In the second interview of WE4F’s series celebrating World Creativity and Innovation Day, Wanweena Tangsathianraphap, Communications and Knowledge Management Specialist from the WE4F South and Southeast Asia Regional Innovation Hub, spoke with Nikolai Schwarz, Country Director at ATEC, the world’s first plug-and-play biodigester company for small scale farmers based in Phnom Penh, Cambodia.
IN YOUR OPINION, WHAT IS THE CULTURE OF INNOVATION? HOW DO YOU DEFINE IT AND WHAT DOES IT MEAN TO YOU?
Nikolai: Innovation is a constant process. And innovation is a mindset, a restless one. Innovation is asking questions over and over again, with a lot of ‘why’ questions (and even more ‘why not?!’ questions). And innovation is curiosity, and the best culture of innovation is one that leaves maximum space for this curiosity to unfold and to almost never go to sleep.
TALKING ABOUT THE INNOVATION AT ATEC, HOW DO YOU COME UP WITH IDEAS FOR THIS INNOVATIVE SOLUTION? WHERE IS THE SOURCE OF INSPIRATION?
Nikolai: ATEC* was established in 2016 after 6 years of research & development. We use human-centered design (HCD) to deeply understand local consumer behavior and market opportunities. We then design affordable, aspirational products and a business model that can deliver impact at scale.
Using HCD, we initially patented then launched the world’s first biodigester that could be installed in challenging environments (e.g., flooding, cyclones, etc.) which affects 80% of smallholder farmers globally. After working with that initial group of early adopters, ATEC saw that paying for the system was still a significant challenge. ATEC therefore, developed and patented the world’s first PAYGO for biogas, meaning customers can get the system now, then pay it off in small amounts over time through mobile money. PAYGO is now used by 9 out of 10 customers in Cambodia where we launched it.
In 2018, ATEC did a pilot in Bangladesh. One of the main findings was that Bangladeshi households have higher gas needs than Cambodian households because of the food they cook and their cooking habits. Following this finding, ATEC designed a bigger biodigester to be able to offer 2 sizes of biodigesters in the Bangladesh market (1.3m3 like in Cambodia and 1.8m3).
WHY DO YOU THINK YOUR INNOVATION WORKS WELL? WHAT IS THE RESULT SO FAR?
Nikolai: ATEC designed its high-quality biodigester system with the following requirements in mind:
- First, match the needs of rural farming families (only requires minimum 2 livestock or 5kg of green waste per day in order to produce enough gas for daily cooking needs)
- Second, provide a system that can work in a variety of challenging environments (flood resistant up to 1.8 meters, no cracking in high groundwater)
- Third, provide a system that can be commercially distributable through retail channels (can be moved and/or on-sold by household as an asset)
- And last but not least, offer the consumer the best product out there at a price point they can afford (new rotor-molded design that uses export-quality UV-treated LLDPE plastic with an expected lifespan of 25 years, PAYGO enabled)
Since 2016, ATEC has sold over 1,800 systems in Cambodia, Bangladesh, Myanmar, Indonesia, Thailand, Papua New Guinea and Fiji. Majority of these being in Cambodia, as Bangladesh only started in 2020. So far, ATEC has achieved a customer satisfaction rate of 98%.
HOW INCLUSIVE IS YOUR INNOVATION? HAS IT BEEN INCLUSIVE OF WOMEN?
Nikolai: Women are overwhelmingly the main cook in the countries we work for now (Cambodia and Bangladesh), they bear the brunt of harmful emissions from cooking, spending long hours in smoky kitchens. Use of firewood kills 3.5 million people every year (most of them being women) – more than traffic accidents. Due to inefficient cooking, women spend 4 hours a day on household chores, like setting the fire, cooking, cleaning the pots and the ashes from wood fuel. Lack of time negatively affects the economic options, personal and mental health of women. In view of this, access to time and labor-saving solutions are particularly valuable to them.
