Posted by : Krati Garg Caspian Climate Conversations | Episode 11
Featuring Shashank Verma, Principal, Xynteo
Shashank has been working in the renewable energy space for more than 15 years and has been on all the 4 sides of the impact table -as a social entrepreneur in India, as a business advisor in East Africa, as an impact investor in Germany and now as strategy consultant in India. Currently, he is working with Xynteo, a Norwegian headquartered advisory firm, which works with leaders from the corporate world, to create new models of growth, to solve the challenges related to sustainability. As part of the energise team, he is leading the rural collaboration project, as well as the biofuels project. Prior to this, Shashank worked as an IT professional for 5 years in India. He has an MBA from Oxford University and a Bachelor of Technology (B.Tech.) degree in computer science from NIT, Kurukshetra.
To tune into the recording, please use the available link here: https://www.mentza.com/circles/7644
Please find below a summarized transcript of this interesting conversation:
Our guest for today, Mr. Shashank Verma is Principal at Xynteo, a sustainability consulting firm. Today we are going to talk about ‘Stages of Development Framework’, a tool they have developed for helping rural businesses in India. Shashank, tell us a little bit about the partners who have come together to build this tool?
Thanks, this tool has been built by Shell and Tata Trust. They have come together under the Xynteo- Vikaasa coalition to co-create this tool which we call ‘Stages of Development Framework’.
A lot of our audience are entrepreneurs working in rural areas. They’ll be very curious to know what the tool can do for them.
The purpose of the tool is to help startups find the right market for their products without having to physically visit the village. We do that by using socio-economic data indicators like percentage of pucca houses in a village which is an income proxy data, road type connectivity like all weather roads vs kuccha roads which has a huge impact in terms of the amount of development a village will experience, types of irrigation that is available, say drip irrigation vs rain fed irrigation, to assess the overall economic potential of the village and so on. We have identified these types of social indicators across 30 sectors. Right now, the tool is not integrated with the data, but there are number of publicly available sources, that we have identified including one which is called Mission Antyodaya by Ministry of Rural Development where there are 141 different data parameters across 30 sectors. In the next phase, we are planning to integrate that data with our tool.
Great. Can you explain to us with an example of how the tool has been applied or will be applied for the benefit of the intended users when the integration happens?
Sure, so just imagine a poor village in rural Chattisgarh, with most of the households living in straw huts kind of dwelling compared to a prosperous village in Gujarat with brick-and-mortar structures; the needs and requirements of goods and services as well as affordability will differ. This tool is able to profile rural areas using publicly available data sources which then helps the startups decide what sort of range of goods and services that they will be able to offer in those different types of villages and what areas should they target with their available offerings.
Can you talk about the case study you have done on this subject?
Sure, so we have partnered with about 11 different incubators when we launched our tool in Nov last year. We’ve had partnership with Atal Innovation Mission, Villgro, Social Alpha and the likes and through them, we have partnered with a number of startups and trained them in the use of the tool. Quite a few of these organisations have really benefitted from the use of this tool. One startup offering cold storage solutions in rural areas were using this tool to help identify the go-to villages that would be good fit and they were using this tool to convince the investors as well. Using the data driven approach of this tool, they were able to identify that the villages which would be a good fit for their solution and therefore, they were reducing the market risk for the investors. So the power of this tool is that it can help startups find their markets faster and more efficiently in a least cost manner, and can also reduce the amount of physical site visits needed, by say 80% or so.
Terrific example Shashank. If we have an Electric Vehicle company and the company is selling two-wheelers for example, in rural areas, how can they use this tool?
So if an EV company wants to sell two wheelers in rural areas, using this tool they can first understand the economic wealth of a village, next they can also using the tool to understand the state of energy in those villages because if someone is selling EV scooters, they would want to be in areas where the energy availability is more reliable than those where it is not. So, using those combinations and also the socio-economic development indicators of that village, they would be able to better profile which of those villages would be a good fit for them. So that’s how an EV company can benefit from the use of this tool.
On the data management front, is there a potential to partner with the government for the regular upkeep of the data?
Sure, so there’s one data set that by the Ministry of Rural Development which is called Mission Antyodaya and that data is collected on yearly basis. We are trying to integrate that dataset into the tool because that can already provide 80-85% of the data indicators that we require for our tool. It is publicly available and at a per village level. So, we are exploring those opportunities for partnerships to integrate the tool with the data, and getting that on a regular basis.
We have a company which is a farm to fork company, and it is planning to set up an agro-processing center in rural Maharashtra, what are the types of data that they should be looking at?
So, if one is setting up an agro-processing unit, the sort of data that they will need to look at will be- one-what is the state of energy available in that village, two- the population density of that village, three- connectivity to markets for being able to sell their produce, and also the quality of the road network. That will help them assess which are the sets of villages that they should be looking at and test in our tool and identify which are the villages where it would be useful for them to set up their centers.
For the way you describe it, isn’t there a market for this tool from traditional businesses? What do you think of that?
I would say, they could find it interesting for certain use cases, but realistically if you look at these companies, they have been on the ground, have their partnerships and distribution systems in place, and understand these villages quite well, so where they already have presence, they probably don’t need this tool. However, if they are trying to figure out a market entry strategy into new geographies, then they could find this tool useful. The main purpose of this tool is to help startups which are really scaling and want to create a primary list of villages from a bigger list. In these cases, it is a great first stab at data before they go on the ground.
What you are saying bring another question to my mind, as companies develop their operations and they gather data from the ground, can they contribute back to this tool?
Using crowd sourcing of data to keep it updated is an interesting proposition. As I mentioned, currently we are working to integrate Mission Antyodaya data into the tool as the first stage. In the next step, I think we can open it for crowdsourcing of data from entities and organisations which are already on the ground, then it could become like google maps where people on the ground can mark their assets on the tool. That’s probably longer down the road.
We’ve talked in this entire conversation about data, but there are also other qualitative factors, can you reflect a bit on that?
Absolutely, there are number of qualitative factors that affect the performance of the business on ground. Let’s say there are political situations, a village may be affected by extremism, or the cultural beliefs of the local communities, etc. So, there are a lot of these softer factors which can or cannot be quantified, and we are looking at how some of that information can be captured, so the investor knows that going into particular areas involves higher perceived risks. So, I think the question that we are trying to answer is, the more transparency you have and the more inside information you have about the village, whether it is hard quantitative data or even qualitative data, it would actually increase the chances of success on the ground, for the companies and the investors.
Any final thoughts for our entrepreneurs and investors?
I would like to conclude by saying, we have been doing this for the benefit of the small organisations. It will be great if there are people and organisations who would like to partner with us, so please feel free to reach out to us. Our tool is free to use. The website is https://ruralcollaboration.in/ . Please feel free to use the tool and let us know what you feel about it and we will be happy to hear comments.