January 22, 2026 • 40 mins
Samir Ibrahim is the co-founder and CEO of SunCulture. When he started the company, he thought he was solving a simple problem: How do you sell solar-powered pumps to help poor farmers irrigate their land? It turned out, he was working on something much bigger: How do you help poor farmers get richer, and create a giant new market from scratch?
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Speaker 1 (00:15):
Pushkin.
Speaker 2 (00:20):
There are at least two ways that you can frame
today's show. One frame, climate change makes the weather more unpredictable,
and the people who suffer most from this are the
hundreds of millions of poor farmers in the developing world
who rely on rain to irrigate their crops. The second
frame is a little less familiar. Poor farmers in the
(00:43):
developing world may be the world's biggest untapped consumer market,
and a company that helps those farmers earn more money
and move into the formal economy.
Speaker 1 (00:53):
Could be huge.
Speaker 2 (00:55):
Today's show is about a company that started out with
that first problem, helping poor farmers deal with climate change,
and now, after more than a decade, the company is
addressing the second. They're helping poor farmers get richer and
starting to sell them things they can now afford. I'm
(01:18):
Jacob Goldstein, and this is What's Your Problem, the show
where I talk to people who are trying to make
technological progress. What's your name and your job?
Speaker 1 (01:27):
My name is.
Speaker 2 (01:29):
Starting easy, It's gonna get hard.
Speaker 1 (01:33):
My name is so funny. No one said no one's
actually asking me what's your name and your job? Before?
Just like that, bam, coming at you, coming at me hot.
My name is Samir Ibrahim. I'm the CEO and a
co founder at sun Culture.
Speaker 2 (01:49):
When Samir co founded sun Culture back in twenty twelve,
he was trying to solve the problem of helping poor
farmers irrigate their land. Wanted to sell them solar powered
water pumps, but it soon became clear that selling pumps
wasn't going to work on its own. To make solar
irrigation work, sun Culture had to become a tech company,
(02:09):
and a carbon credit company and a finance company. Ultimately,
Samir realized that sun Culture really needed to solve a
deeper problem. How do you help poor farmers get richer?
Speaker 1 (02:21):
A human sized solar panel on the roof of a
household completely changes someone's and someone's family's life in a
way that people who are living with disposable income may
never experience that change. It's a huge change. It's like
from someone going and saying like, I literally have nothing
to like I can now pay school fees. I mean,
(02:45):
it's just it's wild.
Speaker 2 (02:46):
Sun Culture is based in Kenya, which happens to be
where Samir's parents grew up. Before he was born. They
immigrated first to Canada and then to Florida, and Samir
was working as a consultant at PwC in Manhattan in
his early twenties when he and a friend decided to
start sun Culture.
Speaker 1 (03:03):
It's no surprise that we weren't farmers. I didn't grow
up in a farming household, so I didn't know anything
about farming. So when we started thinking about how to
solve this problem, we first started exploring where this problem
was very big, and it just so happens that Africa
is where this problem is really prevalent. It's really prevalent
(03:25):
because two thirds of the workforce are farmers that live
on one or two acres of land, and they live
off grid, and they live in rural areas, so they're
the most affected by this problem.
Speaker 2 (03:34):
And the problem narrowly is climate change makes it harder
to grow food.
Speaker 1 (03:38):
That problem, yeah, exactly. Yeah, But then they're also potentially
a big part of the solution to the second problem,
which is we need to grow more food to feed
it growing population. Yeah, Africa has sixty percent of the
world's unused farmable land. It's the only continent with an
economic water scarcity versus a physical water scarcity, So we
(03:59):
have enough groundwater to use it for growing crops and
keeping animals. Just people can afford to draw it, and
you have a massive unemployed workforce that is also agrarian,
so you have all the resources to sort of think
this through. Because I'm not a farmer, I looked at
farming as just an algorithm. You have a bunch of
(04:20):
inputs and variables, then you have an output. So I
looked at it and said, what are the variables that
have the most outsized impact on the outcome? And when
you look at all the farming inputs, it is very
clear that water has the most outsized impact on the output.
Having access to reliable water makes sense, makes sense. I
(04:43):
might even have guessed that one not knowing anything, yeah, exactly,
having reliable water can increase your yields, but up to
five times, Like, it's pretty crazy. And it is coincidentally
the variable that changes the most because water for agriculture
in many parts of the world comes from the rain,
which is increasingly more inconsistent and unreliable. So he said,
(05:04):
great Africa water, that's where we have to start. Irrigation
in Africa is a sixty five billion dollars opportunity because
only four percent of African farmers irrigate versus close to
forty percent in Asia.
Speaker 2 (05:19):
So the other ninety six percent are just relying on rain.
Speaker 1 (05:22):
Rain. That's why African farmers are some of the ports
in the world because imagine you don't know when the
rain's gonna come. So we were like, okay, why do you,
Sophie farmers irrigate and we're like, oh, duh. You'll probably
guess the answer as well. It's just too expensive. Not
only is the water pump too expensive, but the recurring
cost for fuel, which is forty to eighty bucks a month,
(05:43):
is too expensive for a farmer that's making one thousand
or fifteen hundred dollars a year.
Speaker 2 (05:48):
And so the fuel is this like a deep diesel generator,
I mean, is that the.
Speaker 1 (05:52):
Way of petrol exactly a diesel generator of diesel powered
or petrol powered water pump to move the water to
give to their crops was a problem because irrigation is
just moving water from one place to the other.
Speaker 2 (06:05):
Yeah, so like there's a river over there, not that
far away, but the farmer doesn't have can't afford to
buy the gas to run the generator to move the
water from the river, and by the way, if they
could buy the gas to run the generator, then you're
making climate change worse again.
Speaker 1 (06:21):
But we don't exactly worry about that. We don't have
to worry about that. That's not even, that's not even.
That's just like they're just like, we need to be
able to afford something, right, yeah, right, sure? Or then
what happens is they just take buckets and they fill
up those buckets with twenty liters of water, which is
forty five pounds, which is those big weight plates in
the gym, and then they walk to their farm or
they pull it up from the well and just is
super inefficient. So we said, okay, we need to figure
(06:45):
out a way to first make irrigation affordable, then we
need to figure out a way to get it to people.
So from an affordability standpoint.
Speaker 2 (06:54):
Do you ever stop and think like this is too
much Like as you're like at the talking about these things,
you're just like a college kid.
Speaker 1 (07:02):
Right we were twenty three, And I think that was
the advantage.
Speaker 2 (07:07):
You had basically never had a job. It wasn't like
you had like run some company or done some big thing, right.
Speaker 1 (07:12):
I think that was the advantage. I think that's why
we probably didn't stop and say this is going to
be really hard. I think, I think really that.
Speaker 2 (07:19):
Was it the dumb kid advantage.
Speaker 1 (07:21):
Yeah, yeah, I call it, what did I call it?
Sort of naive confidence or just yeah, one of those,
but I like the dumb kid confidence is probably more accurate. Yeah.
So we're just sitting there, We're like, oh, yeah, obviously
we're just gonna make irrigation cheaper, no problem. So okay
to do that. That is like twenty eleven ish, right,
this is what twenty eleven, twenty twelve, Yeah, exactly. Yeah.
(07:43):
What's really interesting about that time is we reached grid
parody in a number of African countries. So the cost
to connect your power to power your your household with
solar became cheaper than the grid. So you have you
have these like tailwinds in terms of cost reductions kind
of happening. So let's figure out to make the fixed
(08:04):
cost reasonable and a fixed cost, and then let's finance it.
So we spread that fixed cost over time, because no
matter what, the upfront cost is still too expensive, which
is why only four percent of African farmers irrigate with
diesel petrol pumps. So we said, let's take an old
technology water pumps irrigation, decarbonize it, figure out how to
(08:24):
make it solar powered, and then deployed in a resource
rich environment like Africa. That's like the summary framework. So
we went and developed and made Africa's first solar irrigation company,
and we the original price of the system. If you
were to go and try to buy one of these
before from like an NGO, it would cost twenty five grand.
(08:45):
We managed to get it down to five grand, okay, twenty.
Speaker 2 (08:48):
Five thousand dollars, So that's like that, so twenty five
thousand dollars is completely out of the question, presumably for
really out of the small farmer who can't afford to
diesel the generator.
Speaker 1 (08:58):
Yeah, when we started, we managed to without really any
technical innovation, just buying the right things from the right
places and putting it together for our pilot project. We
got it down to five thousand dollars. And at that
point we're like, you know what, I'm sure over time
we can get this to be cheaper. Like, let's just
accept we can do that, and let's figure out the
(09:20):
other things I need to go around this, okay. And
that's that's when we learned that affordability was one part,
but availability was the other part, because huh, and that's
the harder part. And it's because because small, older farmers
don't have disposable income, no one's really selling them a
bunch of stuff, which means the infrastructure to be able
(09:42):
to get them things doesn't.
