THE BLOG
11/30/2016 09:37 pm ET Updated Dec 06, 2017

A call for more entrepreneurs to focus on toilets

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Entrepreneurs are everywhere these days, not just in the purely for-profit world but also those looking to create social, as well as financial, gain.

As the international development community grows, entrepreneurial thinking is becoming ever more mainstream, with social enterprises demonstrating how to create businesses that deliver social benefit. As Naveen Jain, technology and spacecraft entrepreneur, once said, "There is not a problem that is large enough that innovation and entrepreneurship can't solve."

Well, if talented social entrepreneurs around the world are looking for a large problem in need of a solution - and given that it is World Toilet Day on Saturday - I would encourage them to look at the sanitation crisis currently gripping the world, and particularly the challenge in cities.

Urban sanitation: one of the biggest challenges in the Sustainable Development Goals

Here's a quick summary of the sanitation crisis. One in three people around the world lack access to a safe, clean toilet. Diseases attributable to poor sanitation currently kill more children globally than AIDS, malaria and measles put together, and diarrhoea is the single biggest killer of children in Africa.

In cities, the issue is particularly challenging. Most of the one billion people who live in informal urban settlements lack access to a proper toilet, and it is extremely hard to improve sanitation in densely populated, unplanned and poorly constructed urban slums.

In my view, this is one of the biggest challenges contained in the Sustainable Development Goals. There simply isn't a clear pathway as to how we meet the ambitious targets set out by the world.

An entrepreneurial opportunity

So why is all this an opportunity for entrepreneurs? Isn't it the job of utilities to provide sanitation? Aren't citywide institutions better suited to providing citywide services?

Here's why it is an opportunity.

Firstly, many city utilities need help delivering sanitation services in low-income communities, particularly where sewers - which are the typical way of transporting human waste - do not exist. So there is a huge need that needs plugging.

Second, low-income residents can - and will - pay for sanitation services, just like people do in developed countries: as long as the service is affordable and meets people's needs.

People want to lead dignified and healthy lives, and paying a small amount for a safe, clean toilet is an important part of that. Its certainly a better alternative for people than having to use public toilets (which are often unsafe and unhygienic, and don't come free anyway), or relieving themselves outside i.e. open defecation.

A number of smart entrepreneurs have identified this opportunity, and have been investing in different ways to deliver cheap sanitation services to low-income customers. We've been supporting sanitation businesses for many years, particularly in Bangladesh, Ghana, Mozambique and Zambia - although we're certainly not the only ones, and businesses such as X-runner in Peru, SOIL in Haiti, Pivot Works in Rwanda and Sanivation in Kenya all are developing interesting business models.

Bring on the innovation

The innovation that entrepreneurs can bring is needed in a number of areas. Firstly, in the design of toilets which low-income customers can afford. If a toilet to be shared by a group of families costs $500 to build, but the dirty public toilet costs $0.05 per use, you can guess which one will win - even if the public toilet works out more expensive in the long run. This is particularly true among low-income customers who find it easier to pay small amounts regularly than large one-off amounts.

Second, in the collection of waste. Without sewers, there needs to be another way to move waste safely from a toilet to a treatment facility. There are different ways to do this, which different businesses are exploring, but we need more efforts to find methods that can be safe, hygienic and affordable.

Third, in the re-use - and sale - of treated waste. Human waste, properly treated, can be re-used but there are obvious health implications if this is not done correctly. And whilst this can be an important revenue generator, we of course need to find ways to overcome natural repulsion to products derived from human waste.

Pivot Works in Rwanda and Sanivation in Kenya are looking at this problem in different ways; the services we have developed in Lusaka, Zambia produce soil fertiliser which can be sold.

Creating the environment for entrepreneurs

There is a complication, though. In many sectors, entrepreneurs are able to create successful products and services without the involvement of other organisations. But not so in the sanitation sector.

Our experience has shown that sanitation entrepreneurs are highly unlikely to develop scalable businesses if they don't receive endorsement and support from the public sector in their city - particularly because a business focusing on the bottom of the pyramid is operating on extremely narrow margins.

For example: dealing with waste, without access to citywide waste treatment facilities, would be pretty much crippling for a sanitation business. And assistance from the public sector, by giving access to unused assets such as vehicles to transport waste, can significantly reduce start-up costs for an entrepreneur.

Persuading cash-strapped utilities to provide this kind of support is not easy. But through patient relationship building, it can be done - and we've found that the buy-in of city utilities and municipal authorities is an absolutely essential part of making a sanitation business successful.

Public private partnerships in action: SWEEP

If all that sounds too complex to justify entrepreneurs getting excited about sanitation, let me wrap up on a positive note. In 2015, in Bangladesh, we launched a business called SWEEP, which provides septic tank emptying services for low-income customers in Dhaka. At the heart of the business model was a simple lease contract with the Dhaka utility, DWASA, enabling SWEEP to use two vacuum tankers which DWASA was not using.

Some 20 months on, the business has served around 80,000 customers, is making money and we're looking to expand the model to Chittagong, Bangladesh's second city. The model is far from perfect, and there is a lot more that we can do to improve its effectiveness, but its a good start, and it shows how sanitation businesses can bring real social value to urban communities that were previously under-served.

Let's hope that come next year's World Toilet Day, we'll have more entrepreneurial successes to report.