developing an innovative value proposition to replace

JacobP.BussmannStudentnr.:900105-152-050MSc.MUEUrbanEnvironmentalManagementMasterThesisManagementStudies(MST)September,2016Supervisors:ValentinaMateria(MST),ThomasLans(ECS)

DevelopingAnInnovativeValuePropositionToReplaceParaffinIn

SouthAfricanlow-incomecommunities

BasedonthecaseofSesoloMelloB.V.workingintheKayamanditownship,

WesternCape,SA

JacobP.Bussmann ValuePropositionDesign“SesoloMello” September2016

I

IherebyagreetotheWageningenUniversity(WUR)plagiarismguidelines.ApartfromWageningenURinternalprocessesforthepurposeofassessingthethesis,the

contentofthisthesismayonlybecopiedordistributedafterreceivingawrittenconfirmationofJacobPaulBussmannand/orSesoloMelloB.V..Moreover,contentrelatedtothebusiness

model,dataandconceptofSesoloMelloB.V.isprotectedbyIPRandstayswithintheownershipofSesoloMelloB.V.andJacobPaulBussmann,eventhoughpublishedbyotherstakeholders.

2016

JacobPaulBussmann


II

Tableofcontents

I. ABSTRACT III

II. ACKNOWLEDGEMENTS IV

III. GLOSSARY V

1. INTRODUCTION 1

1.1. IMPACTOFCOOKINGPRACTICES 11.2. VALUEPROPOSITIONSOFEXISTINGSOLUTIONSANDCOMMONPITFALLS 31.3. THESESOLOMELLOB.V.CASEINTHEWESTERNCAPE 61.3.1. CONCEPTIDEA:LIQUIDBIOFUELASPARAFFINREPLACEMENT 71.3.2. SESOLOMELLOINTHECONTEXTOFSOCIALENTREPRENEURSHIP 101.4. RELEVANCE 11

2. THEORETICALFRAMEWORK 12

2.1. COMPOSITEPROJECTSTRUCTURE 122.2. RESEARCHOBJECTIVE 122.3. MAINRESEARCHQUESTION 132.3.1. SUB-QUESTION:CUSTOMERVALIDATION 14

3. METHODOLOGY 15

3.1. DEFINITIONOFTERMS 153.1.1. VALUEPROPOSITIONDESIGN 153.1.2. BUSINESSMODELCANVAS 193.2. INDUCTIVEQUALITATIVERESEARCHDESIGN 213.2.1. RESEARCHPARADIGMSINTHELIGHTOFENTREPRENEURIALVALUEPROPOSITIONDESIGN 213.2.2. THEMOMTEST&IREPA:ASKINGTHERIGHTQUESTIONSINTHEBOPCONTEXT 223.2.3. SAMPLINGSTRATEGYFORINDUCTIVERESEARCH 253.2.4. SEMI-STRUCTUREDINTERVIEWSINTHEBOPCONTEXT 253.2.5. FOCUSGROUPRESEARCHINTHELIGHTOFBOPMARKETS 273.3. DESCRIPTIONOFWORKPERFORMEDINSOUTHAFRICA 29

4. RESULTS 32

4.1. VALUEPROPOSITIONCANVASFORSESOLOMELLOAPPROACH 324.1.1. BUSINESSMODELCANVASFORSESOLOMELLOAPPROACH 384.2. CONCLUSIONVALUEPROPOSITIONDESIGNPROCESSAND“SOCIALFEASIBILITY” 40

5. DISCUSSION 41

5.1. IMPLICATIONSFORTHESISOBJECTIVEANDSESOLOMELLO´SAPPROACH 415.2. RELEVANCEOFRESULTS 44

6. CONCLUSIONS 45

6.1. LIMITATIONS 456.1. RECOMMENDATIONS 46

REFERENCES 48

APPENDIX 51

A. COLLECTEDDATA 51


III

I. AbstractHouseholdairpollutionpresentsamajorsocialandenvironmentalproblem.TheWHO(2014)

states, that3billionpeoplecookandheat theirhomesusingopen firesandsimplestoves,

using impure fuels like paraffin. This results in approximately 4 million people dying

prematurelyfromillnessrelatedtocookingwithsolidfuels.Womenandchildrenaremostly

affected.ParaffinmainlyprevalentintheSouthAfricantownshipcontextisoneoftheworst

pollutants,causingnotonlydiseasethroughhouseholdairpollutionbut,incombinationwith

unsafe stoves, causes large shack fires everyyear.Moreover, residential solid fuelburning

accountsfor25%ofglobalblackcarbonemissions(Taitetal.,2013).

GovernmentsandNGO´s like theGlobalAllianceForCleanCookstoveshavebeen trying to

introducealternativestovesandfuelsfordecades–withlittlesuccess.Reasonsforthisare

amongothers:ForeignDesignwithoutlocal“buy-in”,underestimatedhurdlesofbehavioral

change,unaffordablesolutionsandlimitationsthroughlock-indesigns.

ThisentrepreneurialresearchistargetedatsupportingthesocialenterpriseSesoloMelloB.V.

insurroundingthesepitfallsbydevelopingasustainablevaluepropositiontoreplaceparaffin,

valid for township communities in theWestern Cape, South Africa. The value proposition

canvas,asbasis forSesoloMello´sbusinessmodelwasutilizedtodeductrelevantresearch

questions,andconductapropercustomervalidationprocess in theKayamandi township -

underlinedbyprinciplesoftheIntegratedRenewableEnergyPotentialAssessment(IREPA)

approach.

Theresultsofapplyingthevaluepropositiondesignprocess,showthatthebestwaytoreplace

paraffinandothersolidcookingfuelsinWesternCapeTownshipswouldbetoestablishthe

provision of cheap electricity through centralized or decentralized electricity production.

Since thisdevelopment iscostlyandonlyslowly facilitatedby thegovernment,next to the

incurredcostsforcustomers,tobuyanelectricalcooker-atransitionsolutionisadvised.

Thederivedvaluepropositionresultsintheintroductionofafluidbiofuelalternative,based

onwastevegetableoils,thatcouldreplaceparaffinonebyoneintheexistingcookstoves.Itis

wellperceived,avoidsthecommonpitfalls–basedonthecurrentknowledgebase-andchecks

mostcustomerrequirementsinthevaluepropositioncanvas.Thissolutionwouldbeableto

createsubstantialimpactnotonlyintheWesternCapebutinthewholeSouthAfricancontext,

where 650 million liters of paraffin could be replaced yearly, with a reduction of toxic

householdairpollutionby90%.

This value proposition design does not claim to be complete or be technically and

economicallyfeasible–thiswillstillbeevaluatedbySesoloMello.However,itcanbeseenas

arepresentationofcustomerpainsandthewishtotransitionawayfromparaffin.Moreover,

itaimstopresentadifferentviewonsustainableentrepreneurshipinBOPmarkets.


IV

II. AcknowledgementsThis thesis does not only represent the six months I spent in South Africa, researching and

workingintownshipcommunitiesofAlexandra,Kayamandi,Khayelitsha.Itrepresentsthestart

ofanentrepreneurialjourneyandapersonaldevelopmentwithalotofstrugglepairedwithalot

ofjoy.ItallstartedduringtheClimate-KICsummerschool2015,whereRoyHendriks,Nicode

Vriendt,MaxBedouétandIwereaskedtofindaglobalproblem,thatwewouldliketoaddress

during the summer school, and the astonishing environmental damage, emissions and health

issuesrelatedtocookingpoppedup.This leadtoawinningbusinessplandraft, thanksto the

support of our coachesAga andPete andwell-connected influencers in ournetwork opening

doorstorelevantinformation.Afterthejourney,thankstothesupportofClimate-KIC(Mobility,

GreenhouseandAccelerator)andWageningenUR,weacquirednecessaryfinancialsupportand

IwasthefirsttogotoSouthAfrica,beingabletocombinemythesisresearchonsitewiththe

validationoffirstideasaroundreplacementofparaffin.

Ofcourse,therehavebeenmanychallengesalongtheway,butIamgratefulforhavingdonethis

journeywithamazingpeople,likeRoy,Nico,Max,Aeneas,JanandJames!OntheSouthAfrican

side,therehasbeensuchagreatsupportbyJuniorAckeemNgwenya,HuubvanZwieten(Clean

CookingRevolution),BerniceRobbertse,BonnyHorbach(ConsulateCapeTown-Kingdomofthe

Netherlands)andamongmanyothers,especiallyGeorgeArrey(HealthPromotersSA),whodoes

amazingworkoneducation,preventionandgeneralsupportaroundhealth-relatedchallengesin

SouthAfricantownshipcommunities.Youdeservemoresupportandfunding, that is forsure!

Moreover,Iwanttothankallthecommunitymembers,mostlywomen,thatwereopenformany

interviews,workshopsandbrainstormingsessions. I learned that listeningcangetyoua long

way,especiallyinfindingmutualunderstandingandjointsolutionswithcompletebuy-in.Thank

youforyourtrust.

I want to thank Valentina Materia, Thomas Lans, Bart Doorneweert, Marjo Lexmond, Nies

SpringerandGarethWakelingmakingthispossibleontheWageningenURandClimate-KICside.

Last but not least Iwant to thank friends likeRoyHendriks, JanRitter andTheoXenakis for

supportingmeintimeswherethisjourneywasfrustrating,Ifeltdeprivedofenergy,orsuffered

frommononucleosisdiseaseduringsummer2017–youkeptmegoingandhadmyback.Same

goestomyfamilywhohavebeenasafehavenalongtheway.

Completing and submitting the thesis now, after officially being done with the research in

September2016andRoy´svalidation,thattechnicalandbusinesscasewisethereisnofeasibility

hasbeenhardtoaccept.SinceJanuary2017,Iamalreadyinvolvedinmynextventure,together

withJanwhomImetinSouthAfrica.Weareprettyconfidentthatwearepartofasustainable

agriculturaltransformation.

Osnabrück,21.10.2017


V

III. GlossaryBiofuel FuelmadefromorganicresourcesBottomofthePyramid(BOP)

The3billionpeopleworldwidelivingofflessthan$2dollarsperday

BusinessModel EconomicearningmodelofacompanyBusinessModelCanvas(BMC)

Tooltopresentacompany’sbusinessmodel–in9blocks.

CO2 Carbondioxide.ProminentgreenhousegascontributingtoglobalwarmingCustomerDevelopment LearningprocessgoingalongwithValuePropositionDesign–identifyinganddeveloping

customersegmentsEntrepreneurship Theactofsettingupanenterprise,creatingorharvestinguntappedopportunitiesFormalhousing Government-initiatedsocialhousinglocatedinSouthAfricantownshipswhichinclude

basicamenitiessuchaswaterandelectricityGlobalAllianceForCleanCookstoves(GAGC)

Globalumbrellaorganizationforcleancookinginitiatives.

HealthPromotersSA NGObasedinKayamandiandKhayelitshasupportingthisresearchInformalhousing MakeshiftshacksoftenlackingbasicamenitiesinSouthAfricantownshipsIlluminatingParaffin ParaffincertifiedbytheSouthAfricangovernmentIREPA IntegratedRenewableEnergyPotentialAssessment–Toolsetforeffectiveworkinrural/

low-incomecommunitiesIterative Repetitiveprocessoftheorizing–testing–reflectingtogainknowledgeorimprovea

productKayamandi TownshipinStellenboschhousing26.000people.LocationofresearchKhayelitsha TownshipinCapeTownhousingapproximately1,5millionpeopleParaffinParaffinSafetyAssociationofSA(PASASA)

ReferstoIlluminatingParaffinusedinSouthAfricaforcookingandheating“Non-profitorganizationdedicatedtoensuringthesafeuseofparaffininthedomesticenvironment.”FoundedandfundedbyBP,CALTEX,ENGEN,SASOL,SHELLandTOTAL

PM Particulatematter–pollutingandtoxicparticlesreleasedwhencombustingfossilfuelsSesoloMelloB.V. CasecompanyofthisresearchShack InformalhousingbuiltfromscrapmaterialSpazashop SmallgeneralstoresellingmostbasiccommoditiesinSouthAfricantownshipsStellenbosch MunicipalityintheWesternCape,SouthAfricaSurvivors TermcoinedtodescribethepeoplelivingoffabareminimuminSouthAfricantownship

communitiesTownship Socio-economicallydeprivedurbanareasinSouthAfrica,containingamixofformal

socialhousingandinformalsettlementsorshantytowns/slumsTripleBottomLine(P) TakingintoaccountPeople,PlanetandProfitinabusinessmodel

TripleTopLine Creatingadditionalvalueoneverysocial,environmentalandeconomiclevelaroundthebusinessmodelandleavingthecompleteecosystem betterthanthestatusquo

Tuckshop SeespazashopValueProposition(VP)ValuePropositionCanvas(VPC)

Corevalue/product/service,abusinessaimstodelivertoitscustomer-ElementofBMCAspecificcanvastool,that“feeds”intotheBMC–itentailsallrelevantinformationconcerning“product-customer”fit–jobs,pains,gainsvspainrelievers,gaincreatorsandenvisionedproducts/services

ValuePropositionDesign TheprocessofdevelopingValuePropositionsbasedonacquiredinformation–oftenpresentedinformofaVPC

Xhosa SouthAfricanethnicgroupandlanguageZAR SouthAfricanrand–currencywithanexchangerateof16ZARto€1euroatthetimeof

research


1

1. IntroductionThis thesis researches the opportunities to replace paraffin in South African communities, by

conductingacustomervalidationandvaluepropositiondesignbasedonSesoloMelloB.V.´sideas.

SesoloMelloisasocialenterprisethataimstosubstituteparaffinwithsafer,andcleanercooking

methodsat theBottomof thePyramid (BOP).Theapproach is to jointlydevelopandvalidate

solutionsdirectlywiththeusersintheKayamandiandKhayelitschatownship.SesoloMelloB.V.

isbasedintheKayamanditownship,whichisthemaincaseforthisresearch.

Thefirstchapterwillintroduceallrelevantaspectsthatformthefootingofthisthesis.Firstthe

situationofindoorairpollution,differentfueltypesandfurtherproblemsrelatedtounhealthy

cooking practices are introduced. Followed by existing value propositions to tackle these

challengesandtheircommonpitfalls.Intheend,firstideasandsetrequirementsbySesoloMello

aresummarized,toderivetheapproachforvaluepropositiondesign.

1.1. ImpactofcookingpracticesRoughlyfourbillionpeopleliveintheso-called“BottomofthePyramid”(BOP),whereharmful

cookingpracticesaremostlypredominant(GlobalAllianceForCleanCookstoves,2015).TheBOP

has been developed as a concept to be able to understand the different dynamics and

requirementsofthemarketsofthepoorestofthepoor.Prahaladdevelopedthewordingwhichis

usedinmanagementliteraturetodescribetheuntappedopportunitiesandinnovationpotential

in thosemarkets (Prahalad, 2012). South Africa consists of a society which is partly poverty

strickenandhas anunfortunatehistoryof inequality andpoverty.Despiteof the fact that the

countryhasmanypredominantfeaturesofagroomedeconomy,povertyiswidespreadamongthe

blackcitizensresidinginruralareasofthecountry(Mensah&Benedict,2009).AsinSouthAfrica

governmentistakingstepsforthebettermentofsociety,therearestillfewinitiativestakenwith

regardtothelinkbetweenenergyandhealthintownshipcommunities, leadingtolittlechoice

apartfromusingparaffinforcooking,heatingandlighting.Despitetheincreasingelectrification

in SouthAfrica, theuseof paraffin oil remainspredominant in low-incomehouseholdswhere

electricityisavailableaswellasinthosewhereitisnotavailableduetohighcosts(GlobalAlliance

ForCleanCookstoves,2015).

Choiceofcookingfuelsisoftenconnectedtoculturalcookingtraditionsliketheslow-cookingon

charcoalandwood(Sesan,2012).Butinmanyregions,itisalsodependentonfuelavailability,

whichisvaryinginruralandurbanareas.InSouthAfricantownships,thereisatendencytouse

paraffin,sincebiofuels likewoodcan´tbecollected,arepartlyculturallynotrespectedandare

hardlyavailable,whiletheexistinglogisticsinfrastructureforparaffindistributionisinplacefor


2

a long time. Thus, paraffin is themost common fuel in SouthAfrican urbanized areas (Global

AllianceForCleanCookstoves,2015;HESASA,2013).Moreover,itisaneconomicdecision,since

fuel costs for cooking and heating take away a large part of people’s income - up to 25% of

householdincomeintheSouthAfricancontext(UCTUnileverInstitute,2015).Thereishardlyany

local economic value creation due to paraffin distribution. Since in the South African context

Paraffinisthemostprevalentfuel,charcoalorotherharmfulfuelsarenotfurtherexplored(Tait

etal.,2013).

Known by Europeansmostly as kerosene or jet fuel, paraffin fuel is a liquid fossil petroleum

derivate. InEurope, it isoftenutilizedasparaffinwaxinformofcandles.Oftenit ispresent in

industrialusecasesaswellasinBOPhouseholdsforcookingheatingandlighting.Someoutdoor

enthusiasts might also know paraffin heaters and cookers in countries of the Global North.

Particulatematter(PM),highflammabilityandcarcinogenic

compounds among other chemical compounds lead to its

inherentdanger(Taitetal.,2013).

Even though infrequent contact with fumes, does not

necessarilyimposelong-termdamage,exposuretoparaffin

can lead to skin damage, lung cancer and if accidentally

swallowed it can cause damage to lungs and severe

poisoning (Chilcott, 2006). Generally, there is to note, that the

properties of these cooking fuels are implicating health risks

(Schwebel et al., 2009). An additional factor is related to the way

peopleutilizethesefuels.Bothfactorsaretounderstandthescopeof

harmful cooking practices, the World Health Organization (WHO)

summarized in 2010, that three billion people are cooking with

harmful fuelsusingopen fires andunsafe stoves andapproximately

250million liters of paraffin areusedperday (IndexMundi, 2016).