Speaker 2 (09:43):
Exist, like to some significant degree. They're not in the
kind of monetized, financialized economy, right exactly, they're growing food
for themselves, they're treading some amount of food whatever at
the market, but they're just not in the cash economy
the way we think of it.
Speaker 1 (09:58):
Right exactly, They're in the informal economy and it's very
isolated and acute, so very village level, et cetera. So
we went from thinking we could drop ship these products
from China and just like Johnny Appleseed, get a bunch
of these things out really quickly. So then realizing we
(10:18):
had to figure out how to manage our own supply chain,
we had to first wait to do a bunch of
innovation on the power electronics.
Speaker 2 (10:26):
Well wait, why didn't your first idea work? So your
idea is like, we can make these things at you
know whatever, eighty percent cheaper than they exist now they'll
be a good deal for farmers, like you know, we'll
order parts from China like everybody does. Why didn't that work.
Speaker 1 (10:41):
Because financing wasn't part of the original idea. It was
we thought we'd be able to do with banks, and
we thought we'd be able to work with banks to finance,
and banks in Africa will ask farmers for two things.
One is a pay slip and they're like, well, I'm
a farmer. I don't have a pay slip, job or collateral.
And banks aren't willing to take irrigation or a cow
(11:03):
as collateral because they don't know how to repossess and
resell them, so farmers can't get access to loans. We
realize we have to figure our financing. We're like, okay,
that's interesting, and then we figured out. We realized we
had to figure out the installation because there's no third
party installers, the maintenance, the ongoing after sales support. We
had to figure out the digital engagement. We had to
figure out supply chain, We had to figure out R
(11:25):
and D from the power electronics side, we had to
figure out how to monetize carbon credits to give them
further discounts boomom boom bom bom bom bom bom. So
what we thought was going to be just a drop
shipping company ended up being a company that has to
build this entire physical and digital infrastructure to get these
irrigation systems to farmers. And that's where the journey started.
Speaker 2 (11:49):
Why didn't you give up when you realized that?
Speaker 1 (11:54):
Because we only realized it over time. It wasn't all
in one wa bam, thank you, ma'am kind of thing.
Speaker 2 (11:59):
Do you kept being like, oh, we just got to
solve this one thing.
Speaker 1 (12:03):
Yeah, truly, And that's and we kept uncovering the next
step over and over and over again until finally, a
few in twenty twenty one, this is almost ten years later,
we've figured out one of the last remaining pieces in
terms of making this truly affordable and locked in for
(12:24):
a large group of people, which is monetizing carbon credits
and giving our customers discounts with those revenues. And at
that point, we have a business that has shown that
you can collect repayments from farmers. We have a ninety
percent collection rate from the quote unquote worst unbankable people
in the world. We have ninety percent digital engagement from
(12:47):
people who most of the world writes off as not
being technologically literate.
Speaker 2 (12:53):
But via text message or something, what does it mean?
Speaker 1 (12:55):
They're checking their balance through our app? How much do
I have left? They're asking, they're asking questions, raising tickets,
they're referring friends. If you're a mobile app, They're like,
really like engaging. And we get to this point where
finally we said, okay, in order to make this affordable
to the mass market, not just at that point, I
don't know, some tens of thousands of farmers we worked with.
Speaker 2 (13:18):
So it was this sort of like better off farmers.
Presumably five thousand dollars where you started, it's still very
expensive for a farmer who's farming a few acres and
can't afford irrigation.
Speaker 1 (13:28):
Yeah, and even even getting down to seven hundred dollars,
which is where we got to, and even if we
spread that cost over over a finance period of two
or three years, even paying something like sixty bucks a
month or fifty bucks a month is too expensive for
most people. Huh. And we have to keep figuring out
(13:48):
how do you make this more affordable.
Speaker 2 (13:50):
So the price has gone from five thousand dollars to
three hundred and fifty dollars, and those are nominal prices, right,
and real prices it will have fallen even more. How
much of that decline in price is the decline in
the price of solar panels?
Speaker 1 (14:06):
Some of it some? Yeah, most of it half no,
less way less, way interesting, interesting, way less.
Speaker 2 (14:14):
Tell me all the things you did to make it cheaper.
Tell me some of the things you did to me.
Speaker 1 (14:18):
A lot of it was working on the power electronics,
so figuring out how to take a small amount of
power to power a high powered appliance, So we need
less solar to power a water pump.
Speaker 2 (14:31):
I read and I think it was a Bloomberg News
article that your pumps use something like three hundred or
four hundred watts. Yeah, she's crazy, right, Like that's like
four incandescent light bulbs.
Speaker 1 (14:41):
Yeah, it's like you can't see me, but it's like
a human size.
Speaker 2 (14:45):
Like the idea that that can be transformational for a farmer, Yeah,
is really something to think about.
Speaker 1 (14:53):
Yeah, it's like there was one of our one of
the stories are so incredible. One of our customers give
a ted talk, and in that talk she talks about
like talking to her plants and promising them water is
going to come because they're dying, and literally not like
just going to everything she can think of and bring
in her being to try to convince her plants to
(15:16):
stay alive. You go from that to her saying my
cow didn't die. I expanded my farm and making kombucha.
Like I mean, it's really transformational stuff. And there's one
story that will always stick with me that that summarizes
and really humanizes this. We went to see a farmer
who is getting an installation. I love visiting installations when
(15:40):
they're happening, especially for those who are using the manual
buckets before, because once they realize that they don't have
to spend three or four hours a day physically pulling
a bucket of water from underground to the surface, whether
it's one hundred feet down or beyond, and they can
do that with a flick of a button, the look
on their face will change your life. It is unreal.
(16:03):
And when we ask this customer in particular, so now
what are you gonna do. You're not gonna use your
muscles to pull this bucket up, and she looked at
me in the face and she said, I'm going to
get fat with a huge grin on her face. She
was just like, that's what I'm gonna do. I was like,
that's right, it's amazing.
Speaker 2 (16:23):
So okay, so let's go back to you know, you
got more than ninety percent out of the price of
this thing, right, which seems like the fundamental thing you did.
Speaker 1 (16:33):
Right.
Speaker 2 (16:33):
Well, so one of the things you did to get
the price down was start using carbon credits? Yes, and
I don't I kind I mean, I can sort of
guess at that, but I also have some questions about that.
So tell me about how carbon credits work in your business.
Speaker 1 (16:49):
Okay, So there is a there are official verification bodies
that create methodologies that count how carbon credits are avoided
or removed from the atmosphere. And it just so happens
that there's an exis existing methodology under the UN framework
(17:12):
that talks about a displacement of diesel or petrol pumps. Okay, So,
because solar is an alternate to diesel and petrol, we
generate carbon credits for the systems that we install.
Speaker 2 (17:28):
So how much do you get paid in carbon credit
credits for you know, the sort of median pump that
you sell.
Speaker 1 (17:36):
So the way to think about this is we generate
carbon credits. The system generates carbon credits for seven years.
We give customers a discount upfront, and we sell those
carbon credits over the remaining years, so we raise debt
to be able to do that. We're able to give
our farmers about a twenty percent discount at minimum on
the monthly cost because we're able to sell carbon. Now.
(17:59):
It might sound like a little bit of just a
small discount, but we ran a pilot when we were
launching our carbon business and we reduce the price of
our system by ten percent and our sales went up
by something like I think it was like two times
something like that. Where we do st our price by
twenty eight percent, our sales went up by four and
(18:20):
a half times. Wow. So small adjustments in the monthly
price make a huge difference. So we use those carbon
revenues to directly subsidize our farmers. We're not a carbon business,
so it's a pass through to our customers, which has
enabled us now to grow more. You know, half of
our customer base was added in the last two years
(18:40):
because of that.
Speaker 2 (18:42):
So you're you know, lending the farmer's money to buy
the pump. Obviously you're borrowing against seven years of carbon
credits and passing that through Like you're a finance company
to some significant degree, Like you're in the finance business.
Speaker 1 (19:05):
Yeah, we're sort of an everything company. And that's just
it's just it's funny. It's like, it's really hard to
describe what type of company we are to many people
because we have to do so many things in order
to give people access to these products.
Speaker 2 (19:22):
And it's I guess it goes back to what you
were saying, which is your customers, these small farmers are
just not in a market economy the way we are
so used to thinking of being in a market economy. Right,
there's not access to capital or to financing. Obviously, what
else is there not that we might take for granted,
Like what else do you have to provide that you
(19:42):
might not have thought?
