EVERY ONE STARTUP THAT DIED FROM COMPETITION, 10,000 DIED BY SUICIDE’

Off Grid Electric also set to differentiate itself but adding something new to Tanzania’s business ecosystem. “Good customer service is such a rarity, so it’s really remarkable that when you do deliver it, customers are just amazed because they haven’t had that experience,” Helgesen says. Off Grid runs what they believe to be one of the first 24-7 customer-service centers in the country. From his days in e-commerce, Helgesen says good customer services wins out again and again in terms of customer loyalty. He’s confident that’s true in Tanzania too.

Off Grid Electric launched in early 2012 as a forerunner in the field. Now solar startups are cropping up all over East Africa. Competitors such as M-KOPA and SunnyMoney have claimed millions of investment dollars and government funding. Smaller solar startups are clamoring for their slice of the pie too. But Helgesen doesn’t seem particularly perturbed. “I always tell my team that for every one startup that died from competition, 10,000 died from suicide, so the most important thing we can do is to focus on executing,” he says.

He sees the competition as a testing ground — where large-scale market trials take place risk free. “That’s far more market intelligence than we can gather on our own, ” he says of competitors. Plus, there’s something of a room-for-everyone mentality: He estimates that even with all the new entrants, off-grid households with a basic solar system comprise only 2% of the market share, and many of those systems still can’t power a TV or laptop. “So you still have a ton of room, in my perspective, to deliver people the power they really want, which is not just the bare, bare basics.”

THE REAL REWARDS OF ENTREPRENEURSHIP

While Helgesen undoubtedly picked up key lessons in the field, he’s quick to establish the value of his MBA and his Oxford experience. However, he doesn’t recommend entrepreneurship for everyone: “For many people, entrepreneurship is the only thing they can do, and they love it and they can’t imagine doing anything else. And for other people, it’s incredibly thankless, and it’s certainly not the best way to make money,” he says.

For him, the reward extends beyond revenue numbers and term sheets. “Some of the most thrilling home visits for me were the ones where you walk out in the village at night and everything is dark. And then you just see homes lit up by our product. And it’s not just one, but you see a whole bunch, and that’s incredibly exciting because they’re often the only lights you see.”

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