Harmful cooking practices result in 4 million humans dying

prematurelyeveryyear(WHO,2014).Moreover80,000childrendiein

SouthAfricaaloneduetopoisoningbyingestionofparaffin-whichiscolorlessandoftenstored

inoldbeveragebottles (Tait etal.2013,HESASA,2012).More than50%ofprematuredeaths

among children under 5, due to pneumonia are related to inhalation of particulatematter in

households (WHO,2014). Township fires,where thousandsof livesandhomesaredestroyed

everyyearareanotherbigchallengeintheWesternCapecontext(Murray,2009).Theseareoften

relatedtoparaffinwickstoves(seefigure2),fallingoverwhileunobserved.Thesestovesareoften

low-qualityproductsimportedfromChinaandwithouttherelevantsafetyequipment.Duetothe

natureofparaffinaparaffin fireusually cannotbe stopped,60 secondsafter ignition (Smiedt,

Figure2:Paraffinwickstove(imagebySesoloMello)

Figure1:ShackfireHoutbay(ImagebyTheSouthAfrican)


3

2016;seefigure1).Nexttotheaforementionedsocio-economic,healthandenvironmentalimpact

ofparaffinuse,thescaleofCO2emissionsemittedbythisfossilfuelcombustionisaround3kgCO2

perliterofparaffinconsumed(Bedouet,2015),whichthusamountstoapproximately750million

kilogramsofCO2perdayglobally.

OneoftheassociationsaddressingtheseissuesisPASASA(ParaffinsafetyassociationofSouthern

Africa), founded and funded by the petroleum industry since 1996. The first steps taken, are

encouragingas theyhave focusedon tackling the issuebysafepackaging, safeappliancesand

safety education (Global

Alliance For Clean

Cookstoves, 2015). These

measures are mostly

targeted at safer handling

of paraffin - not

replacement. In figure 3,

the paraffin value chain is

portrayed. There is little

value generated on

township level, just for a

few middle men (Arrey,

2016).

Figure3:Paraffinvaluechain(http://supplychainn.blogspot.de/2012/09/oil-refinery-distribution.html)

There are alsomisconceptions among the decision-making bodies that the use of paraffin is

decreasingwiththeincreaseinelectrification.Althoughthetrendofusingotherfuelsalongwith

paraffinforendusehasbeenobservedinsomehouseholds,theusageofparaffinforspecificend

usesparticularlyforspaceheating,waterheatingandcookinghavebeenpre-dominant(Truran,

2004).Thisisduetothereasonthatthealternativestoparaffinprovidedareeithernotaffordable

ornotconsideredaffordablebytheusersbelongingtolowincomegroups.

1.2. ValuePropositionsofexistingsolutionsandcommonpitfalls

TheGlobalAllianceForCleanCookstoves,foundedin2010hasthemissiontomitigatethecooking

situation globally. It is funded by large foundations and is an umbrella organization for clean

cookinginitiativesworldwide,providingknowledgeexchangeandnetwork.Afterthechallenge

hasbeentakenupbyinternationalorganizationsinthepastdecades,themainfocushasbeenon

developingcheap,cleancookstovesthatensurecomplete,cleancombustionofsolidfuelsandso

called solar cookers (Global Alliance For Clean Cookstoves, 2015; Osinga, 2015). There is an


4

internationalstandardrankingforstoves,rankingemissions,safetyandefficiency(IWA,2012).

Solarcookers,whicharearoundforoverthirtyyearshaveproventobehardtoimplementand

scale-achallengethatalloftheyoungerinitiativesarefacingaswell(Sesan,2012).Reasonsmight

berelatedtoforeigndesignworkandlessbuy-inoflocalusers.Moreover,thereisoftenhighinitial

costofchangeandrelateddifficultytoconvincecustomersofthehigherlong-termutility.Mimi

Moto, Philipps as well as many other entrepreneurs like Huub van Zwieten (Clean Cooking

Revolution)areworkingtowardsmitigatingtheaforementionedchallengesintheSouthAfrican

context. This often goes in the direction of implementing new appliance designs for cooking,

heatingandlightingconnectedtoavarietyofdifferentfuels-amongotherswoodpellets,lpgand

solarthermal.MimiMoto,Philipps,andtheCleanCookingRevolutionallfocusonthewoodpellet

cleancookstoves,thatprovidearelativelycleancombustionwithlowemissions,butrequirenew

distributionchannelsandadependencyonwoodpellets-thusriskinglockinginusersonusing

woodpelletsthatmightnotalwaysbecheaporavailable(CleanCookingRevolution,2016).

Nexttothecleancookstoveinitiatives,thatarealwaysreliantonavailabilityofspecificfuelneeds,

electrificationposesabiglong-termopportunityinreplacingparaffinstoves.Electrificationcan

be done through grid connection and/or decentralized off-grid solar systems that have been

provensuccessfulinmanyAfricancountriesduringthepastdecade.Mobisol,M-Kopa,Solar17

andothersareestablishedplayers(Bloomberg,2016).Thus,SesoloMelloregardsexistingclean

cookinginitiativesaswellastheirownideasasintermediatesolutionsonthewaytoelectrical

cooking.Unfortunately,manyexistingplayerstrytojumponglobalsubsidyschemesbytheGlobal

AllianceForCleanCookstovesandgovernments,producinglargequantitiesof"cleancookstoves",

producingtheminChinaanddistributedatdumpingprices inAfrica(e.g.MimiMoto -Osinga,

2015).ThisresemblesthepatternofdumpingcheapproductsinAfrica-e.g.meatindustryby-

products,thusdestroyinglocalfarmers.Inanycasethesesolutionsarebarelycoordinatedwith

local customersandusersof these cook stoveproducts and repeat commonmistakesof "give

away"developmentworkapproaches,imposingsolutionsonlocalsystemsandseldomgenerating

acceptance.This is leadingSesoloMello(2015) todescribe thechallengesof thecurrentclean

cooking initiatives as commonpitfalls, that shouldbe avoided in the valuepropositiondesign

duringthisresearch:

Thethreemostrelevantcommonpitfallsare(SesoloMello,2015):

I.Assumptionthatinducingbehavioralchangeiseasy:

Heritage and culture related to hygiene, energy sources and food preparation is very much

integratedincurrentcookingbehavior-notonlyinBOPmarkets.Theperceptionofengineersand

companiesthatareoftenalientoBOPcommunities,thatcheap,innovativeandefficientsolutions

shouldbeeasytoimplementhasbeenprovenwronginmanyexamples-mostprominently,the


5

solarcookerexample.Eventhoughinprincipleitisagreat,healthierandcheapersolution,itdid

nottakeintoaccounttraditionalslow-cookingpractices(Sesan,2012).Newtechnologyalways

requiresbehavioralchangeandthe“buy-in”ofusersisnoteasilyreachedwithoutintegratingthe

communitiesinanearlyproductdevelopmentstage.Often,peopleinBOPmarketsevenstrive

for"luxury"technology,ownedby"rich"people,likefridges,televisionandelectricalcookers,and

don´t accept intermediate compromises. According to Health Promoters South Africa (2016),

thereislittleawarenessofdirecthealthimplicationsrelatedtoparaffincooking-apartfromshack

burns.Inducingvoluntarybehavioralchange,whilemarketingforhealthbenefitshasthustobe

considered. It might be worth testing, whether, marketing a product as high-tech solution is

perceivedwelllocally.

II.OftennewproductsaretooexpensiveforBOPmarkets:

Thishasbeenshowninmanycaseswherethebarriertoadoptnewtechnologyhasbeentoohigh.

However,paraffinstovesareexchangedevery1-2years (Arrey,2016),even though thewicks

couldbeexchanged.Theproductischeaplyavailableanddoesnotrequireanychangeofbehavior.

Onehastofillinparaffinandisabletoexperiencethecommoncookingexperience.

Thetechnologydrivendevelopmentofcleancookstoves,thataimtoberankedcleanestisacostly

processandwhenimplemented,pricesareoftentoohigh.Thisleadstotheconflictofdaytoday

survivalratherthanadecisionforlong-termutility–wherethecleancookstoveactuallyearns

backitshighinitialcostthroughcheaperfuels.Approaches,wherestovesaredonatedthrough

subsidiesormonetarydonationshavenotgainedtractionyeteither(GlobalAllianceForClean

Cookstoves,2010;Sesanetal.,2013).Thismightberelatedtothefollowingpitfall.

III.Someapproachesarebasedona“lockin”nature:

Whenlookingatsubsidiesforstovesordonatedstoves,toavoidthesecondpitfall,onemustask

how a sustainable business model might look like. Some initiatives have thus developed an

approachtocreaterevenuesviaconstantfuelsupply. Justtomentionafew,theCleanCooking

Revolutionaims toprovidewoodpellet based clean cook stoves cheaply andprovide suitable

woodpellets in different packaging sizes to generate revenues. Thesewoodpellets are rarely

available in Khayelitsha and Kayamandi, so there is an opportunity to establish an own

distribution infrastructure, using local entrepreneurs asmultiplicators. On the other side this

createsdependencyonfuelreliabilityandavailabilitywhichmightbeabused.Moreover,itdoes

not appear to be a long-termmodel, since other players can easily enter this "low-tech" fuel

marketaswell.Otherinitiativestakeitonewayfurtherandprovidestovesthatsolelyworkwith

theirbio-basedfuelgel,and/orbioethanolfuels(Emmett,2014).Theycreatea"lock-in"through

specialstove-packagingconnections.

Theseinitiative´sproductsarehardtofindinKhayelitshaandKayamandi,andhavedifficultiesin


6

getting traction in BOP markets generally. Biello (2014) and Sesan (2012) state, that this is

connectedtounwillingnesstoenterintothesedependenciesandnotbeabletoswitchfuelseasily.

Moreover, there is experienceor fear of failing fuel supply.Donated stoves are thusoften left

unusedafterafewweeks(CleanCookingRevolution,Interview,2016).

Summarized, these pitfalls often are results of foreign designs, that do not understand BOP

dynamicsanddonot take intoaccount local culture, consumerbehaviorandstructures in the

designprocess.

Basedon theaforementionedexistingexperiencesandpitfallsofcleancooking initiatives, this

researchaimstoexploreSesoloMello´svaluepropositionideas,integratinglocalneedsandlocal

knowledge.That´swhySesoloMelloB.V.isbasedintheKayamandi1township,workingtogether

withlocalstakeholdersfollowingIREPA2principles(SesoloMello,2015).

1.3. TheSesoloMelloB.V.caseintheWesternCapeSesolo Mello B.V. is a European start-up founded in 2016 and

composedofaDutch,Belgian,BritishandGermanteamsupportedby

manymentorsandadvisorsinSouthAfricaandglobally.Thestart-up

originated in theEITClimate-KICsummerschool2015andhas the

mission statement to replace harmful paraffin in countries of the

Global South with sustainable alternatives. This research aims to

validate ideas in the South African Western Cape context and

integrate local community members and other relevant stakeholders in an early product

developmentstage.Themain focuswillbeon ideasaround liquidbiofuelproductsasparaffin

replacement.Opposedtoothercleancookinginitiatives,SesoloMellodoesnotwanttoreplacethe

paraffinwickstoves,butsolelythefuel.Theadvisedvaluepropositiondesignwillbebasedon

localcustomervalidationandalreadyexistingbusinessmodelideas,thatwillbeextendedwith

locallycollectedinformation.Theadvicewillbecompiledinavaluepropositioncanvasandan

extendedbusinessmodelcanvas.

1Kayamandiishomeforaround25.000peoplewhereofaccordingtoHealthPromotersSA(2016),onethirdisusingparaffinonadailybasis.ThereismostlyXhosalivinginthecommunityandthereisarelativelylowunemploymentrate.2IREPA(Winkleretal.2017):IntegratedRenewableEnergyPotentialAssessment-Includeshighprinciplesofparticipatorystakeholderprocessesinmarginalizedcommunities.

Figure4:SesoloMello´slogo


7

1.3.1. Conceptidea:LiquidbiofuelasparaffinreplacementComparedtotheaforementionedinitiativeschallengedbythecommonpitfalls,SesoloMelloaims

toavoid thosebyworkingwith the localpopulationandbyaimingatamoredirectapproach.

Replacingparaffindirectlywithanalternativeliquidfuel-functionalinexistingstovetechnology.

SesoloMelloandthisresearchfocusonavoidingthecommonpitfallsandfouradditionalfactors

thatcanleadtopublicoppositionandlossoflocalsupport-"Thedevelopmentisinvoluntarily

imposedonthepublic´slocality,thetechnologyisunfamiliar,thepublichasnodecision-making

power, the development is for corporate profit rather than for local benefit." (Amigun et al.,

2011b, p. 2503). Moreover, Sesolo Mello aims to create positive environmental impact, not

creatingafuelvs.foodconflict,commoninbiofuelprojects(Winkleretal.2017).Thisisforming

thenecessarycriteriatovalidatewhetherSesoloMello´svaluepropositionisfeasiblefromasocio-

ecological-economicperspective:

CriteriaI.Embracelocalcommunityandvalidatewillingnesstochange

CriteriaII.Avoidhighpriceofproducts/opportunitycosts

CriteriaIII.Avoidlock-innature

CriteriaIV.Offerparticipatoryopportunities

CriteriaV.Utilizefamiliartechnology

CriteriaVI.Makesurethereislocalvaluecreation

Criteria VII. Make sure there is no negative environmental impact derived from bio-fuel

production,supplyandconsumption

CriteriaVIII.Makesurethehealthrisksofconsumingthebio-fuelalternativeareatleast75%

reducedwhencomparingtoparaffin3

Sincethesolutionshouldbebeneficialcomparedtothecurrentsituation,otherfossilfuelswill

not be considereddue to environmental andhealth implications.Thus, a biofuelwill bemore

beneficial,morespecificallyabiofuelmadefromwastecookingoilssinceaproductionofenergy

cropswouldbeindirectcompetitiontofoodproductioninSouthAfrica.

Biofuelshavealonghistory.Inthe19thcentury,whenthefirstdieselenginewasintroducedby

RudolfDiesel,itcouldusepeanutoiltorun.Useofvegetableoilsinengineshavelostimportance

comparedtofossilfuelsoveralongerperiodoftimetilltheworldfacedproblemsoffuelshortages

and environmental impact. Biofuels are fuels which are generated from biomass and/or

biodegradablewasteindifferentprocesses.

3Inregardtoshackfires,ingestionandindoorairpollution


8

SesoloMelloB.V.(2015)aimstoimplementanenzymaticproductionprocess,toconvertwaste

oils from the food-processing industry into a higher value biofuel. This process is more

environmentally friendly and reduces the production costs of biodiesel when compared to

methanolbasedproduction. It is important tonote, that thebiofuelcannotbeproduced from

staplecrops, sinceotherwise therewillbeaconflict to foodproduction(Winkleretal.,2017).

Thus,SesoloMellofocusesonwastestreamsonly.Aslastproductionstep,10%paraffinwillbe

addedasanignitionenhancer.

In theprocess,anotherby-product isproduced -Glycerol,whichcanbeutilized foradditional

valuecreationthroughlocalizedsoapproduction.

The productwill be healthier, due to up to

90%reducedtoxiccompoundsandresulting

reducedindoorairpollution.Moreover,itis

saferduetothereducedflammabilityofthe

fuel (e.g. when a stove is falling over). In

Additiontothis, ingestionofbiofuelsisless

likelydue to itssmellandcolor - incaseof

ingestionitislessharmful.Lastbutnotleast

itcansaveupto5.22kgCO2perliterparaffin

replaced (Figure 6; Bedouet, 2015). This is

duetousingarenewablewasteresourcefor

ahighervalueproduct.Thiswouldcreatea

substantialenvironmentalimpact,lookingat

250millionlitersofparaffinconsumedperday.InSouthAfrica,fortypercentofthepopulationis

usingparaffinforheating, lightingandcooking.Ofcourse,thereisanenergymixthat includes

wood, charcoal, electricity and sometimes gas. In the township context, paraffin is the most

prevalentfuel(HESASA,2013).Eventhoughthegovernmentregulatesthepricesofparaffinoil,it

hasbeenobservedthatparaffinissoldatahigherpriceandespeciallyduringthetimeswhenthe

demandforparaffinishighitspricesusuallyshiftupwardandevensometimesdoublecompared

totheaveragepriceofparaffinoil–especiallyduringwintermonths.Theuseofbiofuelswould

alsoreducethedependencyuponparaffin.Finally,thebiofuelwillbecheaperbasedoncurrent

paraffinpricesof10-15ZAR/liter4.Thegoalistoestablishalocalizeddecentralizedproduction

system (e.g. in shipping container format), that can tap into existing distribution channels to

ensurefuelavailabilityandwherelocalcommunitymemberscanbeeducatedandemployedto

createvalue.Anadditional featureof this approach is apossible franchisemodel to scale this

4Arrey(2016)

Figure5:Biofuelvaluechain(SesoloMello,2015)


9

approachacrossSouthAfrica.Infigure5thepotentialbiofuelvaluechainisportrayed,thatshows

howmany industrial stakeholders can be

reduced compared to figure 3. Compared

to the traditional paraffin value chain,

SesoloMelloaddsmostvaluefrommoving

the production to the townships.

Moreover,othervaluechainsaroundsoap

productionandbio-fueldistributioncan

be developed together with local

entrepreneurs.Generally,thisapproachleadstomoreopportunitiesforlocalvaluecreationwhen

comparedtoparaffinfuel(Corner&Ho,2010).

Figure 6: LCA of Paraffin and Sesolo Mello (Sesolo Mello, 2015)


10

1.3.2. SesoloMellointhecontextofSocialEntrepreneurship

AproposedDefinitionofSocialEntrepreneurship

Santos(2012)describesthatsocialentrepreneurship,involves“addressingproblemswithpositive

externalitieswithadominantgoalofvaluecreation”ratherthanvaluecaptureforthe

entrepreneur.Andthatmanysocialentrepreneurstargetdisadvantagedpopulations,sincethe

“mostneglectedproblemswithpositiveexternalitiesaffectdisadvantagedpopulations”.These

disadvantagedpopulationsandrelatedmarketsareoftenreferredtoastheBottomofthePyramid.

SesoloMello’sMissionisdefinedinitsmissionstatement(2015):toeradicatetheneedofbillions

ofpeopleintheBottomofthePyramidtorelyontoxic,dangerousandpollutingfossilfuelsfor

dailyhouseholduse.

SesoloMelloB.V.hasset forth tocreateapositive impactwitheveryactiontaken.Opposedto

manyexistingbusinessmodels,thatmeanstoincludeallrelevantexternalities.Environmental,

SocialandEconomicfactorsthatareweavedintoasuccessful,sustainablebusinessmodel.That´s

whySesoloMelloaimsnotonlytoworkaftertriplebottomlinecriteria,buttripletoplinecriteria

–creatingadditionalvalueoneverysocial,environmentalandeconomiclevelaroundthebusiness

modelandleavingthecompleteecosystem5betterthanthestatusquo(McDonough&Braungart,

2002).

