The team is extremely passionate.
Most people that are working in
the sector, in the organization,
are very, very passionate about
what we are working for.
To make that shift and
say what to survive, we will need
to start looking at the urban rich.
It was very, very difficult, and
they felt like we were moving away
from our mission.
[MUSIC]
>> Welcome to Grit & Growth
from Stanford Seed,
the show where Africa and
South Asia's intrepid entrepreneurs
share their trials and triumphs.
[MUSIC]
Just a few announcements before we
get started.
As the world has reopened
to travel,
I find myself on the road again.
In the past two months, I've been
to Indonesia, Kenya, South Africa,
and India, meeting with
entrepreneurs and preparing for
future cohorts of Stanford Seeds
transformation program.
Unfortunately, that also
means less time for podcasting.
So we're changing up the release
cadence of Grit & Growth.
Instead of once every two weeks,
we'll be putting out an episode
once every three weeks.
This will allow us to keep making
great shows while we run
our training programs, connect
entrepreneurs across the world, and
do all the other things that make
Stanford Seed special.
And speaking of special, for
the next few episodes,
we've got something
a little different for you.
[MUSIC]
Starting or growing a business,
it's a unique experience,
there's nothing else quite like it.
It can be incredibly draining and
yet thoroughly rewarding, and
no one knows what you're going
through like another entrepreneur.
So as we gear up for
our third season, we will bring you
entrepreneurs in their own words,
a series of four short form
stories and interviews told by
entrepreneurs themselves.
We hope you'll see your own
experiences reflected in these
conversations, and that these
episodes will motivate and
celebrate the work of
entrepreneurs like you.
For our first installment, you'll
hear from Divya Yachamaneni, CEO of
Naandi Community Water Services.
Divya was a consultant with
Deloitte before she transitioned
into the world of social
entrepreneurship.
We'll hear how Naandi developed
a model to bring clean water to
rural India, and how Divya pivoted
the strategy to make it sustainable
despite some internal resistance.
[MUSIC]
>> Hi, Darius,
I'm Divya, and I am the CEO of
Naandi Community Water Services.
We usually refer to it as
Naandi Water.
So Naandi Water is for
profit social enterprise.
The mission is to save lives
by providing safe drinking water
to underserved communities in
a sustainable manner.
And Naandi Water, at this moment,
works across seven states in India.
I mean, there's an incredible
amount of money that is spent every
year for building water
infrastructure in India.
However, we don't reach most of our
goals because it's extremely
centralized.
Even now, 78% of India does not
have piped water.
And even if they do have piped
water, a lot of times nobody can
guarantee the quality of the water.
There is no
ownership amongst communities, so
year after year, you pour in money,
but there's constant slippage,
the infrastructure
remains dilapidated, etc.
As recently as 2017,
I remember there was one particular
day when 11 people died because of
bad water.
>> So, can you describe for
me the first time you went to visit
of one of these villages that had
been targeted for a water plant?
I'd like to hear in your words
the problem that Naandi water is
solving through your eyes from your
own travel.
>> So I am an urban girl.
I've hardly ever been to any
villages before I
joined Naandi Foundation.
I remember it was such a huge shock
for me because being somebody from
urban India,
I hadn't realized how bad
the problem in rural India was, and
just how contaminated the water is.
It's impossible to drink it.
There is one particular village in
Rajasthan called Shivdaspura.
It was amongst the first villages
that I had gone to, to visit.
People were drinking water from
the ground, which was extremely
highly contaminated with fluoride.
There was actual white foam on it
because it was that contaminated.
And they were drawing water from
that, I mean,
it's almost a sewage canal.
They were drawing water from that,
putting it in the sun for odor,
filtering it with cloth for
dust, etc.
And once the odor goes, etc,
they started to drink it.
And I remember really being very
moved by it, and
it was very difficult to see people
living in those conditions.
So what is the model?
We go to places with extremely
highly contaminated water that have
high nitrates, arsenic, TDS, etc.
We go to these places,
we set up a water center, a water
purification system, we purify
the water, and we provide it back
to communities at a nominal charge.
One family pays 2.5 dollars per
month for safe drinking water.
In our model, the way we worked at
it, is that from the beginning the
community has to take ownership.
So how do they take ownership?
The first thing, even at the time
of the construction of the water
purification center, we weren't
going unless the community promises
to provide us with land,
raw water connection,
and electricity connection.
>> Sorry, let me just jump in here.
I used to finance irrigation
projects, and the problem there was
that the community didn't have any
ownership of the project,
it was just
something that was given to them.
And so operations and
maintenance never really kept up.
>> Exactly.
>> I would travel around rural
areas, and
I would see these projects where
the European Union had proudly
put a plaque on it, built
by European Union two years ago,
and the damn thing was busted, so.
>> Yeah, exactly.
>> So the whole model of,
hear villagers,
we have given you this great thing,
best of luck, never really worked.
>> Exactly, so from the beginning
there is ownership from them.
Then we work together for five to
seven years, during which time we
train one person from the village
itself to run the water center.
We do a lot of
educational campaigns,
a lot of awareness building.
And after this, after seven years,
we hand it back to the communities,
usually to not one person but
to the village government, for them
to run the water center themselves.
So we have so far handed back about
329 water centers, which is in
329 villages, and about 80% of them
continue to work even now.
[MUSIC]
The latest project that we have set
up is in Maharashtra, and
this is with two years of work.
We provide water to schools.
