I first met entrepreneur Hugh Whalan back in 2010 when I learned about Energy In Common, the startup company he founded that was like Kiva, the micro-loan provider, except greener. Since then, I’ve watched as he's branched out into renewable energy and cheered him on earlier this year when he engineered a reported seven-figure acquisition of his new company, Impact Energies.
Hugh grew up in Australia and had traveled to 31 countries before he turned 25, as he put it “mostly with a backpack and too little money in my pocket.” He currently works as CEO of Persistent Energy Ghana, a company that specializes in using microfinance to develop small-scale solar power in rural towns and villages in Ghana. You can read his blog and check out his podcast at HughWhalan.com.
Hugh kindly agreed to answer the following questions about his work in Africa.
MNN: How did you end up working on solar power in Africa?
Hugh Whalan: I came to the U.S. in 2007 to work in in the voluntary carbon credit markets when they were about to become ‘the next big thing’. Well, the carbon markets fizzled, but I learned a lot about startups and business development and along the way became interested in the idea of using carbon credits as a way to finance small scale energy projects — stuff like solar lanterns, tiny solar home systems and cookstoves which benefit the 4 billion poorest people on the globe who earn $1-$6 per day and spend up to 30 percent of this on polluting and expensive fuels such as kerosene, charcoal, candles and batteries.
This interest led me to co-found Energy in Common, which was a crowdfunding site that allowed individuals to lend money to micro-scale green energy projects in East and West Africa. That was my introduction to solar in Africa.
What has starting businesses in Africa taught you?
The big lesson I have learned is that persistence and passion can make up for almost anything you lack – money, talent (well, maybe you need a smidgen of talent), experience… and pretty much whatever else you don’t have!
When we set up the crowd-funding site, Energy in Common, I’d never done business in Africa, didn’t know microfinance from a bar of soap, and knew nothing about designing or coding websites. When I set up Impact Energies, which eventually imported its own branded solar products from China and distributed them through microfinance partners, I knew nothing about importing and less than nothing about how to get stuff manufactured in China. In my current business, Persistent Energy Ghana, I am less of a newbie, but there’s still stuff I grapple with every day.
Whether it is setting up an energy services business in Africa or something else, I’ve learned that its all a lot more possible to you and I, than it might seem.
What lessons can big companies in the U.S. learn from what you’re doing in Africa?
I think many big companies look at Africa and all they see is risk – they think the customers are too poor, the countries are too unstable, and cultures are too different. Risk certainly exists, but they are missing the bigger picture, which is the huge economic opportunity that is literally in front of their noses.
Even the poorest people are still consumers. Like you and I, they make decisions about what to buy each and every waking hour. Collectively people earning $1-$6 per day spend over $5 trillion per year, roughly equal to the GDP of the third largest economy in the world. Big companies should take these types of customers (and the countries they live in) more seriously because they very likely represent the next big frontier of rapid growth.
What has surprised you the most about your job?
I am surprised by how rapidly the social enterprise and small-scale solar ecosystems have grown over the last five years. When I started out in this space, there were less than a handful of solar suppliers I could work with. Now there are many dozens. There is so much interest, and so much more money flowing in.
That is great news because the hardest thing about my job was often that it was lonely — particularly when I started out in 2009 using my bedroom as an office — a lot of travel was required and my team was scattered across many time zones. Now that there are lot more people doing similar stuff, its easier for me to talk to people who can commiserate (or celebrate!!) over the ups and downs of the job.
What’s next in Africa?
Together with my business partner, Nate Heller, I am focused on delivering pre-pay solar energy to poor off-grid customers in Ghana through our company Persistent Energy Group. We have big plans, and if we can make the business model work in Ghana, we’ll expand to other countries in West Africa.
Who is one person doing good in the world (besides yourself) who we should know about and why?
I think Vikram Akula at SKS microfinance did some great things using market based approaches to social issues such as poverty. He took SKS microfinance public in 2010 on the Indian Stock Exchange. While SKS has had its fair share of problems, its rapid growth and the productive discussion it encouraged about market based approaches was incredibly important. SKS, with a for-profit approach, is often compared to Grameen Bank’s nonprofit approach. The following quote sums up the difference (and the importance of market based approaches used by those like Vikram):
"Grameen Bank reaches 7 million clients and that's amazing...[but] it ... took 35 years to do that... Can you imagine how many generations it will take to reach 150 million poor households in India if we took that approach? We have to scale more rapidly, and only commercial capital will meet our huge funding requirements."
The world? No.
Humanity? Probably needs a good kick in the pants and a serious amount of time in the corner with the dunce cap to consider why we are trying our hardest to ruin what we have.
(A note from Shea: I invited Hugh to come up with and answer his own question here)
Why do you think young people and mid career professionals who are searching for jobs in the U.S., Europe or elsewhere, should seriously consider starting a company in a developing country?
The job market at the moment is tough, even for people who are insanely qualified. These tough job market conditions offer an opportunity to take a risk and try to do something really different – like starting a business in a developing country. This can be a great option because:
• A little bit of money can go a long way in a developing country - I recently interviewed a 26-year-old English journalist who started a newspaper in Argentina with £3500 (!!!) and sold it less than three years later.
• Markets are often not as competitive, so there are typically a LOT of opportunities to open just about any kind of business you could think of. Bianca Forzano is a great example of this with her extreme sports bikini fashion label in the Dominican Republic.
• You can combine a sensible amount of adventure (FUN!) with real life business experience.
The absolute worst that can happen is that you don’t make the business work, but what you can gain is great stories for your friends and family as well as fantastic experiences to talk about in job interviews that will set you apart from the competition. Who knows… you may even make your crazy business idea work!!
(Another note from Shea: Hugh got excited and came up with a second question to ask himself.)
You’ve just started a blog and podcast focused on Destination Entrepreneurs. Tell us about that.
My blog and podcast focus on sharing the stories of people starting cool businesses in exotic locations — I call them Destination Entrepreneurs. I am excited about sharing practical resources, lessons and experiences from people who have ‘been there and done it’ with those that are interested in ditching their 9-5 life in order to pursue their own business idea off the beaten track.
In fact, if anyone reading this knows someone who would make a good candidate for an interview for my podcast, get in touch. I’d love to hear from you!
Want to learn more about Africa? Check out these stories here on MNN: