Lutheran adds that Kenya’s market is also attractive because legislators and farmers now recognise that overuse of chemical fertilisers has depleted the country’s soils and contributes to poor yields. Eco Fuels Kenya is hoping to expand its market by encouraging farmers to supplement its chemical fertilisers with organics.
An uphill climb
“Turning the need for organic fertiliser into a demand for product is a timely process. You can talk to almost any farmer and they are very keen on organic, they know the benefits and they know why chemicals are bad, but they still do not just switch all of a sudden from chemicals to organic fertiliser without visible evidence of the fertilisers’ results which often means three to four months trials and another two to three months to close sales after that.”
The US entrepreneur says working on the startup is “very satisfying” as it helps farmers adopt sustainable farming practices and generate income for collectors of the Croton nuts. However, like many startups, Eco Fuels Kenya is doing what “no one has ever done before with limited resources”, so the path is a difficult one.
“The business problems you have here in East Africa, especially at the early stages, are unlike the ones you would have in western markets. For example, a meaningful amount of our investment capital in 2013 unpredictably went to maintaining vehicles, simply due to a lack of ability to find a suitable mechanic in our county,” says Lutheran.
“When you consider that East Africa doesn’t have the same early-stage investment culture as the US and raising seed funding is already an incredible challenge, an unforeseen but necessary expense such as this can drastically slow down your ability to invest in the parts of the business that drive sales growth.”
Making a meaningful impact
Lutheran previously worked with multiple venture-backed startups in the US, including a clothing manufacturer and a mobile app startup, before relocating to Kenya at the start of 2013 to join the Eco Fuels Kenya team.
“The draw for me to come here was the opportunity of building an impactful company in East Africa which turns a naturally-occurring waste material into 100% organic products.”
He adds that the opportunity “to do something meaningful” is attracting more young graduates from western countries to start social enterprises in Africa.
“Overwhelmingly what you see in the US is people who have long careers, they make enough money but they are not satisfied because there is a lack of meaning in the process. It’s very easy to get stuck into those systems where every year you are just hoping for the next pay rise and you are working on something that you’re not passionate about. A lot of people who come here care a lot more about what they are doing with their time, and, due to the nature of absolute poverty in East Africa [compared to relative poverty back in the US] you have a chance to do something meaningful for a lot of people without being reliant on donor money.”