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Siebel Scholar Lindsay Stradley Solves a Sanitation Crisis with a Waste-to-Energy Business

ARTICLE BY: Raymond Rigoglioso

Siebel Scholars Program

December 29th 2016

For 2.5 billion people around the world, the simple act of flushing a toilet at home is not an option. In developing countries, lack of sewage infrastructure contaminates waterways and food supplies and creates diseases that kill 1.6 million children each year.

Siebel Scholar Lindsay Stradley (MIT Sloan '11) wanted to solve this problem. With two fellow students from the Massachusetts Institute of Technology MBA program, in 2011 she launched Sanergy, a company that provides sanitation services, and which also solves multiple social problems.

Caption 1?A Sanergy Fresh Life Operator (toilet owner) assists a young customer in washing his hands after he used her Fresh Life Toilet.
Image credit: Sanergy
Operating mostly in informal settlements in the fast-developing city of Nairobi, Kenya, Sanergy franchises pay-per-use toilets to local entrepreneurs and institutions. Sanergy staff members collect waste from the toilets daily and process it into affordable, sustainable fertilizer for crops and animal feed, which the company sells to local farmers. In the process, it creates jobs, improves school enrollment, and increases crop yields.

Sanergy provides a viable and attractive alternative to the state of toilet affairs in these settlements. Greeted at first with skepticism, Sanergy now enjoys broad support from the community and government officials, and is experiencing robust growth.

Stradley spoke with the Siebel program about her journey to create Sanergy and the company’s future.

Q: What led you and your fellow students to choose sanitation as the problem you wanted to address?

We considered a lot of ideas, but the most widespread problem across regions is sanitation. Moreover, it really should be solvable, even with existing technology. It’s about changing the economics of how sanitation works.

Q: How does the Sanergy model change the economics of sanitation?

We thought we could fundamentally flip the economic equation. Instead of sanitation being a cost, as it is to most municipalities, we could salvage resources that are literally being flushed away down the toilet.

This was not a new concept. Rather, we connected the dots by adapting technologies that have been used elsewhere. Many American and European cities recycle sanitation waste to create fertilizer and bio gas. Milwaukee and Boston have had fertilizer products on the market for decades, for instance.

Sanergy focuses on areas where there are no sewers. Instead of the government investing millions of dollars in systems that take many years to build, in areas where you have 7 percent yearly population growth, we provide a system that costs much less.

A recent estimate from Dakar, Senegal is that it costs $57 per person per year to build and operate a sewer system. Our network costs about $12 per person per year, and we aim to reduce that cost as we grow.

Q: So people in Nairobi are accustomed to paying for toilets? What do yours generally cost?

Yes, pay-per-use is very common. On average, our toilets costs 5 shillings per use, equivalent to 5 cents U.S. That’s competitive with other toilets and in reach of most people. Convenience of location and cleanliness are bigger drivers of choice, not price.

Q: You oversee growth at Sanergy. What in your background prepared you for this role?

I had experience in sales and operations. Prior to MIT, I sold online advertising at Google when it was a scrappy startup. It’s a bit different than selling toilets in informal settlements, but it requires similar thinking to help solve customer problems and set up scalable structures to do so.

After insects feed on reclaimed waste at a Sanergy processing facility, they are harvested to produce animal feed that is sold to farmers.
Image credit: Will Swanson
Before Google, I started a charter school in New Orleans after Hurricane Katrina. The parallels between starting that school and Sanergy are striking. Both require working with government to obtain approvals, navigating laws, and creating structures.

Q: Tell me about the startup phase of Sanergy. How did you get it up and running?

The first few sales were the most difficult. We were selling a franchise service when the concept was new to Nairobi. Once we explained it, we had to establish trust with franchisees that we would fulfill our promises to collect waste daily when we had no operations yet. We spent the first few months building relationships in the community, getting to know leaders, and finding the early adopters who were willing to take a risk.

Q: Part of Sanergy’s business model teaches franchisees how to run their own businesses. What tools do you give them?

Franchisees go through training before we allow them to open their toilet. We teach them everything from how to clean the toilet most effectively to how to generate demand and operate their business. We have three main customers—people who operate a toilet where they charge per use, our original customer; landlords and plot owners who operate them for tenants and charge through a rent increase; and schools and community institutions who build the cost into their operations. Training for each of these groups requires a slightly different approach.

Q: The Sanergy business model produces benefits beyond just sanitation—like increasing school attendance, especially for girls, and boosting crop yields. Tell us about the ripple effects of your work.

All too often, girls drop out of school once they get their period because they have no hygienic space. Something as simple as placing a feminine hygiene bin in the toilets means girls can remain in school. Our toilets have increased school enrollment by up to 20 percent.

Toilets located in shared plots increase safety at night, especially for women and children. Leaving a compound to find a toilet at night can be quite dangerous. We’ve actually seen decreases in sexual assault as a result of our toilets placed in these settings.

The fertilizers we produce increase farmer’s yield by up to 30%. Usually when we sell to farmers at first, we encourage them to use the fertilizer on a quarter-acre of land and leave another quarter acre untouched, so they can see the difference. This produces a powerful visual comparison of the impact.

Q: What does growth look like for Sanergy in the next few years?

In our next phase, we plan to grow inward, which means increasing density of where we work. We have 40,000 people using our network every day, which is great. But there are upwards of 1 million people living where we work. Clearly there’s a lot further we can go. Increased density will also improve our operational efficiency.

We are also strengthening our collaboration with the government. Our goal is to become the primary sanitation provider within certain areas in the next three to five years.

Q: What are the greatest challenges of running Sanergy? What keeps you up at night?

It’s always challenging to work in informal settlements. By definition, we are operating in communities that are constantly changing. They’re not stable or formalized. Every day that leads to new challenges. As much as we try to create structure and processes, we always have to balance that with flexibility and adaptability. It can be fun and exhilarating, and it can also be stressful.