This explains the intrinsic motivation to serve BOP markets and tackle large international

challenges – starting on a local level. That´s why Sesolo Mello understands itself as a social

enterprise.

Eventhoughthesustainabilityassessmentisnotinthecoreofthisthesis,ashortsummaryofthe

mainbenefitsonapracticallevelisdeemednecessarytocomparewiththe8proposedfeasibility

criteria(see1.3.1).

Theproposedbusinessconceptasdescribedinchapter1.3.offersthepotentialtocreatepositive

impactonallsustainabilitylayers.

Environmental Factors: there will be a reduction in GHG emissions and other polluting

emissions,whilethroughtheuseofwasteresourcesbasedonrenewableresources,thereisaGHG

positive effect per liter paraffin replaced (Bedouet, 2015). Through Sesolo Mello´s proposed

enzymaticproductionprocesstherearenotoxicchemicalsinvolvedandnopollutiongenerated

on local level. Through localized production, there is a minimum in logistic emissions, and

vegetableoilpoweredcarscancreateapositiveimpactonthissideaswell.Thisdevelopmentcan

5Heredefinedassocial,environmentalandeconomicsurroundingonlocalandinternationallevel.


11

even be attractive from an economic perspective, since resource costsmight come down and

carbontradingschemesofferpotentialalternativeincomestreams.

Socio-EconomicFactors:Therewillbemanyopportunitiesforlocalvaluecreation.Thesecanbe

groupedindirectimpactandindirectimpact.Thedirectproductrelatedimpactislinkedtothe

reductionof fires,householdemissions,poisoningdueto ingestionandfuelcosts.Theindirect

product related impact is associated with local job creation, local education facilitation,

empoweringexisting local entrepreneurs and supportingnewentrepreneurs in e.g. buildinga

localsoapbusinessfromaproductionby-product.

Inthebestcase,allthesefactorsleadtoapositivesocio-economicdevelopmentintheaddressed

BOPmarkets.

1.4. RelevanceEventhoughtherearemanyreasonsfortherelevanceofthisthesis.Themoststrikingoneisthe

globally “hidden” but significant issue of paraffin related environmental and socio-economic

damagedonebyeachliterofparaffinconsumed.Matinga(2010)weighsthattherelatedissuesin

SouthAfricaareuniqueintheirintensity–globally.Thisalsoshowstherelevancefortheproject

location and research sample in theWestern Cape context, where there is a hotspot of large

townshipstructuresandinformalsettlements,thatarehighlydependentonparaffin.Thechoice

ofKayamandiasoneofthesmallestandsafesttownshipsintheWesternCape,hasbeenmadeby

SesoloMellosincetheyfoundalocalpartnerintheHealthPromotersSAontheoneside-this

providesa“safe”frameworktoworkfromandtopotentiallyset-upafirstpilotproduction.And

ontheotherside,therepresentativebalanceofinformalandformalsettlementswhencomparing

toKhayelitsha.

Apart from the relevantproject locality, thedemand to finda solution to theunder chapter1

describedchallengesrelatedtoparaffinandcleancooking,isandwillbeamajorcontributionfor

a sustainable development of these BOP communities. This also serves the current progress

regardingtheSustainableDevelopmentGoals(SDGs).

This research aims to do a first socio-economic feasibility study on a holistic approach to

implementliquidbiofuelsasaparaffinreplacementinOmarkets,avoidingtheaforementioned

“state-of-the-art” common pitfalls. Even though targeted to be an intermediate solution, the

potentialTripleTopLineimpactissurprisingandcouldpresentabreakthroughinnovationworth

exploring.


12

2. TheoreticalFramework

2.1. CompositeprojectstructureRegardingthethesisfromabroaderperspective,itispartofacompositeprojectbetweenSesolo

MelloB.V.,RoyHendriksandmyself.Asportrayedinfigure7,thefocusofmyresearchanddata

collectionisonsharpeningtheviewonthevalueproposition,andassessingthesocio-economic

feasibilityoftheproject ideathroughcustomerdevelopment.All inthelightofweatherSesolo

Mellowillbeabletoavoidthecommonpitfallsofothercleancookinginitiatives.RoyHendriks

thenevaluatesthetechnicalfeasibilityandeconomicfeasibilityfromaproductionpointofview.

SesoloMelloB.V.expectstoreceiveagoodbasisfordecisionmakingthroughthesefourresearch

factors.SesoloMelloagreedonprovidingallinformationandnetworknecessarytoconductthe

researchinthebestpossibleway.

Figure7:ThesisstructureandconnectionbetweenresearchofBussmannandHendriks

2.2. ResearchobjectiveThethesisobjective is todeterminewhetherSesoloMello´ssocialentrepreneurialsolution for

paraffinreplacement,isabletoavoidthecommonpitfallsofthecurrentcleancookinginitiatives.

Thethreemainpitfallsdescribedinchapter1,arethatsolutionsareoftentooexpensive,arebased

ona lock-innature linkedwith foreigndesignandrequire toomuchbehavioraladaptation. In

ordertoprovethatthesepitfallscanbecircumvented,thefirstpartoftheassessmentwillfocus

onvaluepropositiondesign,basedonanalyzingSesoloMello´s valueproposition concept and

runningcustomervalidationtovalidateassumptionsandfindaproduct–userfit,indicatingthe

suitabilityfortheWesternCapeBOPmarkets.Thiswillbefollowedbythetechnicalandeconomic

assessmentofRoyHendriks.


13

2.3. MainresearchquestionIn order to complete the composite project successfully and answer the defined research

objective, a research question that covers all aspects of social feasibility related to the value

propositiondesignisrequired.Thescopeoftheresearchquestionstillhastobeclearenoughto

avoidvagueness(Suddabyetal.,2015).Moreover,duetotheinductivenatureofthisresearchand

theentrepreneurialapproachofSesoloMello,theresearchscopemustbesufficientlyrobustto

allowunexpectedadaptationsandstilldelivervalidresults.

Basedonthethesisobjectiveandthefactorthatwillberesearched,aswellastheaforementioned

basis-themainresearchquestionisformulatedaccordingly:

“Whatisthesocial6feasibilityofintroducingabiofuel7alternativetoparaffinintownships

oftheWesternCape?”

This research question permits to answer the thesis objective based on conducting a value

proposition design process. Whether the common pitfalls can be avoided in Sesolo Mellos

approach,willthusbedeterminedonthebasisofsocialfeasibility.Iftheresultsofthisresearch

arepositive, thiswill indicate a commitmentof potential customers to the approach and thus

Sesolo Mello can go ahead on assessing technical and economic feasibility in the light of a

successful avoidance of common pitfalls. If the results are negative, it is establishedwhether

SesoloMelloentersthesamepitfallsorwhether it isduetoother factors, thatmightbesetas

additionalcommonpitfallsfornewinitiativesinthefuture.Thethesisobjectivecanbefulfilledin

anycase.ThisthesisresearchisconductedundertheassumptionthatSesoloMello´sapproachis

technicallyandeconomically feasible,whilenotaddressingthescalabilityof themodel.This is

necessarytotesttheassumptionsandgoalsofSesoloMello´sbusinessmodelduringthecustomer

validation.Itrequiresthough,thatthetechnicalandeconomicfeasibilityofthebusinessmodel

willbeassessedbyRoyHendriksand/orSesoloMelloB.V. since it isbeyond thescopeof this

research.

Thisresearchquestionisbasedonamorespecificsub-question.Thissub-questionwillleadthe

author toanswerrelevantquestions for customervalidation.Culminating in thedefinedvalue

propositionadviceforSesoloMelloB.V.Finally,thiswillanswerthemainresearchquestion.

6Basedoncriteriadefinedinchapter1.3.1..7DefinedinaccordancetoSesoloMello´sliquidwastevegetablebiofuel(seechapter1).


14

2.3.1. Sub-question:Customervalidation“DoesSesoloMello´sbiofuelsolvethecustomersjobs,painsandgains?8”

Thisquestioncoversallrelevantfactorsforcustomervalidationandvaluepropositiondesign.If

answeredpositively,themainresearchquestionisnotnecessarilypositive,butitshowsthat

SesoloMello´sapproachcanworkfromacustomerperspective.ThisispresentedinaValue

PropositionCanvas(VPC)andrenewedBusinessModelCanvas(BMC).Ifanswerednegativelyor

partlynegatively,itisestablishedthatSesoloMello´sapproachorpartsofitareperceived

negativelybythecustomersandthereismostlikelynomarketforSesoloMelloB.V.inWestern

Capetownships.

Inordertoanswerthisquestion,thereismultiplesmallersub-questions,thatleadtorelevant

questionsintheinterviewdesign:

Ø WhichcustomersuseparaffinintheWesternCape?Howdothepersonaslooklike?

Ø Howdotownshipinhabitantssource/buyanduseparaffinduringtheyear?

Ø Whatarethejobs,townshipinhabitantshaveforfuelsandforcooking,heating,lightingin

general?

Ø Howdoesparaffinuseaffecttownshipinhabitants?Andwhatfactorsaremostimportant

tothem?

Ø Whatalternativetechnologiesorproductsforcookingheatingandlightingaretownship

inhabitantsusing?Aretheysatisfiedwithit?

Ø Howaretownshipinhabitantsreactingtoalternativeapproaches,morespecificallywhen

confrontedwithSesoloMello´sdirectbiofuelalternativetoparaffin?

Ø Wouldtuck-/spazashopownersadapt/sourceandsellanewalternativeproduct?

Ø Howwouldsuchaproductneedtobemarketed(includingpackaging)?

Ø DoalternativesolutionssucceedalreadyintheWesternCapecontext?Ifnot,whatdoes

themstopfromsucceedingcurrently?

8BasedonValuePropositionDesign(Osterwalder,A.etal.,2013)


15

3. MethodologyTheresearchquestionswillbeaddressedthroughqualitativeresearch,namelysemi-structured

interviewsand focusgroupresearch.Thesearestructured inorder tobepresented inavalue

propositioncanvasandbusinessmodelcanvasformat.Theformatforinterviewsandfocusgroup

research are based onmixedmethods from the IREPA approach, theMOM test and standard

customer development methodology. As described in chapter 2, the inductive nature of the

researchand theentrepreneurial approach require themethodology to support thenecessary

flexibility. Thus, themethodologywill bedivided in threeparts.Definitionof terms, including

descriptionsandprinciplesofValuePropositionDesignandBusinessModelCanvas.Thesecond

partdescribesthequalitativeresearchdesign,namelythechoiceofsemi-structuredinterviews

andfocusgroupresearch,includingcondensedprinciplesoftheMOMtestandIREPA9.Thethird

partdescribestheworkperformed,inordertopresentanoverviewthatenablesthereaderto

betterfollowtheapproachconductedtogeneratetheresearchresultsintheBOPcontext.

3.1. DefinitionofTerms3.1.1. ValuePropositionDesign

Avalueproposition(VP)isabusinessormarketingstatementthatacompanyusestosummarize

why a consumer should buy a product or use a service. This statement convinces a potential

consumerthatoneparticularproductorservicewilladdmorevalueorbettersolveaproblem

thanothersimilarofferings.Companiesusethisstatementtotargetcustomerswhowillbenefit

mostfromusingthecompany'sproducts.TheVPincludesinformationfromstepslikeidentifying

therelevantcustomergroup/personaandthetestingofdifferentassumptionsinthecustomer

validation. One tool to develop and display a VP is the Value Proposition Canvas by Alex

Osterwalderetal.(2013).Basically,itisatooltomatch“jobs”/tasksthatacustomerneedstohave

solvedwitha“product”and/or“service”thatsolvesall“gains”and“pains”acustomercurrently

experiencesrelatedtothosejobs.Itisaboutreallyunderstandingapotentialcustomersegment/

”persona”. Moreover, it aims to really understand how a customer is currently solving the

challenge/jobs, andwhat competitionproducts are currentlyout there.This job-solution fit is

thencalledValueProposition(seefigure8).

Onapracticallevelandintheframeworkofthisthesisthereissomebasicinformationandbasic

order that should be entered into the fields of the VPC – following a short explanation

(Osterwalder,2016),dividedintothe“rightcustomerside”:10

9ThisincludestheunderlyingresearchparadigmsforBOPmarkets.10Alltheseinformationperbox,thenshouldberankedaccordingtotherelevancetothespecificcustomergroup. The overviewdoes not expect to be complete, since there are alwaysmore questions, or betterquestionstoask–itprovidesagoodstartthough.


16

Ø “CustomerJob(s)”:Descriptionofwhataspecificcustomersegmentwantstogetdone–

whenandwhere.Thisincludes,taskstheymightwanttotackleorproblemstheywantto

solve.What are the specific functional tasksor specific functionalproblems theyhave.

Whatarethespecificsocialjobs,likee.g.gainofstatus,theywanttogetdone?Whatare

theemotionaljobs,likee.g.security,theywanttogetdone?Whatbasicneeds11dothey

wanttogetdone?

Moreover,thereismultiplesmalljobsacustomerperformstogetthemainjob(s)done–

theseshouldberesearchedasgoodaspossible.

Ø “Gains”: Description of benefits a customer expects, wants orwould be surprised by.

Includingsocialgains,costsavings,goodemotionsandsocialgains.Morespecificallyone

has toassesswhichsavingswouldmake thecustomerhappy,what resultsa customer

expectsandwhatwouldbeacherry-add-on,howcurrentsolutionssatisfythecustomer

in terms e.g. of quality,what solutionwouldmake the customers life easier andwhat

positivesocialoutcomedoeshe/shedesire.Whatarecustomerslookingforanddream

about,ormeasuresuccessandfailure?Thisiscrucialtounderstandwhatwouldincrease

thelikelihoodtoadoptyoursolution.

Ø “Pains”: Description of undesired costs, situations, risks and negative emotions a

“customerexperiencesorcouldexperiencebefore,during,andaftergettingthejobdone”.

Thisincludesquestionsaroundwhatistoocostly,makesthecustomerfeelbadorhow

currentsolutionsunder-deliverforthecustomer.Moreover,thereneedstobeinformation

around the main challenges and difficulties, customer experiences, as well as what

negativesocialoutcomesorriskshe/shefears–whatiskeepingthecustomerawakeat

night?Whatarethecommonmistakeshe/shemakesandwhatarethecommonbarriers

preventingthecustomerfromadoptingsolutions(whichisstronglyrelatedtotheunder

chapter1describedcommonpitfalls).

11(McLeod, 2007): Maslow´s hierarchy of needs


17

Figure8:ValuePropositionCanvas(Osterwalderetal.,2016)

…andthe“leftproduct/serviceproviderside”(Osterwalder,2016;seefigure8):

Ø “Products& Services”:Description of services and products,which the holistic value

proposition is formed around. Basically, it defines what value you offer that help the

customertogetthepriordescribedfunctional,socialandemotionaljobdone–orsatisfy

the basic needs. Questions around which secondary products and services help the

customer to be the “buyer” (e.g. compare, decide, buy), “co-creator” (individualize, co-

design)or“transferrer”(e.g.productdisposal,transfer).Theseproductsandservicesmay

be tangible, like for example SesoloMello´s liquid biofuel, digital/virtual like e-books,

intangibleasforexampleinsurancesandcopyrightsorfinancialasforexamplefinancing

services.

Ø “PainRelievers”:Descriptionof howproducts and services solve customerpains and

eliminatenegativeemotions,undesiredcostsandsituations,aswellasrisksthecustomer

experiences,orcouldexperiencerelatedtogettingthejobdone.Dothesolutionsproduce

savings,makethecustomerfeelbetter, fixunder-satisfyingsolutions,solvesdifficulties

andchallengesheexperiencesordiminishsocial consequencesandrisks thecustomer

fears.Doesthesolutionhelpthecustomersleepbetteratnightandsupportshimeradicate

mistakeshecommonlymakesandfinally,doesitreduceanderadicatethebarriersthat

preventsthecustomerfromadoptingthesolution(s)?


18

Ø “GainCreators”:Descriptionofhowtheproducts/servicesareabletocreategainsforthe

customersegment.Howareexpectedbenefits,desiresincludingfunctionalutility,social

gains,positiveemotionsandcostsavingsgeneratedbythesolutions.Relatedquestions

shouldfindout,whetherthesolutiongeneratessavingsthatsatisfythecustomer,produce

outcomesthat fulfillsexpectationsorover-deliversonexpectations.Moreover, itmight

copysuccessfulcurrentsolutions,makethecustomersjob/lifeeasierandcreatepositive

social consequences for his desires. Does the solutionmatch the things customers are

dreamingabout,orlookingforwhilematchingcustomerssuccessandfailurecriteria?And

finally,dotheymaketheadoptioneasierforthepersona?

TheValuePropositionCanvascanbeunderstoodascoreofandaplugintotheBusinessModel

Canvas(BMC),asportrayedinfigure9wherethecustomerisatthecenterofasuccessfulbusiness

case.That´swhy inthenextchapter, theBusinessModelCanvas isexplained inmoredetail to

understandtheholisticframework.

Figure9:ConnectionbetweenBMCandVPC(Osterwalder,2016)


19

3.1.2. BusinessModelCanvasDirectlyconnectedto,andpartlybasedontheVPC,theBMCisdescribedinthischapter.Inorder

to develop the term businessmodel, the definition of Kaplan (2012, p.18): “A businessmodel

describestherationaleofhowanorganizationcreates,delivers,andcapturesvalue”isadapted.This

definitionistakenonestepfurtherbyOsterwalder&Pigneur(2013)whoproposeninespecific

buildingblocksforbusinessmodelcreation.Theseblocksarethefollowing:CustomerSegments,

Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key

Activities,KeyPartnershipsandCostStructure.

Theseblocksarealsovisuallyrepresentedintheformofacanvas,called“BusinessModelCanvas”

(BMC),asseeninfigure9&10.Thewayandthesequencethatthe“BusinessModelCanvas”is

workedwith,istobedecidedbyeachuser.Therefore,thereisnospecificmethodregardingthe

waytheCanvasisdeveloped(Doorneweert,B.&Lans,T.,2015).

Eventhoughthecanvasseemsasacompletetool,eachblockhasitsownseparatefunctionand

purpose.TheirdefinitionisgivenbyOsterwalder&Pigneur(2013):

Ø CustomerSegments:“thedifferentgroupsofpeopleororganizationsanenterpriseaims

toreachandserve”.

Ø ValuePropositions:“thebundleofproductsandservicesthatcreatevalueforaspecific

CustomerSegment”.

