Six years ago, Swapnil Chaturvedi gave up a comfortable life in the U.S. to return to his native India. Instead of working for a car company, he wanted to take on one of India’s biggest challenges: a lack of sanitation among its poor.
The entrepreneurial turn hasn’t been easy. Chaturvedi’s startup, Samagra, went through four unsuccessful models before arriving at a proposition that’s (hopefully) now sustainable. Chaturvedi estimates he spent $200,000 of his own money getting to a point where he has a chance of long-term success.
“After 11 years in the U.S., I was naive and too solutions-oriented,” he says, looking back. “If I had given energy to understanding people’s lives first, rather than imposing a solution, I would have saved a lot of this money.”
As entrepreneurs look to build toilets for the 2.4 billion who still don’t have them, the question is how to make toilets pay for themselves. Chaturvedi looked at turning human waste into fertilizer or converting it to fuel, but neither option worked in practice. He’s now convinced the answer is around getting people to pay for toilets, and then rewarding them for their loyalty. Samagra runs a network of 48 toilet blocks in the city if Pune, serving about 50,000 people daily.
“We’re trying to make toilets into business centers so that when people come and pay for using the toilets, they also get rewards,” he says. “We incentivize people to use the toilets so they’re not motivated to go outside in the open.
When customers visit a Samagra block, as well as using a clean toilet, they can also pay for mobile phones, TV service, or their electricity bill, open a micro-savings account, deposit or send money, or take advantage of member discounts on a range of goods. Chaturvedi says the additional services offset the cost of the main business and improve loyalty (the discounts increase the more people revisit).
In India, municipal toilets are often badly maintained, leaving a gap in the market for cleaner commercially-run versions. But Chaturvedi says many people need extra incentive–other than a clean toilet–before they’ll pay up. “An incentivizing program is critical because [people] never had a habit to pay,” he says.
Samagra, which has been supported by the Bill and Melinda Gates Foundation, recently became part of a new toilet startup accelerator run by the Toilet Board Coalition (TBC), a business group trying to widen sanitation access. The startup will get capital as well as in-kind support from member companies, which include Unilever, Kimberly-Clark, and Unicef.
Samagra features in a new TBC report looking at ways to “digitize” sanitation. The startup’s loyalty program, which is mobile-based, is one example of fusing software and hardware to build a more profitable enterprise, it says. Other possibilities include placing sensors in toilets to monitor cleanliness, or, more futuristically, sampling poop and pee to gather health data.
“If we look further into the human waste inputs that pass through a toilet we see the opportunity to capture essential health data which can improve our understanding of an individual’s basic health,” the report says. “A look into the future can envision a smart health care cycle being generated by the sanitation system.”
Samagra itself is profitable at about 40% of its sites so far. Over the next six months, Chaturvedi plans to get the rest to break-even point, before setting up in three more cities with the same model. After six years of trial and error, he hopes the toilet-plus-rewards approach is more successful than his other ideas.