Green Entrepreneurs
Bridge Between Business and NGOs: Green Entrepreneur Builds Bamboo Homes, Jobs, and Environment
19 April 2011 By Maryruth Belsey Priebe
CO2Bambu is a green enterprise on steroids, trying to solve massive social and environmental problems and succeeding fairly well. Created originally to produce eco-friendly, affordable, flat-pack bamboo housing for low-income communities in Nicaragua, CO2Bambu has developed into an organization that hopes to be the solution for disaster relief housing in areas affected by earthquakes, flooding, and hurricanes.
Green entrepreneur Ben Sandzer-Bell, founder and CEO of CO2Bambu sat down with me to talk about what it takes to develop a green business in a developing country and where he sees his social enterprise going next.
Can you describe the basic idea behind CO2Bambu?
We have three core businesses all focused around low cost housing solutions. The lowest price option is for disaster relief housing, then mid-sized low-cost housing (social housing), then larger structures like schools. These are all based on the same CO2Bambu construction system.
We’ve already started to set up in Haiti for disaster relief housing. We’ve taken our Nicaraguan bamboo seeds there, are beginning to set up nurseries and working on plantation development, are developing a team, ironing out logistics, working with green architects, and so on. But we’re 5 years from getting a local bamboo harvest and we need customers.
We’ve been talking to NGOs but it’s not working. They either do nothing or they say want 10,000 houses tomorrow. But we haven’t given up – we’re just at the beginning of a reckoning process and a year from now we’ll be ready to work with them. We’ll have a track record in Haiti and there will be mounting pressure on NGOs to deliver housing solutions that have a track record.
Our key is to work with that huge section of Haitian society made of folks who run the country – local teachers, doctors, dentists, small business people, police, etc. None of these people are the poorest of the poor, so they won’t get help from NGOs but they are the backbone of reconstruction – physical and environmental rebooting of Haiti society. How can they turn the country around if they go home to plastic tents?
We’re going to help these people with microfinance. This helps us avoid the long complicated NGO funding processes. We’re going to retail one by one through alliances with banks who recognize like we do that NGOs aren’t going to solve the problem. We’ll have a warehouse full of kits, the customer will come there to pick their house, they’ll pay for it to be delivered.
As CO2Bambu grows, will you be able to maintain your standards for sustainable forestry?
The country loses 70,000 hectares per year to deforestation mostly through burning for cattle ranges and encroachment of agricultural life. The 175 hectares of reforested land we will be planting with guadua bamboo this year and 100 hectares next year don’t make a dent yet. However, when we manage to find a set of investors who want to have ecological impact, and develop plantations of thousands of hectares, be they owned by farming cooperatives, mid size farmers, or indigenous communities, reaching Forest Stewardship Council Certification (FSC) will be a priority.
Is it harder or easier to be a green entrepreneur with people-planet-profit as your guiding principle?
Easier. I really believe that financial results are about scorekeeping on whether you’re doing the right thing with your business. For me, it’s not about how do you get the highest financial return, it’s how you satisfy a customer’s requirement for a good product. They give you money and you’re profitable. If you don’t do things right, you lose money and customers are unhappy. If all I wanted was profit, there would be other things I could do to be more profitable. I personally want to have social and ecological impact and financial returns.
A triple bottom line business is about choosing people who are like-minded to run your organization – they share your social and eco impact desires, which means it’s easy to manage because their basic instinct is to veer in the right direction. In a startup everyone makes mistakes by definition – if we don’t then we’re not trying hard enough. We have to [make mistakes] otherwise we’re not stretching ourselves – we need to learn from mistakes.
Since you started, has your mission evolved and changed?
I think so. The mission hasn’t changed with regard to Nicaragua: develop industry, address housing deficit, create jobs, move ecological material. We’re well along with that.
What is perhaps somewhat clearer now is what we’re going to export and how. We’re going to participate in rebuilding Haiti. That’s a change.
How do the prices you pay for the bamboo compare to other crops grown here? How does the cost of the bamboo homes compare to traditional Nicaraguan homes?
Farmer can make roughly $500/year per hectare with bamboo forever starting year 5 which is a big deal – that’s much more than most farmers earn annually. Bamboo creates a new category of farmers – in the past, you had two groups, the farmers who grew rice, beans, and other immediate crops that could be farmed or eaten – cash crops. And then there’s the timber industry. These farmers plant with XYZ rare woods and in 40 years harvest and make a lot of money. If they start really young and have a long life, they might be able to plant again and see a second harvest.
Between these two is the bamboo economy. It will take 5 years, but then once it gets started, a field of bamboo generates a lot more revenue for farmers – 15 to 20 times more value over their lifetime. Because it’s regenerative and can be cut sustainably, the bamboo meets a particular market space. For cattle famers, they need X amount of space for 20 heads. But by converting half of that into bamboo, within 5 years it becomes more financially interesting than cattle.
As for houses, what we need to fight for is the temptation to say bamboo is half the price – it’s not, can’t, and shouldn’t be, though it is price competitive with traditional construction. I don’t want to propagate an inaccurate perception that bamboo is cheaper. It happens to be competitive. But because we have to develop an industry, there are costs that have to be born. The concrete block industry, by contrast, is a mature industry and therefore doesn’t have the industry development costs.