Speaker 1 (19:43):
I mean, you know, when you're if your cable breaks,
you call a third party installer maintenance personally, you go
on task grab it to find someone to do it
that doesn't exist. So we do all of the installation ourselves,
all the maintenance, all the ongoing after sales support. What's
been really interesting now is and this will answer the
question of what else might you know, think about our
(20:04):
customers are making more money, like we talked about, and
just like us, when they make money, they want to
buy more stuff. They want to get fat, they want
to get fat, but they also want to buy things
like health insurance, and they want to buy things like
weather insurance. They want to buy things like high quality
seeds and fertilizer. So they're coming at us and they're saying, hey,
you know i've been paying you. Well, I'm paying my
(20:26):
twenty thirty bucks a month and do it I'm paying
Can you just add a little bit more to my
monthly and give me these other things? So we said okay.
So about a year ago we started a pilot where
we bundled in health insurance. So if someone gets sick
and go to the hospital, if someone passes away, the
(20:46):
family has insurance to be able to take care of
that need.
Speaker 2 (20:49):
Now let me ask you are are there. You can't
be a health insurance company too, right, presumably there's there
are health insurance companies in these countries. You are just
selling insurance and taking some weird bundle.
Speaker 1 (21:04):
We're starting to bundle it to the monthly because again,
the reason they come to us is because they trust us,
they get duped by not good products. They trust us.
We can get them discounts because we're buying in bulk basically, right,
because we just added to the monthly payments and then
they don't have to go and try to figure out themselves, right.
So we did that. We made an investment into a
(21:26):
company that allows us to now finance agriculture inputs. So
let's say you're Jacob as a farmer, you're paying well
for ten months and you come to us and you're like,
I want some seeds. We're like, cool, here's a voucher
that we sent to your phone. You can go to
any of these right now in Kenya one thousand to
proof shops you can get your seeds and what is
added to your monthly payments. And last month we started
(21:49):
a pilot with Parametric Weather Insurance. If it floods in
your area, you get paid out as well. So we're
starting to think about, okay, how do we now provide
access to services that helps people protect themselves from shocks
and go back to the same thesis, right, how do
you increase prosperity at a small, older farmer level and
(22:10):
rural areas to increase food supply and reduce client migration.
All of these things help farmers protect themselves against the
risk of not paying for their irrigation system. Just good
for your business, which is good for our business for sure,
which is good for our business. And that's also just
a bunch of things that will help them not have
to worry about where they're going to spend money and
(22:31):
figure that out. So's it's kind of all bundled together,
and we're in the phase of thinking about how do
we continue to provide services for our customers for things
that they want. Does this become an ongoing subscription that
they are able to access that they want to do
they want extended warranty. So we're in this discovery phase
where our customers are pulling us to offer more products
(22:52):
and services because we have a credit relationship with them,
because we have their location, because we have payment history,
all these things. This digital engagement. We're now realizing that
we can be the access point for people trying to
get services and products to farmers, and access points for
(23:12):
farmers who want to get access to high qualify, high quality,
verified products and services versus going to go buying a
bag of seeds that never actually sprout, which is often
their experience.
Speaker 2 (23:28):
Will be back in just a minute. Part of the
way agriculture has become profoundly more productive in the United
States and other countries has been consolidation. Right, It used
(23:50):
to be the case in this country that eighty percent
of the people were farmers. That it was fifty percent,
and now it's two percent.
Speaker 1 (23:55):
And that is.
Speaker 2 (23:56):
Because basically we have substituted capital and technology for labor
and that has worked out great in many ways. And
yes there are problems with like you know, monoculture, farming,
et cetera.
Speaker 1 (24:07):
Et cetera.
Speaker 2 (24:08):
But fundamental the way we have grown so much food
is with uh more and more machines and fewer and
fewer people. How does that idea map to the places.
Speaker 1 (24:18):
Where you're working. I think about this a lot. And
one of the big differences for the consolidation of land
in the US and how mechanization took fifty percent down
to two percent in terms of farmers is because at
that time it wasn't profitable to mechanize a small farm.
(24:39):
That's like one of the things now consolidation and economies
of scales is a really good thing. So like that
is one hundred percent part of the story. But also
you couldn't mechanize a small farm profitably. What we're doing
now you can mechanize an eighth of an acre profitably,
which means that you don't require consolidation in order for
(24:59):
your farm to be able to produce food. I don't
think there's going to be one solution for the future
of African farmers. I think there's going to be a
mix of consolidation. I think there's going to small I
think it's going to be a whole mix of it.
But the differences are that you can mechanize a small farm,
and culturally, sometimes the only asset that families own is
the farm, and it gets passed down generation after generation.
(25:21):
So it's a challenge to culturally switch people from giving
up their only asset that they have in their family
to pass down as an inheritance to being able to
sell that off. Now there are companies who are doing that.
I think they're going to do a very good job.
I think there's no one size fits all. I think
there will be some consolidation. I think they'll be farming
as a service. I think they'll be what we're doing.
(25:41):
I think there's gonna be a whole mix of things.
But it's not going to be because you can't mechanize
a profitable and make a small farm profitable. It will
be because people like to buy rent or lease cars.
It's just going to be an option in the US
always because you had to.
Speaker 2 (25:57):
Right, because there was no way to be a profitable
small farmer. Yeah, I mean you're you're making profitable not profitable,
this sort of binary thing, right, But it could be
the case that you can make money as a small farmer,
but that land would be would produce more food, let's say,
with the same amount of inputs if it were consolidated, right.
(26:19):
Like that seems very plausible to me. And so while
at the level of the individual, and as you say,
culturally people might want to keep their farms, you could
imagine there being a pressure, you know, somebody might offer
them a lot of money because it would be not
because it's some there's some evil capitalists, but because like,
their farm could be worth more if someone with more
access to capital and more consolidation bought it and started
(26:41):
growing food on it, right, And that doesn't seem like
necessarily an unhappy story, although I take your point that
culturally it might be complex.
Speaker 1 (26:48):
Not a bad thing at all. I think it's great.
It's just it's an option, and it's I think I
think it's going to be. I don't think there's a
there's a better or worse here. I think there's it's
just it's an option. Yeah, fair, I feel like it's
gonna be. All these models have to exist at the
same time in order to figure out how to solve
the problems we're talking about. So I'm totally for it.
(27:10):
It's just not our business, but I'm totally for it.
Speaker 2 (27:12):
So let's talk about the future of sun Culture. When
you look out over the next few years, what do.
Speaker 1 (27:19):
You worry about. The biggest worry is we've added about
forty percent of the people that we have today just
in the last two years, and we're growing quite fast.
And that's only started about two years ago. So two
years ago we started growing quicker than we ever have.
We went from you know, ten retail locations to thirty
(27:40):
retail locations in Kenyans. It's really just like building all
of the I hate the like figital like the physical
digital infrastructure to support that scale.
Speaker 2 (27:47):
I never heard that before. I don't like it.
Speaker 1 (27:51):
You can't I'm so sorry that I put that in
your life, but you're gonna thank me one day when
you use it at a party and someone laughs. So
it's all having all that in place. But we're growing faster,
and it's just making sure that we continue to bring
on people that align with our culture to make sure
(28:12):
that we have the right people in place. And it's
just like I think, I always think about it in
terms of a sports team. I used to play a
lot of soccer and you just got to sometimes change
the formation based off of who your opponent is. And
we just have to make sure we continue to iterate
on our org structure, where people are, who we have
in place to make sure we can continue to scale.
And that is a big focus of mine.
Speaker 2 (28:35):
If things go well, where will the company be in
five years?
Speaker 1 (28:41):
If things go well? There's there's different levels of well.
So level one of well is we're at few hundred
thousand farmers all paying us this dollar a day to
get access to services that they need. They're happy, they're
making more money. Our net promoter score for our customers
(29:03):
is seventy eight. It's so high. Our customers are so happy,
and that continues to stay there. Level two is we're
able to then potentially move what we're doing into different
farm sizes. So maybe we help with the folks who
are operating larger plots of land to your point, maybe
(29:25):
the tens of acres to become more efficient, to be
able to produce more food, to be able to hire
people and create jobs around them. And I think that's
something we're really interested in. How do we take what
we've learned around renewable energy and agriculture and financing and
bring that to larger farms in different geographies. So can
(29:47):
we take what we're doing and bring it elsewhere not
only from a geographer perpective, but also from a size.
Speaker 2 (29:53):
Perspective Geographically, do you think you might grow the business
outside of Africa?