The use of biogas is estimated to reduce the daily time of fuel wood collection, cooking, and washing up by three hours. ATEC biodigesters give women greater agency to create strong lives for themselves by improving their health, economicoutputs, and time management. Addressing modern, reliable, and sustainable cooking is arguably the highest impact technology intervention for women in last-mile households.
LOOKING BACK, HOW WAS IT BEFORE YOU WON THE AWARD AND WHAT HAS CHANGED AFTER JOINING THE PROGRAM? WHAT HAVE YOU DONE WITH THE GRANT/TECHNICAL ASSISTANCE RECEIVED?
Nikolai: The award has had positive internal and external implications for us. Obviously, our team was thrilled to have won it! But we loved the praise and high-fives received from partners and friends in Cambodia and around the world, so it has given us a lot of visibility!
The prize has brought us a step closer to our vision of every village in Cambodia having at least 5 biodigesters. We’re putting the grant to work in rolling out our national sales and marketing strategy, a major rock for us to move in order to reach operational sustainability.
The technical assistance part has started a little later for us but we’re curious to explore with your teams now how to best map our partners and networks, another key element of our sales and referral strategy ahead!
WHAT ADVICE DO YOU HAVE FOR COMPANIES THAT ARE STRUGGLING TO INNOVATE NOWADAYS?
Nikolai: Be curious, ask questions over and over again, and make room for the ‘path to yes’ – you’ll have enough time to check and explore why your ideas might not work, keep that for later.
ATEC staff inspected the plug-and-play biodigester at the farmer’s house.
SINCE LAST YEAR, COVID-19 HAS HAD SIGNIFICANT IMPACTS ON MANY BUSINESSES AROUND THE WORLD. DOES YOUR COMPANY FACE ANY CHALLENGES? IF SO, HOW HAVE YOU PIVOTED TO RE-INNOVATE AND GET CREATIVE DURING THIS DIFFICULT TIME?
Nikolai: We had a 60% drop in revenues due to COVID-19, so we had to set up COVID-related expense controls and draft a COVID-adjusted budget. To pass through this difficult time and adapt to the economic downturn of the rural households we target and overcome the fearful climate, we decided to offer new payment plans. We would install the product and customers would only start paying for it 3 months after the installation. This solution was very successful, and many customers signed up with this new option.
To the extent that we decided to make it a permanent offer and it officially became our Brand Promise Guarantee in January 2021: Test us for free and check for yourself if we’re living up to our brand promise of providing you with free gas and fertilizer when owning one of our biodigesters. We guarantee you, if we don’t deliver on this promise, you can return the unit for free, no questions asked. So, in a way, the necessity to adjust to a more reluctant market climate through COVID-19 has helped us to unlock our potential and define what our brand really stands [for].
HOW DO WE DEVELOP AND ENCOURAGE THE CULTURE OF CREATIVITY AND INNOVATION AMONG ENTREPRENEURS? WHAT WOULD YOU RECOMMEND TO THEM?
Nikolai: My recommendations to [entrepreneurs are]:
- Be very precise on your customer segment/profile
- Dig deep into your customer’s problems and aspirations
- Test assumptions
- Take the time to run pilots
- Base yourself on data
- Disruption potential: what innovation has the greatest potential to disrupt your entire sector at scale?
ATEC* produces, sells and distributes the world’s first plug-and-play biodigester for small scale farmers. Combined with the patented PAYGo technology, ATEC provides a turnkey solution that gives farmers up to 1350L of biogas per day and 40 tons of fertilizer per year. An ATEC* biodigester is one of the highest impact technologies on the SDG indicators – achieving results across clean cooking, improved farming, environment, health equity and livelihoods. ATEC won Asia EDGE Ag-Energy Prize “Grand Prize, Mid-Stage Category” in 2020.
Wanweena Tangsathianraphap is a Communications and Knowledge Management Specialist for the WE4F South and Southeast Asia Regional Innovation Hub. She helps connect people together and bridge the gaps created by time, distance and culture through various communication tools. She believes in the power of knowledge sharing that it helps transform one’s ideas and shape personal view towards the world.