A Lesson in Systems Change.
Lindsay Stradley, Sanergy Co-founder (photo: Gordwin Odhiambo for Magnum Foundation)

A Lesson in Systems Change.

Lindsay Stradley, David Auerbach, and Ani Vallabhaneni understand what it means to innovate at the edges while keeping an eye to wholesale systems change. They understand that some systems are so complex, colossal, and dysfunctional that moral innovation is required. This is the kind of experimentation aimed at solving problems in ways that put our shared humanity at the center, starting where you can, usually at the margins, while relentlessly insisting on sustainability and scale.

These co-founders chose an especially wicked problem: inadequate sanitation. One in three people on Earth lack access to a proper toilet. The lack of toilets is a public health crisis, yet governments the world over have failed to provide proper sanitation to their most vulnerable citizens. The large majority of all public sanitation funding goes to the top 20% of income earners. Meanwhile less than 6% is set aside for the bottom quintile of the planet’s population who live without sewage, often relying on dirty, dangerous, and overflowing pit latrines or open defecation.

Sanergy’s co-founders pursued a business model based on the principles of the circular economy: reduce and reuse waste and improve resource productivity. They would build a network of toilets operated profitably by local residents who had a strong stake in the community. They would collect the waste daily, convert it into fertilizer, and they would sell it to farmers — a system that would "turn waste to gold." Of course, changing the status quo is easier said than done.

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Lindsay Stradley, Sanergy co-founder speaks with a Fresh life entrepreneurs in Mukuru (photo: Gordwin Odhiambo)

I spoke with co-founder Lindsay Stradley about Sanergy’s journey to scale and the evolution of her company since its founding in 2011.

By starting with local entrepreneurs who purchased and maintained fee-based toilets, the co-founders were able to build a strong and recognized brand, and, as Lindsay said, “raise the bar of what people can and should expect the sanitation experience to be, close to your home. It should be clean, open, whatever you need.” 

The co-founders also came to see that local entrepreneurs alone are insufficient for systems change. The model of selling directly to local residents fell short in providing on-demand nearby accessible sanitation 24-7. So the company started selling to larger residential housing systems serving low income people. Interestingly, the landlords absorbed the cost of toilets without passing the costs onto tenants. “Good sanitation makes for happier customers,” Lindsay explained, and that is good for long-term success. Sanergy also provides sanitation services to over 200 schools that began to see higher enrollment and retention rates. Especially for girls, who are more likely to drop out once they begin menstruating if proper sanitation is not available.

As Sanergy grew from serving thousands to more than a 140,000 people living in informal settlements, government began to view the company as a partner. “From a systems perspective,” Lindsay told me, “it is important to look at the whole community, recognize the gaps or the “leakage” (where government services were failing) and determine what role Sanergy could play to help.” 

In Mukuru, this meant helping government remove waste from public pit latrines. The latrines traditionally are cleaned by community members called “frogmen” who use buckets to manually empty the pits of waste. Though not a financially profitable endeavor, Sanergy was able to make the process of emptying latrines safer — and thus build trust and credibility with government.

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A worker after replacing toilet carriers at a school in Mukuru, Nairobi. (photo: Gordwin Odhiambo)

In a perfect world, a sanitation company that operates at the degree and level of Sanergy’s sophistication would partner with government to deliver services on contract at revenue levels that covered the company’s costs. But a decade after launching, Sanergy still must subsidize operations to cover costs and hire talent whose job is simply to maintain relations with government.

Sanergy is now a hybrid company, operating not only a major sanitation business, but a for-profit organic waste management and reuse business — which manufactures and sells organic fertilizer, insect-based animal protein meal, and biomass briquettes for clean energy. When Sanergy first envisioned selling organic fertilizer from human waste, I thought the company would have a long road to market creation. And it has. But not for the squeamishness that I’d thought smallholder farmers would feel at the origin of the waste. Instead, Sanergy found itself in “market creation mode.” In other words, building new habits and practices requires overcoming enormous obstacles. While fertilizer purchases are growing, the company has a way to go.