Speaker 1 (30:01):
Yeah, not for the next few years. But we've looked
at We've looked actively at places in Central Asia, We've
looked actively at places in South Asia, We've looked at
places in Latin America. So it's not a now thing,
it's not a twenty twenty seventh thing, but it's it's
a thing. And it's just again going back to team.
(30:26):
Do we have the right team in place to be
able to do this and can we replicate this in
other markets with the right people. It's less now about
a viability thing. It's more can we manage it as
a team. That's really the question. We don't necessarily want
to spread ourselves too thin right now, but there there
is a moral question of like, if you can do
(30:47):
this in other places, why not just go balls to
the wall right Like it's a necessary, needed thing. You
can build your business much bigger. And there's this sort
of how do you how do we make sure we
do that sustainably? We don't want to run into the
situation where we grow too fast and the wheels fall off.
So it's this, it's this delicate balance of what that
looks like, and it's it's it is a definite yes
(31:07):
we will. It's just question is when, so your five
year timeframe seems seems possible.
Speaker 2 (31:15):
Now, gaze off into the distance and give me your
big injury thoughts.
Speaker 1 (31:20):
What I find really inspirational from a business perspective is
that smaller farmers who are who are often written off
as like very poor people, you can't sell to them,
et cetera, are now becoming real consumers. And it's almost
in Silicon Valley talk, we're almost increasing wallet size and
(31:43):
taking a share of wallet. Like you get people to
make more money and then you sell them stuff. It
just so happens that the things we sell them are
like insurances and access to inputs, but we're selling them
more stuff. And when you start looking at smaller farmers
as consumer market, there is a view that they're one
of the largest untapped consumer markets in the world. We
(32:04):
have all of this interesting data of who they are,
what they're growing, how they use their irrigations, what their
payments are like, and we can now start to layer
on with the demographic and geographic and payment data, the
types of the types of things they're asking for, and
we now start to become sort of the entry point
(32:26):
for an emerging consumer market. I think what we're doing
is a way to do that. It's not the only way,
but it is enabling the largest group of consumers or
potential consumers to make more money, and I think that
might be a transition. And instead of looking at this
work only as impact and development work, but you think
about it as sort of a way to build the
(32:49):
consumer industry. Things get really interesting, especially if you look
at the trajectory that East Asia had in Southeast Asia
that Africa hasn't necessarily had because you have, like eighty
percent of their jobs are informal, and by twenty fifty,
one in four people on Earth will be African. One
in three working people by twenty fifty will be African.
(33:12):
Half of all new entrance into the global workforce will
come from South sou in Africa. Like, it's just like
really big consumer opportunity, but instead of starting with the
ride sharing or a delivery app, I believe it needs
to start with helping people increase incomes. And that's where
the irrigation comes in.
Speaker 2 (33:31):
We'll be back in a minute with the lightning round.
Let's finish with the lightning round. So your parents, is
it right? Your parents are from East Africa. They moved
first to Canada and then to the United States.
Speaker 1 (33:52):
That's right.
Speaker 2 (33:53):
Presumably I'm making a guess here, but it's sort of
the classic immigrant story of wanting to give their family
a better life. You moved back to East Africa. So
was that like a disappointment to them? Were they like,
come on, man.
Speaker 1 (34:07):
My parents are really good at not telling me when
they're when things when they think it's going to put
pressure or like put me down. So I didn't. I
didn't find out that until a few years later that
they were like, what the hell is this guy doing?
(34:27):
They told me. They told me later that they were like,
you know what, we're just going to think about it
as an MBA. He's gonna go for a year or two.
It's just like he's going to school, and that's fine.
And then like later they're like you're still They're like,
oh cool, now they're super proud and stuff. But you know,
I was living in their immigrant dream. I was self
sufficient in Manhattan. I just started working in PwC. They
(34:50):
were like, we win. We left East Africa accounting account
accounting firm. I was doing consulting there for them. They
were like, we won, We won the game. We won
the immigrant game. We left EDIOM and was causing problems.
We left and like we won. And then I'm like,
so I need to go to East Africa and I
need to figure out how to borrow some money from people.
(35:11):
So they went and borrowed money from two uncles, a
grandparent themselves lent it. They never told me where they
got it from, which would have also stressed about we
paid it back. And I think after we paid it back,
they're like, oh, wow, you're there, like, this is what
you're doing? Cool? And now obviously they're really they're really
happy and proud and yeah, do they have equity? They
(35:36):
don't have the company? They don't.
Speaker 2 (35:38):
Oh you should give them some after all that.
Speaker 1 (35:43):
One of the big drivers for me is to I
would like to retire them.
Speaker 2 (35:48):
So, oh that's very sweet. Yeah, I mean I didn't
ask you about exiting. Like, is there some universe where
you sell the company or sell part of the company.
Speaker 1 (35:58):
Yeah, there's a universe. There's for sure universe. I mean,
my job as a CEO is to provide investors' returns. Technically,
that doesn't necessarily mean that it all has to go right.
So there's a world in which we sell it. There's
a world in which you have to pride off of me.
But there's a lot of different options going forward. The
most important thing is how do you get to scale fastest? Yeah?
Speaker 2 (36:23):
What is the rate limiting step for you?
Speaker 1 (36:25):
Now? In scaling, there are two things that would change
the game for us. One is in our control. One
is not in our control. In our control, it's can
we have a thousand times more sales agents in the field,
and if that's the case, then we can almost think
(36:45):
about scaling linearly, but just by adding people and can
we manage that growth. So that's one thing that is
in our control. The thing not in our control is
does a multilateral institution come with a large subsidy and
a time bound five year subsidy?
Speaker 2 (37:05):
Does that mean the World Bank?
Speaker 1 (37:07):
For you?
Speaker 2 (37:07):
Does that mean the World Bank?
Speaker 1 (37:08):
That does? Yeah, do we have a subsidy in Uganda
through the World Bank? But is there a large is
there a larger scale multi country subsidy for access to
electricity and what people call productive use of energy? So
what we're doing basically productivity.
Speaker 2 (37:26):
Turning water into food class.
Speaker 1 (37:28):
Water into product classic productivity, that would be that would
be a huge that would be a huge game changer.
If if that and and it looks like it will happen,
it's just when. But that's that's the moment at which
we then push a lot of capital into the system
and really hire those agents skilled in new markets, et cetera.
(37:49):
And that's that's the moment. So just making sure we're
ready for that.
Speaker 2 (37:53):
Back to your parents, Yeah, living in East Africa helped
you understand your parents better in any particular ways.
Speaker 1 (38:04):
Nobody has ever asked me that question, and it is
part of what I think about most as a theme.
And there's there's no question about why we started in
East Africa versus anywhere else. I can tell you it's
because Kenya is an English speaking country and because there's
a port and blah blah blah, but it's because my
family's from there, and like that's that's there's an affinity
(38:27):
to it. So I learned a lot about my parents
are tough and smart and like charismatic, and it's it's
very East African vibe and kind of seeing how they
grew up has helped me understand that.
Speaker 2 (38:43):
That last sentence was quite interesting when you say they're
tough and smart and charismatic and that's an East African vibe,
Like what do you mean by that.
Speaker 1 (38:54):
Tough? As in My mom's dad died when she was seven,
and she had six older brothers and they moved from
Belgium to Congo to them Kenya and there's this sort
of and I you know, I've met my my one
of my mom's cousins still lives in Kenya and his mom,
who recons passed away raised was like raised my mom
(39:17):
helped raise my mom for a few years. Meeting her
and hearing the stories and seeing where my mom grew
up helped me understand that toughness of her. But it's
like you hear the stories, but then you see it
and you see them in that place, and that really
brings it together.
Speaker 2 (39:36):
Tell me about the Buffalo Ranch sub at publics?
Speaker 1 (39:40):
Where did you get this shitternet? What?
Speaker 2 (39:46):
Where?
Speaker 1 (39:47):
This is wild? That is so good. That's so good.
Oh man, that's great. That is really good stuff. My
wife's a journalist and I have a lot of respect
for that.
Speaker 2 (40:04):
That was awesome.
Speaker 1 (40:06):
I mean, it's it is delicious. It is also something
that will change your life. It's like, you know, I
grew up in Orlando and Publix was the grocery store
we went. It's a regional grocery store and it's just
the Buffalo sub there is just so so delicious.
Speaker 2 (40:36):
Samir Ibrahim is the co founder and CEO at Sun Culture.
Please email us at problem at Pushkin dot fm. We
are always looking for new.
Speaker 1 (40:45):
Guests for the show.
Speaker 2 (40:47):
Today's show was produced by Trinomanino and Gabriel Hunter Chang.
It was edited by Alexander Garreton and engineered.
