Abu Musuuza: Village Energy

This is a series of accounts on how entrepreneurs made the leap into the wonderful, challenging — yet fulfilling! — life of building a business in East Africa. They stuck it out in both the exciting I-have-a-brilliant-idea-that’s-going-to-earn-me-lots-of-money phase and the not so exciting no-one-will-actually-buy-my-product phase. Here is how they did it!

Abu Musuza is the Co-Founder and CEO of Village Energy Limited, a solar distribution company that has been operating in Uganda since 2010. Together with his co-founder, Jay Patel, he steered the company from manufacturing micro solar systems to being among the few locally owned solar distributors in Uganda and is now focusing on more productive uses of energy. It has been quite the journey for them and Abu was gracious enough to share his story with us.

On Starting Village Energy

“The story of Village Energy is basically my personal story. I was fortunate to be born into a fairly middle class family in the beginning of the ’80s, unlike my father who had grown up in extremely difficult circumstances in Luwero district in Uganda. He learned how to write on a muddy floor and worked really hard to turn his circumstances around, eventually becoming a surgeon and creating for his family a comfortable middle class lifestyle. As one of the youngest members of the family, I knew nothing of the struggle and only knew our comfortable life. However, when I was 16 years old, the comfortable life came to an abrupt end when my father lost everything he had worked hard for and we were thrown into poverty. I was exposed to a life I had never known and even worse; I saw my father struggle in vain to regain the middle-class lifestyle he had worked so hard for. Seeing this made me desire to be wealthy and birthed my entrepreneurial journey.

“At the age of 27, I became the Director of Ashoka East Africa, based in Nairobi, with the responsibility of running the program in East Africa. During this time, we had an intern from the United States whom I noticed carried around a mysterious brown box in and out of the office. After a while, my curiosity got the better of me and I asked him about it. He opened it to reveal a crude solar system- composed of recycled material, that he was trying to sell to rural areas. I knew about the dangers associated with kerosene and how wide spread its use was, especially in rural areas in Uganda where many people were cut off from the grid. So this little box was an epiphany for me. Not only did I see the opportunity to deliver a safer energy option to the communities that needed it but I also saw the opportunity for a cash payout; a chance to finally restore my family’s pride! Thus began my journey with Village Energy. From our estimates, the math looked great, so I did what any enthusiastic — yet naive — entrepreneur would do; I quit my well paying job.

“I learned a lot from taking this crazy leap of faith. For one, the most important thing when starting isn’t having an air-tight business plan or amazing cash flow figures, because investors don’t really believe these figures to begin with. I had to focus on getting a proof of concept or a hypothesis. Was there an actual problem to be solved from the market perspective? I wasn’t going to know the answer to this by talking to people, but by actually going out there and finding out. Sure, I failed a lot as I went along, and I will get into that shortly, but I also learned a lot.

My family and friends did not understand the decision I made because it sounded reckless. I heard all sorts of reasons why it wouldn’t work and had to be intentional about not listening to them and doing it anyway.”

On Raising Capital

“There are two types of investors; one comes from a more financial or management background and is usually more risk averse and extremely strict. This investor is very interested in numbers and can help you think through gaps in your strategy. The second type of investor is a successful entrepreneur who is now investing in other businesses. This investor has a higher risk appetite and understands the entrepreneur. Because we were a new business and were therefore risky, we went after this second type of investor. Using our personal savings, we created a prototype that we used to pitch to this investor. Together with another investor, he got onboard! After jumping a few hurdles, we finally got our micro solar systems onto the market.

“One of the biggest mistakes we made, was being more passionate about the product and not listening to the feedback from the customers we were trying to serve, a mistake made by many technology companies. With the first version of the product, our system could only be used for lighting and not for charging phones, a big necessity for our customers who therefore wouldn’t buy the product. The second version could charge phones, however, the aesthetic design wasn’t great and our sales — once again — suffered. To lower our costs it made sense for us to move away from manufacturing and focus on the distribution of solar products from companies already manufacturing them. In this process we lost the initial investment our investors made. While this was a disappointment for all of us, we learned from the experience.”

On Lessons Learned

“Whenever we went out to make solar installations, we met people who were disappointed because they had invested in solar products that were not working either because the installation was poorly done, the products were of poor quality or were expired. In their eyes, I saw a desperation similar to what I saw in my father’s eyes; they were trying to get their families out of poverty. It was then that I realized that we weren’t just selling solar systems but a chance for people to improve their circumstances, from relying on kerosene to living a more modern lifestyle. People don’t just buy the product you are selling, but the value it brings to them. I had to take time to understand my customers in order to deliver products that would help improve their circumstances.

When we understood what our customers wanted, our promise to them was to help them improve their circumstances through solar energy. However, this promise was only partially fulfilled if the solar system broke down after installation. We therefore expanded our service offering to include both distribution and after sales services.”