Given the reality of low fertilizer margins, Sanergy surveyed which re-use products within the circular economy might both serve farmers and generate profits. The team identified black soldier fly larvae and as it turns out, Sanergy’s animal protein feed is better than existing products because of its quality, consistency, and price. “Because smallholder farmers already practiced purchasing animal feed, the path to take-up was faster and ultimately, it turned to profitability more quickly.”

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Workers filling fertilizer bags at a Sanergy factory in Kineni, Kenya. (photo: Gordwin Odhiambo)

I asked Lindsay to share a few lessons of success. First, she said, “To scale many of the critical services needed for the poor that can be done market based, you have to do them in partnership with the government.” And you must design for partnership right from the start. 

Second, invest in people. “We need to transition now from a startup mentality to scaling to reach millions of people. Make sure you think about this and transition early enough. And third, she added, be intentional “about the kind of initial investment you are making in learning and innovation.” 

Rather than ask the customers to wait, sometimes for decades, for government to lay sewage pipes, Lindsay says, Sanergy offers “a way to do this right now, using markets collaborating with the communities that we serve to do this safely, effectively, and affordably.” Once you have a model, the chance for more radical reform is possible.

And yet, a new generation sometimes critiques social entrepreneurship and impact investing as “tinkering at the edges” rather than effecting wholesale change. Of course, there is some truth to the allegation as many companies do shift away from purpose toward profits to survive. Social entrepreneurs like Sanergy may have started out as “idealistic social entrepreneurs who are going to solve all the world's problems through business.” But because the Sanergy team has kept their eyes fixed on their north star and critically, the human beings they had come to serve, they have succeeded in going where governments had failed and markets alone would not work. In this, they are leading a new path to building solutions in which all people have access to an essential element of human dignity: a clean, safe toilet. That shouldn’t be too much to ask.

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Jenifer Adhiambo, a Fresh Life entrepreneur cleaning her station in Mukuru, Nairobi (Photo: Gordwin Odhiambo)

This is part nine in Jacqueline Novogratz's monthly series on Moral Leadership, featuring a new generation of leaders for a new economy. The photos in this piece were created by Gordwin Odhiambo, grantees of the Magnum Foundation, as part of a partnership to invite readers into the stories that are shaping our shared future.

About Acumen

Acumen is changing the way the world tackles poverty by investing in companies, leaders and ideas. We invest patient capital in businesses whose products and services are enabling the poor to transform their lives. 

About Magnum Foundation

The Magnum Foundation is a nonprofit organization that expands creativity and diversity in documentary photography, activating new ideas through the innovative use of images. Through grant making and fellowships, the Magnum Foundation supports a global network of social justice and human rights-focused photographers, and experiments with new models for storytelling.

Diego Fuentes

Strategist at Kirkoswald Asset Management LLC

2y

What a wonderful example of real world social entrepreneurship. Congratulations to all those involved, particularly on the innovative business model and the creativity of generating value added products from waste.

Chrys Hutchings

Managing Director & Adjunct Professor ~ Bates Center for Entrepreneurship and Leadership at Lewis & Clark College

2y

Great article! Your readers might be interested to know that Sanergy is cohosting a webinar series with us and PASA, Working Effectively with Manual Pit Emptiers to Achieve Safely Managed Sanitation. You can learn more and sign up here: https://bit.ly/3uhYEV4

Fiona Hazell

MAD Co-Founder | Social Innovation Enthusiast |

2y

Mike Debelak Lorah Njagi Holmstedt Anna Kendall Samuel Malinga Henry Othieno Emelie Ekblad Svitlana Pinchuk seems like trying to address the larger system isn’t so MAD after all ;) I like Lindsay’s point about designing for scale from the start - something Peter Muungano said from day one.

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