Speaker 1 (40:55):
By Sarah Bruguero.
Speaker 2 (40:56):
I'm Jacob Goldstein and we'll be back next week with
another episode of What's Your Problem.
Pushkin.
Speaker 2 (00:20):
There are at least two ways that you can frame
today's show. One frame, climate change makes the weather more unpredictable,
and the people who suffer most from this are the
hundreds of millions of poor farmers in the developing world
who rely on rain to irrigate their crops. The second
frame is a little less familiar. Poor farmers in the
(00:43):
developing world may be the world's biggest untapped consumer market,
and a company that helps those farmers earn more money
and move into the formal economy.
Speaker 1 (00:53):
Could be huge.
Speaker 2 (00:55):
Today's show is about a company that started out with
that first problem, helping poor farmers deal with climate change,
and now, after more than a decade, the company is
addressing the second. They're helping poor farmers get richer and
starting to sell them things they can now afford. I'm
(01:18):
Jacob Goldstein, and this is What's Your Problem, the show
where I talk to people who are trying to make
technological progress. What's your name and your job?
Speaker 1 (01:27):
My name is.
Speaker 2 (01:29):
Starting easy, It's gonna get hard.
Speaker 1 (01:33):
My name is so funny. No one said no one's
actually asking me what's your name and your job? Before?
Just like that, bam, coming at you, coming at me hot.
My name is Samir Ibrahim. I'm the CEO and a
co founder at sun Culture.
Speaker 2 (01:49):
When Samir co founded sun Culture back in twenty twelve,
he was trying to solve the problem of helping poor
farmers irrigate their land. Wanted to sell them solar powered
water pumps, but it soon became clear that selling pumps
wasn't going to work on its own. To make solar
irrigation work, sun Culture had to become a tech company,
(02:09):
and a carbon credit company and a finance company. Ultimately,
Samir realized that sun Culture really needed to solve a
deeper problem. How do you help poor farmers get richer?
Speaker 1 (02:21):
A human sized solar panel on the roof of a
household completely changes someone's and someone's family's life in a
way that people who are living with disposable income may
never experience that change. It's a huge change. It's like
from someone going and saying like, I literally have nothing
to like I can now pay school fees. I mean,
(02:45):
it's just it's wild.
Speaker 2 (02:46):
Sun Culture is based in Kenya, which happens to be
where Samir's parents grew up. Before he was born. They
immigrated first to Canada and then to Florida, and Samir
was working as a consultant at PwC in Manhattan in
his early twenties when he and a friend decided to
start sun Culture.
Speaker 1 (03:03):
It's no surprise that we weren't farmers. I didn't grow
up in a farming household, so I didn't know anything
about farming. So when we started thinking about how to
solve this problem, we first started exploring where this problem
was very big, and it just so happens that Africa
is where this problem is really prevalent. It's really prevalent
(03:25):
because two thirds of the workforce are farmers that live
on one or two acres of land, and they live
off grid, and they live in rural areas, so they're
the most affected by this problem.
Speaker 2 (03:34):
And the problem narrowly is climate change makes it harder
to grow food.
Speaker 1 (03:38):
That problem, yeah, exactly. Yeah, But then they're also potentially
a big part of the solution to the second problem,
which is we need to grow more food to feed
it growing population. Yeah, Africa has sixty percent of the
world's unused farmable land. It's the only continent with an
economic water scarcity versus a physical water scarcity, So we
(03:59):
have enough groundwater to use it for growing crops and
keeping animals. Just people can afford to draw it, and
you have a massive unemployed workforce that is also agrarian,
so you have all the resources to sort of think
this through. Because I'm not a farmer, I looked at
farming as just an algorithm. You have a bunch of
(04:20):
inputs and variables, then you have an output. So I
looked at it and said, what are the variables that
have the most outsized impact on the outcome? And when
you look at all the farming inputs, it is very
clear that water has the most outsized impact on the output.
Having access to reliable water makes sense, makes sense. I
(04:43):
might even have guessed that one not knowing anything, yeah, exactly,
having reliable water can increase your yields, but up to
five times, Like, it's pretty crazy. And it is coincidentally
the variable that changes the most because water for agriculture
in many parts of the world comes from the rain,
which is increasingly more inconsistent and unreliable. So he said,
(05:04):
great Africa water, that's where we have to start. Irrigation
in Africa is a sixty five billion dollars opportunity because
only four percent of African farmers irrigate versus close to
forty percent in Asia.
Speaker 2 (05:19):
So the other ninety six percent are just relying on rain.
Speaker 1 (05:22):
Rain. That's why African farmers are some of the ports
in the world because imagine you don't know when the
rain's gonna come. So we were like, okay, why do you,
Sophie farmers irrigate and we're like, oh, duh. You'll probably
guess the answer as well. It's just too expensive. Not
only is the water pump too expensive, but the recurring
cost for fuel, which is forty to eighty bucks a month,
(05:43):
is too expensive for a farmer that's making one thousand
or fifteen hundred dollars a year.
Speaker 2 (05:48):
And so the fuel is this like a deep diesel generator,
I mean, is that the.
Speaker 1 (05:52):
Way of petrol exactly a diesel generator of diesel powered
or petrol powered water pump to move the water to
give to their crops was a problem because irrigation is
just moving water from one place to the other.
Speaker 2 (06:05):
Yeah, so like there's a river over there, not that
far away, but the farmer doesn't have can't afford to
buy the gas to run the generator to move the
water from the river, and by the way, if they
could buy the gas to run the generator, then you're
making climate change worse again.
Speaker 1 (06:21):
But we don't exactly worry about that. We don't have
to worry about that. That's not even, that's not even.
That's just like they're just like, we need to be
able to afford something, right, yeah, right, sure? Or then
what happens is they just take buckets and they fill
up those buckets with twenty liters of water, which is
forty five pounds, which is those big weight plates in
the gym, and then they walk to their farm or
they pull it up from the well and just is
super inefficient. So we said, okay, we need to figure
(06:45):
out a way to first make irrigation affordable, then we
need to figure out a way to get it to people.
So from an affordability standpoint.
Speaker 2 (06:54):
Do you ever stop and think like this is too
much Like as you're like at the talking about these things,
you're just like a college kid.
Speaker 1 (07:02):
Right we were twenty three, And I think that was
the advantage.
Speaker 2 (07:07):
You had basically never had a job. It wasn't like
you had like run some company or done some big thing, right.
Speaker 1 (07:12):
I think that was the advantage. I think that's why
we probably didn't stop and say this is going to
be really hard. I think, I think really that.
Speaker 2 (07:19):
Was it the dumb kid advantage.
Speaker 1 (07:21):
Yeah, yeah, I call it, what did I call it?
Sort of naive confidence or just yeah, one of those,
but I like the dumb kid confidence is probably more accurate. Yeah.
So we're just sitting there, We're like, oh, yeah, obviously
we're just gonna make irrigation cheaper, no problem. So okay
to do that. That is like twenty eleven ish, right,
this is what twenty eleven, twenty twelve, Yeah, exactly. Yeah.
(07:43):
What's really interesting about that time is we reached grid
parody in a number of African countries. So the cost
to connect your power to power your your household with
solar became cheaper than the grid. So you have you
have these like tailwinds in terms of cost reductions kind
of happening. So let's figure out to make the fixed
(08:04):
cost reasonable and a fixed cost, and then let's finance it.
So we spread that fixed cost over time, because no
matter what, the upfront cost is still too expensive, which
is why only four percent of African farmers irrigate with
diesel petrol pumps. So we said, let's take an old
technology water pumps irrigation, decarbonize it, figure out how to
(08:24):
make it solar powered, and then deployed in a resource
rich environment like Africa. That's like the summary framework. So
we went and developed and made Africa's first solar irrigation company,
and we the original price of the system. If you
were to go and try to buy one of these
before from like an NGO, it would cost twenty five grand.
(08:45):
We managed to get it down to five grand, okay, twenty.
Speaker 2 (08:48):
Five thousand dollars, So that's like that, so twenty five
thousand dollars is completely out of the question, presumably for
really out of the small farmer who can't afford to
diesel the generator.
Speaker 1 (08:58):
Yeah, when we started, we managed to without really any
technical innovation, just buying the right things from the right
places and putting it together for our pilot project. We
got it down to five thousand dollars. And at that
point we're like, you know what, I'm sure over time
we can get this to be cheaper. Like, let's just
accept we can do that, and let's figure out the
(09:20):
other things I need to go around this, okay. And
that's that's when we learned that affordability was one part,
but availability was the other part, because huh, and that's
the harder part. And it's because because small, older farmers
don't have disposable income, no one's really selling them a
bunch of stuff, which means the infrastructure to be able
(09:42):
to get them things doesn't.