Ø Channels: “how a company communicateswith and reaches its Customer Segments to

deliveraValueProposition”.

Ø CustomerRelationships:“thetypesofrelationshipsacompanyestablisheswithspecific

CustomerSegments”.

Ø Revenue Streams: “the cash a company generates fromeachCustomer Segment (costs

mustbesubtractedfromrevenuestocreateearnings)”.

Ø KeyResources:“themostimportantassetsrequiredtomakeabusinessmodelwork”.

Ø KeyActivities:“themostimportantthingsacompanymustdotomakeitsbusinessmodel

work”.

Ø Key Partnerships/ Strategic partnerships: “the network of suppliers and partners that

makethebusinessmodelwork”.

Ø CostStructure:“allcostsincurredtooperateabusinessmodel”.


20

Figure10:BusinessModelCanvas(Strategyzer,2015)

Thegatheringofinformation,describedinthepreviouschapter,necessaryfordevelopingasolid

VPCandBMCandthusunderstandingapotentialbusinesscaseineveryrelevantdetail,isoften

challenging,sinceforexamplefoundersareoftenbiasedandadapttheirquestionstotheanswers

theywanttohear–ontheotherhandcustomersoftendon´tliketogivehonestanswersincase

thewrongquestionsareasked(Fitzpatrick,R.(2013).Topreventthis,duringtheresearchprocess

thefollowingchapterdealswithprinciplesofentrepreneurialqualitativeresearchanddescribes

theapproachtakeninthisthesis.

Fromasustainabilityperspective,thebusinessmodelcanvas,doesnotnecessaryincludeexternal

factorsasenvironmental,orsocialimplications,neitherdoesitpresentvisionandmission.That´s

why Alexandre Joyce developed the “triple layered businessmodel canvas”,which presents a

socialandanenvironmentallayerofthebusinesscase(Joyce,2016).AndLibes(2016)created

the “business presentation pyramid”, adding purpose, opportunity, financial plan, immediate

needsandcompetitiontoobtainamoreholisticviewofthebusiness.SincetheBMCisstillthe

mostestablishedandwidelyspreadtool,andtheinformationnecessarytoanswerallboxesof

triplelayeredbusinessmodelcanvasorbusinesspresentationpyramidareoutofthescopeofthis

research, the BMC will serve the purpose of presenting the results obtained of the value

propositioncanvas.


21

3.2. InductiveQualitativeResearchDesign

3.2.1. ResearchparadigmsinthelightofentrepreneurialValuePropositionDesign

Researchparadigmsconsistofbasicbeliefsthatdealwiththerealityandrepresenttheworldview

thatexplains thenatureof theworld.Thereare recently twodominating researchparadigms:

positivism and interpretivism (Bryman & Bell, 2015; Klassen et. al, 2012). The positivism

approachisexternal,independentandobjectivefromthesocialreality.Theroleoftheresearcher

isneutralandheshouldnotbeallowedto introducehis/herbias intotheresearch(McNeill&

Chapman,2005).AccordingtoKlassen(2012),deductivelogicalinquiryisusedtogatherdata.To

generalize the findings to a whole population, data will be collected on large sample size in

quantitative methods. Due to this reason, the quantitative approach is more reliable when

repeatedandquantifiable(McNeill&Chapman,2005).Overall,themainfocusofpositivismison

facts,numbers,validityandgeneralizabilityusingquantitativesurveysandstatisticaltechniques

(Easterby-Smithetal.,2008).Incontrast,aninductive,interpretive,qualitativeresearchstance

accepts that social reality is driven by human interests and it seeks to understand human

experiencesinductivelyandasawhole(Erikksson&Kovalainen,2008).Thebasicassumptionof

interpretiveresearchisthatthereisnosinglereality;insteadmultiplerealitiesexist(Lincoln&

Denzin,2003).Itassumesthathumanbehaviorcannotbeunderstoodobjectively,butthatpeople

are rather subject to many influences such as feelings, perceptions, attitudes and behaviors

(Crossan & Sorenti, 2002). Consequently, interpretive research helps to gain insight into

individuallivesintermsoftheirlife-longexperiences.InthewordsofLeedyandOrmrod(2005:

133):“thistypeofresearchfocusesonthephenomenonwhichoccursinthenaturalsettingand

will also involve phenomena in all their complexities”. In sum, positivism is based on realism

ontologywhich assumes that observations are theory neutral and that generalizations of the

observedcanbemade.Whereas,interpretivismisbasedonlife-worldontologywhichassumes

thatthesocialworldcannotbeunderstoodwithoutsubjectivemeaningsofsocialreality(Lincoln

&Denzin,2003).Thesetwophilosophicalschoolsareattachedtotwodifferenttypesofresearch

approaches:positivisttoquantitativeandinterpretivetoqualitative(Bryman,2012).

AccordingtoDenzinandLincoln(2011:30):“theresearcherapproachestheworldwithawebof

ideasandaframework(theoryandontology)thatspecifyasetofquestions(epistemology)that

he or she examines in specific ways (methodology and analysis)”. However, the choice of a

particular stance regarding nature and knowledge of the world is based upon the research

questionsthataretobeexplored,themethodofinvestigationandthenatureandinterpretation

ofthedatagathered.


22

Theontologicalpositionarguesthatreality isnotanobjectivephenomenonandthatthereare

multiple realities (Denzin & Lincoln, 2011). Especially, when a researcher aims to study

individuals’behaviorandthesocialworldinwhichtheylive,theassumptionofcriticalrealism

(subjectivity) is that knowledge of the social world and individual behaviors are inevitably

interpretive innatureratherthanforthrightlyrepresentative(FrazerandLacey,1993).This is

whythisstudyisbasedontheontologicalstanceofrealism,tobestrepresenttheinductivesocial

entrepreneurial approach in the BOPmarket context. Thus, the intent to claim any objective

observationortopresentanobjectivepredictionisoutofthescopeofmystudy.Butsincethis

researchaimstoprovideanentrepreneurialadviceonspecificcustomergroups,toSesoloMello

B.V.basedonlocalcircumstances,interpretiveobservationsarerelevantandimportanttoanswer

theresearchquestionsandtheVPCdesignquestionsposedinchapter3.1.1.

My epistemological stance lies in social constructionism, which states that all knowledge

producedislocal,provisionalandsituationspecific(BrymanandBell,2015).Groundedintothe

critical realism perspective, the findings of this research study may differ depending on the

contextualfactorsunderwhichdataiscollectedandanalyzed(Madilletal.,2000).Inparticular,

whenaresearcherisengagedinsocialconstructionism,itbecomesinevitabletoexcludepersonal

andculturalviewsabouttheresearchanditsimpactondatacollectionandanalysis.Thiscanbe

achanceaswell,sinceinthecontextofthetownshipsoftheWesternCape,theresearchercan

connect views from his European context and possible solution approaches with the local

knowledge obtained. However, as explained in chapter 1, this presents another reason, why

havingtheHealthPromotersSouthAfricaaslocalpartner,andbeingsupportedbynative(female)

translatorsissocrucialtogetalessbiasedviewontheactualsituation.

Inaccordancetotheresearchquestionsposedandtheinductiveentrepreneurialapproach,the

adoptionofaqualitativeapproachisbestsuitedtoobtainacontextualunderstandingoftheissues

under investigation. Due to experience of prior entrepreneurial projects, and an academic

consultancy trainingatWageningenUniversity, thecombinationofsemi-structured interviews

andafocusgroupworkshopdesignischosen.Thesectionbelowdiscussestheproceduresand

criteriaadoptedininterviewandworkshopdesign–followedbythecriteriaforrecruitmentof

thesample.

3.2.2. TheMomTest&IREPA:AskingtherightquestionsintheBOPcontext

Asalreadydescribedinthepreviouschapters,entrepreneurialresearchposesabigthreatinthe

formofconfirmationbias.Oftenanentrepreneurorresearcherisaskingquestionsinthewrong

way,leadingtofalseanswers–amajorfactoriscustomersgivingdishonestanswers,sincethey

do not want to disappoint the interviewer (Fitzpatrick, 2013). However, there is criteria for

information acquisition and question design, that has proven quite successful in practical


23

entrepreneurialresearch:TheMomTest.CondensedinabookbyFitzpatrick,itestablishessome

relevantprinciplesforthisresearch:

The qualitative research focuses onmultiple focal points consisting ofwhat people say (their

knowledgeandunderstanding),whatpeopledo(theirmeaningfulbehavior),whatpeoplemean,

needordesire(emotionaldrivers)andtheculturewithinwhichpeoplelive(normsandcodes).

Inorder to establish a sufficientdata-basis andbe able to interpret the information, the right

questionsarekey(Winkleretal.,2017).

According to Fitzpatrick (2013), questions should be asked about current or past behaviors/

actionsinaqualitativeway–thisleadstomoreelaboratedescriptionsandthelikelihoodofan

honestanswer ishigh. Moreover, theresearcher isable toobtainadditional information, that

mightnothavebeenintendedtobeobtainedinthefirstplace.Alwaysavoid“wouldyouandI

formulations” as well as future assumptions. Some example questions (and their example

effects;Fitzpatrick,2013)are:

Ø How do you solve challenge now? (identify potential competitors or missing

services/products)

Ø Whydoyoubother?(understandthecustomer´svalues)

Ø Whataretheimplications?(understandpotentialfearsorrisks)

Ø Talkmethroughthelasttimethathappened.(identifycurrentbehaviorandpotential

commonmistakesinproductusage)

Ø Talkmethroughyourworkflow.(identifypotentialforprocessimprovement)

Ø What else have you tried? (identify potential competitors or missing

services/products)

Ø Wheredoesthemoneycomefrom?(whatisthecustomerabletopay)

Ø WhoelseshouldItalkto?(expansionofcustomergroups)

Ø IsthereanythingelseIshouldhaveasked?(knowledgeexpansion)

Ø Whydo youwant that?Howare you currently copingwith theproblem? (identify

painsandgains)

Next to the quality of questions, it is important to assess the level of commitment,which is

another indicator for honesty and real interest. This can be done through following example

factors:

Ø time–clearnextmeeting,trialagreement

Ø reputationrisk–intropeerstoentrepreneur

Ø publictestimonial

Ø cash–letterofintent


24

Ø pre-order

Ø deposit

Inordertoimprovetheconversationsfromtimetotime,thisprocessshouldbeunderstoodasan

iterativelearningprocess.Itincludesprepping,researchingquestionswellenough,doingadue-

diligenceandwritingdownassumptionsaboutapersonandvalidatethemlater;askingyourself

whatcommitmentyouwanttoachieve,howoneshouldshowupinthemeetingandhowtowrite

it down – or should one record it? - the focus is on emotions, problems, goals,workarounds,

obstacles,ideas,requests,budgets,follow-uptasksandreferencedpersons.Intheendthenotes

shouldbe reviewed, the assumptionsupdated and the researcherhas to askoneself –how to

improveandlearnbetternexttime(Fitzpatrick,2013)?

Moregenerallyspeakingthefollowing7pointsofadvicearecrucialtounderstandyourcustomer

segment(Doorneweert,B.&Lans,T.,2015):

1. focusoncustomers'issues,notyourproduct

2. don'tfishforcompliments,askhardquestions

3. iftheysayit'saproblembuttheyhaven'tattemptedtosolveit,it'snotaproblem

4. aftereachandeverymeetingpotentialcustomersshouldcommittothenextsteps

5. segmentationofwhoyouwanttoreachwhereandhow

6. youshouldbeterrifiedofatleastonequestionyouareasking!

7. theonlythingpeoplelovetalkingaboutmorethanthemselvesistheirproblems

Intheory,youshouldthenchoosethesegmentthatscoreswellforprofitability,easytoreachand

rewardingforyoutobuildabusinessaround.12

In case, you obtain too many new answers after a few meetings, it is time to redefine your

customergroupandnarrowitdown.Ifyoudon´t, this isasignofagoodunderstandingofthe

customersegments jobs,painsandgainsandnormally this isagoodpoint to (re-)defineyour

valueproposition.

Summingitup,thebestresultsaregeneratedinaconversation,ratherthananinterview.That´s

whyeventhoughinqualitativeresearchterms,ithasbeenlabeledsemi-structuredinterviewsin

this research – in practice the interviews have rather been conversations, leading to new

conversations.Thesamecharacterappliestothefocusgroupworkshop.

12Sincethisisasocialentrepreneurialresearchproject,thesecriteriaaddtothepre-definedsocialandenvironmentalfactors.


25

3.2.3. SamplingstrategyforinductiveresearchThisleadsintothesamplingstrategyforrelevantcustomersegmentsandintervieweesandhow

to find out about them. In this research, the semi-structured interviewswill lead through an

explorativeprogresstowardsthesuitablefocus-groupsample.Inentrepreneurialresearch,the

researcher/entrepreneurisoftentrustingkeyinformants,toleadtootherrelevantinformants.

Theaimistogetasdeepofaninsightintothelocalcontextaspossiblebeforeconductingafocus

group workshop, through literature research, followed-by semi-structured interviews

(conversations)withrelevantstakeholders.Relevantstakeholdershavebeenidentifiedthrough

a purposive sampling (Bryman, 2012) approach, in order to select for example local spaza-/

tuckshop owners to investigate the current trade structures and proposition of customers´

behavior regarding purchase amounts, labelling and packaging. It is a strategy to select those

casesdeliberatelywhocanprovideimportantinformation(Bryman,2012).AccordingtoPatton

(2002:230)“thelogicandpowerofpurposefulsamplingliesinselectinginformation-richcases,

fromwhom one can learn a great deal about issues central important to the purpose of the

inquiry”.Purposivesamplingwasusedinaplannedmannertoselecttheinformation-richsample

cases/participantswhocouldproviderelevantinformationabouttheresearchquestionsraised

inthisstudy(Bryman,2012).Thisisreflectedinthepresentsampleofshopkeepers(interviews:

5); socialworkers, ngo´s, entrepreneurs, government related informants (interviews:13); and

especiallylocalfemaletownshipinhabitants(focusgroup:22).Theinterviewsamplesizeisbased

on the prior described “Mom Test”-criteria. In the inductive process, the information started

repeatingitself,untilasufficientlyclearpictureofthelocalcontexthasbeenestablishedtoanswer

theresearchobjectiveandprepareforthefocusgroupworkshop.Approachingtheresearchfrom

aninterpretiveperspective(Denzin&Lincoln,2011),Iwasawareofthefactthatthequalitative

approach uses small sampleswith the aim to produce thick and rich descriptions (Miles and

Huberman,1994),insteadoflargesamplesthataimtogeneralizethefindings(Bryman,2012),

whichwasnottheintentofthestudy.

3.2.4. Semi-structuredinterviewsintheBOPcontextBasedonIREPA(Winkleretal.,2017)andthedescribedcriteriaandpre-requisites,thefollowing

factorsareimportantforsemi-structuredinterviewdesignintheBOPcontext:

Ø dialogshouldbefreetoflowandkeepspaceforindividualknowledgeandinput

Ø information always should be cross-checked during the interview and between

differentinterviewpartners

Ø the researcher needs to decide by his own what type of information source and

methodofdatacollectionshouldbechosenataspecificlocation


26

Concerningthelocalityofconductingtheseconversations,thereisagoodoptionforthespecific

township context, there is the possibility of so-called transect-walkswith key-informants and

observations,which has been donewith e.g. GeorgeArrey in theKayamandi township. These

walkscangivegoodinformationwithouttheneedforhouseholdmemberstospendalotoftime

togiveinformationduringinterviews.Thequestionsduringthewalkareaskedtoakeyinformant

whoknowsthelocalsituationwellenoughtotelldifferencesbetweendifferenthouseholdsand

localities(Winkleretal.,2017).Inthiscasethisknowledgeshouldberelatedtohealth,cooking,

heating,lightingandtownshiplogistics.Itisimportanttonote,thatthepersonchosenshouldbe

respected by the community in order not to disturb social hierarchies when these social

interactionstakeplacewithanon-respectedperson(Bondreauetal.2008).Duetosafetyreasons

ofcarryinghigh-techequipmentinthetownship,onlyfewinterviewshavebeenrecordedwithan

audiorecorder(Arrey,2016).Thus,theinterviewsarenotfullysubscribed-theinformationis

ratherprocessedonthebasisofthebullet-pointsummaries.

Nexttothepriormentionedquestions,thesemistructuredinterviewsandfocusgroupworkshop

aimtoestablishinformationabout:

Ø whichcustomersegmentsuseparaffinintheWesternCape;

Ø whereandhowcustomerssource/buyanduseparaffinduringtheyear;

Ø howparaffinaffectstownshipinhabitants,andwhatismostimportanttothem;

Ø what alternative technologies or products for cooking heating and lighting, township

inhabitantsareusingandweathertheyaresatisfiedwithit;

Ø whatcurrentlyinhibitsadoptionofalternativestoparaffin;

Ø howtuck-andspazashopownerssourceandsellparaffinandalternativefuels;

Ø howparaffiniscurrentlypackaged-includingproductmarketingandlabelling;

Ø howpotentialcustomersanddistributorsreacttoandhowtheycommittoSesoloMello´salternativebiofuelapproach;

Based on the above described criteria and prerequisites, the interview guides for the semi-

structuredinterviewscanbefoundinAppendixA.


27

3.2.5. FocusgroupresearchinthelightofBOPmarketsIREPA(Winkleretal.,2017),definesgroupdiscussionsandbrainstormingasamethod,thatcan

beusedbyresearcherstogetherwithhomogenousandheterogeneousgroupsinBOPmarkets,

todiscusslocalproblemsandconstraintsinordertoimplementbottom-upsolutions.

AccordingtoIREPA,focusgroupdiscussionsaroundafocalquestion-“HowCookingactivitiesare

currently performed in Kayamandi?” – can lead to a dynamic creative process, with many

interactions.Oftenthissavestime,combiningvaluableinputandevengeneratesdeeperinsights

andknowledge thansemi-structured interviews–whichare innaturenot thatdifferentapart

from the sample size. A main potential pitfall is the quality of workshop moderation, which

requiresathoroughpreparation.Duetolimitedlocalstaffavailable,limitedtimetojointlyprepare

aworkshop,andmypriorexperienceinmoderation,thisresearchaimstoconductthefocusgroup

researchfromtheperspectiveofaparticipativeobserver.Sinceasparticipativeobserverthereis

little to no time to take relevant notes. Thus, the workshop will be recorded with an audio

recorder.

Besidescreatinginnovativeideas,thisworkshopformatalsoresultsinspecificstepsthatshould

be executed in order to realize a SesoloMello´s pilot project in Kayamandi. Ideally, after this

workshopthestakeholdersshowcommitmentandsignuponalist13aspilotcustomerstofurther

participateinthefeedbackloopduringSesoloMello´sproductdevelopment.

Thegeneral conceptof thisworkshop is to takeall the stakeholdersona journey through the

currentcooking,heatingandlightingsituationintheWesternCape,alongpotentialalternatives

approachesleadingtoabrainstormingonabottom-updesignproduct.Duringthefirsthalfofthe

workshoptheparticipantsbrainstormoutloudontheircurrentcookingbehaviors.Duringthis

process,wheremostlikelymanyjobs,painsandgainsaroundcookingemerge,theresearcherwill

feedsomeinformationaroundhealthycookingintothebrainstorming.Thisisduetothefact,that

theHealthPromotersSouthAfricadoestimate,thatmanycommunitymembersarenotawareof

thehealthimplicationsofparaffin(Arrey,2016),eventhoughtheyareexperiencingotherpains

or describe the health implications in other words. The detail of information, and wording

depends on the pains being described during the first half – and the perceived readiness to

brainstormonalternativeapproachesinthesecondhalf.Duringthesecondhalf,thestakeholders

willnotbeconstrainedby toomany factors, suchas time,money, resourcesetcetera,andwill

brainstormonpotentialalternativeapproaches.Thiswillenhancethecreativityoftheideasthat

willbeproduced.Thesecondhalfofthisworkshoprequiresthestakeholderstoconverttheirjobs,

painsandgainsintorealityandpotentialpainrelievers,gaincreatorsandproducts/servicesto

letthemdecideuponthestepsthatneedtobetakeninordertoachieveanalternativetoparaffin

–incasethisiswantedbytheparticipatingcommunitymembers.Following,thescientificvalue

13SeeFigure17(SesoloMello,2016)


28

offocusgroupresearchandthegeneralapproachisshortlyportrayed.14

According to Street (1997) workshops are one of the most useful tools that can be used for

enhancementofstakeholder involvement.Theirvalueandprovenapplicationonasustainable

local–andurban-scalehasbeenhighlightedbyseveralstudies(Andersen&Jaeger,1999;Street

1997),whileWeaveretal(2000)describetheuseofstakeholderworkshopsforapplicationsof

sustainabletechnologydevelopment.However,itisessentialtobementionedthatonlyonesingle

workshop isnotenough toengagean in-depthcollaborativeprocess; aworkshopneeds tobe

includedinabiggercontextofaparticipatoryprocessandbecombinedwithmorestimuli,like

interviews,asstatedbyMayer(1997)-dependingonthecomplexityoftheresearchquestion.

ThisiswhytheKayamandiworkshopneedstobecarefullyplannedandcombinedbySesoloMello

B.V.withotherfollow-upactivitiestoestablishasuccessfulpilotproject.

Dueto(dr.ir.)AnnemarievanPaassen–communicationandworkshopexpertinthesubdivision

KnowledgeTechnologyandInnovationofWageningenUniversity-onhowtoeffectivelyengage

potential participants, I decided that the approach of the workshop should be based on the

concept of Appreciative Inquiry (AI). According to Holman and Devane (1999), AI is “the

cooperative search for the best in people, […] and thewholeworld around them”. The same

authorspresenta four-dimensional (4-D)modelof theAI cycle (seeFigure11)which isnota

“formula”butmoreofaconceptualapproachinthecontextoforganization-changeefforts.

Figure11:TheAppreciativeInquiry4-DCycle(Holman&Devane,1999)

14 Based on E-ACT (Bussmann et al., 2014): “Towards a new business model for reintegration incombinationwithlocalfoodproductioninZwolle,NL”

Discovery"Whatgiveslife?"(thebestofwhatis)

APPRECIATING

Dream"Whatmightbe?"(whattheworldis

callingfor)ENVISIONING

IMPACT

Design"Whatshouldbe-

theideal?"CO-CONSTRUCTING

Destiny"Howtoempower,

learnandadjust/improvise?"

SUSTAINING Affirmative Topic Choice


29

ThisworkshopdesignapproachistransferredintotheBOPsetting,basedontheMomTestand

IREPAprinciples,e.g.aroundaskingtherightquestions,describedinthepriorchapters.

The theory is applied in the so-called AI Organization Summit where most members of an

organization(herecommunity)aretakingpartinastrategicandcollaborativeprocessthataims

inreachingconsensusoverachallenge.TheSummithasbeenproventobeeffectiveanditusually

requires4daystocomplete-onedayisdevotedforeachcomponentofcycle-foranumberfrom

50to2000participants(Holman&Devane,1999).However,afour-dayworkshopwouldnotbe

arealisticoptioninKayamandiandinthescopeofthisresearch,thereforethefourcomponents

arepresented inavery concisemannerandbe covered relativelyquicklywithina three-hour

workshop.ThegeneralaspectsofanAISummit(Holman&Devane,1999),arethusintegrated.

Basedontheabovedescribedcriteriaandprerequisites, theworkshopdesigncanbe found in

AppendixA.

3.3. DescriptionofworkperformedinSouthAfricaAfterthoroughpreparationandgainingaccesstorelevantnetworks,whilestillatWageningen

UniversityintheNetherlands,thischapterpresentsabasicsummaryoftheactivitiesperformed

andtheresultsachievedduringthe6-monthtimeperiodinSouthAfrica.

After arrival in Johannesburg, the first stepswere related to re-activating and expanding the

network in South Africa. This entailed visiting local townships and organizations which are

working in townships, likeAwethu,VulaVula andThebeVentures.There I conducted the first

interviews and got first “real life” impressions apart from the

informationavailableinliteratureandinputreceivedupfrontviaSkype

callswith local entrepreneurs and theHealthPromoters SouthAfrica.

FromthereItravelledtoCapeTown,sincethedecisionhasbeenmade

toconducttheprojectandmainresearchhintheWesternCape.ThiswasduetoagoodsupportnetworkinCapeTown,manylargetownshipsand

links to Stellenbosch University – where the

Kayamanditownshipislocated.AfterthebigSouth

AfricansummerholidayinDecember,wherebarelyanypeopleareinoffices

andmanytownshipinhabitantsmovebacktothe“homelands”,thetaskwas

to activate and expand the network in Cape Town and Stellenbosch as

quickly as possible, meeting the Sustainability Institute in Stellenbosch,

Dutch embassy in Cape Town, ECN, Lions Club and local/ international

entrepreneurs, like Lumkani – local fire sensors for shacks, Green Diesel – Upcycling waste

cookingoilstobiodiesel,orAckeemNgwenya–SocialEntrepreneur.Moreover,therehasbeen

contactwithsocialentrepreneurshiphubslikeOPENandthePhilippiVillagearoundCapeTown.

Figure12:Awethulogo(Awethu,2016)

Figure13:PhilippiVillagelogo(PhilippiVillage,2016)


30

Here I could conduct further semi-structured interviews and found additional possible entry

pointstothetownships.Especially,findingandgainingtrustofalocalpartnerorganizationina

townshiphasbeenimportant.Thenetworkexpansionappearedtobea

natural process, where one contact lead to the next one and the

information obtained from the conversations, narrowed down and

repeateditselfmoreandmore.Luckily,IgottoknowtheCleanCooking

RevolutionandtheHealthPromotersSouthAfricawhoareactiveinthe

Stellenbosch township “Kayamandi” and “Khayelitsha”. Kayamandi has approximately 30.000

inhabitantswithalargeformalpartandinformalpart15.Itisarelativelyyoungtownshipanddue

to its size, it presents a relatively safe work environment than e.g.

KhayelitshaorMitchellsPlain.TheHealthPromoterCEOGeorgeArreyisan

experienced “social worker” and is well linked across townships around

Cape Town. His guidance and mentorship has been a great help to get

interviews done safely, understand the local environment better and

prepare and co-organize the local focus group workshop. At this point

George committed to do a focus group research with approximately 30

womeninthecommunitycenteroncookingpracticesandparaffinuse,

consumerbehaviorandwillingnesstotestanewproduct.Moreover,he

agreedonfindingagroupof100committedwomenwhowillextensively

test Sesolo Mello´s product in the pilot

phase. This potential long-term

partnership with an established

organization appeared to be a great

opportunityforthestart-uptogetaccessto

local townships. Furthermore, I started

seeingGeorgeassenioradvisoronparaffin

distribution networks, since he ran a

spazashophimselfandhasavastnetwork

ofotherfriendsandentrepreneurslivingin

otherWestern Cape townships. This gave

merelevant insiderknowledgeon theexistingstructuresandconsumerneeds (Patton,2002).

15 Informal settlemens: Currently not accepted by local government – thus no infrastructuredevelopment

Figure16:HealthPromoterSAheadquartersandLegacycenter(SesoloMello,2016)

Figure14:CleanCookingRevolutionlogo(CCR,2016)

Figure15:DutchConsulateGeneralCapeTownlogo(NLConsulateGeneral,2016)


31

Thus, the main focus of

research was on Kayamandi

township - inagreementwith

SesoloMello,whomanagedto

touch base in Stellenbosch/

Kayamandi. This allowed to

narrowdownandfindagood

scope to solve the research

objective. At the Health

Promotershub,Icouldspenda

lotoftimeandworkinthelocalcontext.ThisiswhereIconductedthefocusgroupresearchonparaffinusageandhealthawarenesswith22localwomen(sincewomenaremostlyresponsible

for household decisions and cooking).Moreover, I interviewed five tuckshop- and spazashop-

owners in Kayamandi,who purchase and sell paraffin on a regular basis andwho could give

valuableinsightsonthemarketstructures.Whilevisitingthetownshipregularlyandobtaining

more andmore detailed information, I started towork out amore detailed value proposition

aroundSesoloMello´sapproachofusingwastecookingoilsasfuelalternativeforcooking,heating

and lighting.During the time inSouthAfrica Imanaged toobtainmy thesis researchdataand

validateassumptionsforasolidvaluepropositiondesign.Following,theresultsoftheperformed

activitiesarepresented.

Figure17:Excerptofpilotcustomerlist(Bussmann,2016)


32

4. ResultsThis chapter has the objective of answering the sub-question of this thesis: “Does Sesolo

Mello´sbiofuelsolvethecustomersjobs,painsandgains?”andthemainresearchquestion:

“Whatisthesocialfeasibilityofintroducingabiofuelalternativetoparaffinintownships

of theWesternCape?”. It is thus divided into three parts: Thequalitative research results16

condensed in the Value Proposition Canvas. Followed by the integration of the VPC in the

BusinessModelCanvasandexplanationofthecustomersegmentimplicationsforthebusiness

model.

4.1. ValuePropositionCanvasforSesoloMelloapproachInorder tokeepagoodoverview, the relevant research results (jobs [j], pains [p], gains [g]; gain

creators[gc],painrelievers[pr]andproduct/servicepropositions[ps])utilizedintheVPCaremarked

withthelettersandnumbers,thatcorrelatewiththenumbersinfigure19.Thenumbersarenotto

beunderstoodasranking.

Throughthesemi-structuredinterviewsandfocusgroupresearchitcould

be validated, that paraffin users in the Kayamandi township are using

paraffinonaregularbasis.Moreover,thedemandisdependingonseasonal

effects. Theyneedhigher quantities duringwinter,mainly due to heating

relatedtobadinsulationofshacks.Eventhough,pricesshouldintheorybe

governmentregulated,thedemandpeakshaveimmediateeffectsonprices

ofavailableparaffininthetownships.Insummer,theshopownersdescribe

thattheysellparaffinaround9-10ZARperliter,inwinterpricesmaysoar

to around 15-16 ZAR17 per liter. The so called “survivor” (Arrey, 2016)

communitywomendescribe,thatthisresultsincooking,heatingandlighting

being even less affordable. Thus, increasing the barriers of changing to

alternativesolutionsevenmore.However, thepricechangesarebetteror

16ThemoredetailedsummariescanbefoundinAppendixB.1716ZARequalsapprox.1Euro(currencyrate:January2015)

Figure18:WorkshopstartintheHealthPromoterHeadquarter(SesoloMello,2016)

Figure19:PromotionalbannerofHealtherPromotersSA(SesoloMello,2016)


33

worsedependingonthelocationwhereparaffinispurchased.AccordingtotheHealthPromoters,

theworstconditionsapplyatsuppliersthatdrivearoundthetownshipsandsupplysmallamounts

forrelativelyhighprice–“thefuelisevenoftenofabad,impurequalitystandard”(Bussmann,

2016).Thefuelpurchasedinlocaltuck-/spazashopsisunderlyinglittlelesspricefluctuations,but

atleastthefuelqualityisquiteconstant,since“customerswilldefinitelycomeback,returnbad

qualityproductsanddemandrefund”(Tuckshopowner#1,2016).Thelowestandmorestable

pricesapplywhendrivingtothenextbiggerstoresoutsideorattheouterboundariesoftheformal

settlements – best is to buy paraffin in larger quantities. This is done by somewomen, who

collectivelygotothesestores,orcollectivelyplaceordersthatareoftenrealizedtogetherwith

localmen/taxibusinesses.Theproductsarethenoftenpurchasedinlargerquantitiesanddivided

between the customers. From a single community member perspective, products, especially

paraffinareoftenpurchasedonaweeklyorevendailybasisinsmallerquantities,sincethepay-

checksareoftenpaidweekly,andthesurvivorsstruggleeverydaytofundtheirfoodandenergy

supply. Paraffin quantities consumed in a standard household of three to four community

membersisaround0,75-1literperdayinsummerand1,5-2literinwinter(seefigure1).Inthe

formal settlements of Kayamandi around 1500 households utilize electricity for cooking, and

lightingandusenon-orlittleparaffininsummer.Inwinter,theystillusearound0,75-1literper

day.Theapproximately4500households, thatusenoelectricityoronly for lighting, consume

around 0,75-1liter of paraffin a day. And 1,5-2 liters in winter respectively. This shows that

cookingandheatingarethemainfactorsforparaffinconsumption,especiallysinceelectricityis

tooexpensive–cookinginsummer–andcookingandheatinginwinter.GeorgeArrayexplained,

thatthedemandinwintercanbeasmuchasthreetimeshigherthaninsummer.Thisissupported

byotherstudiesaswell(Lametal.,2012).Manywomendescribe,thattheyarecookingonlyevery

threedaysinordertosaveonfuel–sometimeseventogether–thisismostlyacostquestion,but

cookingtogetherdoesrepresentcookingtraditionfromthehomelandsaswell.Table1:StateofelectricityusageinKayamandi(Healthpromoters,2016;CleanCookingRevolution,2016)

ElectricityusageinKayamandi(formalpart)

Sum ofhouseholds

SummerParaffin[Liters]/hh/day

Winter Paraffin[Liters]/hh/day

¼ is on fullelectricity

1500 noneorlittle ~0,75-1l(heating)

½electricityonlyforlight

3000 ~0,75-1l ~1,5-2l

¼ has uses noelectricity

1500 ~0,75-1l ~1,5-2l

Thehouseholdswithoutdirectincomeoftenhavearound300ZARpermonthfromgovernment

allowance.Thisallowsthemtospendaround10ZARperdayonenergyandfood.Anewparaffin


34

stove,onaveragereplacedeverysecondyear,costsaround120-200ZAR.Buyingnewalternative

stovesthateasilycostdoublethepricearethusoftennotaffordable–eventhoughthefuelmight

becheaperinthelong-run.Eveninformalsettlements,electricityisnotalwaysavailable,orthe

voltageisjustnotsufficient.Intheinformalparts,electricityisoftenobtainedfromformalpartby

connectingwireswithoutpermission.Sometimesthereareagreementsbetweenneighbors,that

distribute the electricity in an informal matter (Horbach, 2016). The difference between the

poorestcommunitymembers-“survivors”–andaveragecommunitymembersinKayamandiis,

that the latter live in e.g. brick houses, take care of health and show interest in the Health

Promoters.Cookingistreatedashealthyaspossiblebutcheap.Thesurvivorsontheotherside,

liveininformalsettlements,inthecheapestshackswithnoinsulationandlittleprotectioninthe

event of heavy rain events. For them everything depends on price – not about health or

environment.Traditionally,womenaremostlyresponsibleforhouseholdandcookingdecisions,

sotheyneedtoinstigatethebuyofaproduct(Arrey,2016).

Onapracticallevel,whenexplainingtheprocessofcooking,womendescribethatparaffinemits

blacksmoke(“blackpots”)andchildrenaswellasadultshavetocough.Manyofthewomenare

not aware of long-termhealth implications, and have been very interested in the information

provided during the workshop – the education factor is something that is wished to be

strengthenedtogetherwiththeHealthPromoters.

Thebiggestproblem,thewomendescribeareshackfiresduetostovestippingoverandrelated

burninjuries.Moreover,ithasbeendescribedquitedetailedonhowtostoreparaffinsafely,so

childrendonotdrinkit–however,transparentsoftdrinkbottlesarestilloftenusedaspackaging

material.Theavailability(wintershortages)andthehighcostfluctuationsofparaffin(number

onecomplaintaboutparaffin–moreimportantthanhealthissues)werefurtherissuesdescribed.

During theworkshop,manywomenwerekeenon findinganaffordable,healthyalternative to

paraffinandengagedwithalltheirknowledgeandimagination.Thisleadto20womensigningup,

and committing tobe further involved in the education andpilot customerphasewith Sesolo

Mello–howmanykeepthecommitmenttotestthefuelwilldependonSesoloMello´squalitiesin

avoiding the common pitfalls. This shows the relevance of health, social and environmental

challengesrelatedtocurrentcookingpracticesintheKayamandicontext.Basedonallqualitative

datacollected,thefollowingvaluepropositioncanvas18iscompleted.Basedontheinterviewsand

focusgroupattendees,thecustomersegmentisnarroweddowntofollowingpersona:Kayamandi

Xhosacommunitywomanbetweenapproximately20and60years,motherofatleastonechild,

livingassingleorinapartnership.Thedifferentiationbetweenformalandinformalsettlements

is currently not required, since responses on behavior did not differ significantly among the

18Duetoreasonsofpresentability,itissplitintotwopartsontheverticalaxis.


35

connected customers – however, this has to be considered when applying results on other

townshipsintheWesternCape.

Followingthemainselectedaspectsforthevaluepropositioncanvasarelistedandelaborated

on(seefigure19&20).

