TOR025: Takamoto Biogas With Kyle Schutter

kyle inside biogas system-sm

WHO IS KYLE SCHUTTER?

Kyle Schutter is the Founder and Managing Director of Takamoto Biogas.

Trained as an engineer at Brown University, Kyle researched biogas in Kenya, Uganda, Rwanda, Ghana and the USA before in 2011 he founded a company that constructed individual biogas systems for small-scale farmers in rural Kenya. After two years of operations, Kyle invented the Takamoto Pay-As-You-Go Biogas business model and technology to enable more people to access renewable energy without a large up-front capital investment.

Kyle has received the Enjuba Young Entrepreneur Award, Heinberg Social Innovation Award, received “Special Recognition” from the Sankalp Africa Summit 2014 and took second place in the William James Foundation Business Plan Competition. He has lived in Kenya for the last three years and continues to search for innovative solutions to provide sustainable, modern energy for rural communities.

You can connect with Kyle here:

https://twitter.com/kyleschutter

https://ke.linkedin.com/in/kyleschutter


IN TOR 025 YOU’LL LEARN ABOUT:

  • Takamoto, and innovative biogas production device with an equally innovative distribution system that is making biogas finally accessible to everyone in North Africa.
  • Kyle’s travels, both throughout the continent and between worlds, from academia to entrepreneurship, and from researcher to manager.
  • His views on why starting small can be better, why incorporating into a for profit made more sense in terms of social impact, and some African anecdotes.

OUR CONVERSATION INCLUDES THE FOLLOWING:

Organizations

  • Takamoto biogas
  • William James Foundation

Topics

  • Biogas
  • Biogas barriers of entry
  • Energy consumption
  • Network independent energy provision
  • Financing
  • SMS
  • Language
  • Delegate

Places

  • Nairobi, Kenya
  • China
  • Nigeria
  • Ghana

EPISODE CRIB NOTES

Takamoto biogas

2011 Founder, managing director

Work with ideas, solve problems. Is involved in tech testing, stress varies day to day.

Takamoto provides biogas for farmers by processing organic waste in tanks.

Customers are charged for gas used, without start-up costs.

It grew from his university research. He opted to launch instead of a doctorate.

Traveled around Africa to find how people make and use energy.

He had saved money, got into business plan competition. Did not win but got attention, donations.

Kenyan business partners. Not great success.

Progress came slowly, he relied on many grants before achieving profitability.

11 person staff.

There is large demand because of the benefits, environmental and network independency.

 

The technology

He initially envisioned selling the devices. In the business plan he realized there were two potential pitfalls: quality of installation performed by customer, and financing.

He realized he could develop a logistics system that would also ensure quality control, benefit farmers better, and would also ensure Takamoto’s continuous flow of income.

Biogas is huge in Africa, but the cost of entry is prohibitive. Cost of gas in Africa can be costlier than in the U.S. or Europe.

Installations are metallic, new ones are plastic. Built in China.

Takamoto name “just sounds cool. Kind of Asian, kind of meaningful.

 

Customer development

His first customer had a fleet of buses, they ended up talking, he bought in bulk, spread the word.

Customer grew by talking to people, going to villages. Early on demand surpassed production capacity.

Financing is part of the business because Takamoto eats the setup and risk, banks are wary.

Trackers measure gas consumption, integrate with SMS for alert. People request activation code to get the tank going.

SMS technology is outsourced.

 

R&D, people, challenges

Almost every aspect of our business we had to invent in someway.” Tanks, pipes, software.

A wider frame allows to invest in long term customer relationships.

Few tanks have had to be uninstalled, mostly for low use.

People knew biogas, they could not afford it but there was recognition.

Language is a barrier, there is a lot of diversity in the region. It affects technical support deeply.

It’s not hard to find people who do the work well. “Kenya has a strong workforce.” Lots of automation and self-help speed things up.

 

On scale, quest for profit

Starting a company with too much money too early is dangerous.

As frustrating as it be, scarcity improves problem solving.

The value chain has been challenging, Kyle would like to partner up with local logistics experts.

For profit provided a better alignment of interests. It ensures delivery better, that right motivations are in place, and social impact is granted. “It pushes a virtuous cycle.

Funding is always needed. Rounds of investing are coming, but sustainability implies a long term financing partner for the installations.

 

Kyle in Kenya

Early on, he read a lot of books on business and innovation.

Learning to let go, delegate, and not being liked, were the hardest ones.

He’s happy at Kenya, his second home. National and U.S. governments have some feuds, it might affect his resident status in some capacity

Launching a business is not too daunting, it took about three months. “I don’t have anything to compare it to. I have only started a business in Kenya.

He gets support from his friends abroad. “Not a lot of sharing knowledge, but some shoulders to cry on.

 

Tools, technologies

Dropbox as loss prevention system.

There is still a lot of paper in the field.

 

Story

His first business partner tells him he needs some cash to avoid prison. Kyle helps, the next day he finds out his partner was doing another project for which he had missed payment and a priest was after him. He was covering a hole in that project with funds from Kyle’s project. “We stopped working together.

 

Advice

I thought about all of the existing opportunities in the world.

It is tough, but he invests in his support network of family and friends.


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