Speaker 2 (09:43):
Exist, like to some significant degree. They're not in the
kind of monetized, financialized economy, right exactly, they're growing food
for themselves, they're treading some amount of food whatever at
the market, but they're just not in the cash economy
the way we think of it.
Speaker 1 (09:58):
Right exactly, They're in the informal economy and it's very
isolated and acute, so very village level, et cetera. So
we went from thinking we could drop ship these products
from China and just like Johnny Appleseed, get a bunch
of these things out really quickly. So then realizing we
(10:18):
had to figure out how to manage our own supply chain,
we had to first wait to do a bunch of
innovation on the power electronics.
Speaker 2 (10:26):
Well wait, why didn't your first idea work? So your
idea is like, we can make these things at you
know whatever, eighty percent cheaper than they exist now they'll
be a good deal for farmers, like you know, we'll
order parts from China like everybody does. Why didn't that work.
Speaker 1 (10:41):
Because financing wasn't part of the original idea. It was
we thought we'd be able to do with banks, and
we thought we'd be able to work with banks to finance,
and banks in Africa will ask farmers for two things.
One is a pay slip and they're like, well, I'm
a farmer. I don't have a pay slip, job or collateral.
And banks aren't willing to take irrigation or a cow
(11:03):
as collateral because they don't know how to repossess and
resell them, so farmers can't get access to loans. We
realize we have to figure our financing. We're like, okay,
that's interesting, and then we figured out. We realized we
had to figure out the installation because there's no third
party installers, the maintenance, the ongoing after sales support. We
had to figure out the digital engagement. We had to
figure out supply chain, We had to figure out R
(11:25):
and D from the power electronics side, we had to
figure out how to monetize carbon credits to give them
further discounts boomom boom bom bom bom bom bom. So
what we thought was going to be just a drop
shipping company ended up being a company that has to
build this entire physical and digital infrastructure to get these
irrigation systems to farmers. And that's where the journey started.
Speaker 2 (11:49):
Why didn't you give up when you realized that?
Speaker 1 (11:54):
Because we only realized it over time. It wasn't all
in one wa bam, thank you, ma'am kind of thing.
Speaker 2 (11:59):
Do you kept being like, oh, we just got to
solve this one thing.
Speaker 1 (12:03):
Yeah, truly, And that's and we kept uncovering the next
step over and over and over again until finally, a
few in twenty twenty one, this is almost ten years later,
we've figured out one of the last remaining pieces in
terms of making this truly affordable and locked in for
(12:24):
a large group of people, which is monetizing carbon credits
and giving our customers discounts with those revenues. And at
that point, we have a business that has shown that
you can collect repayments from farmers. We have a ninety
percent collection rate from the quote unquote worst unbankable people
in the world. We have ninety percent digital engagement from
(12:47):
people who most of the world writes off as not
being technologically literate.
Speaker 2 (12:53):
But via text message or something, what does it mean?
Speaker 1 (12:55):
They're checking their balance through our app? How much do
I have left? They're asking, they're asking questions, raising tickets,
they're referring friends. If you're a mobile app, They're like,
really like engaging. And we get to this point where
finally we said, okay, in order to make this affordable
to the mass market, not just at that point, I
don't know, some tens of thousands of farmers we worked with.
Speaker 2 (13:18):
So it was this sort of like better off farmers.
Presumably five thousand dollars where you started, it's still very
expensive for a farmer who's farming a few acres and
can't afford irrigation.
Speaker 1 (13:28):
Yeah, and even even getting down to seven hundred dollars,
which is where we got to, and even if we
spread that cost over over a finance period of two
or three years, even paying something like sixty bucks a
month or fifty bucks a month is too expensive for
most people. Huh. And we have to keep figuring out
(13:48):
how do you make this more affordable.
Speaker 2 (13:50):
So the price has gone from five thousand dollars to
three hundred and fifty dollars, and those are nominal prices, right,
and real prices it will have fallen even more. How
much of that decline in price is the decline in
the price of solar panels?
Speaker 1 (14:06):
Some of it some? Yeah, most of it half no,
less way less, way interesting, interesting, way less.
Speaker 2 (14:14):
Tell me all the things you did to make it cheaper.
Tell me some of the things you did to me.
Speaker 1 (14:18):
A lot of it was working on the power electronics,
so figuring out how to take a small amount of
power to power a high powered appliance, So we need
less solar to power a water pump.
Speaker 2 (14:31):
I read and I think it was a Bloomberg News
article that your pumps use something like three hundred or
four hundred watts. Yeah, she's crazy, right, Like that's like
four incandescent light bulbs.
Speaker 1 (14:41):
Yeah, it's like you can't see me, but it's like
a human size.
Speaker 2 (14:45):
Like the idea that that can be transformational for a farmer, Yeah,
is really something to think about.
Speaker 1 (14:53):
Yeah, it's like there was one of our one of
the stories are so incredible. One of our customers give
a ted talk, and in that talk she talks about
like talking to her plants and promising them water is
going to come because they're dying, and literally not like
just going to everything she can think of and bring
in her being to try to convince her plants to
(15:16):
stay alive. You go from that to her saying my
cow didn't die. I expanded my farm and making kombucha.
Like I mean, it's really transformational stuff. And there's one
story that will always stick with me that that summarizes
and really humanizes this. We went to see a farmer
who is getting an installation. I love visiting installations when
(15:40):
they're happening, especially for those who are using the manual
buckets before, because once they realize that they don't have
to spend three or four hours a day physically pulling
a bucket of water from underground to the surface, whether
it's one hundred feet down or beyond, and they can
do that with a flick of a button, the look
on their face will change your life. It is unreal.
(16:03):
And when we ask this customer in particular, so now
what are you gonna do. You're not gonna use your
muscles to pull this bucket up, and she looked at
me in the face and she said, I'm going to
get fat with a huge grin on her face. She
was just like, that's what I'm gonna do. I was like,
that's right, it's amazing.
Speaker 2 (16:23):
So okay, so let's go back to you know, you
got more than ninety percent out of the price of
this thing, right, which seems like the fundamental thing you did.
Speaker 1 (16:33):
Right.
Speaker 2 (16:33):
Well, so one of the things you did to get
the price down was start using carbon credits? Yes, and
I don't I kind I mean, I can sort of
guess at that, but I also have some questions about that.
So tell me about how carbon credits work in your business.
Speaker 1 (16:49):
Okay, So there is a there are official verification bodies
that create methodologies that count how carbon credits are avoided
or removed from the atmosphere. And it just so happens
that there's an exis existing methodology under the UN framework
(17:12):
that talks about a displacement of diesel or petrol pumps. Okay, So,
because solar is an alternate to diesel and petrol, we
generate carbon credits for the systems that we install.
Speaker 2 (17:28):
So how much do you get paid in carbon credit
credits for you know, the sort of median pump that
you sell.
Speaker 1 (17:36):
So the way to think about this is we generate
carbon credits. The system generates carbon credits for seven years.
We give customers a discount upfront, and we sell those
carbon credits over the remaining years, so we raise debt
to be able to do that. We're able to give
our farmers about a twenty percent discount at minimum on
the monthly cost because we're able to sell carbon. Now.
(17:59):
It might sound like a little bit of just a
small discount, but we ran a pilot when we were
launching our carbon business and we reduce the price of
our system by ten percent and our sales went up
by something like I think it was like two times
something like that. Where we do st our price by
twenty eight percent, our sales went up by four and
(18:20):
a half times. Wow. So small adjustments in the monthly
price make a huge difference. So we use those carbon
revenues to directly subsidize our farmers. We're not a carbon business,
so it's a pass through to our customers, which has
enabled us now to grow more. You know, half of
our customer base was added in the last two years
(18:40):
because of that.
Speaker 2 (18:42):
So you're you know, lending the farmer's money to buy
the pump. Obviously you're borrowing against seven years of carbon
credits and passing that through Like you're a finance company
to some significant degree, Like you're in the finance business.
Speaker 1 (19:05):
Yeah, we're sort of an everything company. And that's just
it's just it's funny. It's like, it's really hard to
describe what type of company we are to many people
because we have to do so many things in order
to give people access to these products.
Speaker 2 (19:22):
And it's I guess it goes back to what you
were saying, which is your customers, these small farmers are
just not in a market economy the way we are
so used to thinking of being in a market economy. Right,
there's not access to capital or to financing. Obviously, what
else is there not that we might take for granted,
Like what else do you have to provide that you
(19:42):
might not have thought?