Figure20:VPC–Jobs,Pains,Gains(modifiedbyauthor,Osterwalderetal.,2014)

Jobs(j)

Ø 1:Desiredbyend-user-inthelong-runmodernstoves,poweredbycheapelectricityor

gas.Themainrelevanceisoncookingandheating,sincetheyrequiremostenergy.

Ø 2:Theuserwantsasafeproduct,thatdoesnotendangertheirfamilies,especiallychildren

anymore.

Ø 3:Theuserdoesnotcareabouttheenvironmentorhealththatmuch,butincreaseinsocial

statuswithinthecommunityisanimportantfactor.

Ø 4:Theuserwants tobemore flexiblewhen itcomestohouseholdactivities,especially

cooking.

Pains(p)

Ø 1:Costsofenergymatchoneofthelargestexpendituresandisbarelyaffordableinwinter

time.


36

Ø 2:Theuserfearsfires,poisoning,coughing, lossofproperty,notaffordableenergyand

food.

Ø 3:Adirtyhouse,blackwallsandpotsareperceivedasnegative.

Ø 4:Theuserfeelsunder-servedthroughbadqualityfuels,thatareassociatedwithpoverty.

Manycommunitymemberslook-uptoelectricitybasedtechnicandgas-powereddevices.

Ø 5:Unpredictable,unfairtreatmentinthesupplyoffuel,ameanstofulfillbasicneedsisa

bigservicegap

Gains(g)

Ø 1:Everythingrevolvesaroundafairpricingstrategyandfuelefficiency,thatenablesmore

degreesoffreedom.

Ø 2:Havingacleanhome,isassociatedwithagoodfeeling.

Ø 3:Securityaroundfuelsupplyandquality,relievesday-to-dayfears.

Ø 4:Securityforthefamily,createsmorefreedomandreducesday-to-dayfearsassociated

withcooking,heatingandlighting.

Ø 5: Suitable container sizes, safe containers, and well branded containers improve the

customerexperienceonmultiplelayers.Theycreatemoreflexibility,securityandwhen

marketedright(fuelbottlesaswell-knownase.g.cokeinthetownshipcontext)increase

thestatusinthecommunity.

Figure21:VPC–Products&Services,PainRelievers,GainCreators(modifiedbyauthor,Osterwalderetal.,2014)


37

Asseeninfigure19,themainpains,gainsandcustomerjobsareexplained.Thepain

relievers,gaincreatorsaroundtheproducts/servicestrytomatchthesecustomer

expectationsasgoodaspossible,forSesoloMellotocreateatripletoplayervalue

proposition.

Painrelievers(pr)

Ø 1:Thefuelhastobecheaper,andmorepricestable.

Ø 2:Thesupplyhastobeconstantinqualityandreliableevenduringdemandpeaks.

Ø 3:Airpollution,riskoffireandriskofpoisoninghastobereducedtoaminimum–even

thoughitwon´tbeasperfectasagas-orelectricity-poweredsolution.

Ø 4:Thefuelcan´temitblacksmoke,thatcreatesadirtyhome,blackwallsorpots.

Ø 5: It is crucial toprovideaneasy toadopt, cheapsolution,usingexistingchannelsand

utilitiestoavoidreluctancetoadoptandcommonpitfalls.

Ø 6:Packagingcansolve,safety,flexibilityandstatusissues.

Ø 7:Asanindirectfactor,localvaluecreationwillcreatemorejobsandopportunitieswithin

thetownship.

Gaincreators(gs)

Ø 1:Educationprovidesanadditionalvaluetothecommunity,thatisperceivedaspositive

andstatusincreasing.

Ø 2:Goodairqualitywill increaseuser’shappinessandhealth (e.g. lesscoughing) in the

longerrun.

Ø 3: Job creation and opportunity creation plays a crucial role for socio-economic

empowerment.Theend-userwilllikelyassignapositivevaluetothis.

Ø 4:Eventhoughnotperceivedrelevantcurrently–itmayportrayawaytoincreasestatus

whenmarketedasinnovative“western”andqualityproduct.

Ø 5:Increasingstatusthroughbranding,isabiggaincreatoraddressingthecurrentunder-

servingandexperienceddependenceonabadproduct.

Ø 6: Experience shows, that involving the users in the product design, will createmore

ownershipandacceptanceofaproduct.

Products/Services(ps)

Ø 1:Thisisthesetgoal,targetingalljobs,painsandgainsofthepersona.SesoloMelloaims

toaddressclean,affordableandsafelightingaswell,eventhoughthisdoesnotappearto

beamajorpain.

Ø 2:Throughtheexplainedpainrelievers,andgaincreatorsSesoloMelloaimstoimprove

theperceptionandstatusofthecustomersegmentwithinthetownshipcommunity.


38

Ø 3:SafetyandhealthisatthecoreofSesoloMello´sactivities.Thiswillbedeliveredthrough

thedescribedmechanismsaswell.

Ø 4:Moreflexibilityinpracticaltermsandeconomictermsisagreatchallengetosolvefor

thecustomer.

Tosummarizetheresultsfromthevaluepropositiondesignprocess,thebestpossibleproduct–

userfitasintermediatesolution,istocreateabiofuelmadefromwastevegetableoilasaoneto

onereplacementtoparaffin.Especiallyimportantis,thatthefuelhastoworkinthesamecooking

stoveandlampsasparaffin,inordertoallowcooking,heatingandlightingwiththesameenergy

source.Moreover,existingsupplychainscanbeutilizedtoestablishreliablesupply–aregulation

onend-consumerpriceshastobe installed.Eventhoughhealthier,andmoreefficientper liter

consumed,thefuelpriceperlitershouldstillbecheaperthanparaffinatalltimesoftheyear,and

belessfluctuatingovertheseasons–thisisacrucialpointforvalidatingtheeconomicfeasibility

oftheapproach.DefinedbySesoloMello,thefuelhastoemitlessharmfulcompounds,reducing

healthimplications.Fromacustomerpointofview,itismoreimportanttonotexperience“black

smoke and pots”, as well as coughing anymore. Moreover, a branded child-safe “container”

packagingisdesirabletoreducepoisoningincidentsandtopreventfuelmix-upalongthesupply

chainwhilecreatingbrandawareness.Aspecificallydesignedmulti-usecontainerisperceivedto

evencreateapositivesocialstatusforcustomersinthecommunity.Thevaluepropositiondesign

processappearstosupportthesocialfeasibilityofSesoloMello´sapproachandpositivelyanswers

thesub-researchquestion.

4.1.1. BusinessModelCanvasforSesoloMelloapproachThefollowingbusinessmodelcanvas,designedbySesoloMello(2015)andmodifiedbasedonthe

value proposition canvas input, that influences not only the “Customer Segments” and “Value

Propositions”,“CustomerRelationships”boxes,butallotherboxesaswell.Theaimtoestablish

and maintain “Customer Relationships” through co-creation of the product with end-users.

Additionally, a personal relationshipwith the retailers has to be developed and incentives to

guaranteeastablepriceandgoodmarketingcanbeachievedthrougharewardsystem.ThisBMC

represents the current status and approach of Sesolo Mello. The validation, elaboration and

analysisoftheother“6boxes”isoutofthescopeofthisresearchandwillbemostlyconductedby

Mr.Hendriks.


39

Figure22:BMCofSesoloMello´sapproach(modifiedbyauthor,SesoloMello,2015)

SesoloMellodefinestheir“keyresources”asintellectualproperty,theequipmentandmaterials

to produce the fuel, and a committed on-site team, including employees and a local support

network.

“Key Activities”, are currently identified as production, distribution, scaling and marketing –

including empowerment projects (e.g. education). Sesolo Mello needs “Key Partners”: its

suppliers,supportiveNGO’s,aboardofadvisors,andprovidersofseedfundingforthestart-up

phase. “RevenueStreams”willbegeneratedbyselling fueland theby-productglycerol. In the

start-up phase, grants can be considered a “Revenue Stream” as well. The “Cost Structure”

comprises of labor costs,material, cost of equipment and resources,marketing and transport

costs.

Eventhough,inthebeginningSesoloMellowillprobablyselldirectlytothepilotend-consumers,

these are not themain customers. SesoloMello set the goal to utilize asmuch of the existing

distributionchannelsaspossible,todecreaseentrancebarriers.Thus,thepayingdirectcustomer

isthelocaldistributor.However,sincethejobs,painsandgainsarerelatedtothepriormarket

segment and described persona - the end-user – the scope of the research is limited to this

persona.Moreover,onlywhenthesolutionappealstotheuser,thedistributorwillshowinterest

inpurchasingtheproduct.


40

4.2. ConclusionValuePropositionDesignprocessand“socialfeasibility”

Thechapterhadtheobjectivetoanswerthesub-question:“DoesSesoloMello´sbiofuelsolvethe

customersjobs,painsandgains?”andthemainresearchquestion:“Whatisthesocialfeasibilityof

introducingabiofuelalternativetoparaffinintownshipsoftheWesternCape?”.

Inordertodothis,thechapterhasbeendividedinthreeparts.Firstthemostimportantqualitative

researchresultshavebeencondensedintothevaluepropositioncanvas,groupingcustomersjobs,

pains and gains – andmatching pain relievers, gain creators into suitable services/ products.

FollowedbytheintegrationandupdateofSesoloMello´sbusinessmodelcanvas,thatnowleaves

the other 7 boxes around technical feasibility and economic feasibility open to be assessed.

ConcludingitcanbesaidthatSesoloMello´svaluepropositionhasbeensuccessfullydeveloped

aroundaddressingallrelevantpains,gainsandcustomerjobsinthiscustomersegment.Thus,it

canbeconcludedthatthebusinessmodelisfeasiblefromasocio-economicperspective.


41

5. DiscussionThischapterwilldiscusstheconsequencesofthepresentedresultsfortheresearchobjective

andSesoloMello´sapproach;aswellastherelevancefortheoryandpracticeofotherclean

cookinginitiatives.

5.1. ImplicationsforthesisobjectiveandSesoloMello´sapproachTheresultsofassessingthesocialfeasibilityofSesoloMello’sapproachwereclear:Thecustomer

jobs,painsandgainscanbematchedwithadoptedpainrelievers,gaincreatorsandaccording

products/services.TheestablishedValuePropositionCanvasandBusinessModelCanvasisbased

onthefollowingproductandrelatedservices:

“Abiofuelmadefromwastevegetableoilasaonetooneliquidfuelreplacementtoparaffin.”

Thepresentedresultshave implicationsontheobjectivesof thisresearchaswellasonSesolo

Mello´sapproach.Theobjectivewas”…todeterminewhetherSesoloMello´ssocialentrepreneurial

solutionforparaffinreplacement,isabletoavoidthecommonpitfallsofthecurrentcleancooking

initiatives.”.

Theresultsandanswerstothemain-andsub-researchquestionimpliesthatSesoloMellomight

beabletoavoidthecommonpitfalls,iftechnicalandeconomicfeasibilityisvalidatedsuccessfully.

Followingtheimplicationsofthesocialfeasibilityonthemainthreepitfallsisdiscussed:

Ø Solutionsareoftentooexpensive

Asshownintheresults,customersmainlywantthreethingswhenitcomestofuelsources.Alow

energypriceingeneral,supplysecurityandpricestability(Taitetal.,2013).WithSesoloMello´s

sustainabilityapproachtobusiness,thesetopicswillbeacoreperspectiveinthebusinessmodel

andbeguaranteed.Thismeans,thepriceneedstobethesameasthelowestparaffinprices,orif

feasible–cheaper.Thiscanonlybeguaranteedif local feedstockanddistributionpartnersare

reliableandcommitted. If this isnot thecase, SesoloMellowouldbe forced to introduceown

distribution channels. However, introducing competitive elements in township structures has

provendifficult, according toNeves&duToit (2012)whodescribeeventsof violenceagainst

Somalitradersthattriedtotakeamarketshareintuck-andspazashops.

BasedonafirstinterviewwithGreenDieselintheCapeTownarea,potentialrisksforfluctuating

wastevegetableoilpricesarose:

“Ithasbecomemoreexpensiveforustogetwastecookingoil.Becauseoftheweakrand(ZAR)

muchisexportedtoGermanyandothercountries.Thentheymakebiodieselfromitoverthere.”

(Watermann,2016).


42

Thisshouldbefurtherevaluated.SesoloMellostillneedstoStill,ifSesoloMello´sapproachdoes

worktechnically,therewillverylikelybeawaytopartnerwithlocalwastevegetableproducers,

toensureeconomicfeasibilityandpricestability.

Thus, it can be concluded, that if these questions of technical and economic feasibility are

answered, fromacustomerperspectivethesolution iscompetitivetoparaffinandmoreeasily

accepted,thenalternativecookstoves.

Ø Solutionsareoftenbasedonalock-innaturelinkedwithforeigndesign

Opposedtoothercleancookinginitiatives,whereoftenstoveandfuelisexchanged.Customers

canalwaysswitchback toparaffin,withouthaving lost the initial investment foranexpensive

stove.Thus, incaseSesoloMellodoesnotmanagetodeliverthedefinedvaluepropositionsor

customershaveotherreasonsforswitchingback,theycanutilizethesamestove.Again,underthe

assumption,thatthetechnicalfeasibilityisratedpositively.

Ø Solutionsrequiretoomuchbehavioraladaptation

Customersdonotneedtochangetheirstoves;thus,theydonotneedtoadapttoanewstove.The

onlythingtheyhavetoadoptto,isamoreefficientandlesshotfuelcombustion(Bedouet,2015).

Thefocusgroupworkshopshowed,thatslowcookingisacommonpractice,whichissupported

bythefuelproperties(Bussmann,2016).Moreover,theadoptionwillingnessissupportedbya

competitivefuelpricingaswellasaccesstothefuelviathesamedistributionchannelscustomers

areusedto(SesoloMello,2015).Thismeansthatcustomersdonothavetochangetheirhabitsto

obtaintheproduct–norinvestinthechange.However,customersmightevenbeinterestedin

changing their behavior related to adopting to new, safer packaging materials. This is an

opportunityforaco-creatingprocessbetweenSesoloMelloandthelocalcommunity.

Based on research of Tait et al. (2013) and the obtained results from Kayamandi, the little

adaptationrequired,mightbeoneofthemostconvincingargumentsofSesoloMello´sapproach.

Thus,supportinganotheravoidedpitfallofothercleancookinginitiatives.

Concluding,basedontheKayamandisituation,SesoloMellowillmostlikelybeabletoconvince

theircustomersandavoidthecommonpitfallsofcleancookinginitiatives.Aslongastheykeep

uptotheirpromisesanddeliverthedescribedvalueproposition.

Comparingtheresultsofthestudytothe8pre-definedcriteria,onecansaythat:

“CriteriaI.Embracelocalcommunityandvalidatewillingnesstochange”-canberatedpositive,

basedontheacceptanceofSesoloMellofounders,supporterandapproachinKayamandi.

“CriteriaII.Avoidhighpriceofproducts/opportunitycosts”-hastobeprovenfromatechnical

andeconomicperspective.Avoidanceofhighopportunitycoststopurchaseastove-canberated

positive.


43

“CriteriaIII.Avoidlock-innature”-canberatedpositive.

“Criteria IV. Offer participatory opportunities” – canbe ratedpositive, through SesoloMellos

bottom-upapproachandopportunitiesinco-creationonforexamplepackagingdesign.

“CriteriaV.Utilize familiar technology”–canberatedpositivedue to littlerequiredchange in

behavior.

“CriteriaVI.Make sure there is local value creation” – can be rated positive based on Sesolo

Mello´sdecentralized,localproductionapproachandopportunitiesinlocalSpin-Off´s.

“Criteria VII. Make sure there is no negative environmental impact derived from bio-fuel

production,supplyandconsumption”–canberatedpositivebasedonBedouet(2015),buthasto

bevalidatedfurtherafterthetechnicalfeasibilityhasbeenproven.

“CriteriaVIII.Makesurethehealthrisksofconsumingthebio-fuelalternativeareatleast75%

reducedwhencomparingtoparaffin19-canberatedpositivebasedonBedouet(2015),atleast

relatedtohouseholdemissions.Thepositivelyinfluencedfire(higherignitiontemperatures)and

poisoningrisk(newpackaging)hastobeassessedbyanexternalorganization.

Concluding,eightoutofeightpre-definedcriteriacanbematchedbySesoloMello´sapproach,as

longastechnicalandeconomicfeasibilityisguaranteed.Basedonthecurrentknowledgebase,six

out of eight criteria can be rated fully positive and two out of eight require additional

measurementandvalidation.

Basedontheresearchobjective,itcanbeestablishedthatthesocialfeasibilityforSesolo

Mello´sapproachisgive,andthecommonpitfallscanbeavoided.Atleastinthecontextof

theKayamanditownshipintheWesternCape,SouthAfrica.

19Inregardtoshackfires,ingestionandindoorairpollution


44

5.2. RelevanceofresultsChapter5.2,addressestherelevanceoftheresultsforthequalitativeresearchandValueProposition

DesignintheBOPmarketcontext.Moreover,fortheoryandpraxisofothercleancookinginitiatives.

This research and Sesolo Mello, show that there is keen interest of BOP communities to

collaborateandco-createtodevelopsolutionsfortheparaffinproblematic.Thismightbeasign,

thatthereispotentialforother,notcookingrelated,challengesaswell.Thecommunitiesshould

be taken seriously andaproduct-user fit shouldbe created together, rather thanaggressively

marketing solutions, that somebody “foreign” thinks are necessary and might not offer the

requesteduserexperience(ExampleofMimiMotoopposedtoCleanCookingRevolution;Arrey

2016).

Thisshowstheimportanceofemotionalandqualitativeinquiryaswell,ratherthanquantitative

measurements(ofcoursethisisnotmutuallyexclusive)(Winkler,2017).

Moreover, there appears tobe a lackof understanding and/or interest of the importance and

potentialimpactofadaptedpackagingsolutions.Notonlyfromtheperspectiveofpackagingsafety

(Taitetal.,2013),butfromacustomerexperiencepointofview.Thisdoesapplyforalternative

fuels, butwill be transferrable to other consumables aswell. Customers at the Bottom of the

Pyramid,atleastintheWesternCapecontext,oftenpurchasetheirconsumablesonadaytoday

basis – in smaller quanitities (Health Promoters SA, 2016). This offers opportunities for co-

creationandnewbusinessmodelsandshouldbefurtherexploredbySesoloMelloand/orother

stakeholders.Moreover,SesoloMello´sapproachoffersanewperspectiveontheimportanceto,

sometimes,developbluntandsimplesolutions–ratherthanovercomplicatedones.

Fromaqualitativeresearchperspective,theresultsofthestudycannotbegeneralized,butthe

mixedmethodsapplied,cancreateanewpointofviewforotherinitiativesaimingtoworkinBOP

markets.ForactorstargetingBOPmarkets,thecustomerfocusshouldbeasimportantasitisin

entrepreneurialventuresine.g.Europe–Userexperienceappearstobekeytoacceptanceand

success. Even though,many large corporates likeUnilever are doing in depths studies on the

hiddenpotentialofBOPmarkets;servingcustomersjobs,painsandgainsshouldbeevenmoreat

the core (UCT Unilever Institute, 2015). However, social, environmental and economic

sustainabilityshouldbeconsideredinanynewventure,beitintheBOPcontextornot–thatis

whatvalueaddstandsfor,andwhatposesimmensechallengestosocialentrepreneurscompeting

withmoreconservativeparadigms(McDonough&Braungart,2002).


45

6. ConclusionsThissectionaimstoconcluderesultsofthediscussion,byaddinglimitationsandfinallydeliver

recommendationsforresearchingeneralandSesoloMello´snextstepsspecifically.

6.1. LimitationsThe scope of this research is focused on the South African context, more specifically on the

KayamanditownshipintheWesternCape.Thus,thereisageographicallimitation,whenaiming

to transfer the developedmodel to other settings (e.g. other cultural background).Moreover,

thereisalimitationinregardtotheresearchmethodology.Sincetheresearcherandtheteamof

SesoloMelloarewhiteEuropeans inapredominantlyblackSouthAfricansetting,partsof the

resultsmightbebiased.Ithasbeentriedtoavoidthisthroughcooperationwithlocallyaccepted

peopletotranslateandconnect.However,itisunlikely,thatmypresencedidnothaveaneffect

on answers given. Thus, this research can be seen as a basis to decide on a good research

methodologyapproachandtrytoavoid,notonlythecommonpitfalls,butthelimitationpitfallsin

thisresearchapproach.

Duetothelimitationsinphysicalmobilitywithinthetownship, ithasbeendifficulttoconduct

many interviews. Even though, the specific amount of customer contacts, required to validate

assumptions is discussed controversially (Doorneweert& Lans, 2015.; Fitzpatrick, 2013). The

sample of 22 workshop participants, 13 other relevant stakeholders and 5 tuck-/spazashop

owners might be too small – especially when aiming to conclude for other Western Cape

townships, thereneeds to be additional interviews and focus groupworkshops.However, the

densityofrepeatinganswershasshown,thatthenarrowviewonthemarketsegmenthasbeen

correct.Moreover,manyofthecollectedresultshavebeenmatchedwithexistingliterature,e.g.

donebyTait et al. (2013),whoconductedextensive researchonparaffin in theSouthAfrican

context.Still, thedataobtainedfromthestudydesign-qualitativeinductiveresearch–willbe

hardtoreplicate;apartfromspeakingwiththesamepeople.Andeventhen,duetothepersonal

influenceontheinterview/conversationsituationanotherresearcherwillmostlikelynotbeable

toobtainthesameresults.Thisposesanimportantquestionforentrepreneurialresearchandthe

inherentconflictofinductive,intuitivedataprocessing-andasystematicandreproducibleway.

The inherent nature of this entrepreneurial research together with Sesolo Mello and Roy

Hendriks;andtherealisticscopeofthismasterthesis;limitedthedatacollectionandconclusion

tocustomervalidationandVPdesignaroundoneidentifiedcustomersegment.Itwouldhavebeen

beneficial to test the biofuel assumptions on a broader level; with more and other potential

customers (e.g. like industry,usingparaffin for industrialheatingprocesses).Moreover, it has

proveddifficult,toassesssocialfeasibility,withoutdoingownvalidationontechnicalfeasibility,

and only being able to do limited validation froman economic perspective.Nevertheless, this


46

mighthavebeenapositiveopportunity,toco-createwithusers–withoutbeingbiasedbyalarger

knowledgebaseonwhatispossibleandwhatisnot.

6.1. RecommendationsAkeytake-away,ofthisclosecollaborationworkbetweenasocialentrepreneurialventurelike

SesoloMelloB.V.andtheresearchproject,showsthepotentialandmaybetheresponsibilityof

researchandbusinesstocollaboratetogetherwithlocalcommunitiestosolvelocalchallenges.

This supports the conclusions drawn in this thesis, evenmore. Goal should be to respect and

understandtheBOPcommunitiesaseye-level-partner,indevelopingnewsolutionsandbusiness

models to solve socio-economic and environmental challenges. The same goes for other clean

cookinginitiatives,thatstilloftenfallintothecommonpitfalls.Andwhoknows,whenlistening

closely, theremight be solutions, products andmind-setsworth transferrin to the “developed

world”. Moreover, from a Western European perspective, I can’t perceive how the living

conditionsintheformalandinformaltownshipscanstillbe

thatbad;whileacrosstheroadthereisvineyards,luxury

hotels and art exhibitions on a Western European level.

There isastrongnecessity tochallengetheSouthAfrican

government to work on solutions, especially related to

sanitation, electricity and poverty relief/ economic

empowerment. My impression was, that through

gentrification,theinformalsettlementsarerathergrowing

then shrinking. This should be something to consider as

well,fromtheviewpointofacleancookinginitiative–and

this does require to integrate an approach of local

empowerment,asSesoloMellodoes(Klemzetal.2006).

ItcouldbeestablishedthatSesoloMello´svalueproposition

willnotrequiretoomuchbehavioralchange,willnotbetoo

expensiveanddoesnotestablishalock-in.However,thescopeofthisresearchhasnotbeenon

technical and economic feasibility and scalability, it is required to test the assumptions and

businessmodelinthislight.Thisentailsre-validatingtheavoidanceofthecommonpitfallsand

pre-definedcriteria.

Furtherresearchisrequired,especiallyinabroaderWesternCapecontext–incasetheexpansion

oftheconcepttotheseareasisplanned.Concreteresearchquestionscouldbe:

Ø Inhowfarcanthestatebemobilizedinordertotacklethecleancookingissues?

Ø Ifparaffincan´tbereplaced,whatcanbedonetomitigaterisksintheshort-term?

Ø Realizationofhealthimplicationsandsenseofurgency–versuscostsofchange?

Figure23:JacobandNonzameattheendoftheworkshop(Bussmann,2016)


47

Ø IncludeHaddon´sMatrixoninjuryprevention,whencomparingalternativefuelsources

&cookingappliancesinqualitativeresearch,inordertocomparepotentialinterventions

withexistingrisksandpotentialpitfalls(Deljavanet.Al.,2012).

Ø Howtoavoidconfirmationbiasasforeigninitiativeinalocalcontext?

A second direction of research, not only related to paraffin appears to be intriguing as well.

Questionsarisingduringtheresearchprocessare:

Ø Whatistheimpactofcultureandtraditionsonproductdesign,howcanitbeutilizedfrom

alocalentrepreneurialperspective.

Ø Howwould the facilitation of local think-tanks and entrepreneurship centers to drive

bottom-upinnovationbeperceivedindevelopingcountries?Istherearequiredorder–

povertyreliefbeforeinnovation?

Ø Qualitativevsquantitativeresearchincustomerdevelopmentandmarketresearch?

InSesoloMello´scase,notonlythetechnical,economicandenvironmentalfeasibilityshouldbe

furtherpursued,butotherpersonasinabroaderWesternCapecontext.Thepotentialfor“cash-

cow”marketopportunities,likeinindustrialsectors,shouldbeexplored,tobemorefinancially

independentonfeedstockpartnersincreatingrealvalueonatownshiplevel.


48

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AppendixA. CollectedData

1.1. Interview&FocusGroupDesign

Thisappendixincludesallinterview20andfocusgroupformatsthatwereappliedtoobtaindata.The

tuck-/spazashop interviews and the focus group research have been conducted together with

GeorgeArreyandAmendaMfenyana(HealthPromotersSouthAfrica)inordertranslatequestions

intoXhlosaandreducelanguagebarriers.Interviewcontenthasbeenwrittendowninbulletpoints

andpartlybeenrecorded21.

1.1.1. A semi-structured interview format for philantrophical/social workers, (social)

entrepreneursanddiplomats

Interviewtime:approximately20-30minutes

Ø WhatdoyoulikeaboutSouthAfricaandwhatdon’tyoulike?

Ø Howlongareyou/haveyoubeenlivinghere?

Ø HowdoyourexperienceswithBOPmarkets/SouthAfricantownships/townshipsinthe

WesternCapelooklike?

Ø Whatarethechallengesrelatedtotownships-youexperienced/gottoknowoffinthe

past?

Ø Whatdoyouknowaboutcleancooking/paraffin?

Ø Whatotherinitiativesdoyouknowthatareworkingonpovertyalleviation,sanitation,

energyandcleancooking?Howdidyouexperiencetheirwork?

Ø Whatchallengesofworkingintownshipsdidyouexperienceinthepastandwhatshould

onedo/notdo?

Ø HowdoyouperceivethetownshiphandlingbytheSAgovernment?

Ø Whowouldbeapersongoodtotalktoaboutthistopic?

20InterviewquestionshavebeendesignedinaccordancewithtoTheMomTest(Fitzpatrick,2013)21Recording,aswellas takingpictureshasnotalwaysbeenpossible,since it isnotalwayssafe to takevaluableequipmentintothetownship.


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1.1.2. Asemi-structuredinterviewformatforspaza-/tuckshopowners

Interview time: approximately 15-20 minutes

Ø Whataretheproductssoldmostinyourshop?

Ø Howdoesyourrelationshipwiththecustomerslooklike?

Ø Howdoesyourcontactwithothershopownersandretailerslooklike?

Ø WhatarechallengesyouexperiencedandexperienceinKayamandi/Khayelitsha?

Ø Howdoesyourexperiencewithparaffinlooklike?

Ø Howdoyougetyourparaffin?

Ø Howoftendoyougetnewparaffin?

Ø In the last year,whatwas the lowest, highest and average price you paid per liter of

paraffin?Andsolditfor?

Ø Whatisyourbusiestmonthandcalmestforparaffinsales?

Ø Howmanylitersofparaffindoyousellinyourshopperweek?

Ø Whatistheaverageamountofparaffinthatyourcustomersbuyperpurchase?

Ø Whatisthemale/femaleratioofyourcustomersbuyingparaffin?

Ø Did you ever have someone steal paraffin from you? If so, howmany times has this

happened?

Ø Areyouobligatedtopurchaseparaffinfromspecifictraders,orareyoufreetochoose?

Ø Whowouldbeagoodpersontotalktoaboutparaffinsales?

1.1.3. AfocusgroupformatforcommunitymembersinKayamandi

Workshoptime:max.4hoursParticipants:approx.20stakeholders

Facilitators:3(GeorgeandAmandaofHealthPromotersSA&JacobforSesoloMello)

Generalworkshopstructure:

Firsthalf:

Ø Introductionand“get-to-know”,whichmakesthestructureandexpectationsveryclear

Ø Openbrainstormingoncurrentcookingbehaviors

Ø Discussionaroundchallenges(withjobs,painsandgainsinmind)

Ø Researcher feeds some missing information around healthy cooking into the

brainstorming(informationdensity,dependingonpreviousdiscussion)

15-minute break with informal chat and some beverages and snacks provided.

Second half (during the second half the group will be split in two for more effective idea

development – George and Amanda will respectively supervise the groups and take relevant

notes additional to Jacobs notes and the recording):


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Ø Brainstormingonpotentialalternativeapproaches(convertingjobs,painsandgainsinto

reality and potential pain relievers, gain creators and products/services to let them

decideuponthestepsthatneedtobetakeninordertoachieveanalternativetoparaffin)

Ø SummarizingtheresultsandpresentingSesoloMello´sapproach

Ø Doafeedbackroundonthecompletediscussionandopenopportunitytoparticipatein

co-creatingtheproductandtestingit(includingasubscriptionlist,withalldatarequired

togetintouch–thisisfacilitatedbyHealthPromotersSAaswell)

Materialsrequired:

Purpose Materials

General -4tablesforstakeholders

-23chairs

Introductorypresentationonsuccesscases - Powerpoint presentation/ flipchart

presentation

Assignmentsstakeholdersgroups -Flipchartoutlining thegeneralstructure

oftheworkshop

-Markers

-Pencils

-Sketchpaper

-Awardforthegroupwiththebestidea


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1.2. Summariesofinterviews&focusgroup

Thisappendixpresentsthesummariesofdataobtainedduringinterviewsandfocusgroupresearch.

1.2.1. Summariesofsemi-structured interviewsphilantrophical/socialworkers, (social)

entrepreneurs,diplomats

InterviewSummaryOwenMuzambi-Awethu(Johannesburg,3rdDecember15)

AwethuisaSouthAfricanorganizationbasedinJohannesburgwhichincubateslocalentrepreneurs

amongotherstownshipbasedventures.OwenMuzambilivesintheAlexandratownshiphimselfand

hasaleadingroleintheAwethuSchoolsEntrepreneursproject.OwenMuzambisuggestedtotalkto

VulaVuladuringmystayinJohannesburg.

Muzambi describes the recent positive developments towards more entrepreneurs and

especiallyyoungerentrepreneurialmindsbornintownships.Heconnectsthisdevelopmenttoa

mind-setshiftofyoungtownshipinhabitantsandthegrowingmentoringandfinancialsupport

throughorganizationslikeAwethu.Moreover,hementionsthatthebetteraccesstoinformation

via the internet plays an important role in this development. Concerning paraffin use and

awareness of health implications he describes that his family used a paraffin cook stove for

cookingandheatingforalongtimeuntilhisyouth,untiltheyswitchedtoelectricitybasedcooking

duetoavailabilityandbetterfamilyincomethroughhisowngrowingcontribution.Hedescribes

thathismotherhasalwaysbeenresponsibleforpurchasingparaffinandcookingfood.Hismother

stillsometimesusesparaffinforheatingduringwintermonths.Moreover,hedescribesthatthe

familydidnottalkabouthealthimplications,butthatduetotheindoorcookingandalotofblack

smokehehadtocoughsometimesandthepotsandwallswereblack.

InterviewTonyMalgas–VulaVula(Johannesburg,5thDecember15)

VulaVulaisacompanybasedinJohannesburgsuburb“Braamfontain”.Theyprovideindepthmarket

researchfortheircustomersandarespecializedonperformingfocusgroupresearchandin-depth-

interviewsintownshipsettings,sincemostoftheiremployeesdolivethemselvesinthoseareas.

TonyMalgas

- Stressesimportanceoflocalemployeesforfocusgroupresearchduetolanguagebarriers,

“blackandwhiteprejudices”resultingintrustissues

- describesparaffinasanissueaffectingmanyinhabitants

- describesthatthereisnotreallyanaffordablealternative

- describesthathepersonallyisusingelectricitycooking


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InterviewHuubvanZwieten–Cleancookingrevolution(CapeTown,10thJanuary16)

Thecleancookingrevolutionisastart-upfoundedendof2015bythedutchentrepreneurHuubvan

Zwieten.TheyfocusonreplacingparaffinstovesbywoodpelletstovesstartingintheWesternCape.

Aftertheinterview,heconnectedmetoPhilippiVillage,WesternCape.

- Believesthatachangeawayfromparaffinisnecessaryandthatpeoplearereadyforit.

- Employslocalwomenasindependententrepreneurs(socalled“Cleancookingangels”)in

ordertospreadthewordandsellthewoodpelletstoves.

- Describes social entrepreneurship as value creation through empowering people and

describesitasabetterdevelopmenttoolthanclassicalgiveawayapproaches.

- Runsacrowd-fundingcampaigninEuropetosubsidizenewstoves.

- Aimstogenerateprofitsonsellingwoodpelletsasfuelforthestoves.

- Workswithmanylocalstakeholders,likerestaurantsandwinefarmersintheregionto

sponsorstovesfortheiremployees.

- TheAlliance for Clean Cook stoves is apparently going to give awaymany clean cook

stovesduring2016/17buthedoesnotknowdetailsofwhatstoves,whereandwhen.

InterviewGeorgeArrey–CEOHealthPromoters(Stellenbosch,21stJanuary2016)

Health Promotion South Africa Trust is a non-profit organization providing information and

training inhealthandhygiene toprevent illness in the townshipsofSouthernAfrica.Thehealth

promotersarehostingworkshopsindifferentWesternCapetownships,especiallytheKayamandi

township, where their headquarters are located.

GeorgeinthefunctionasCEOofHealthPromoterscommittedtohostmyfocusgroupresearchwith

approximately 30 women in the community center on the 14th February on paraffin, consumer

behavior andwillingness to test alternatives. I am seeing George as an expert on local paraffin

channels, since he ran a spazashop himself and has a vast network of other friends and

entrepreneurslivingintownships.Hebelievesthataonebyonereplacementisabetterapproach

thanchangingstoves.IntheverybeginningGeorgeofferedsafetyconcernsandinsisted,thatIshould

onlywalkinthetownshiparetogetherwithhim.Moreover,Iwasadvisedtonotcarryanyvaluable

materials.

- Townships have never been meant to be a place for proper settlement, during the

apartheiditwasmeantformenwhowouldcomeforfiveyearcontractsfromtheeastern

capetoworkinthewesterncape.Womanhaven’tbeenallowedtolivethere,butstayed

intheeasterncapetodofarmingetcetera.Municipalitiespartlystillseeitintheoldway,

thusnotadaptingthesettlementsforfamily’sneeds.


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- At the same time the townships are growing, these growing parts are the informal

settlementswhicharenotdesignatedbythemunicipalities/government.Thustherewill

benoinfrastructureuntilthereisanewlawinplace.

- Ingeneral,olderpartsintownshipsaremoredeveloped.InKhayelitschayoucanseethe

roll-overeffect(gentrification)ofgrowingcapetown.

- Newlybuilt,designatedtownshipareasarewelldevelopedfromthebeginningincluding

infrastructuresolargeysersetcetera.

- Atthesametimeinthedevelopedparts,peoplestartedusingelectricityorsometimegas

forcookingandlighting,whiletheyarestillusingparaffininthewinterforheating(inthe

normalparaffinstoves),becauseelectricityistooexpensive.

