sharing economy for social good

Using the Sharing Economy Mindset for Urban InnovationAs demonstrated through 3 unique business models

By: Tom Juntunen

Me Tom Juntunen

� BS in Civil Engineering, Santa Clara University (2012)� Commercial Construction Engineer, BNBuilders (2012 – 2016)� MBA at University of San Francisco (2017)

� USF Social Entrepreneurship and Innovation Conference� US-China Social Innovation Forum

� Interests: Technology for Social Innovation; Low-Energy Wearables for Good; IoT; Human-Centered Urban Development Design

� Hobbies: Golf, Tennis, Cycling, Snowboarding, French House

The Sharing Economy Mindset

The Sharing Economy Mindset is the idea of:

� Renting or borrowing goods, instead of buying or owning them

� Using a service-model approach; pay-per-use

� Leveraging de-centralized, peer-to-peer exchanges

� Recovering value from under-utilized assets

� Optimizing the time and resources of people, places, and things

The Collaborative Economy

Source: Collaborative Lab

Social Impact

Why is the sharing economy model useful for social impact causes?

� Focuses on recovering value from existing assets (cheap), instead of creating value from new assets (expensive)

� Fosters micro-entrepreneurship (low barrier-to-entry jobs)

� Enables rapid capacity-building; innovation from the bottom-up

� Creates sustainable ecosystems with measurable impact to attract top-down investment and grant donations

Case Study 1:Non-Profit Model

� Kiva is an international nonprofit, founded in 2005 and based in San Francisco, with a mission to connect people through lending to alleviate poverty.

Source: Srijan Business Modelling Event

Case Study 1:Non-Profit Model

� Kiva Lenders lend their under-utilized cash assets from their bank accounts (receiving interest of < 1%) to entrepreneurs living in poverty at no-interest to transform lives.

� “Lending seemed appropriate because they were business people and didn’t need a donation. They didn’t need a handout.” - CEO

� By the numbers (2016 data):� $922.6M lent through Kiva from 1.5M lenders� 2.1M borrowers from 82 countries received loans.� Repayment rate at 97.1%

� Tags: micro-entrepreneurship, rapid capacity building, measurable impact, peer-to-peer exchanges, excess-liquidity utilization

� Fun Fact: Funds lent in first three years of operation:� Year 1 - $500k Year 2 - $14M Year 3 - $50M

Source: Kiva.org Website

Case Study 2:For-ProfitModel

� Imperfect, a crowd-funded company based out of Oakland, California, is planning to capture some of the 6 billion pounds of fruits and vegetables wasted annually in the U.S. (40%) that are considered too “ugly” to be marketable.

Source: Community Environmental Council

Case Study 2:For-ProfitModel

� Customers pay $12 per box for weekly deliveries of imperfect fruits and vegetables that would have otherwise gone to waste.

� “Why pay extra when you can get cheap and fresh produce — and feel good about saving the world from the ravages of food waste, too?” – Ariel Schwartz, Tech Insider

� By the numbers (2016 data):� Recovered 700,000 pounds of rejected produce in 1st year� Saved customers an collective $400,000 on produce costs� Provided extra income to 50 different California farmers in exchange

for their ugly produce

� Tags: value recovery, time optimization, peer-to-peer exchanges, measurable impact, excess-food utilization

Sources: Community Environmental CouncilImperfect Produce Website

Case Study 3:Hybrid Model

� Sanergy builds healthy, prosperous communities by making hygienic sanitation affordable and accessible throughout Africa's informal settlements.

Source: Sanergy Website


Deep Dive

� The Problem: 2.5 billion people worldwide—or almost 40 percent of the global population—lacks access to basic sanitation

� Includes 8 million of the estimated 10 million people who live in Kenya’s multiple urban slums

� Poor sanitation conditions contributed to the death of an estimated 1.6 million children worldwide each year

Source: BerkeleyHaas Case Series: Sanergy, by Dr. Jennifer Walske and Dr. Laura Tyson


Deep Dive

� Business Model: Three Central Parts

1. A dense network of micro-franchised small-scale sanitation centers located in every block of the slums (non-profit)

2. A low-cost containerized waste collection infrastructure to easily transport the waste (for-profit)

3. A centralized processing facility that efficiently converts the waste into electricity, which will be sold to the national grid, and high-quality organic fertilizer, which will be sold to farms, tapping into a potential $177 million market in Kenya (for-profit)

� At each step, Sanergy creates jobs, opportunity, and profit, while simultaneously addressing serious social and economic needs.



Deep Dive

Build Franchise Collect

Convert Transfer

Source: Sanergy Website


Deep Dive

� Innovation: A fully integrated, systemic-level solution

� Competitors only focused on a single component of the model—either the sanitation sites or waste disposal

� Many of the toilet providers did not have a systematic waste disposal infrastructure, neglecting to address the hygiene problem created by uncollected waste

� Few domestically produced organic fertilizers on the market



Deep Dive

� Why Kenya?

� Three main reasons:

1. Field research showed people that were willing to pay for sanitation in low-income urban areas. We had a franchise model in mind where entrepreneurs would be able to make money, and people were able to pay, which was a clear revenue source.

2. There was huge demand for an organic fertilizer in the market, but there was very highly constrained supply and almost no domestic production.

3. The local entrepreneurial ecosystem was strong. People in urban slums had under-utilized time, and they wanted to work.



Deep Dive

� First Business Model Component: The Fresh Life Network� Started in Mukuru, a slum located in Nairobi, with a population of

500,000� To limit the amount of capital outlay needed to establish a network of

toilets, Sanergy chose a franchise model—branded as “Fresh Life”—that would be beneficial to both local entrepreneurs and the community

� After approval, local entrepreneurs would purchase pre-fabricated toilets and charge customers a per-use fee.

� The toilets, which included the installation, the marketing, the branding, and daily waste collection service, cost about $500.

� Entrepreneurs charge about five cents per use of the toilets. Sanergydon’t collect these fees. They get to keep 100 percent of it. Sanergymakes its profits from the sale of end products derived from waste.

� Fun Fact: Sanergy worked with Kiva to ensure financing was available to the franchisee for the upfront cost of the toilets.



Deep Dive

� Micro-entrepreneurship

� A local entrepreneur had 74 toilet users per day, on average

� $1,350 gross income per year – almost double the annual poverty income threshold in Kenya

� Breakeven after 7 months



Deep Dive

� Second Business Model Component: Collecting the Waste

� Regular, frequent waste pickup.

� Toilets deposit waste in airtight containers which are collected and replaced by a waste collector on a regular basis.

� The full containers are then taken to Sanergy’s central processing facility

� The franchisees pay Sanergy an annualized fee for this service ($90)



Deep Dive

� Third Business Model Component: Converting the Waste into Salable Products

� Solid waste converted into fertilizer

� Liquid waste converted into liquid fertilizer

� Small- to Medium-farms see an average yield increase of 30% -sometimes even an increase of 100%

� Also exploring using gases from the treatment process to create biogas.

� Recovering value from existing assets, rapid-capacity building, measurable impact



Deep Dive

� Impact Measurement

� Sustainability� Measure profitability at the business unit level

� Scale� # of toilets launched � # of users� Amount of waste removed� Number of jobs created

� By the Numbers (2015 Data):� 614 Fresh Life Toilets in operation used 31,355 per day� Collected more than 7,900 metric tons of waste� Created 779 jobs, with 60% of staff coming from informal settlements


Q & A Questions?

Thank you谢谢

Thank you

sharing economy for social good

Small Business & Entrepreneurship