Speaker 1 (19:43):
I mean, you know, when you're if your cable breaks,
you call a third party installer maintenance personally, you go
on task grab it to find someone to do it
that doesn't exist. So we do all of the installation ourselves,
all the maintenance, all the ongoing after sales support. What's
been really interesting now is and this will answer the
question of what else might you know, think about our
(20:04):
customers are making more money, like we talked about, and
just like us, when they make money, they want to
buy more stuff. They want to get fat, they want
to get fat, but they also want to buy things
like health insurance, and they want to buy things like
weather insurance. They want to buy things like high quality
seeds and fertilizer. So they're coming at us and they're saying, hey,
you know i've been paying you. Well, I'm paying my
(20:26):
twenty thirty bucks a month and do it I'm paying
Can you just add a little bit more to my
monthly and give me these other things? So we said okay.
So about a year ago we started a pilot where
we bundled in health insurance. So if someone gets sick
and go to the hospital, if someone passes away, the
(20:46):
family has insurance to be able to take care of
that need.
Speaker 2 (20:49):
Now let me ask you are are there. You can't
be a health insurance company too, right, presumably there's there
are health insurance companies in these countries. You are just
selling insurance and taking some weird bundle.
Speaker 1 (21:04):
We're starting to bundle it to the monthly because again,
the reason they come to us is because they trust us,
they get duped by not good products. They trust us.
We can get them discounts because we're buying in bulk basically, right,
because we just added to the monthly payments and then
they don't have to go and try to figure out themselves, right.
So we did that. We made an investment into a
(21:26):
company that allows us to now finance agriculture inputs. So
let's say you're Jacob as a farmer, you're paying well
for ten months and you come to us and you're like,
I want some seeds. We're like, cool, here's a voucher
that we sent to your phone. You can go to
any of these right now in Kenya one thousand to
proof shops you can get your seeds and what is
added to your monthly payments. And last month we started
(21:49):
a pilot with Parametric Weather Insurance. If it floods in
your area, you get paid out as well. So we're
starting to think about, okay, how do we now provide
access to services that helps people protect themselves from shocks
and go back to the same thesis, right, how do
you increase prosperity at a small, older farmer level and
(22:10):
rural areas to increase food supply and reduce client migration.
All of these things help farmers protect themselves against the
risk of not paying for their irrigation system. Just good
for your business, which is good for our business for sure,
which is good for our business. And that's also just
a bunch of things that will help them not have
to worry about where they're going to spend money and
(22:31):
figure that out. So's it's kind of all bundled together,
and we're in the phase of thinking about how do
we continue to provide services for our customers for things
that they want. Does this become an ongoing subscription that
they are able to access that they want to do
they want extended warranty. So we're in this discovery phase
where our customers are pulling us to offer more products
(22:52):
and services because we have a credit relationship with them,
because we have their location, because we have payment history,
all these things. This digital engagement. We're now realizing that
we can be the access point for people trying to
get services and products to farmers, and access points for
(23:12):
farmers who want to get access to high qualify, high quality,
verified products and services versus going to go buying a
bag of seeds that never actually sprout, which is often
their experience.
Speaker 2 (23:28):
Will be back in just a minute. Part of the
way agriculture has become profoundly more productive in the United
States and other countries has been consolidation. Right, It used
(23:50):
to be the case in this country that eighty percent
of the people were farmers. That it was fifty percent,
and now it's two percent.
Speaker 1 (23:55):
And that is.
Speaker 2 (23:56):
Because basically we have substituted capital and technology for labor
and that has worked out great in many ways. And
yes there are problems with like you know, monoculture, farming,
et cetera.
Speaker 1 (24:07):
Et cetera.
Speaker 2 (24:08):
But fundamental the way we have grown so much food
is with uh more and more machines and fewer and
fewer people. How does that idea map to the places.
Speaker 1 (24:18):
Where you're working. I think about this a lot. And
one of the big differences for the consolidation of land
in the US and how mechanization took fifty percent down
to two percent in terms of farmers is because at
that time it wasn't profitable to mechanize a small farm.
(24:39):
That's like one of the things now consolidation and economies
of scales is a really good thing. So like that
is one hundred percent part of the story. But also
you couldn't mechanize a small farm profitably. What we're doing
now you can mechanize an eighth of an acre profitably,
which means that you don't require consolidation in order for
(24:59):
your farm to be able to produce food. I don't
think there's going to be one solution for the future
of African farmers. I think there's going to be a
mix of consolidation. I think there's going to small I
think it's going to be a whole mix of it.
But the differences are that you can mechanize a small farm,
and culturally, sometimes the only asset that families own is
the farm, and it gets passed down generation after generation.
(25:21):
So it's a challenge to culturally switch people from giving
up their only asset that they have in their family
to pass down as an inheritance to being able to
sell that off. Now there are companies who are doing that.
I think they're going to do a very good job.
I think there's no one size fits all. I think
there will be some consolidation. I think they'll be farming
as a service. I think they'll be what we're doing.
(25:41):
I think there's gonna be a whole mix of things.
But it's not going to be because you can't mechanize
a profitable and make a small farm profitable. It will
be because people like to buy rent or lease cars.
It's just going to be an option in the US
always because you had to.
Speaker 2 (25:57):
Right, because there was no way to be a profitable
small farmer. Yeah, I mean you're you're making profitable not profitable,
this sort of binary thing, right, But it could be
the case that you can make money as a small farmer,
but that land would be would produce more food, let's say,
with the same amount of inputs if it were consolidated, right.
(26:19):
Like that seems very plausible to me. And so while
at the level of the individual, and as you say,
culturally people might want to keep their farms, you could
imagine there being a pressure, you know, somebody might offer
them a lot of money because it would be not
because it's some there's some evil capitalists, but because like,
their farm could be worth more if someone with more
access to capital and more consolidation bought it and started
(26:41):
growing food on it, right, And that doesn't seem like
necessarily an unhappy story, although I take your point that
culturally it might be complex.
Speaker 1 (26:48):
Not a bad thing at all. I think it's great.
It's just it's an option, and it's I think I
think it's going to be. I don't think there's a
there's a better or worse here. I think there's it's
just it's an option. Yeah, fair, I feel like it's
gonna be. All these models have to exist at the
same time in order to figure out how to solve
the problems we're talking about. So I'm totally for it.
(27:10):
It's just not our business, but I'm totally for it.
Speaker 2 (27:12):
So let's talk about the future of sun Culture. When
you look out over the next few years, what do.
Speaker 1 (27:19):
You worry about. The biggest worry is we've added about
forty percent of the people that we have today just
in the last two years, and we're growing quite fast.
And that's only started about two years ago. So two
years ago we started growing quicker than we ever have.
We went from you know, ten retail locations to thirty
(27:40):
retail locations in Kenyans. It's really just like building all
of the I hate the like figital like the physical
digital infrastructure to support that scale.
Speaker 2 (27:47):
I never heard that before. I don't like it.
Speaker 1 (27:51):
You can't I'm so sorry that I put that in
your life, but you're gonna thank me one day when
you use it at a party and someone laughs. So
it's all having all that in place. But we're growing faster,
and it's just making sure that we continue to bring
on people that align with our culture to make sure
(28:12):
that we have the right people in place. And it's
just like I think, I always think about it in
terms of a sports team. I used to play a
lot of soccer and you just got to sometimes change
the formation based off of who your opponent is. And
we just have to make sure we continue to iterate
on our org structure, where people are, who we have
in place to make sure we can continue to scale.
And that is a big focus of mine.
Speaker 2 (28:35):
If things go well, where will the company be in
five years?
Speaker 1 (28:41):
If things go well? There's there's different levels of well.
So level one of well is we're at few hundred
thousand farmers all paying us this dollar a day to
get access to services that they need. They're happy, they're
making more money. Our net promoter score for our customers
(29:03):
is seventy eight. It's so high. Our customers are so happy,
and that continues to stay there. Level two is we're
able to then potentially move what we're doing into different
farm sizes. So maybe we help with the folks who
are operating larger plots of land to your point, maybe
(29:25):
the tens of acres to become more efficient, to be
able to produce more food, to be able to hire
people and create jobs around them. And I think that's
something we're really interested in. How do we take what
we've learned around renewable energy and agriculture and financing and
bring that to larger farms in different geographies. So can
(29:47):
we take what we're doing and bring it elsewhere not
only from a geographer perpective, but also from a size.
Speaker 2 (29:53):
Perspective Geographically, do you think you might grow the business
outside of Africa?
Speaker 1 (30:01):
Yeah, not for the next few years. But we've looked
at We've looked actively at places in Central Asia, We've
looked actively at places in South Asia, We've looked at
places in Latin America. So it's not a now thing,
it's not a twenty twenty seventh thing, but it's it's
a thing. And it's just again going back to team.
