NICE International is a social venture that created the concept and franchise-model for NICE solar-powered Information and Communication Technology (ICT) centers. NICE brings Internet access and IT training courses to the The Gambia in West-Africa. Their profitable business model is allowing NICE International to expand to up to 50 new NICE centers over the next four years, including expansion to Tanzania and Zambia.
We recently interviewed Ties Kroezen using Skype to connect with him at NICE International headquarters in The Netherlands.
Singlebrook: Please give a brief overview of what your organization does.
TK: My organization is providing people in Africa with access to products and services that are relevant to their development. We are a distribution company. However, we use modern technology in doing the distribution. The way we do this is by setting up NICE centers, which are retail outlets that are powered with solar energy and equipped with 15-30 computers with an Internet connection and with TVs. We give people access and use those systems to provide value-added services, such as education.
Singlebrook: How did you come up with the idea for NICE International?
TK: The idea was developed by some people from the Dutch energy sector. In 2003, one of these people visited The Gambia in West-Africa for a leadership program. He was accommodated in a small, typical African village with no running water or electricity. He realized what an impact it would have for the village to have access to electricity. He came back to The Netherlands, started a foundation, and started brainstorming about how to give Africans access to energy.
The first idea was a shipping container with solar panels on top to sell electricity to households. They realized that selling electricity wouldn’t generate enough revenue to pay off the shipping container and solar panels. They said, “Maybe we shouldn’t look at the supply side, but at the demand side. What are people going to do with electricity? What is it good for?” That’s when they had the idea of combining electricity with IT and the Internet. That literally opens up a world of opportunity for people in Africa. Then they are willing to pay more for the electricity, making the business concept financially viable.
That’s when the first idea for NICE emerged. In 2006, we decided to set up a mother company in The Netherlands with a subsidiary in The Gambia to do pilots. In early 2007, the first two NICE centers were opened in The Gambia. During the first two years, we struggled with getting the technology right. We made adjustments and were able to develop towards financial viability. In 2008, the first two centers started reporting profits. We’ve scaled up to a total of seven centers in The Gambia today. Last year, we introduced the franchise model so that local entrepreneurs can open a NICE franchise. Currently, six of seven NICE centers are franchises.
Singlebrook: How have your cultural, educational and professional backgrounds prepared you to turn your ideas into reality?
TK: In all aspects, my background has helped me to build this business. My educational background includes degrees in Business Administration and Information Technology. Professionally, I’ve been a consultant for 15 years doing project work in IT business strategy consulting. Culturally, before joining NICE, I spent three years in another African country, Ghana. I started another business there--a marketing / trading company for agricultural products for small-scale farmers to get access to European markets. This experience as an entrepreneur in Africa helped me in building NICE.
Singlebrook: Has anything (or anyone) particularly surprised you since you started NICE International?
TK: There have been many surprises. Having lived in Africa before, my biggest surprises came before my work with NICE. I got used to many things that would be a big surprise to a Westerner. For instance, the poor quality of infrastructure, including electricity and Internet infrastructure, and the high cost of these services. In The Gambia, we pay 600 times more for Internet access than we do in The Netherlands.
Culturally, in Africa, contracts do not have the same kind of value as they do in the US or Europe. When you sign a contract, the other party may not feel bound to it. As a Westerner, you have this idea that all a developing country needs to develop is money. That is typically not the case. The countries are not poor because of lack of money. That is a symptom. The cause is that the countries are not organized. If you set up a company in the US, you will always have suppliers to supply you with services like electricity and Internet access. That allows you to concentrate on the piece where your business is focused. In Africa, you end up addressing all kinds of issues because, if you don’t, no one will. There are also the problems with government services like poor quality and corruption.
Singlebrook: What have been a few of the biggest challenges you’ve faced in launching and growing this venture? How did you handle them?
TK: Especially in the first two years, the equipment used for the technology was a challenge. We use Western computers and solar systems because they are hardly produced in Africa. The equipment is not used to the conditions in Africa. The computers would overheat and freeze for a few hours. It took time to find equipment that is capable of operating under these conditions.