“The other lesson we learned was when we got into partnership with two micro-finance institutions to distribute solar systems to their customers. As we were novices to contract negotiation, we weren’t very smart in the way we handled the contract. We committed ourselves to distributing systems to all their branches and to making all the installations, a stretch especially for our small staff of four at the time. We got overwhelmed and the products started breaking down. Because of this, we received a lot of backlash from the customers and a lot of pressure from the micro-finance institutions that wanted us to deliver as promised. All this could have been avoided had we understood our capacity and negotiated the contract in line with that. Advice from a Board — which we hadn’t set up at the time, or a mentor could have helped us flag this from the start.”

On Building Teams

“From an early stage, we utilized word of mouth to recruit talent. We also focused on advertisements to fill some spots. We thought technical people meant good employees and ended up hiring highly technical people. However, they lacked commitment and this ultimately affected the quality of their work. They did not understand why we did what we did. We also did not have a process to find, keep and motivate talent and were never deliberate about building a culture.

To fix these challenges we did three things;

1. We were — and still are — deliberate about building a culture of storytelling. The on-boarding process of new employees includes the story of why I started Village Energy. This way, everyone connects with the work we do on a personal level. We also encourage all employees to share their own personal stories of how and why they ended up where they are, at Village Energy. This helps us understand each employee’s values and motivation. It also ensures that these values are aligned with those of Village Energy.

1. We have deliberately created an environment where everyone is free to create. We actually don’t have a dress code. If you can deliver what you’re supposed to dressed in a wedding gown, so be it.
2. We are deliberate about being a solution oriented company, as opposed to a problem oriented one. I ask that no one comes to me with a problem without an idea on how to solve it. I always ask, “What do you think we should do?””

On Utilizing all Resources

“Our approach to this has been to scout for people doing the same thing we are trying to achieve and form an alliance with them. This could be anyone from a micro-Finance institution to another energy company like Green-Bio Energy. We have also done a lot of talk shows on solar energy on different media outlets. By doing this, we have demystified solar energy and provided all this knowledge for free, all the while getting our name out there.”

On Winning Strategies

“I’m glad we had the ability to spot and take advantage of opportunities others wouldn’t. Unlike larger organisations, we were able to change strategy a few times because we were small and nimble. We were able to evolve from being a solar company to a more wholesome energy company.

“I am also glad we had the good sense to study and understand the entire renewable energy value chain. We went from manufacturing, to distribution and after sales services and then morphed into being a recognized indigenous solar distributor in Uganda. Our failures and willingness to change and adapt led us to where we currently are — productive uses of energy.”

On Leadership

“When I was starting out, I read a lot on leadership from articles to autobiographies of people I admired like Martin Luther King Jr., Mother Theresa, Nelson Mandela and Mahatma Gandhi. I learned that none of them just woke up and decided to be a leader. They all set out to do the most obvious thing in the face of difficult circumstances. When Mother Theresa saw children starving, the most obvious thing for her to do was to feed them. To Mandela, the most obvious thing for him to do during the apartheid regime was to fight against racial segregation. If a household has a broken down solar system, the most obvious thing for me to do is to fix it. If someone wants to improve their circumstances, the most obvious thing for us to do is to help them achieve this, if we can. That’s who a leader is; a person doing the most obvious thing for society.

These men and women who saw what the most obvious thing was and tried to do something about it are my biggest leadership influences. They had the humility and audacity to try to change the situation, even though they knew they were probably not going to see the change they wanted to see in their lifetime.”

On the Most Exciting and Challenging Parts about Starting Out

“Possibility. This continues to be really exciting to this day. Back then, the slew of possibilities our rudimentary cash flow promised were exciting, especially to a young and naive entrepreneur. Had we sought the advice of people with more experience, they probably would have given us a reality check. However, if you are overly rational as you begin a business, it will probably never take off. Today, I am excited by the possibilities and many opportunities we have to impact people’s lives as an energy company.

“As I started out, I was my biggest challenge. Comparing myself to people I had gone to school with was brutal. I would second guess myself, tell myself I wasn’t getting anywhere on my journey, especially when compared to these guys. They had big jobs, drove cars I only dreamt about driving and basically seemed like they had made it. I, on the other hand seemed to be losing weight at an alarming rate, had no car and constantly felt like I was struggling. I was my own worst enemy until I realized that we were all on different paths. I did not know the half of what they were going through or what they wanted in life. I also had to intentionally surround myself with people facing similar challenges as I was in order for me to stick it out.”

What’s Next For Village Energy?

“As a company, we are evolving and becoming more of an energy company driving productive technologies to the last mile. We distribute, power and provide payment solutions to enable ease of acquisition of these technologies. We want to dig deeper into the productive use of energy and grow our business in the market. However, as we grow our technician network, distribution, infrastructure and training academy, we are conscious of how important it is to open up this infrastructure to other companies with innovations in clean energy to bring such critical products to the communities that need them. There is no value in different companies building their own infrastructure while all are targeting the same consumers. Collaboration on distribution infrastructure is going to be important in the future.”

Truckloads of thanks to Abu for sharing his story with us!