Presented on October 6th, 2016 at the Chinese University of Hong Kong Class: ARCH 5731A Topical Studies in Urbanism: Urban Innovation and Entrepreneurship in Contemporary China Lecturers: Tat Lam & Jessica Cheung Sources: - BerkeleyHaas Case Series: Sanergy, by Dr. Jennifer Walske and Dr. Laura Tyson - Kiva Website - Sanergy Website - Imperfect Produce Website - Community Environmental Council - Collaborative Lab - Srijan Business Modelling Event

1. Using theSharing
Economy Mindset for
Urban Innovation
As demonstrated through 3 unique business models
By:Tom Juntunen

2. Me Tom Juntunen
– BS in Civil Engineering, Santa Clara University (2012)
– Commercial Construction Engineer, BNBuilders (2012 – 2016)
– MBA at University of San Francisco (2017)
– USF Social Entrepreneurship and Innovation Conference
– US-China Social Innovation Forum
– Interests: Technology for Social Innovation; Low-EnergyWearables
for Good; IoT; Human-Centered Urban Development Design
– Hobbies: Golf,Tennis, Cycling, Snowboarding, French House

3. TheSharing
Economy
Mindset
The Sharing Economy Mindset is the idea of:
– Renting or borrowing goods, instead of buying or owning them
– Using a service-model approach; pay-per-use
– Leveraging de-centralized, peer-to-peer exchanges
– Recovering value from under-utilized assets
– Optimizing the time and resources of people, places, and things

4. The
Collaborative
Economy
Source: Collaborative Lab

5. Social Impact
Why is the sharing economy model useful for
social impact causes?
– Focuses on recovering value from existing assets (cheap), instead
of creating value from new assets (expensive)
– Fosters micro-entrepreneurship (low barrier-to-entry jobs)
– Enables rapid capacity-building; innovation from the bottom-up
– Creates sustainable ecosystems with measurable impact to
attract top-down investment and grant donations

6. CaseStudy 1:
Non-Profit
Model
– Kiva is an international nonprofit, founded in 2005 and based in
San Francisco, with a mission to connect people through lending
to alleviate poverty.
Source: Srijan Business Modelling Event

7. CaseStudy 1:
Non-Profit
Model
– Kiva Lenders lend their under-utilized cash assets from their bank
accounts (receiving interest of < 1%) to entrepreneurs living in poverty
at no-interest to transform lives.
– “Lending seemed appropriate because they were business people and
didn’t need a donation. They didn’t need a handout.” - CEO
– By the numbers (2016 data):
– $922.6M lent through Kiva from 1.5M lenders
– 2.1M borrowers from 82 countries received loans.
– Repayment rate at 97.1%
– Tags: micro-entrepreneurship, rapid capacity building, measurable
impact, peer-to-peer exchanges, excess-liquidity utilization
– Fun Fact: Funds lent in first three years of operation:
– Year 1 - $500k Year 2 - $14M Year 3 - $50M
Source: Kiva.orgWebsite

8. CaseStudy 2:
For-Profit
Model
– Imperfect, a crowd-funded company based out of Oakland,
California, is planning to capture some of the 6 billion pounds of fruits
and vegetables wasted annually in the U.S. (40%) that are considered
too “ugly” to be marketable.
Source: Community Environmental Council

9. CaseStudy 2:
For-Profit
Model
– Customers pay $12 per box for weekly deliveries of imperfect fruits
and vegetables that would have otherwise gone to waste.
– “Why pay extra when you can get cheap and fresh produce — and
feel good about saving the world from the ravages of food waste,
too?” – Ariel Schwartz,Tech Insider
– By the numbers (2016 data):
– Recovered 700,000 pounds of rejected produce in 1st year
– Saved customers an collective $400,000 on produce costs
– Provided extra income to 50 different California farmers in exchange
for their ugly produce
– Tags: value recovery, time optimization, peer-to-peer
exchanges, measurable impact, excess-food utilization
Sources: Community Environmental Council
Imperfect Produce Website

10. CaseStudy 3:
Hybrid Model
– Sanergy builds healthy, prosperous communities by making
hygienic sanitation affordable and accessible throughout Africa's
informal settlements.
Source: SanergyWebsite

11. CaseStudy 3:
Hybrid Model
Deep Dive
– The Problem: 2.5 billion people worldwide—or almost 40 percent
of the global population—lacks access to basic sanitation
– Includes 8 million of the estimated 10 million people who live in
Kenya’s multiple urban slums
– Poor sanitation conditions contributed to the death of an estimated
1.6 million children worldwide each year
Source: BerkeleyHaas Case Series: Sanergy, by Dr. JenniferWalske and Dr. LauraTyson

