What exactly does Quetsol do?
We aim to alleviate rural poverty by providing micro-scale appropriate-technology solutions. Specifically, we sell solar kits — combinations of small solar panels, batteries and other components — that give our customers renewable electricity to power light bulbs and charge mobile phones, laptops and a variety of other devices at a price that’s cheaper than candles. Besides a 10-watt unit that powers a LED bulbs and mobile chargers, we’re launching a 75-watt system that powers large devices like TVs, radios, and computers. We also have a 30-watt unit in the works, which will power a laptop.
Our entire target demographic is rural villagers whose primary access to light is candles — we design with their needs in mind and in collaboration with them. We ask our customers about the design, and according to their feedback we evolve the products and make necessary adaptations. We’re soon going to open-source everything, so that not only will people be able to fix the systems themselves, but build them from scratch if they want to — not just in Guatemala and Latin America, but anywhere.
How did you get involved in this project? What’s your background, and how did you get excited about identifying these people and these needs?
I grew up in Guatemala City and went to Harvard to study astrophysics and physics. Afterwards, I worked for a few years in finance, which got me thinking a lot about natural resources and consumption and the way the world is being currently administered, at least with regard to natural resources. It also got me thinking about the severe lack of basic services giving rise to dire humanitarian consequences — poverty, health problems, lack of education. When thinking about how to best spend my talents and time, I thought, “What better way than to help solve these problems for my own country and people?” It seems the gravest difficulties are the ones we pay the least attention to. Because they seem so insurmountable, we just kick the can down the road. I got tired of having that attitude.
I know it appears that astrophysics to solar energy is a big leap. I was always really interested in astrophysics as a personal, philosophical, spiritual pursuit, but life is so short, and the problems facing us so big and so easily solvable at the same time. I couldn’t justify to myself locking myself away in a closet without looking at them.
Why did you choose to focus on solar energy?
Poverty has a whole host of variables nonlinearly correlated with each other, but energy is a key variable. Not having access to lighting at night has been demonstrated time and again to severely limit educational progress, yet it’s a relatively easy to solve problem. Water and agriculture are also key, but I don’t know much about them. I did know that a solar panel could easily accomplish all the basic tasks of lighting and communication. And the personal computer is the window into all available information. So we figured solar energy would offer the most value for money.
Our customers also have mobile phones, which are an important economic tool. Guatemala has a very robust telecommunications system, and phones can be acquired quite cheaply. People spend money on prepaid minutes and charging the handsets, which sometimes involves walking up to two hours in one direction, two hours back for the nearest power outlet. So it’s a great loss of productivity, and the cost adds up as well, at 70 cents or so per charge. Being able to charge a phone at home is a great relief.
How did you identify your villages?
When we started doing the market research, we wanted to find out exactly how much people were spending on what in terms of light and power. Simultaneously, we did product research. How would it cost to produce each unit? With my friend and cofounder Juan Rodriguez, I drove around to random villages, knocked on people’s houses and said, “Can we ask you a few questions?” They would be very nice and let us in. After we had gathered all the information, we said, “Definitely. There’s demand. The economics work. We’ve got to do it.” With our idea, we entered and won a business plan competition sponsored by AIDG, an NGO that was created by Peter Haas, currently a Senior Fellow. This gave us $50,000 of initial financing. Adding that to $25,000 of our own money, we got started with $75,000, with which we purchased the first round of inventory and covered operating costs. We’ve continually grown, selling six units the first month to close to a thousand a year later.
So this is an entrepreneurial business model, not a charitable humanitarian project.
That’s right. All our clients pay for their units. Not many can come up with the $240 up front, so eventually, we formed a partnership with a large microcredit NGO, which had 60 branches all over the country. The NGO offered the credit to the customers, and when they purchased units, we would get paid immediately, while the foundation handled the repayment obligations. This left us free to handle our technical servicing and guarantees.
Why is it important that this be a for-profit business rather than a technology that’s given away?
It’s been demonstrated time and time again that people tend to not value what they’re getting for free. But when people have a financial stake in something — or, to use the industry parlance, they have skin in the game — then they take care of it. They feel responsible. Yes, of course, we need profit to produce more inventory, and pay for the growing infrastructure that it will take to cover those half a million homes in Guatemala without light, and eventually Latin America and beyond. That takes economic sustainability, which can only come from revenue.
Quetsol does have a charitable side: we’ve structured a foundation which will allow people interested in donating — we’ve had a lot of interest — to get those fiscal benefits, too. And Quetsol the enterprise will sell to Quetsol Foundation, which gets a discount. But even the foundation has a policy of no giving away. So, for example, we have a community of a hundred households. Then, rather than give away a hundred units, for example, we’ll heavily subsidize them, so each household will pay something like 25 percent. That pool of money then goes towards getting a large system for the community as a whole — for a school or for a clinic, for example. This way, people will feel they’ve made an investment, while still contributing towards the community as a whole.
How will the open-source aspect of your business plan work, and how will that benefit you as well as people who are using it?
We will be publishing a booklet on how the technology is put together, and distribute it free in booklet form and on the internet, hopefully in the first quarter of 2012. Open source benefits everyone. It will benefit our customers because they’ll have all the information available to them. We do offer a full-service warranty, so it’s our obligation to make sure the technology works or otherwise repair or replace. But it’s valuable to learn how your own machines work. More importantly, open-sourcing it will allow others around the world to do it. There are 1.5 billion people without access to electricity. If Quetsol were to try to provide light to all of them, many more generations of children would have to live in darkness. I would rather disseminate quickly to everyone. How does that help us? Well, it helps us achieve the mission — which is NOT to make the most money possible, but to solve the problem. And making money is a requirement if we want to solve the problem. It’s the means to the end. We’ll reach this goal faster if there are many companies doing what we do.
What’s it been like to be a TED Fellow?
It’s been an incredibly inspiring opportunity to meet some of the world’s most gifted people doing some of the most world-changing and beautiful work. The most powerful aspect for me has been getting exposure to incredible ideas woven in such a multidisciplinary way – it literally feels like your brain is opening and expanding at a TED conference.
The Fellows program itself has provided me with great support through a coaching program, an amazing network within my field, and an incredible group of people that are constantly feeding my brain with great ideas and resources with which to accelerate my project. I’ve been inspired personally by the work of such individual TED Fellows as Marcin Jakubowski of Open Source Ecology. In general, I’m most thankful for the inspiration I get seeing such amazing people work from so many different angles to express and advance humanity.
What’s next for Quetsol?
We’ve been busy expanding our operations and infrastructure. We’re now opening up a second servicing branch in Coban, a part of the country where there’s the least electricity coverage, and where our sales were the strongest in the last year or so. Until now, we’d been doing all post-sales servicing via phone and mail. The new branch allows customers there to get their units serviced by walking into a shop. We expect the majority of our customers to be in this region in the long run.
So far, we’ve reached about 200 villages, and from July 2011 to now we’ve sold about 500 systems. And we’re about to hit a very heavy growth phase. Until now, we’ve had 60 distribution points with working in partnership with one microfinance service. But recently, we signed with the largest bank in Guatemala, which has close to 900 branches. We’re going to start with a pilot project, opening 50 distribution points at the bank’s branches where customers can buy the product AND get credit. Once those are up and running, we’ll distribute via all branches of that bank, which should take us to about 700 distribution points. Of course, we’ll increase our inventory accordingly to fulfill the increased demand.
There are many aspiring social entrepreneurs out there who are trying to take their passion and ideas to the next level. What one piece of advice would you give them, based on your own experience and successes?
Not taking “no” for an answer. The “no” can come in many different forms; from being told “It can’t be done” to thinking “No one is doing it, it must not be worthwhile” — from obstacles that hint it shouldn’t be done to apparent personal obstacles. “No” can be quite a frequent occurrence, and if you accept it easily, your idea is more prone to failure.
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