So we've seen that absenteeism has
dropped from 24% to 2%.
We have seen that medical
expenditure for waterborne diseases
has fallen from 50% to 13%.
We have seen that the drudgery on
women, that is because usually they
have to walk for
one to two kilometers carrying 20
liters.
But from the time the water center
has come in, about 40% of the times
it's the men that actually pick up
the water because it's no more just
a woman's work.
[MUSIC]
When we began,
Darius, there was absolutely nobody
else that was doing this.
So we were the pioneers of
this model,
we were the ones that actually
demonstrated it on a large scale.
But by 2012, we realized that there
is a whole lot more that we need to
learn because we set up with
state governments,
which means we have scale, but
we didn't necessarily have
everything properly sorted out.
So, so far we do cover all costs
up to the state level, but
we didn't want to take grants for
the national level cost.
And so in order to do that,
we realized that if we can't
increase the price,
that's going to be very difficult.
We knew that we needed to be
sustainable while providing
water at the same affordable cost.
So we explored various ways in
which we could do it, right?
We said, okay, let's just see if we
can get economies of scale in
the same model.
We tried that, but it didn't work.
Then we said, you know what,
urban areas we seem to be earning
a whole lot more than rural areas,
so let's see if that could help us
increase our revenues and
cover all our costs.
We tried it for two years, but
because of regulatory aspects
as well as the changes in law,
even that didn't work.
By then we were like, it looks
like the most likely way in which
we could be sustainable, is through
this cross subsidization.
[MUSIC]
>> The bottled water is sold on
a commercial basis?
>> Yes.
>> The profits cross
subsidize the world water schemes?
>> Yes. >> That's a pretty big
strategic pivot.
And I'm just curious,
could you just say a few words
about what was the process that got
you to introduce this new product,
because that's quite a big
shift in strategy?
>> I was one of the people that
was, from the beginning, really
convinced that this was the way to
go because I had done a lot of
research in rural retail by then.
And we saw how much money goes in
there, and
how very few organizations have
been able to cover all national
costs.
And we had even reached a place
where nobody else
had reached by then.
But to go further was going to be
difficult.
So I was quite convinced that
we will need to look at it from
another perspective.
>> And within your team,
was this strategy debated?
Was there a challenge?
>> Hugely,
it was very difficult for me.
It took me a very long time to
discuss and get the team on board
about the whole urban model for,
initially, the middle class, and
then the rich.
Because I kept feeling like we were
moving away from our mission.
The team is extremely passionate.
Most people that are working in
the sector, in the organization,
are very, very passionate about
what we are working for.
So, these took me almost two and
a half years of constant
conversations, discussions,
debates, some people even leaving
from the leadership team before it
became a part of what we do.
Over the last two years through
various conversations with
the customers as well as
generally understanding the market,
we saw where we could differentiate
ourselves with quality of water and
services well.
Right now it is India's only social
packaged drinking water brand.
The brand is called iQuench.
And with the tagline of,
this water is good for you,
good for society, and good for
the planet, because 100% of
the profits will go to supporting
those people in rural India that
don't have water to drink.
>> And I'm just curious, so
has your hypothesis proven true?
Is this business, are you in it for
the long haul?
>> So we have a fairly
differentiated product right
now that we are seeing more and
more people like quite a bit.
At the end of the year last year,
we quickly
switched consumer segments to B2C,
and we were able to do about 42%
over the previous year.
And this year, again,
we grew about 62% in the last
two months over the previous year.
So we see that there is a demand
for good, safe, drinking water
that is unadulterated.
And what adds to all of this,
is the fact that people feel like,
okay, I get to have good water, and
then some people in rural India
are also going to benefit.
So I do think we are going to be in
this for the long haul.
[MUSIC]
>> It's exciting to know that
Naandi strategic pivot has paid
off, and they can continue to fund
their work in rural India.
It's a reminder that different
approaches can serve the same
mission.
For social enterprise, success
isn't about dominating the market,
it's about fulfilling the need.
And since Naandi pioneered their
model, others have followed,
creating more opportunities for
safe water in rural communities.
>> Once this model was
demonstrated on a large scale,
several other state governments
then adopted the model, the central
government adopted the model.
Bank started to give out loans to
entrepreneurs that wanted to
set up a water center.
So, right now, this model is fairly
well known in the country.
And in fact,
a lot of other countries in Africa
are also using this model.
[MUSIC]
>> I want to thank
Divya Yachamaneni and
Naandi Community Water services for
sharing her story and for
the impact she's having in India.
Since we last spoke in 2021,
Naandi has opened an additional six
water centers for a total of 335,
that have impacted more than
700,000 lives across India.
[MUSIC]
This has been Grit & Growth with
the Stanford Graduate School of
Business, and I'm your host,
Darius Teter.
If you like this episode, leave us
a review on your podcast app.
It really helps us to share
the stories of these incredible
entrepreneurs with as many
people as possible.
To learn how Stanford Graduate
School of Business is partnering
with entrepreneurs in Africa and
Asia, head over to
the Stanford Seed website at
seed.stanford.edu/podcast.
Grit & Growth is a podcast by
Stanford Seed,
Erica and researched and
developed content for this episode.
Kendra Glad,
she's our production coordinator,
and our executive producer is
Tiffany Steves, with writing and
production from Andrew Ganham, and
sound design and mixing by
Alex Bennett at Lower Street Media.
Thanks for joining us,
we'll see you next time.
[MUSIC]