12. CaseStudy 3:
Hybrid Model
Deep Dive
– Business Model:Three Central Parts
1. A dense network of micro-franchised small-scale sanitation
centers located in every block of the slums (non-profit)
2. A low-cost containerized waste collection infrastructure to
easily transport the waste (for-profit)
3. A centralized processing facility that efficiently converts the
waste into electricity, which will be sold to the national grid,
and high-quality organic fertilizer, which will be sold to farms,
tapping into a potential $177 million market in Kenya (for-
profit)
– At each step, Sanergy creates jobs, opportunity, and profit, while
simultaneously addressing serious social and economic needs.
Source: BerkeleyHaas Case Series: Sanergy, by Dr. JenniferWalske and Dr. LauraTyson

13. CaseStudy 3:
Hybrid Model
Deep Dive
Build Franchise Collect
Convert Transfer
Source: SanergyWebsite

14. CaseStudy 3:
Hybrid Model
Deep Dive
– Innovation: A fully integrated, systemic-level solution
– Competitors only focused on a single component of the model—
either the sanitation sites or waste disposal
– Many of the toilet providers did not have a systematic waste
disposal infrastructure, neglecting to address the hygiene problem
created by uncollected waste
– Few domestically produced organic fertilizers on the market
Source: BerkeleyHaas Case Series: Sanergy, by Dr. JenniferWalske and Dr. LauraTyson

15. CaseStudy 3:
Hybrid Model
Deep Dive
– Why Kenya?
– Three main reasons:
1. Field research showed people that were willing to pay for
sanitation in low-income urban areas.We had a franchise model
in mind where entrepreneurs would be able to make money,
and people were able to pay, which was a clear revenue source.
2. There was huge demand for an organic fertilizer in the market,
but there was very highly constrained supply and almost no
domestic production.
3. The local entrepreneurial ecosystem was strong. People in
urban slums had under-utilized time, and they wanted to work.
Source: BerkeleyHaas Case Series: Sanergy, by Dr. JenniferWalske and Dr. LauraTyson

16. CaseStudy 3:
Hybrid Model
Deep Dive
– First Business Model Component:The Fresh Life Network
– Started in Mukuru, a slum located in Nairobi, with a population of
500,000
– To limit the amount of capital outlay needed to establish a network of
toilets, Sanergy chose a franchise model—branded as “Fresh Life”—
that would be beneficial to both local entrepreneurs and the
community
– After approval, local entrepreneurs would purchase pre-fabricated
toilets and charge customers a per-use fee.
– The toilets, which included the installation, the marketing, the
branding, and daily waste collection service, cost about $500.
– Entrepreneurs charge about five cents per use of the toilets. Sanergy
don’t collect these fees.They get to keep 100 percent of it. Sanergy
makes its profits from the sale of end products derived from waste.
– Fun Fact: Sanergy worked with Kiva to ensure financing was available
to the franchisee for the upfront cost of the toilets.
Source: BerkeleyHaas Case Series: Sanergy, by Dr. JenniferWalske and Dr. LauraTyson

17. CaseStudy 3:
Hybrid Model
Deep Dive
– Micro-entrepreneurship
– A local entrepreneur had 74 toilet users per day, on average
– $1,350 gross income per year – almost double the annual poverty
income threshold in Kenya
– Breakeven after 7 months
Source: BerkeleyHaas Case Series: Sanergy, by Dr. JenniferWalske and Dr. LauraTyson

18. CaseStudy 3:
Hybrid Model
Deep Dive
– Second Business Model Component: Collecting the Waste
– Regular, frequent waste pickup.
– Toilets deposit waste in airtight containers which are collected and
replaced by a waste collector on a regular basis.
– The full containers are then taken to Sanergy’s central processing
facility
– The franchisees pay Sanergy an annualized fee for this service
($90)
Source: BerkeleyHaas Case Series: Sanergy, by Dr. JenniferWalske and Dr. LauraTyson

19. CaseStudy 3:
Hybrid Model
Deep Dive
– Third Business Model Component: Converting the Waste into
Salable Products
– Solid waste converted into fertilizer
– Liquid waste converted into liquid fertilizer
– Small- to Medium-farms see an average yield increase of 30% -
sometimes even an increase of 100%
– Also exploring using gases from the treatment process to create
biogas.
– Recovering value from existing assets, rapid-capacity building,
measurable impact
Source: BerkeleyHaas Case Series: Sanergy, by Dr. JenniferWalske and Dr. LauraTyson

20. CaseStudy 3:
Hybrid Model
Deep Dive
– Impact Measurement
– Sustainability
– Measure profitability at the business unit level
– Scale
– # of toilets launched
– # of users
– Amount of waste removed
– Number of jobs created
– By the Numbers (2015 Data):
– 614 Fresh LifeToilets in operation used 31,355 per day
– Collected more than 7,900 metric tons of waste
– Created 779 jobs, with 60% of staff coming from informal settlements
Source: BerkeleyHaas Case Series: Sanergy, by Dr. JenniferWalske and Dr. LauraTyson

21. Q &A Questions?

22. Thank you
谢谢
Thank you