2012-11-01

Turning Rural Indians Into Water Entrepreneurs

Anand Shah’s Sarvajal is bringing clean water to India, but with a twist: the franchise model.

In Sanskrit, jal is the root for "water," and sarva is the root for "everyone." Put them together, and you’ve got exactly what Sarvajal delivers: Water for all. Originally launched as a nonprofit experiment in 2007, the company has grown into a thriving hub-and-spoke model of over 150 Sarvajal franchisees operating small reverse-osmosis filtration plants and revolutionary Water ATMs in India’s northwestern states, and its potent combination of entrepreneurship, common sense, and tech savvy has made a significant change in the quality of life for thousands of rural Indian villagers. "In 60 years of existence, India has always had getting clean water to people as the last mile at the top of its list of things to do," says Sarvajal CEO Anand Shah. "We figured that if you put a lot of smart people on this idea, maybe you could come up with a solution."

Shah is a smart guy. Born and raised in Texas of Indian descent, he graduated from Harvard with a degree in evolutionary biology, and was teaching at a charter school he helped found in Boston when the events of September 11th got him itching to do something larger. He moved to India to launch IndiCorps (which he describes as a "reverse Peace Corps" for people of Indian origin), and was subsequently tapped to run the Piramal Foundation, funded by a wealthy family interested in doing good. There, as part of an incubator called the Grassroots Development Lab, he used Piramal resources to back the pilot that would grow into Sarvajal. "The idea was from a young Stanford grad who wanted to work on something health care related," says Shah. "We found that the single greatest intervention you could make was actually clean water, and nothing else."

Sadly, the most prevalent method of water intervention—charity installs filtration plant, sells water at low prices to cover operating costs, filtration plant eventually stops running, no one is nearby to fix it—does not work. Shah knows, because they tried. "We had the family pay for a plant, put it in a village of 10,000 people, and started selling water to the community," Shah says. "What we realized in the midst of this was that because philanthropists were paying for plants and machinery, there was never an incentive to reduce the costs of that machinery. There was no competition."

They’re now able to manufacture machines that would cost $45,000 in the U.S. for as little as $3,000, in part by choosing to focus on an area of the country with uniform water-quality issues, and in part by setting their sights on building something that could be taken off a truck and installed in under an hour. Similar innovation allows them to avoid the inevitable decay of institutional inattention: Each Sarvajal machine comes equipped with an in-house device they call the soochak (Hindi for "facilitator"), a control system built on the backbone of cell phone technology, a far more ubiquitous resource in India than clean water. "It used to be that when a franchisee called us and said, ‘My machine isn’t working,’ I had to send someone 100 miles to go look at that machine," Shah says. "It could be that the machine just wasn’t plugged into the wall. Now I can diagnose problems before they happen, over the phone, with real information from the machine."

Perhaps the biggest breakthrough for Sarvajal came with the invention of the Water ATM, which enabled them to gain even deeper penetration into decentralized rural communities. "You need three to four thousand people living in a village to make even our smallest filtration machine viable," Shah explains. "So we decided to build this ATM, a solar-powered, off-grid tank, regulated by a smart card. You can put this ATM in a packet of maybe 50 households, deliver water there once a day, and they can come pick up water when they feel like it." They’ve since partnered with Audi to develop a modified version of the ATM for the urban slums of Delhi and Mumbai. "The way India’s water businesses are structured is that you have to have regulatory approval to sell what they call ‘packaged water,’ bottled water where you break a seal before you open it," Shah says. "The reason the ATM idea is so critical for us is that it allows us to sell clean water that’s not in a bottle. You come to it and you hit a button and water comes out, like the machines at grocery stores in the U.S. We feel it’s extremely disruptive."

Understanding regulatory loopholes is just one example of how Shah’s decade of experience in the country is vital to Sarvajal’s success. "Water is a very politically sensitive issue in India, as in many areas of the world," Shah says. "People feel like water is a resource given to them by some sort of divine power, not something someone can charge them for." To allay those fears, Sarvajal made sure their filtration machines were transparent—literally—because seeing the water being processed allows users to feel as though they are paying for a service; likewise, the franchise model adds a human face to the business, rather than a corporate one. "Instead of buying from a large company, you’re really buying from a neighbor," explains Shah. "You’re buying from your nephew or your son or daughter. Someone you knew who had built this, a local stakeholder."

And for Sarvajal’s franchisees, the water business represents an incredible opportunity. "The best franchisees tend to be the ones who need this as their bread-earning business," Shah says. "There are a lot of folks who were doing low, blue-collar labor jobs, traveling long distances every day to work on a cell phone tower or a construction project. Instead, they’re staying in their village and selling water to their community. Those are the ones that work the hardest." There are even a handful of people who, after becoming a Sarvajal franchisee, have been elected to become the mayor of their community. "That’s happened about 10 times," says Shah. "Becoming a water entrepreneur builds a lot of political capital, because of how much people see water as a problem."

As for Shah, becoming a water entrepreneur has built him a life. "Fifteen years ago, if you’d asked me if I was going to spend 10 years of my life in India doing grassroots work, I would have said you were out of your mind," he laughs. "I showed up, thought I was going to be there for six months, and then one thing led to the next and I never left." One gets the sense, however, that he’s in it for the long haul. "We know that this is a solvable issue," he says with certainty. "There’s no reason why this problem should still exist."

This piece is part of Change Generation, our series on young, change-making entrepreneurs. Read the rest here.

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