That said, the price range for our bamboo homes depends on what kind of houses we’re talking about, but they rang anywhere from U$150/square meter to $225/square meter. The cost can go up and down depending on whether it is built with electrical and water or not, on pillars or not, with complicated supply chain to get to location or not, whether beneficiaries contribute sweat equity or not.
What are the biggest challenges in educating local consumers about healthy, sustainable agriculture and home building?
These communities can play at different layers the construction ecosystem – as farmers, as builders, and as home owners. Same communities, three completely set of characteristics. It’s not just about convincing them to plant bamboo, but convincing them to use bamboo for their housing so that the same amount of money can give them a house and a bamboo economy.
So we work with local communities on all of these issues. First, we talk about the concept – the materials, the houses, the jobs. It’s about developing a relationship with the community so that they very quickly adjust their worldview from this material is useless to this material can give jobs, employment, revenue for community, education for children, roof over our heads, etc. It’s a significant transition. But it’s happening, and faster than we expected.
Then we work on confidence building. Even after introducing the concept and showing the house, they believe gringos are going to do bad things to them. These communities have been consistently disturbed, taken advantage of by what they see as gringo enterprises – Canadian and American gold mining companies which have wreaked havoc, left cyanide in water, left communities with health problems, etc.
Finally, we demonstrate how to make this happen. We show them that they use these same techniques in Colombia, Ecuador, and that we’ve done this here in Granada. We invite them to see it so that it moves from being an abstract concept (not a hut on the beach that will fall apart in two years) to something that will work.
What advice would you have for other aspiring green entrepreneurs who are looking to work in a developing country?
There are at least levels of questions:
1. Advising people about start-up:
It’s hard, and it’s hard for everybody, and it always takes longer and costs more than you think — by definition because you haven’t done it. You don’t know yet what you’re going to encounter. While MBAs like to produce business plans and financial projections, these are tools for use in a stable environment. But when you are developing everything new in parallel, these tools are useless because none of your assumptions are valid, initially.
To me, lesson one is be sure you have the stamina and the team has stamina before you start. The people who are with you on day one may not be with you on day 2 and 3 and 4. Not everyone has the ability to mutate from a 2 person office to a 200 or 2,000 person business. It’s not the same skillset. The team part is critical. There will be a high mortality rate – accept that.
You have to do startups with adequate capital. That’s the most difficult for us. We’re doing the right thing and are doing really well, but we’re constantly chasing money because we’re under capitalized.
2. Advising people about developing countries:
You have to accept that you don’t know how the system works unless you’re from that country. So this is full of potholes for someone who is not from that particular cultural background – language, historical, administration. Even for someone like me – I’m reasonably well traveled, have lived and worked diversely – I recognize the patterns but not the specifics. So I recognize that I’m wrong by definition. I have a filter because of the benefit of knowing I don’t know what I’m talking about in terms of values, historical references that affect decision making processes, and so on.
Someone who might not have lived in other countries may think there is one way of doing things – it becomes comical as they attempt to fix their host country. It’s not that easy. You can see examples of this all of the time.
Let me give you one story as an anecdote. Bill Clinton, when President, visited Haiti, armed with smart MBAs from the best schools. He concluded that it was totally economically unsound for Haiti to spend so much for food. He had a hungry population, after all, and rice was costing more in Haiti than in the US (where it was subsidized by Congress).
So he and his MBAs proceeded to convince the government of Haiti to reduce tariffs on imported agro products such as rice. The reasoning went that they could put the money saved thanks to cheaper US products, to good use by developing a country. That makes sense to a US mind – free trade, pay least, etc.
It is bordering on criminal from a developing country point of view. Why? Ten years later, Haiti has no agricultural sector. Local farmers can’t compete with cheaply imported grains so they’ve all moved to the big city and are living on the streets. Now Haitians are dependent on the US for food supply. And the money that they were supposed to save? It didn’t magically go into building more schools. This was an ethnocentric approach that seemed to make sense at a global level (from a US perspective) but did not translate down to the local level.
This is very similar to an entrepreneur starting something in a developing country believing he or she can parachute in with the solution. It will not work. You have to understand the country you’re working in. It’s an experiential thing.
3. Having an eco impact:
Anybody who takes the call to arms – from Al Gore or whatever is the impetus for an ecological awakening – is awesome.
The world I come from operates based on a lame dichotomy: here are businesses that exist to make profit and NGOs that strive to have a social impact. In fact, for an organization to have the same objectives as an NGO, but the management rigor of a for profit business is not antithetical – that is what we need.
Let me give you another example. In Nicaragua, one of the embassies that has had the biggest social and environmental impact is the Danish Embassy. They are very good socially. But these days, their government is choosing to take its money and go home because of a food fight they are having with the Nicaraguan government. Essentially, they require that the government give them transparency in how the funds are used before they fund any more programs. But the Nicaraguan government has refused. They don’t want transparency.
As a result, the Danish government that has been working here for decades is winding down its programs. That means that these extremely effective programs are shutting down because they relied solely on NGO funding.
Compare that to a business like CO2Bambu. We do not depend on a single government. We believe in social, economic and ecological development that has more to do with a population’s needs, and less to do with the government. If you want to improve the economy of a community, it should happen with a business as opposed to an NGO that dries up when funding ceases, for whatever reason.