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Village Tech Solutions
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Value Proposition
- VTS is the American non-profit offshoot of Ecosystems Pvt. Ltd, a firm started in Nepal to find energy and transport solutions for rural Nepal.
- VTS’ approach is to find a problem, use their engineering skills to develop a solution, and hand it over to Nepalis (Ecosystems has evolved into Nepalese company VillageSolutions Pvt. Ltd.), to make and distribute the solution profitably.
- Ecosystems and VillageSolutions have built 38 “WireBridges” across rivers and chasms in the Himalayas, giving over 3.5 million passengers better, safer access to medical care, schools and trade.
- VillageSolutions also sells 3 and 10 watt solar home systems to off-grid Nepalis and NGOs.
Problem Addressed
- Human Powered WireBridge:
- Nearly 12 million people make their homes in the rugged terrain of the Himalayan foothills where snow-fed rivers and streams are familiar obstacles to basic services, such as schools, markets, and medical posts.
- The water’s unpredictable rise and fall during the three to four month monsoon season, makes crossings through the river extremely dangerous.
- Suspended walking bridges are expensive and time consuming to build.
- Bridges constructed of a pulley and makeshift seat are dangerous and inefficient.
- Solar Home System
- Almost none of Nepal is served by grid power, and the grid is dying because climate change is affecting river runoff and therefore the capacity of the country’s hydro power plants.
- General Focus
- A combination of poor IP protection and donor market distortion have reduced incentives for innovation in products serving Nepal’s poor.
Operating Environment
- VTS feels that donors and policies have had a strongly adverse effect on the indigenous development of market-based solutions to poverty problems in Nepal.
- On the one hand, a lack of intellectual property protection reduces the profit motive for local entrepreneurs to innovate products.
- On the other hand, there is so much donor money available that sellers of socially beneficial products do not need to keep product costs affordable to unsubsidized beneficiaries.
- The availability of donor funds also reduces customers’ willingness to buy products such as solar lights because they believe they might someday be given them for free.
- Nepal also suffers from a lack of trust that makes many businesses difficult to start.
- Sellers are afraid to invest in a business (such as a lamp charging station) because they worry customers might be given power in some other way.
- Customers are afraid to invest in a light that someone else would recharge because they are afraid the recharger might go out of business.
- VTS evolved into focusing on rural transport and lighting after being stymied trying to work in higher-profile sectors because they refused to pay bribes.
Revenue & Affordability
- VTS’ WireBridges are generally public goods not affordable to the people they serve.
- They are funded by NGOs and donors such as the German Embassy.
- VTS charges the actual cost of its WireBridges ($16-25,000), but faces competition from other providers who build more expensive bridges at heavily subsidized rates, distorting the market.
- VTS’ solar home systems are potentially affordable to end-users ($65 for 3W system, $125 for 10W system), but VillageSolutions primarily sells to NGOs because they buy in larger quantities. These NGOs then subsidize customer purchases.
- VTS is trying to link subsidies on solar lights to positive behaviors such as attending family planning clinics, so that customers are covering more of the product costs by generating value in other ways.