- Moreover,electricityisnotavailableinunlimitedamounts,manypeoplejustsimplydon’t

have thevoltageorwhatever to runa fridge,washingmachineetceteraPLUS it is too

expensive

- Electricitypriceswentupby15%lately!

- Sothesepeopleusingelectricityforcookingstillneedparaffinforheatinginthewinter...

- ComingtotheamountspeopleuseinKayamandi(formalpart)

o 24000people

o 6-7khouseholds

Electricitystatus Sum

households

Summer Paraffin

[Liters]/hh/day

Winter Paraffin

[Liters]/hh/day

¼ is on full

electricity

1500 Noneorlittle ~0,75-1l

(heating)

½ electricity for

light

3000 ~0,75-1l ~1,5-2l

Noelectricity 1500 ~0,75-1l ~1,5-2l

o Summernoheatingbutcooking–winterhighheatingcost

o Poorestpeople= informalsettlements+cheapestshacks:everythingdepending

onprice

o Avg.people=e.g.brickhouses:careofhealth,cooking+healthy+cheap

o Womendecideoncookingtoolandistheonecookingbecauseofculture

§ Theyneedtoinstigatethebuy

o Money available for electricity/ energy: 3-4 people = 1 household = 300

Rands/month=10R/day–Summerlower–Winterhigher

o Paraffinstove120-200Rands


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o 1lParaffincurrentlyaround10Rands(heardof1,5lfor13,50Raswell)

§ 1,5l=13,50Rfor3propermeals-2daysofcookinginSummer

§ Inthewintertheycutoncookingtoheatandnotincreasethecost–they

cook one time for 3 days… - in winter 13,50R for one day

(cooking+heating)

o 1lParaffininwintermighteasilycost12-14Rands

§ Sometimestheyrunoutofparaffinsupplyinwinter

o Paraffinissubsidizedbythegovernmentbutsoldmoreexpensivethanallowed

- Salarystructures

o Peoplegetpaidmonthlyandpartyweekly

o Somecitizensreceivegovernmentgrants300R/month/person

- Paraffindistribution

o Spazashops(Tuck-shops)makeowndecisionwheretobuy

§ Acentralwholesaler/distributionpoint(majorityinKaymandi)

§ Supplierswhodrivethroughthetownshipsandsellitfromthetruck(sell

itmoreexpensive)

o End-consumersbuyitatSpazashopsforconvenience

§ Theyaremoreexpensive,sothemaingroceriesareoftendoneatbigger

stores/shopsinthecity

o Kayamandi

§ 500tuckshops

§ 14 years ago, Somalians chased away the SA´s entrepreneurs/ owners,

partly through underbidding their prices in response there have been

someSAshopownersretaliating

o Khayelitscha

§ Similarstructuresbutmuchbigger

- Otherinitiatives

o Oftenlackunderstandingoflocalcircumstancesandrequirements

o Areoftennotwillingto listen.Hementionstheexampleofmimimoto,adutch

cleancookinginitiativeaimingtosellwoodpelletstovesintheWesterncape,but

tryingtoconvincecustomersoftheproductasitis,ratherthaninvolvingthemin

thedesignprocess.OpposedtotheCleanCookingRevolution,thatworksclosely

togetherwiththecommunitytodevelopalocalizedapproach

- Feedstock

o Georgedescribesthatwastecooking-oilcanbedirectlysourcedfromsmalltake

awayshopsandhouseholdsinsidethetownships


58

o he believes it would be easy to test alternative products in the Kayamandi

communityandcreateamore“circulareconomy”insidethetownship

Interview Philipp Freiherr von Bodenhausen – HSH Global Software, Rotary Club Cape

Town(25thJanuary2016,CapeTown)

VonBodenhausenhasbeen interviewedmainlydue tohisactivitiesat theRotaryCluband their

involvementintownshipprojects.

- Describesshockingpovertyintownships

- Describesshockingparaffinshackfiresinwintermonthswhere100-1000sofpeopleare

suddenlyhomelessandlosealltheirbelongings

- DescribesthattheRotaryClubisdonatingclothesandrequiredconsumableseveryyear

- MentionstheHealthPromotersSA,aswellasDeepakChopra

InterviewDavidGluckman–DirectorLumkani(21stJanuary2016,CapeTown)

Lumkani is a social entrepreneurial business which has developed an early-warning system to

reduce the damageanddestruction caused by the spread of shack/slum fires in urban informal

settlements.

- Stressesimportanceoflocalsupportandlocalemployeesifyouwanttobesuccessful

asentrepreneurintownships–trustissues

- DescribeshowLumkaniimplementedalotoflocalknowledgeandfeedbackintheir

productdevelopment–veryimportantfortakingownershipandacceptanceofnew

products

- Describesshockingparaffinfiresinwintermonthsandblacksmokeonshackwalls

- Describes that he sees a lot malnurtured children and that some of them have

respiratoryissues

InterviewJuniorAckeemNgwenya–SocialEntrepreneur“Roadless”(26thJanuary2016,

CapeTown)

Ackeem Ngwenya is a South African Entrepreneur and designer who is working on upcycling

resourcesandsimplifyinglifeforlow-incomecitizensinSouthAfricawithhisdesigns.

- Describes that local knowledge and feedback in product development is very

importantfortakingownershipandacceptanceofnewproducts

- DescribesthatheisawareoftheParaffinissuesbutthatmostpeoplejustcareabout

financialimplicationsofcooking

- Womenareresponsiblefortakingcareofthehouseholdandtheirchildren


59

- Describes that there are many resource flows in the townships which could be

recycled/upcycledlocally,likeplastics,wasteoils,water

- MentionsbaddesignandlowqualityproductionofthePanda-Paraffinstoves–often

madeinChinaeventhoughthereisalocalcompanyproducingparaffinstoves

- Apparently, many illegal fake panda stoves which do not match the government

legislation

- Townshipsaretheuntapped1trillion$market

InterviewLeslieSmiedt–US/InternationalEntrepreneurandProductDesigner/Patenting

expert(2ndFebruary2016,CapeTown)

LeslieSmiedtisaserialentrepreneurandproductdesignerspecializedindesigningandpatenting

products.Sometimeshebuildsyoungteamstotakeononeofhisconcepts.Iinterviewedhimbecause

of his “All-Out”-projectwhichaimsat providing theft-secured fire extinguishers in townships for

immediateresponsetofires.

- Paraffinfiresareabigissue

- Apparently, many illegal fake panda stoves which do not match the government

legislationaresold

- Productdesignshouldbedoneinclosecontactwithlocalcustomersbecausecustomers

are picky and return products that are not working (even though products are not

workingduetousermistake/error)

- Townshipsaretheuntapped1trillion$market

Interview Bonnie Horbach&Thessa Bos - Consul General Cape Town& Deputy Consul

General,KingdomoftheNetherlands(CapeTown,15thFebruary2016)

After the interview, Thessa connected me to Robert Thijssen of the African Center of Frugal

Innovation.

- KnowtheHealthpromotersandthinktheyaretrustworthy

- Describetheparaffinissuesashighontheconsulatesagenda,thussupportinginitiatives

likethecleancookingrevolution

- Describethattheythinkasolutionaimingatjustreplacingafuelonebyonecouldbemore

easily implemented,more beneficial to customers and better accepted than replacing

stoves–comparedtootherinitiativestheyhaveseeninthepast


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InterviewBettinaWaterman–COOGreenDieselCapeTown(CapeTown,10thMarch2016)

Green Diesel is one of South Africa´s first producers of biodiesel from waste cooking oils and

bioethanol. They are predominantly active in the Western Cape and collect waste oils from

restaurantchainslikeKFC.

- Wastecookingoilscanbesourcedaround3-4Randsperliter

- DescribesthatGreenDieselsellsBiodieselat9-10RaliterandBioethanolat25Ra

liter.

- Therearepeoplefromtownshipscomingtobuytheirbiodieselforgenerators.

- Biodieselhasahire flamepoint(>200-degreeC insteadof40),which issafer than

paraffin

- Wastecookingoilsaresourcefromrestaurantsandrestaurantchains,thinkingabout

sourcingitfromtownships

- There are waste cooking oil collection companies who sell the waste oil at

approximately6Rands

- Due to globalization, many collectors sell the waste cooking oils to Europe, e.g.

GermanytomeetEuropesBio-dieselpercentage–thisdrivesupcostsoflocalsupply

InterviewRobert Thijssen of the African Centre of Frugal Innovation (Cape Town, 15th

April2016)

The CFIA is a multidisciplinary research center that studies all facets of Frugal Innovation, a

relatively new concept of innovation focused on the development of high-quality, affordable

products for emerging markets. Herein we cooperate with African, multi-national and

Dutchpartnersfromthefieldsofbusiness,researchandgovernment.

- TryingtoimplementtheIshackwithStellenboschuniversity,asolarshacktoprovide

electricityinthehousehold–problemofstealingintownships

- Paraffinissuesareabigtopiconthegovernmentagenda,butnotreallypursued

- Describesthattheythinkasolutionaimingatjustreplacingafuelonebyonecouldbe

more easily implemented, more beneficial to customers and better accepted than

replacingstoves


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InterviewAmendaMfenyana–HealthPromotersSA(Stellenbosch,20thFebruary2016)

Health Promotion South Africa Trust is a non-profit organization providing information and

training inhealthandhygiene toprevent illness in the townshipsofSouthernAfrica.Thehealth

promotersarehostingworkshopsindifferentWesternCapetownships,especiallytheKayamandi

townshipwheretheirheadquartersarelocated.

- SameasGeorgeInterview

- Electricitystatussymbol–fridgeasluxury–electriccookingasluxury

- Heatingstillwithparaffininmanycases

- Baddiseasesduetoparaffin

Interview Amor Strauss - General Manager Philippi Village (Cape Town area, 22th

February2016)

PhilippiVillageisanentrepreneurialdevelopmentwithinthelow-incomePhilippisuburbofCape

Town,providingaspacewhereentrepreneursandbusinessescangrow;whereresidentscandevelop

skills,andincreasetheiremployability.

- Sinceelectricityismoreandmoredeveloping,theinformal(nottobedeveloped)partsof

thetownshipsmightbemoreinterestingforalternativecookingenergycarriers.

- Insidetownshipstherearedesignatedhousingareaswhichareactivelydevelopedinto

brickhouses,withsanitationandelectricity.

- Khayelitscha

§ 50%ofinhabitantsuseelectricity–sinceitisquiteanoldanddeveloped

township

§ Butthereareareasaswellwhichdon’thaveaccesstoelectricityandmight

nothaveinthenextyearsbecauseofdevelopmentplans

§ Theremightbe5-6peoplelivinginashack

- Local Entrepreneurship is developing in a positive direction. More and more young

townshipinhabitantsaskforworkspaceatPhilippiVillage.

- Oftentopicsaroundrecycling/upcyclingmaterialsfromthetownshiparetreatedbylocal

entrepreneurs.


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1.2.2. Summariesofsemi-structuredinterviewsspaza-/tuckshopowners

InterviewSpazashopOwner#1(Stellenbosch,17thFebruary2016)

OwnsspazashopinKayamanditownship.

- Sothesepeopleusingelectricityforcookingstillneedparaffinforheatinginthewinter...

o Money available for electricity/ energy: 3-4 people = 1 household = 300

Rands/month=10R/day–Summerlower–Winterhigher

o Paraffinstove100-200Rands

o 1lParaffincurrentlyaround10Rands(heardof1,5lfor13,50Raswell)

§ 1,5l=13,50Rfor3propermeals-2daysofcookinginSummer

§ Inthewintertheycutoncookingtoheatandnotincreasethecost–they

cook one time for 3 days… - in winter 13,50R for one day

(cooking+heating)

o 1lParaffininwintermighteasilycost12-14Rands


- Customersbuyparaffinperdayratherthaninhigherquantities

- Insummerhesellsparaffinfor11R/l

- Hebuysparaffinfor8.5R/l

InterviewSpazashopOwner#2(Stellenbosch,5thMarch2016)

OwnsspazashopinKayamanditownship.

- 1lParaffininwintermighteasilycost14-16Rands


- Hebuysparaffinfromadistributor

- Customersaremainlywomen


- Hebuysparaffinfor7.5R/l

- 80%womenbuyathisstore

- Womenbuyaroundaliterinsummerand2iterinwinter–perday

- Themarketisquitecompetitiveandhedoesnotlikeallofhiscolleagues

InterviewTuckshopOwner#1(Stellenbosch,17thFebruary2016)

OwnstuckshopinKayamanditownship.


- Hebuysparaffininabiggerstore

- Sometimesherunsoutofparaffinsupplyinwinter



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- Thinksparaffinisbadandthereshouldbeanalternative


- Hebuysparaffinfor9R/l

- Womenbuyaround2literfor3daysinsummerandnearlydoubleinwinter

- “customerswilldefinitelycomeback,returnbadqualityproductsanddemandrefund”

- mainlywomenpurchaseparaffin

InterviewTuckshopOwner#2(Stellenbosch,5thMarch2016)





- Hebuysparaffininabiggerstoreoutsidethetownship

- Doesnotlikeparaffininprivate–preferselectricity

- Insummer,hesellsparaffinfor10R/l


InterviewTuckshopOwner#3(Stellenbosch,5thMarch2016)


- 1lParaffininwintermighteasilycost14Rands



- Womenbuyaroundaliterperday

- Thinksparaffinisunhealthy,becauseofthecoughing

- Insummer,hesellsparaffinfor10.5R/l


- Hedoesnotwanttodisappointhiscustomerswithmissingsupply


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1.2.3. SummaryoffocusgroupresearchinKayamandi

Focusgroupsession(Stellenbosch14thFebruary2016)

(mainextractsfromrecordingandnotes)

Participants:22Women,allmothers,Xhosa

Facilitators:AmandaMfenya,GeorgeArrey,JacobP.Bussmann

FirstHalf:

• Warmwelcomeandopennessfortheexchange

• Cookingbehavior:12Paraffin–5Electricity–5lpg(2platestove9forcooking-allofthem

heatwithparaffininWinter

• Womenagreeonpreferringslow-cookingduetoculture

• Theydescribethecookingprocessasinconvenient,sinceduetotheexpensivefuel,they

oftenhavetocooktogether,cookforafewdaysinadvanceorpartlycannotcookincase

there is no fuel or they don´t have money. Some of them complain about the high

electricitycostsandthehighinitialcostsforlpgandelectricitystoves.

• Theydescribetheproblemofsafetyrelatedtofuelingestionbytheirchildrenandshack

burnsandthebadparaffinsmell.Moreover,theycomplainaboutblackpotsandwalls.

• Somesay,thattheybuyaround10-15literspermonth(insummer)=150-190Rands–

manycalculateinZARratherthaninlitersorsomeofthemdonotreallycalculatetheir

fuelconsumption.

• Somebuyitatspaza-/tuckshopsbutarenothappywiththequality.So,someofthemgo

outsidethetownshiptobuyitinwholesalestores.Itispackagedin1,5and10literbottles

andcanisters.Theysplititupaccordingly.

• Paraffinperception.

o Smokeinthefood

o Blacksmokeinthehouse

o Havetobepresenttocook,becausestovecouldfalloverandcan´tbesaved

o Childrengetsick–arecoughing

o Childrenmightdrinkit–mostofthemstoreincoldbeveragebottles

o Paraffincreateslungpain

o Fearofexplodingstoves

• Mostofthemagree,thatthereisnootheroption–electricityistooexpensiveortheyare

notabletoconnecttothegrid(informalsettlements).Thosewhohavelpgorelectricity,

stillseeparaffinasagoodoptionandnecessaryforthewinterheating.

• Thewomendescribeparaffinqualityasabigissue–thereis2typesofparaffin.

o Guysdrivingaround(worst)andtuck-/spazashops(better):badsmell


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o Wholesale/shoppingcenter(best):lesssmell(perceptionis:“goodparaffin”)

§ Theydon’tknowwherethedifferencebetweenthetwois.Thepriceisthe

same.

§ Onaveragepricesareexplainedataround10R/literinsummer

§ And15R/literinwinter

• Womendon’thaveabudget,buythingswhentheyhavemoney

• Cookingistooexpensive!

• Traditionalfoodcookingtakeslong-time->toomuchfuel

• Heatingisexpensiveinwinter–thus,sometimesnoheating

• Sometimesnosupplyavailable–onereason iselectricityand lpgheatersswitching to

paraffinforheatinginwinter

§

SecondHalf:

• Collaborativeideastoimprovethesituation:

o Havecheaperfuelandsteadysupply–oracheaperenergysourceingeneral

o Electricitywouldbegreatforcooking,butthereisnoimaginationforheatingyet

o Locktheparaffinbottletight,sochildrencannotopenit

o Clearlylabelbottlesorcontainersthatcontainparaffin

o Donotre-useeverydayhouseholdbottles,suchasmilkorjuicebottles,tostore

paraffin–perhapscreateanewbottle

o Makeagood,safe,reusablebottlefor1to5litersofparaffin(diverseopinions)

o Storeitawayfromthereachofchildren

o Havealongerlastingfuel–moreefficientfuel,“lesssmelly”fuel

o Retrofittheexistingstovestomakethemcleaner

o Distributealternativestovesforfreeormakethemcheaper–butstillopposition

forwoodpellets–toocomplicatedanddifferentcookingstyle

o Useafunnelwhendealingwithparaffin,awayfromopenfiresorstoves

o Preferablycookanddealwithparaffininanareawherethereisafreeflowofair

–ventilationinshacks?


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o Usesand,toputoutfires

• SesoloMelloiswellperceivedandrelatedquestionsareansweredbyJacob.20outof22

womensigneduptoparticipateinco-creatingtheproductandtestingitinthefuture

• Theyexpressedgratefulnessfortheopportunitytodescribetheirdailychallenges

• Statements:

o BikaneNulovuyo(Kayamandi):“Ialwaystrytostoreparaffinawayfrommychild.

Ialwaysstoreitonashelf,butIuseanoldcolddrinkbottle“

o Dobtien Dadis (Kayamandi): “I don´t like the black smoke in my house while

cooking.TheWallsandpotsareblack”.

• Follow-upideasofHealthPromotersSA:

o Doanexperimentwithmonitoringavailablebudget, sinceresultsappear tobe

quitevague.

o Doregularhealthworkshopsoncookingorevencreatecookingworkshopswith

livecookingonalternativestoves–withalternativefuels,inordertoprovethe

effectsandeducatepeopleonrighttreatmentoffuelsetcetera

developing an innovative value proposition to replace

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