(30:26):
Do we have the right team in place to be
able to do this and can we replicate this in
other markets with the right people. It's less now about
a viability thing. It's more can we manage it as
a team. That's really the question. We don't necessarily want
to spread ourselves too thin right now, but there there
is a moral question of like, if you can do
(30:47):
this in other places, why not just go balls to
the wall right Like it's a necessary, needed thing. You
can build your business much bigger. And there's this sort
of how do you how do we make sure we
do that sustainably? We don't want to run into the
situation where we grow too fast and the wheels fall off.
So it's this, it's this delicate balance of what that
looks like, and it's it's it is a definite yes
(31:07):
we will. It's just question is when, so your five
year timeframe seems seems possible.
Speaker 2 (31:15):
Now, gaze off into the distance and give me your
big injury thoughts.
Speaker 1 (31:20):
What I find really inspirational from a business perspective is
that smaller farmers who are who are often written off
as like very poor people, you can't sell to them,
et cetera, are now becoming real consumers. And it's almost
in Silicon Valley talk, we're almost increasing wallet size and
(31:43):
taking a share of wallet. Like you get people to
make more money and then you sell them stuff. It
just so happens that the things we sell them are
like insurances and access to inputs, but we're selling them
more stuff. And when you start looking at smaller farmers
as consumer market, there is a view that they're one
of the largest untapped consumer markets in the world. We
(32:04):
have all of this interesting data of who they are,
what they're growing, how they use their irrigations, what their
payments are like, and we can now start to layer
on with the demographic and geographic and payment data, the
types of the types of things they're asking for, and
we now start to become sort of the entry point
(32:26):
for an emerging consumer market. I think what we're doing
is a way to do that. It's not the only way,
but it is enabling the largest group of consumers or
potential consumers to make more money, and I think that
might be a transition. And instead of looking at this
work only as impact and development work, but you think
about it as sort of a way to build the
(32:49):
consumer industry. Things get really interesting, especially if you look
at the trajectory that East Asia had in Southeast Asia
that Africa hasn't necessarily had because you have, like eighty
percent of their jobs are informal, and by twenty fifty,
one in four people on Earth will be African. One
in three working people by twenty fifty will be African.
(33:12):
Half of all new entrance into the global workforce will
come from South sou in Africa. Like, it's just like
really big consumer opportunity, but instead of starting with the
ride sharing or a delivery app, I believe it needs
to start with helping people increase incomes. And that's where
the irrigation comes in.
Speaker 2 (33:31):
We'll be back in a minute with the lightning round.
Let's finish with the lightning round. So your parents, is
it right? Your parents are from East Africa. They moved
first to Canada and then to the United States.
Speaker 1 (33:52):
That's right.
Speaker 2 (33:53):
Presumably I'm making a guess here, but it's sort of
the classic immigrant story of wanting to give their family
a better life. You moved back to East Africa. So
was that like a disappointment to them? Were they like,
come on, man.
Speaker 1 (34:07):
My parents are really good at not telling me when
they're when things when they think it's going to put
pressure or like put me down. So I didn't. I
didn't find out that until a few years later that
they were like, what the hell is this guy doing?
(34:27):
They told me. They told me later that they were like,
you know what, we're just going to think about it
as an MBA. He's gonna go for a year or two.
It's just like he's going to school, and that's fine.
And then like later they're like you're still They're like,
oh cool, now they're super proud and stuff. But you know,
I was living in their immigrant dream. I was self
sufficient in Manhattan. I just started working in PwC. They
(34:50):
were like, we win. We left East Africa accounting account
accounting firm. I was doing consulting there for them. They
were like, we won, We won the game. We won
the immigrant game. We left EDIOM and was causing problems.
We left and like we won. And then I'm like,
so I need to go to East Africa and I
need to figure out how to borrow some money from people.
(35:11):
So they went and borrowed money from two uncles, a
grandparent themselves lent it. They never told me where they
got it from, which would have also stressed about we
paid it back. And I think after we paid it back,
they're like, oh, wow, you're there, like, this is what
you're doing? Cool? And now obviously they're really they're really
happy and proud and yeah, do they have equity? They
(35:36):
don't have the company? They don't.
Speaker 2 (35:38):
Oh you should give them some after all that.
Speaker 1 (35:43):
One of the big drivers for me is to I
would like to retire them.
Speaker 2 (35:48):
So, oh that's very sweet. Yeah, I mean I didn't
ask you about exiting. Like, is there some universe where
you sell the company or sell part of the company.
Speaker 1 (35:58):
Yeah, there's a universe. There's for sure universe. I mean,
my job as a CEO is to provide investors' returns. Technically,
that doesn't necessarily mean that it all has to go right.
So there's a world in which we sell it. There's
a world in which you have to pride off of me.
But there's a lot of different options going forward. The
most important thing is how do you get to scale fastest? Yeah?
Speaker 2 (36:23):
What is the rate limiting step for you?
Speaker 1 (36:25):
Now? In scaling, there are two things that would change
the game for us. One is in our control. One
is not in our control. In our control, it's can
we have a thousand times more sales agents in the field,
and if that's the case, then we can almost think
(36:45):
about scaling linearly, but just by adding people and can
we manage that growth. So that's one thing that is
in our control. The thing not in our control is
does a multilateral institution come with a large subsidy and
a time bound five year subsidy?
Speaker 2 (37:05):
Does that mean the World Bank?
Speaker 1 (37:07):
For you?
Speaker 2 (37:07):
Does that mean the World Bank?
Speaker 1 (37:08):
That does? Yeah, do we have a subsidy in Uganda
through the World Bank? But is there a large is
there a larger scale multi country subsidy for access to
electricity and what people call productive use of energy? So
what we're doing basically productivity.
Speaker 2 (37:26):
Turning water into food class.
Speaker 1 (37:28):
Water into product classic productivity, that would be that would
be a huge that would be a huge game changer.
If if that and and it looks like it will happen,
it's just when. But that's that's the moment at which
we then push a lot of capital into the system
and really hire those agents skilled in new markets, et cetera.
(37:49):
And that's that's the moment. So just making sure we're
ready for that.
Speaker 2 (37:53):
Back to your parents, Yeah, living in East Africa helped
you understand your parents better in any particular ways.
Speaker 1 (38:04):
Nobody has ever asked me that question, and it is
part of what I think about most as a theme.
And there's there's no question about why we started in
East Africa versus anywhere else. I can tell you it's
because Kenya is an English speaking country and because there's
a port and blah blah blah, but it's because my
family's from there, and like that's that's there's an affinity
(38:27):
to it. So I learned a lot about my parents
are tough and smart and like charismatic, and it's it's
very East African vibe and kind of seeing how they
grew up has helped me understand that.
Speaker 2 (38:43):
That last sentence was quite interesting when you say they're
tough and smart and charismatic and that's an East African vibe,
Like what do you mean by that.
Speaker 1 (38:54):
Tough? As in My mom's dad died when she was seven,
and she had six older brothers and they moved from
Belgium to Congo to them Kenya and there's this sort
of and I you know, I've met my my one
of my mom's cousins still lives in Kenya and his mom,
who recons passed away raised was like raised my mom
(39:17):
helped raise my mom for a few years. Meeting her
and hearing the stories and seeing where my mom grew
up helped me understand that toughness of her. But it's
like you hear the stories, but then you see it
and you see them in that place, and that really
brings it together.
Speaker 2 (39:36):
Tell me about the Buffalo Ranch sub at publics?
Speaker 1 (39:40):
Where did you get this shitternet? What?
Speaker 2 (39:46):
Where?
Speaker 1 (39:47):
This is wild? That is so good. That's so good.
Oh man, that's great. That is really good stuff. My
wife's a journalist and I have a lot of respect
for that.
Speaker 2 (40:04):
That was awesome.
Speaker 1 (40:06):
I mean, it's it is delicious. It is also something
that will change your life. It's like, you know, I
grew up in Orlando and Publix was the grocery store
we went. It's a regional grocery store and it's just
the Buffalo sub there is just so so delicious.
Speaker 2 (40:36):
Samir Ibrahim is the co founder and CEO at Sun Culture.
Please email us at problem at Pushkin dot fm. We
are always looking for new.
Speaker 1 (40:45):
Guests for the show.
Speaker 2 (40:47):
Today's show was produced by Trinomanino and Gabriel Hunter Chang.
It was edited by Alexander Garreton and engineered.
Speaker 1 (40:55):
By Sarah Bruguero.
Speaker 2 (40:56):
I'm Jacob Goldstein and we'll be back next week with
another episode of What's Your Problem.
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