Also, finding qualified technical personnel and managers for the business was a challenge. This is my favorite funny example: In our solar systems, there is a switch that automatically shuts down the system to protect it from thunder storms (that happens quite a bit). Our staff thought it was so annoying that they used duct tape on the switch so it couldn’t turn off. So, during the next thunder storm, the whole system got burned. The lack of knowledge and experience working with the equipment and lack of management skills are a big issue. We have quite a good team in The Gambia now, but it’s been a challenge.
Another challenge is that most customers have little money to spend. People are living on $2-$5/day, $10/day if they’re lucky. The services have to be very cheap while using expensive Western equipment, which is even more expensive after transporting it. So there is high cost on the supply end with low prices necessary on the other end. It isn’t easy. There’s always a risk that sales will go down.
We addressed this challenge through several strategies that increase occupation rate (like on an airplane, we lose money if a seat in one of the NICE centers is empty). We use our own pricing system so we can change prices according to the less busy and more busy times of day and week to maximize occupation rate. We also add value through education programs. Browsing the Internet costs about $.50/hour. We offer educational courses that cost $1-$1.50/hour. That adds value to the same occupation capacity. For our IT courses, people register and attend the course, which includes a trainer and access to the computers. Students do practical exercises on the computer. In most cases in Africa, IT training is done on a blackboard, and students never see a computer. With our courses, when students go to find a job, they can actually do the work.
Singlebrook: What have you learned from some of your successes?
TK: In general, many things that may seem impossible when you start are possible if you are creative, persistent, and if you try hard enough. Many people, when we started with NICE, said, “Nobody has ever been able to make money with Internet in Africa.” By analyzing what is working and what isn’t working, we have been able to develop a model that is profitable and highly appreciated by customers. If you believe that it can be done, go out and do it.
Singlebrook: What are some ways that you’ve used web or mobile technology, including social media to help further your mission?
TK: The web is very much a part of our business. You have to make a distinction between our business in Africa and here in Europe. In Sub-Saharan Africa, only 6-7% of people have access to the Internet in one way or another. Using the Internet to market and sell products there is still quite difficult--not very many people will see it. We use other tools for marketing in Africa, such as radio ads about the benefits of IT, distributing leaflets to houses around NICE centers, organizing road shows to create excitement, and sponsoring a youth soccer team.
In Europe we use the Internet and social media quite extensively. Here, we have a different focus. One of the things we do here is organize funding for our business and find partners who want to work with us to distribute products or services to the NICE centers. We use Twitter, Facebook, and our website for this.
Singlebrook: What would you like to share about your experience at the Unreasonable Institute?
TK: It has been a wonderful experience, very inspiring. It has given me a lot of energy, especially the interaction with the other entrepreneurs and mentors. As a social entrepreneur, sometimes you’re out there on your own. Everybody says you’re a fool for trying to do what you do. It’s nice to be with people who have the same kind of businesses. You encourage each other to go forward.
The other side is more practical. My experience at the Unreasonable Institute has generated valuable contacts for our business, including several potential investors that I’m currently talking with, and also several partners, including Hewlett Packard. HP will provide us with their latest equipment to test in the NICE centers. There is a shipment on the way with computer systems that will be used in The Gambia. It’s a win/win. For us, it’s nice to get the computers. For HP, they get the opportunity to see if their equipment can handle the conditions and intense use.
We’re developing other partnerships as well with other companies that sell products and services that fit our concept. These partnerships include two of the other entrepreneurs at the Unreasonable Institute. One Degree Solar is selling a solar system that we will test. We will explore the potential of selling the systems in The Gambia. EGG Energy is a battery charging service so people can have electricity in their homes. We’re looking at building that partnership in Tanzania.
Singlebrook: What advice do you have for aspiring social entrepreneurs?
TK: Social entrepreneurs are sometimes stubborn fools. You have to be a bit of an idiot to do something that seems impossible, and you have to be stubborn to keep doing it even when people are saying you are a fool. Follow your heart. If you believe it can be done and believe in the social impact you can create, do it. The biggest risk is that you will fail. At the same time, you have to be very realistic and pragmatic. Just ideals won’t get you there. While you have to follow your heart, you have to use your head in doing it. Try things out. Stop if it fails and look for something better. It’s a journey of trial and error. TRY.